When it comes to strategy, too many organisations believe in the power of ‘magic’. They build a strategic plan, identify the Key Performance Indicators (KPIs) and supporting targets required to deliver their goals and then hope that – as if by magic – success will be delivered. This is something I see again and again. The fact is that developing the plan and KPIs is only the first step, the key is to implement the plan, which is largely about the projects and initiatives that are selected to help deliver the strategic goals.
Goals, Initiatives and KPIs
Most companies fail in the execution, not in the strategy formulation. It is easy to come up with a strategic plan but strategic goals require initiatives to deliver them. In terms of strategy execution initiatives are more important than the KPIs and targets, which help you monitor progress against strategic objectives, but they won’t help you deliver them.
Losing Weight Example
Using an everyday example as a simple illustration, an objective might be to lose weight, the KPI might be the actual weight of the individual, the current state 100kg and the desired state 80kg. The initiatives might be ‘eat no more than 1500cal per day’ and ‘exercise 3 times a week’, each with time-bound milestones to monitor progress towards the 80kg target over a set period of time. Despite the hopes of many, we can’t lose weight just by making a resolution and monitoring progress; it takes work, and initiatives are where the real work of strategy implementation takes place.
So, let’s look at how you align your initiatives with the strategic priorities and KPIs in your organization.
Identify & Map Current Initiatives
The first step is to work with business units and functions throughout the organisations to identify initiatives and projects that are currently ongoing or are already planned. Once the existing initiatives have been identified, the next step is to map the initiatives to strategic objectives. To do this list all strategic objectives on a vertical axis, and list the initiatives horizontally.
The idea is that every initiative clearly links to a strategic objective, taking into account that an initiative can help to deliver more than one objective.
It is common during this exercise that you identify projects that don’t link to any strategic objectives as well as gaps where no initiatives support current strategic objectives.
This process by itself can provide valuable insights. Many organisations I have worked with found that just listing all the projects and initiatives underway today and stopping those that might have been launched for good reasons but are no longer strategically relevant, often leads to significant savings.
This exercise also identifies where similar initiatives are in place within various parts of the enterprise, which can lead to some consolidation of initiatives or their aggregation into larger cross-cutting initiatives.
Finally, if an initiative is deemed critical for the success of the organisation and does not correspond to any strategic objective, then it might signal a shortcoming of the strategic plan, which will need to be revisited.
Identify & Map New Initiatives
Once you have identified and mapped your existing initiatives it is time to look at any potentially new projects. When I do this with companies I often facilitate brainstorming sessions with management teams to identify other initiatives that will help deliver the strategic goals. This process should allow companies to identify new initiatives for those objectives that didn’t have any initiative linked to them and potentially additional initiatives across all other strategic objectives. A simple business case template can be used to provide a first filter into the strategic and other benefits of the proposed initiatives. Those that are not strategic are filtered out at this stage.
With both new and existing initiatives mapped, the organisation has to set criteria for prioritising the initiatives. The mapping exercise itself provides a valuable steer (as it will show where objectives are either over- or under-represented through initiatives) but there will still likely be too many projects to fund. Prioritsing criteria can be weighted according to areas such as strategic fit (which should have the highest weighting), time and cost to implement, complexity, risk, etc.
The prioritisation exercise should provide a ranked list of initiatives across all strategic objectives from where the management team can discuss and agree which initiatives to fund. It goes without saying that the final list of initiatives should cover every strategic objectives. As with everything in strategy management, the initiative ranking process is about the quality of the conversations it triggers rather than the actual tool or technique deployed.
It is critical that accountabilities and responsibilities are assigned for each initiative launched. I recommend that corporate level initiatives are owned by a member of the senior team as they will have the authority to overcome the many cultural and political issues that will inevitably arise in initiative implementation – especially as the highest level these will likely be cross-cutting. The other thing I have seen working well is when organisations assign a c-level sponsor with ultimate accountability as well as a project manager with day-to-day responsibility of delivering the initiative. The key is to make it very clear who is accountable and responsible for delivering the initiative.
Finally, the initiatives must be reported on an ongoing basis (monthly often works well) against cost and schedule dimensions but also to whether the initiative is delivering the anticipated strategic benefits. The senior team should also look at the portfolio of initiatives as a whole to understand inter-dependencies, issues and whether the portfolio is still appropriate for delivering the strategic objectives.
Let me end this article with an apt proverb from Japan:
“Vision without action is a daydream. Action without vision is a nightmare.”
Bernard Marr is an internationally bestselling author, futurist, keynote speaker, and strategic advisor to companies and governments. He advises and coaches many of the world’s best-known organisations on strategy, digital transformation and business performance. LinkedIn has recently ranked Bernard as one of the top 5 business influencers in the world and the No 1 influencer in the UK. He has authored 16 best-selling books, is a frequent contributor to the World Economic Forum and writes a regular column for Forbes. Every day Bernard actively engages his almost 2 million social media followers and shares content that reaches millions of readers.