What step is commonly missed when implementing a strategic business plan?

Peter Mills, business consultant and director of The Leadership Framework, provides his insights

Every year, most organisations turn their attention to strategic planning. They may even take a one or two day retreat and then, over the next few months, the leadership team will formulate the organisation’s three to five year strategic plan. It will be used to guide the organisation’s future and to solve its problems. It’s new and the team is excited.

And then? Nothing but talk or blame as to why it wasn’t implemented. The following year, the process starts again and there is a new ‘strategy’. Why did it fail?

Good strategic planning doesn’t end with strategy creation, it ends with implementation, and unless done well, even the best strategy will fail. More critically, the organisation will not do what it needed to do to be successful.

While most organisation’s focus on cascading objectives and monitoring performance, the step they commonly forget is to align the organisation for success. It is only by aligning the three parts of the working organisation, i.e. the organisation’s structure, roles and role relationships, its systems of work and its managerial leadership processes, that managers can create the right working environment for success.

When looking at organisational design, the main issue for strategy implementation is how to ensure everyone works together to deliver business outcomes. If cross-functional work is not properly aligned:

• Important decisions may not be made or may become stalled or negotiated.
• Overlapping work boundaries will occur, often resulting in confusion, uncertainty and an inappropriate use of authority.
• Functions may start duplicating the work of others. Alternatively, no function will think they are accountable, so gaps in strategy implementation will occur, often resulting in accusation and conflict.
• Resources to complete an initiative may be misallocated.

This impedes information flow, hinders productive work and promotes workarounds. People will continue to work on the things they do best, i.e. their day-to-day operational work, and forget about strategic outcomes.

Clear roles, with defined working relationships, enable functions to work together. Basic information such as, who needs to work with whom, who makes the decision and who carries out the work. In strategy implementation, issues tend to be where work passes:

• From one function to the next, e.g. from the marketing division to the sales division.
• From head office to branches.
• From inside the organisation to outsourced providers.

A common problem for many organisations is the integration of work of core functions with specialist functions, such as finance, human resources and information technology. Typical issues for these functions are:

• How do specialist functions integrate with day-to-day line manager accountabilities and authorities?
• What are the specialist function vs core functions accountabilities and authorities for strategy development and delivery?
• Who monitors and reports on strategy implementation?

As successful strategy implementation requires specialist functions and core functions to work together, line manager roles and specialist roles must be design so that they are complementary and are not in conflict.

Systems of work i.e. the organisation’s policies, procedures, forms, information and communication technologies, also need alignment. Systems of work coordinate and direct the work of the organisation’s people to deliver its products and services. They facilitate work across functions, across teams and within teams and provide the standardising methods and boundaries for work. They align people and work with legislation, social norms and the organisation's values and allow the leadership team to monitor and verify that the organisation’s purpose and strategy are being achieved in accordance with its cultural, ethical and moral standards.

As systems of work influence the ability of people to do their best work, if they are poorly designed or not aligned to strategy, they will be counter-productive or may not be used. This not only impacts work outputs, it hinders strategy implementation. This occurs where:

• The system does not do what it is supposed to do.
• Accountabilities and authorities for the system or within the system are unclear.                           
• Handover points are not clear.
• The work outputs are not used or not trusted.

Therefore, all systems of work must be designed to support strategy implementation.

Prioritising the review, design and deployment of a system of work must be based on strategic requirements, i.e. systems of work key to strategy implementation should be reviewed first. For example, a strategy to increase sales by improving customer satisfaction may need to review the customer management systems as a priority.

No matter what the strategy, there are three systems that organisations must get right for successful strategy implementation. These are:

• The System of Systems: The methodology to review, design and deploy an organisation’s systems of work. It ensures accountabilities and authorities for work are in the right place, linked to the organisation’s authorised structure and that the system delivers the outcomes required.
• The Strategy Implementation System: The policies, procedures, forms, information and communication technologies necessary to ensure strategy delivery.  
• The People Management System: The processes for organisational design and to create roles, select and induct new employees, assign and assess work, reward and develop people and provide fair treatment. While the whole People Management System is important to support effective managerial leadership, several areas typically come into play for strategy implementation. These are the reward system and the talent systems. These are the systems that influence the attraction, retention and development of organisational capability.

The final area of alignment required is that of managerial leadership. Managers not only design and deploy the organisation’s structure and systems of work, they are both part of and are impacted by the working organisation. To perform their role, managers need a coherent framework for their managerial leadership. They need a holistic and integrated framework that provides:

• Clarity on the requirements of their role and the role of others.
• Clear accountabilities and authorities for their people work.
• An understanding of impacts on team performance and individual effectiveness.
• Principles and practices to manage effectively and in a manner that builds trust.
• Methods and tools to improve team performance and to execute business unit strategy.
• A checkpoint against which they can assess themselves.

Without such a framework, managers tend to place an inappropriate focus on team member performance, rather than looking at the whole working organisation. This can lead to poor manager-team member working relationships and a failure in outcomes.

For organisations, a holistic and integrated managerial leadership framework also:

• Provides consistency in leadership practices.
• Provides a common language to solve people management issues.
• Supports cross-organisational alignment and productive working relationships between operational roles and specialist functions.
• Provides managers with skills and tools to execute organisational strategy.
• Builds an organisational culture consistent with the organisation’s values.

Strategy implementation involves change, and change is difficult, therefore managers must create the right working environment to enable success. They must align the whole working organisation i.e. the organisations, structure, roles and role relationships, its systems of work and managerial leadership practices to ensure success.

About the author
Peter Mills has over thirty years of experience in human resource management in a range of industries, including engineering, manufacturing, investment, petroleum and IT. He has led hundreds of team members in their leadership journey.

Make it work! How to successfully implement your business strategy (GOKO Publishing) rrp: $24.95 is his third book in a leadership series. He is also Director of The Leadership Framework www.theleadershipframework.com.au