strategy EXECUTION

In their latest book, The Execution Premium, Linking Strategy to Operations for Competitive Advantage (Boston: Harvard Business Press, 2008), Drs. David P. Norton and Robert S. Kaplan provide a comprehensive management model designed to address one of management’s greatest challenges:
linking strategy formulation and planning with operational execution.

The six-stage model incorporates elements from the Balanced Scorecard, strategy maps, principles and practices along with management tools developed by leading experts to create a practical approach that will enable organizations to not only plan and successfully execute their strategy, but also to monitor, test and adapt their strategic assumptions in order to ultimately achieve an execution premium.

It consists of six major stages:

1. Develop the Strategy – Organizations must be able to state exactly what business they’re in, identify the key issues they face, and determine how best to compete. Developing the strategy uses an array of strategy tools such as mission, values, and vision statements; external competitive, economic, and environmental analyzes.

2. Plan the Strategy – Organizations must be willing to develop strategic objectives, measures, targets, initiatives, and budgets that will ultimately guide action and resource allocation. Planning the strategy uses such tools as strategy maps and Balanced Scorecards, along with targets and strategic initiatives.

3. Align the Organization – Organizations must be able to link company strategy to the strategies of individual business units while both aligning and motivating employees to optimize strategy execution. Align the organization with the strategy by cascading strategy maps and Balanced Scorecards to all organizational units.

4. Plan Operations – Organizations must link long-term strategy with day-to-day operations, aligning strategy with operating plans and budgets while focusing on those process improvements that are most critical to the strategy.

5. Monitor and Learn – Organizations must be committed to monitoring performance results once a strategy has been developed, planned and implemented, enabling us to determine if the strategy is being properly executed. This process integrates information about operations and strategy into a carefully designed structure of management review meetings.

6. Test and Adapt – Organizations must also test fundamental strategic assumptions to determine if we indeed, do have the right strategy. This involves testing and adapting the strategy, using internal operational data and new external environmental and competitive data.

Source: The Palladium Group /Balanced Scorecard Collaborative