Without strategy, execution is aimless. Without execution, strategy is useless, says Morris Chang, CEO, TSMC.
This post is with reference to my previous articles on the Concept of T.E.S.T. and PoC and the importance of the first ‘T’ i.e., Team.
Like always, I reiterate my firm belief in the fact that startups that are well positioned on the T.E.S.T. (Team, Execution, Scalability and Technology) and PoC (Proof of Concept) criterion, stand a greater chance of tasting success.
Since I have already elaborated on T.E.S.T. and one of its vital aspects – ‘T’, i.e., TEAM – in the aforesaid links, today I will reflect on the next link in the chain i.e., “E” or EXECUTION.
“Without strategy, execution is aimless. Without execution, strategy is useless.” – Morris Chang, CEO, TSMC (a Taiwan based semiconductor manufacturing company)
This quotation pretty much says all that I want to convey in today’s post.
While most business leaders lay emphasis on strategy formulation or planning to build a strong foundation for the business, they often miss out on one key aspect that is instrumental in making plans materialize. And that is EXECUTION. Though planning plays a key role in any business, what is even more important is how, or rather, how ‘effectively’ those plans are executed. Even the best laid plans in a business stand to fail if not executed well.
A research by Dr Kotter, CIO at Kotter International, on this subject suggests that roughly only 5 per cent of all organisations succeed in implementing their strategies. A whopping 70 per cent of them fail in execution. The remaining 25 per cent are able to achieve only mediocre results on this front. The fact has been validated by several other studies.
This clearly reflects that companies currently undermine the importance of execution, not realising that building strong execution capabilities can help them acquire a competitive edge in the market, which can benefit all its stakeholders in the long run.
While developing a strategy or long term plan is considered to be a humongous task; and one that will decide its fate in the long run, the real challenge lies in executing it and bringing the strategy to fruition. This is where the real investment in time, effort and resources actually happens. And this is the stage where companies usually stumble.
Talent: An Important Tool
Talent is a critical tool that can be instrumental in effectively bridging the gap between strategies and the actual outcome by way of execution. Hiring people with the right knowledge, skills, competencies and experience and upgrading these skills from time-to-time, as the market demands, is therefore vital to building strong execution capabilities for an organisation. Moreover, a culture of meritocracy and an effective reward and recognition programme can further help motivate and retain talent and bring out their optimum potential, which can boost the overall execution capabilities of the organization.
But, that’s not all. While the senior management in most organisations usually focuses on drawing up strategies that can give them an edge in the market, the execution is usually delegated to the teams. To draw out the best capabilities of people who will actually be executing the plans, what is most important is that the plans are clearly communicated and understood not just by the core team, but, by every single employee who will work on making them a success.
A study by Harvard Business Review reveals that 95 per cent of employees do not understand their company’s strategy? In that case, how can the companies expect them to execute the plans? Plans, therefore, need to be clearly and precisely formulated and communicated to everyone within the organisation. Also, while their execution may be delegated to the teams, the actual responsibility and accountability ought to rest with the senior management to ensure successful implementation.
Since strategies or plans are usually devised for a longer period of time, for them to be easily comprehensible by everyone, they need to be broken down into small term ‘SMART’ goals (i.e., Specific, Measurable, Achievable, Realistic and Time-bound goals), so that every single person understands exactly what is expected from them in terms of performance to be able to effectively contribute to realizing those goals, and therefore, the long term plans.
It will also ensure that the communication that percolates down is consistent and no game of ‘Chinese Whispers’ comes into play, thereby leading to filtering or misinterpretation of the information or plan. Effective communication of the plan therefore ensures that all efforts are directed towards a common goal, thereby maximizing the impact of execution.
Monitor the Progress
The next step then is to monitor the progress against these goals to know the current position viz-a-viz the actual target. Unless a proper tracking mechanism in place, it’ll be difficult to track the deviation from the actual plan and take corrective action.
Also, what is important to note is that planning and execution are both interdependent on each other. While planning provides the basis for execution, it is important to take inputs from those involved in execution to understand the ground realities and undertake course correction, if required, to address the dynamic market environment. The more these two functions work in tandem with each other, the better competitive advantage a company can enjoy because of its ability to quickly adapt or respond to market conditions. This is what will set it apart from others and put in on the course to success.
Published at FranchiseIndia.com