The CEO’s Promise
The most important responsibilities of any CEO are to develop the strategy, clarify the organizational strategic initiatives, communicate them to employees and make sure the initiatives are achieved. It is in essence the CEO’s promise to the company’s stakeholders. However, in our experience working with mid-market companies, all too often CEOs focus primarily or exclusively on strategy development, allocating little time to managing execution of the strategic plan. As we all know from experience, a great strategic plan is useless if it lacks commitment to a formal and disciplined strategy execution process.
In fact, Kaplan and Norton (the founders of Balance Scorecard), surveyed members of their online business community and found that nearly 50% had no formal strategy execution process in place; yet 70% of those businesses that did have a formal strategy management process reported they outperformed their peers. Studies have shown that the success rate of strategy execution at mid-market companies is at best 33%, and over 50% of companies fall short of realizing the value they expect from their strategic plan because of poor execution capabilities.
Strategy management as we define it is a continuous process, not an annual process. Unfortunately, many CEOs often develop strategic plans and set goals at the beginning of the year and then only look at them again at the end of the year. What if a football coach managed his team by setting goals once a year and not making adjustments? It most likely would not work. Rather, a great football coach manages his team play-by-play, day-to-day and game to game. He builds improvements into each game as the season progresses so that at the end of the season he has improved his team’s chances of achieving their objectives. If he didn’t use this continuous improvement process throughout the season, what chance would he have of meeting the team’s objectives?
Like the football coach, the strategy management system of both developing a robust strategy and a strong organizational strategy execution capability will help the CEO deliver on his or her promises to the stakeholders.
For those of you that read our newsletter regularly, you know that Albu Consulting is committed to helping CEOs establish “Strategy Management” as an organizational competency. Our mission is to work with leadership teams to help develop robust strategic plans and provide the tools, training and motivation needed to follow through on the CEO’s promise with a comprehensive and disciplined strategy execution process.
If you’d like to learn more about how Albu Consulting can help you establish strategy management as an organizational competency, please call us for a free consultation.