How to Implement Strategy In Your Organizational — Start By Aligning Strategy

Organizations talk a good game about strategy. But without aligning strategy with the right funding, projects and programs to carry them out, even the most forward-thinking strategies fail. In fact, according to PwC, only 15% of organizations big and small fully achieve their strategy. For tangential strategies like sustainability, success falls to 2%! 

Read Why 98% of Companies Do Not Achieve Their Sustainability Goals.

Many organizations recognize that they are not good at aligning strategy and implementing it. As a result, they will often engage consultants to help with developing and implementing strategy.  They hope that magic will happen — just as outlined in the case study presented by the consultant to win the business. However, management needs to be deeply involved in aligning strategy and achieving it for it to be successful. Therefore, it cannot be fully outsourced. Management understands the context of their business best. It just needs the right tools to manage this aspect of their business.

One size does not fit all

Dynamic markets and technologies pressure organizations to cut costs and improve productivity, quality and speed. Consequently, organizations have embraced tools such as Lean, six sigma, total quality management, benchmarking, and re-engineering. While dramatic operational improvements have resulted, rarely have these gains translated into sustainable profitability.

Our aligning strategy methodology and governance analytics are tools to help management in implementing the organization’s strategy. Our approach requires management’s expert advice and insight.

The first step is to understand how existing activities and goals contribute to your achieving overall strategy — what gets funded gets done. We use governance alignment analytics to optimize your organization. Governance alignment is critical to

• achieving your strategies
• ensuring flexibility to rapidly respond to evolutions in goals and associated strategies

Over funding ongoing programs or even worse cutting all programs by a given percentage diverts the resources away from achieving the strategy.

Good governance focuses on optimizing the alignment of its structures to your overall strategies. We view these structures collectively as “governance chains”. Good governance means that you make sure that all resources increasingly contribute to achieving your mission and vision. Our analytics enables you to objectively align your governance chains for success.

Our governance alignment program provides analytics and methodologies give you the tools to rapidly model, assess and optimizes your organization.

An effective PMO

To help bridge the chasm between high-level strategic vision and in-the-trenches implementation, many organizations turn to a project management office (PMO). Greg Wood, managing director of the corporate PMO for Rio Tinto says:

A strong PMO delivers two distinct areas of improvement to the organization. It helps organizations choose the right projects to deliver, and it helps them deliver projects correctly. It’s not enough for projects to come in on time and on budget. They must also be in sync with strategy, or it’s just wasted capital.

Organizations continue to struggle. The PMI’s Pulse of the Profession®: The High Cost of Low Performance found that only 42% of organizations report high alignment of projects to organizational strategy.

That’s simply not good enough in today’s hyper-volatile business world. Most of all organizations must strike the right strategic response — and they must do it quickly. According to the 2014 PwC survey, at least three-quarters of CEOs acknowledge the need for change or are developing strategies for change in response to global forces.

A 2013 Economist Intelligence Unit of the Economist report echoes the findings:

• almost 90% of senior executives reporting that executing strategic initiatives is essential for their organization’s competitive advantage
• 61% admitted that they struggle with executing on those strategies
• 56% of strategic initiatives have been successful

Break out of the cycle

It’s a vicious and expensive cycle to set strategies that you don’t fully carry out. Here are four tips to get you started on a better path:

1. Do a better job at selecting the right strategies — ensure they have a reasonable chance of success — know the relative value of the contribution of each strategy to the organization's overall goals.
2. Fund the strategies that contribute most to achieving your goals adequately — reduce funding for those that don’t — remember what gets funded gets done.
3. Most noteworthy, set up performance pay structures that are weighted to the importance of the achievement of the strategy.
4. Set up a PMO structure and governance and manage it. Magic does not happen — implementing strategy is very hard work — set-up and support a PMO. Stay on top of the analytics and progress.

All organizations have challenges with governance, money and people, Allenvision Inc. has built it business on providing advance analytics to help executive decision-makers better manage their business.