A dynamic approach to strategy

Strategy implementation efforts are often bogged down by such pitfalls as team members’ inability to translate leaders’ directives into actions or change course based on new information.

Every year, many companies convene their sharpest thinkers to develop strategies to guide initiatives aimed at entering new markets, capturing greater market share, becoming more profitable, or otherwise improving some aspect of the business. And every year, many of these strategies fail. Corporate history is littered with strategic plans that were unveiled with much fanfare only to fall short of expectations.

Often, strategies are not inherently defective. Rather, they fail to produce the desired results because organisations do not effectively execute them. Frequently, the real problem is a mismatch between what the strategy was designed to accomplish and how it was implemented. CIOs who understand these concerns can better respond to CEOs and business leaders who may think they lose control to team members who revise strategy to accommodate their own beliefs about process, system, and organisational challenges.

Organisations can confront the root causes of strategy execution failure by pursuing a set of implementation tactics designed to overcome common barriers. A dynamic approach to strategy execution is based on the belief that companies can treat the process as a leadership exercise rather than a purely administrative activity. Dynamic strategy translates leaders’ strategic ambitions into specific actions, explicitly designing activities to enable the organisation to adapt to changing conditions and investing in efforts to embed new skills and behaviours. With this methodology, CIOs can establish and sustain a vibrant and engaging IT program management environment in which they can confidently reassure the CEO and business leaders that complex and nuanced strategies will be properly executed.

Organisations can aim to establish a dynamic implementation approach by following these tactics:

Translate strategy into explicit implementation guidelines and choices.

If leaders can’t make their ambitions explicit, the rest of the organisation will likely interpret them for themselves. For example, what should the leader of the customercentricity team do with a strategic ambi- tion to become more customercentric? Does that mean the company should organise by customer group? Should the team conduct research to understand what customers really want? Reward service people for being highly responsive? Initiate an effort to improve the quality of its products? All responses are possible—and confusion about which action to take is the sign of a major translation problem.

The dynamic approach begins with leaders articulating actionable design principles that provide direction to teams without being overly prescriptive. For example, an actionable design principle for becoming customercentric might include: “Make the first moment of customer contact memorable.” By giving the implementation team such a specific direction, leaders enable their people to understand where to start and how to evaluate findings without prescribing exact solutions.

In that vein, dynamic strategy implementation demands a different kind of leader, one who is skilled at seeing how operational choices affect strategic outcomes, and who can consistently manage for outcomes, not milestones. The approach also benefits from metrics that specify a clear line of sight between program deliverables and desired strategic outcomes.

Adapt to rapidly changing conditions.

A dynamic approach helps companies correct or even change course completely as they implement strategy. Companies can improve leaders’ contextual awareness by soliciting diverse perspectives—for instance, by crowdsourcing improvement ideas. They can leverage scenario-planning and environment-scanning tools to anticipate changes. And they can emphasise the importance of productive conversations to facilitate more effective collaboration.

Dynamic implementation also calls for leaders to respond to changing conditions and new information by identifying whether a problem is a detour requiring rapid course correction or a leading indicator signalling that a change in direction is needed.

Sustain the strategy by building organisational capabilities.

Behavioural changes may not stick until they are embedded as enduring organisational capabilities. The dynamic approach helps individuals develop new competencies and results in sustained performance improvement. Building organisational capabilities requires significant effort, from clearly defining current and desired capabilities to designing an integrated system of assets and activities that builds and sustains them.

This approach can also help address organisational resistance that often torpedoes implementation efforts. While traditional techniques typically require significant upfront investment over many months before showing results, the dynamic approach adopts a different mix of small-scale activities in the initial stages of an implementation, emphasising the ones that set the stage for organisational learning—for example, demonstration projects, pilot programs, and applied learning programs. Such an approach can produce concrete deliverables and value in the early stages, increasing learning, buyin, alignment, and enthusiasm.

***** Whether an organisation is entering a new market, launching an innovative product, or changing its business model, strategy execution risk looms large. Major economic and competitive shifts can require real-time adaptation of techniques, expectations, and responsibilities. By adopting a dynamic approach to strategy implementation, companies can potentially increase the odds of effectively translating, adapting, and sustaining new strategies. For more information, please visit www.deloitte.com/mt