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Tuesday, February 05, 2008

Strategy, Execution and Organizational Alignment

One of the toughest challenges that a CEO faces is connecting their strategy to execution. It's considered to be the major reason why CEOs fail.

The strategy execution process looks like this:
  • Clear strategic planning - mission, vision, values, strategic position
  • Crisp 1 year goal setting - financial, customer, production, people goals and measures
  • Align resources - processes, policies, measures, technology, people
  • Individual plans to execute against the goals - prioritized daily, status updated weekly
  • Continual measurement of progress

The strategic planning process begins with an annual strategic planning process that involves reviewing strengths, weaknesses, opportunities and threats (SWOT), as well as internal and external trends. This information helps to update or renew the mission, vision, values and strategic position of the company.

Next, the organization's VFOs (Vital Few Objectives) are decided upon in the 1 year goal setting process. Priorities for each quarter are identified, along with responsibilities assigned and measures established. These VFOs are decomposed into key Initiatives and Projects. Individual Plans for each team member are created that tie directly to these Initiatives and Projects. Each team member is accountable for their quarterly plan, which assures alignment with corporate goals.

Quarterly planning sessions are held to assess held to assess how well the organization has accomplished their priorities. Short monthly team meetings help to stay aligned and to make adjustments early enough to ensure progress. Brief weekly individual status meetings are held to keep progress on track. Any "at risk" items are flagged and addressed immediately.

The combination of all of these activities contribute to organizational alignment. The key driver of organizational alignment is a organizational "fitness." By fitness, we're referring to an organization's ability to be both efficient (doing things right) - and effective (doing the right things). By building accountability within an organization, continual alignment and organizational fitness occurs.

BOTTOMLINE: A clear strategy can only be of value when it is translated into crisp goals, and when a organization's resources are continually aligned toward execution.

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