Practitioner Series on Making Strategy Execution a Reality | Part 3 of 3
Strategy Execution is a top-down process.
It starts with a clear idea from leadership of what opportunities should be pursued, the operating capabilities required to get there, and the outcomes that should be expected.
3 steps to drive Strategy Execution
1. Determine trade-offs
It’s important to understand that some opportunities may be foregone in order to pursue other ones.
We find that implementations become easier, and client success more likely, when the business leaders are ready to set a clear direction, and are willing to accept necessary operating trade-offs to pursue it. This may sound like a given for any organization, but I can assure you that it is not.
In the business arena, these trade-off frameworks typically take the shape of quasi-competing portfolios of projects that are geared toward a few general purposes:
- Digital business transformation
- Maintaining operating continuity
- Leveraging shared services and infrastructure
- Retiring legacy systems
One of the key questions Strategy Execution must answer is the relative allocation of financial and human resources to each of these portfolios and their goals, knowing full well that an additional dollar spent on infrastructure or maintenance is a dollar less for digital transformation.
2. Define prioritization criteria
There is no “correct” set of prioritization criteria that should be applied across investment portfolios, but in general we find these factors to be the biggest differentiators in portfolio performance that yield richer prioritization and resource allocation outcomes:
- Strategic Alignment
- Digital Transformation / Innovation
- Technical Debt Reduction
- Financial Benefit and Efficiency
3. Strategic outcomes drive resource demand
Deeper into the execution level, much of the focus today is on managing demand through resource capacity planning. This is a critical need to ensure timely delivery of key initiatives, but by itself is a dangerous mindset without being informed by strategy.
Managing resource demand should be driven by achieving strategic outcomes—not just increased efficiency.
Managing resource demand should be driven by achieving strategic outcomes—not just increased efficiency. In the absence of strategic prioritization, many organizations are trying to optimize by rolling up project-level plans into broader programs that are then affiliated, often ex post, to strategic initiatives put forth by teams seeking to justify their own plans in absence of broader portfolio strategies.
Overcoming this bias is not the province of spreadsheets, document sharing, project management apps, or social networking tools. Not that these are bad tools. They just are the wrong tools to fully enable scalable prioritization and resource planning. They can be somewhat collaborative, but often yield scattered, unstructured data that lacks a strategic prioritization mechanism. Getting stakeholder feedback is great, but applying it in a rigorous and focused way is the crux of the process.
So what does a solution made for Strategy Execution do?
Organizations need something that is built specifically for Strategy Execution. A solution that:
- easily gathers input from all stakeholders in a focused, efficient interface which fosters more genuine buy-in across the organization
- applies relevant data directly to portfolio prioritization without a need for manual collation or transformation
- uses simple visualizations to convey the resource implications of prioritization outcomes and the true decision points that must be addressed under specific sets of constraints and assumptions
- enables the governance process to easily separate the project selection decision from the resource allocation decision, which, although related, require different types of data and optimization algorithms
- quickly identifies resource allocation bottlenecks and helps you strategically alleviate them
Leaders do not want portfolio decisions made by default from the bottom up. Execution matters, and most PPM tools can play a pivotal role in ensuring more disciplined project delivery. But portfolio delivery, and the strategic benefits that should accrue from it, requires Strategy Execution. And this begins with Strategy.
But portfolio delivery, and the strategic benefits that should accrue from it, requires Strategy Execution. And this begins with Strategy.
Where investments are involved, there is simply far too much at stake in terms of growth opportunities, competitive advantage, alleviating technical debt, and business continuity to leave to the vagaries of manual labor.
Re-posted from our previous blog