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Tuesday, October 03, 2006

Strategy Management in Small Businesses

Many organizations suffer a disconnect between strategy formulation and its execution.

The answer? Harvard Business School professor Robert S. Kaplan (creator of the balanced scorecard) and colleague Andrew Pateman argue for the creation of a new corporate office - the "Office of Strategy Management."

Over the past fifteen years, they studied the root causes of this disconnect between strategy and performance:

  • Their research showed most organizations do not have a strategy execution process.
  • Many have strategic plans, but no coherent approach to manage the execution of those plans.
  • Organizations need to find a consistent, coherent way to translate their strategy into operational terms.
  • 60% of typical organizations do not link their strategic priorities to their budget.
  • 67% of HR and IT organizations develop strategic plans that are not linked to the organization's strategy.
  • 70% of middle managers and more than 90% of front-line employees have compensation that is not linked to the strategy
  • 95% of employees in most organizations do not understand their organization's strategy.

In short, there is often a chronic disconnect in organizations between strategy formulation and strategy execution. Organizations failing to make this link are destined to be among the failures.

BOTTOMLINE: So your organization is too small to start an "Office of Strategy Management?" Consider the first complete strategy-driven program designed specifically specifically for smaller organizations. Consider a program that eliminates the barriers that prevent organizations from effectively executing their strategy, while creating a new culture of effective work habits and focused business processes. Unlike partial attempts like seminars, consultants and quick fixes, consider a program that make these new habits ”stick” by providing practical tools to align individual performance, and on-going coaching to ensure organizational progress and accountability. Small businesses using such a program learn how to do things right, how to do the right things, and how to get them done right - year after year.

Consider Six Disciplines.

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