The execution phase of business strategy – any strategy really – is where most management fail to deliver. I know many companies –including Fortune 500s- where strategy building is an exercise in layering carefully crafted buzz words on a document, which soon after would be saved to some obscure shared computer drive and rarely visited. Ask yourself, how many times in the course of the year have you opened your company's long-range and one-year strategy documents to status if your department or company is on course? I am not talking about measuring progress on sales, costs, and inventory levels. I am talking about measuring progress on the execution of the strategy you set. And, there is wherein the misunderstanding lies.
Soon after going through the annual joint exercise of setting strategy – usually done at an expensive off site retreat at great costs, management turns its attention to traditional accounting tools to measure achievements and deficits. This puts measurement of the results into the hands of the CFO. I have nothing against financial types, I myself find that numbers tell a story. But, management level accounting bench marks are gross numbers that will not get you visibility or get you to root cause of trouble except after several drill down levels. Finally, these same financial measures only offer delayed blunt tools for corrective action.
To get to tools and measurements of strategy execution you must combine project management practices into what you are doing. The Project Management discipline, pioneered by Aerospace industry, is all about managing resources and activities to meet a time based objective. If you will agree with me to simply define strategy as series of coordinated activities to meet time based objectives, then project management tools should be utilized in strategy execution and measurements. So, into your strategy execution phase think about mapping-in and utilizing practices of Work Breakdown Structure (WBS), Critical Path management, and progress measurements by adding Earned Value to traditional GAAP measurements. All these are tools I found, after learning project management domaine within the enviornment of an Aerospace blue blood.
Tolerance for failed strategy is very narrow. But in many cases appropriate corrective actions could be taken to trim course for success. Utilizing project management practices gives management a dashboard to monitor execution. With better visibility into the execution of all the discrete activities that bind strategy, you can actually follow the execution of the strategy you set and also have the tools for better informed decision making.