FP&A Strategy Execution Readiness
Your company has a strategy. Are you confident it is ready to be deployed and executed? Most likely not, as 60%-90% of strategy implementations fail and only 14% of executives are satisfied with the execution of a strategy. This post introduces a framework to assess your company’s strategy execution readiness, in order to align leaders around how to bridge your strategy to execution gaps. I also provide a free strategy execution checklist to assess your readiness.
Before a strategy can be deployed and executed effectively, you need to have leadership alignment around execution readiness. Your leadership team has to ask themselves at least the following questions:
- Do we have the best possible circumstances to execute our strategy?
- If not, what are the gaps to effectively execute our strategy?
- Are we aligned around our strategy execution gaps and strengths?
- How and when are we going to address our gaps?
Answers to these questions will provide understanding between your leaders on how they perceive the risk profile of execution the strategy. It will give your leadership team insight if they feel ready to execute their strategy. But most important, it will create alignment on how your company can create the best possible circumstances to execute the strategy successfully.
To help executives understand their gaps to effective strategy execution, I researched 7 strategy implementation frameworks and 75 leading strategy execution articles published over the last 30 years. I looked for the most common strategy execution factors, and distilled and grouped 5 key success factors.
I developed a 40 question checklist to assess business confidence across the 5 strategy execution key success factors. If you take this survey with your leadership team, it provides you answers to powerful questions like:
- What are our perceived strategy execution gaps?
- What are our perceived strategy execution strengths?
- Are we aligned around strategy execution readiness?
What follows is a brief description of these 5 ultimate strategy execution success factors.
There are collective leadership and common language around purpose, vision, behaviours, strategic capabilities, balanced scorecard and budget objectives. This supports focused decision making, resource allocation and issue resolution.
60% of organizations do not have strategic initiatives in the budget
Mindset and Behaviours
A resilient, positive and growth mindset culture, with effective behaviours and group dynamics supports alignment, integration and strategy execution. These cultures are proven to outperform negative, fearful cultures with aggressive behaviours. People & Culture get a mention in 6 from 7 researched strategy frameworks, however:
30% of managers mention cross-unit working as the greatest challenge to strategy execution
Performance and Appraisal
The strategy is cascaded to individual performance level. Objectives , rewards and consequences are clear and include the ‘What’ as well as the ‘How’ we do it. Recruitment policies are aligned with values and behaviours and there is action towards performance issues. Reward systems are mentioned in 6 out of 7 researched strategy frameworks, however:
70% of middle management and 90% of front line employees incentives is not linked to strategy
The organizational structure supports the strategy. There is strategic capability building, clear roles and responsibilities and continuous formal, informal and two-way strategy communication to engage employees. Organizational structure is mentioned in 7 out of 7 researched strategy frameworks, however:
In 38% of companies, managers do not inform their team about the chosen strategic direction
Integrated Planning & Monitoring
There is a strategy implementation plan. A periodic rolling forecast provides visibility in gaps to budget and supports enterprise resource re-allocation. Strategic initiatives, goals, measurements and targets are periodically monitored. Control, process, information systems and goals are mentioned in 5 out of 7 researched strategy frameworks, however:
92% of companies do not report on strategic lead performance indicators
If you and your leadership team ask yourselves the right questions around these five key strategy execution themes, you will create understanding around your strategy to execution gaps. You will start a conversation together about your strategy execution readiness. You will hold up a mirror and ask; Are we ready to execute?
You can download the Strategy Execution Survey here. Success with aligning your leadership team around strategy execution.