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Friday, May 15, 2009

Turning Great Strategy into Great Performance

According to research conducted by the folks at strategy/execution specialists Marakon (as published by the Harvard Business Review), companies typically realize only about 60% of their strategies’ potential value because of defects and breakdowns in planning and execution.

By strictly following seven simple rules, you can get a lot more than that.

  1. Keep it simple, make it concrete. Avoid long, drawn-out descriptions of lofty goals and instead stick to clear language describing what your company will and won’t do. (Discipline I. Decide What's Important)
  2. Debate assumptions, not forecasts. Create cross-functional teams drawn from strategy, marketing, and finance to ensure the assumptions underlying your long-term plans reflect both the real economics of your company’s markets and its actual performance relative to competitors.
  3. Use a rigorous analytic framework. Ensure that the dialogue between the corporate center and the business units about market trends and assumptions is conducted within a rigorous framework, such as that of “profit pools.” (The Six Disciplines Methodology, as described in Six Disciplines for Excellence)
  4. Discuss resource deployments early. Create more realistic forecasts and more executable plans by discussing up front the level and timing of critical deployments. (Discipline III. Align Systems)
  5. Clearly identify priorities. Prioritize tactics so that employees have a clear sense of where to direct their efforts. (Discipline II. Set Goals That Lead)
  6. Continuously monitor performance. Track resource deployment and results against plan, using continuous feedback to reset assumptions and reallocate resources. (Discipline IV. Work The Plan)
  7. Reward and develop execution capabilities. Motivate and develop staff. (Discipline VI. Step Back)

BOTTOMLINE: Now, you understand a little more why the Six Disciplines strategy execution coaching program works for small and midsized businesses - while other business improvement approaches fall short.

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