For us to be able to coax our organization to better execute our strategies, isn’t it imperative for us to translate our plans into objective goals for each strategy implementing entity at our firm? Isn’t is important for us to ensure that all the entities in our organization are aligned to our plans? Aren’t these threshold requirements?
Our study of over two dozen organizational leaders across industries & organizational sizes revealed quite another thing!
The clarity in what an organization wished to achieve was found to be a mere 70%
Since optimal execution of business strategy begins with a clear & uniform understanding of what needs to be achieved as an organization, we dug deeper to figure out the causes of this low score, and here’s what we found!
1) Although leaders were quite clear about what to pursue as an organization & what direction to take, this wasn’t necessarily communicated effectively to all layers within the organization. In certain cases, there was an absence of objective goals. In certain others, goals were centered around sales & revenues which essentially meant that the necessary thrust for customer focus, operational efficiency, quality, evolution and other success factors required for sustenance & performance were missing!
2) Yet another crucial factor that determined clarity was the number of goals that an organization pursued. While no goals or for that matter sales only goals obviously meant ineffective management having too many goals was also a problem. Having too many goals blurred priorities thereby reducing clarity on what actually mattered the most to the organization. A global study based on the law of diminishing returns suggests the following
3) The third crucial factor owing to a low clarity in the what, was an inherent disconnect between strategies & the customer! Oxymoronic? Well, its true! Although customers are an indispensible partner for success, not enough attention was being paid to understanding their precise needs.
4) The fourth crucial factor were the goals themselves! On the one hand, certain organizations provided more impetus to an extrapolation of past achievements while setting goals, thereby not factoring organizational & market potential. On the other hand, organizations laid a lot of thrust on aspirations while setting goals, in which case the market realities were not factored. In effect the desirable balance between market realities, past performance & aspirations remained unachieved.
5) Last, but not the least was a missing alignment from the organizational stakeholders who were actually responsible for implementing the strategies on the ground. We found that the average alignment achieved by organizations was 72%!
The gap stemmed from factors like,
a) No buy in
b) Only one or few entities could see how they impacted the organizational goals. The remaining organizational entities really did not see the connect between their contributions and the organizational goals.
c) The measures for any given goal seemed to remain the same across various levels, thus blurring accountabilities & alignment. The following pyramid showcases the typical distribution of focus areas for success