You probably hear (or tell) this story as often as we do: “Our business went through a major strategic planning session last year. So far, it’s created a big stack of paper and a pile of dust.”
A company that invests so much time and effort into strategic planning should be set for double-digit growth for years to come. But in many cases, the growth doesn’t materialize.
When that happens, the management team tends to start pointing fingers at each other. That’s too bad, because in most cases the entire management team shares the blame for not aligning on the specific factors necessary to create growth.
In our recent column "Get Your Team on the Same Page," we identified four steps to aligning the management team on a path to value growth. The first three steps–aligning on a common fact base, building a growth agenda, and determining investment choices–are important in setting the strategy. But those three steps won’t amount to much if you can’t execute. And in our experience, execution is all about aligning on three key elements: targets, timelines, and accountabilities.
Each investment opportunity should have a set of targets, as well as intervening milestones, that the management team agrees are necessary to achieve to be successful. For example, an opportunity such as achieving sales of $50 million in Wal-Mart by 2015 probably involves a set of incremental targets: $5 million in 2012, $15 million in 2013, and $30 million in 2014. It probably also involves some key milestones, such as securing a meeting in Bentonville or obtaining product approval from Wal-Mart. The most powerful aspect of these types of targets and milestones is that the management team agrees that if the targets are met, the opportunity will likely be achieved; if not, the opportunity will likely be delayed or lost.
Agreeing on a specific timetable for each growth opportunity is critical to setting appropriate expectations and measuring progress. Additionally, many of the investments or opportunities may be interdependent–that is, two investments may be necessary to achieve the opportunity. If one investment falls behind schedule, it’s logical that subsequent targets will not be achieved.
Arguably the most critical part of a strategic execution plan is having a clear view of who’s responsible for what. One member of the senior management team should be given ownership of each high-value growth opportunity. In addition, accountability should be assigned for each investment, milestone, target, and action required. Agreeing “who has the ball” is often the most important driver of success. When someone’s job or bonus is on the line, you’re more likely to see positive results.
Do you have examples of effective or ineffective execution plans? Share your comments below, or write us at firstname.lastname@example.org.