Are your strategic plans piled on a shelf growing dust? Do managers only open them at reporting time? This editorial sets out the five critical failures of strategic performance systems and argues that simplicity, built-in reporting and open sharing of objectives are what make implementation stick.
Strategy has one purpose
Strategy exists to be implemented. If it is not implemented, it was only a dream.
Many leaders share the same frustrations with corporate strategic performance systems that simply do not work.
The five critical failures
One: the system is too complex. Two: it is combined and confused with other organisational systems, such as risk management. Three: the objectives are too global, immeasurable, or not time limited. Four: the system has no reporting capacity. Five: implementing the objectives is not a priority.
Simplicity is the answer
It does not matter which system you use, as long as it is simple and the reporting process — the performance part of the system — is built into the strategy element of the system.
At NSC Group we favour the Balanced Scorecard, originally designed by Kaplan and Norton. It is simple to follow, it leads you through the process, and performance reporting flows naturally out of the strategic process.
Stop treating the plan as top secret
The key to effective implementation is sharing the objectives, initiatives, metrics and timeframes with the people who have to deliver them. Too many organisations treat the strategic plan as confidential, leaving too few people in a position to implement it.
Worse, the bulk of the organisation does not know the strategy exists, and unwittingly takes daily actions that impede it. Chaotic, complex, poorly designed processes are doomed to failure. Stick to a simple, implementable, measurable process and strategy implementation becomes business as usual.