The heart of strategy execution lies in three vital business processes: People, Strategy and Operations.
Execution is the key to success in today’s business environment. It is the job of the business leader to prosecute the building blocks of execution – leader behavior, creation of a framework for cultural change and maximizing human capital – with intensity, depth and rigor. But this cannot be done without effective processes to support the effort.
In their book, Execution: The Discipline of Getting Things Done, former Honeywell CEO Larry Bossidy and renowned management consultant Ram Charan describe three core business processes for execution:
- The People Process
- The Strategy Process
- The Operations Process
Every company uses them, but too often they stand alone in silos. The business leader owns these processes – not the staffs in human resources, strategic planning or finance – and must be deeply engaged in all of them.
The People Process: Link Strategy with Operations
Of the three core processes, the people process is the most critical. If businesses fail to get this right, they will never achieve their full potential. A robust people process accomplishes three important things:
- In-depth and accurate evaluations of people
- Identification and development of the leadership talent necessary to execute the company’s strategy
- Development of the leadership pipeline that forms the basis for succession planning
The people process ensures that the organization has the right kinds and numbers of people by linking to strategic milestones over the near, mid- and long terms as well as to operating plan targets. This can involve the tough decision to replace people if they lack the skills required to pursue the strategy.
In order to have the right people in place, the leadership pipeline also must be effective. Talent management involves the assessment of potential future leaders – in terms of both quality and quantity – and determination of how well talent in the pipeline matches up with the human resource requirements of the business strategy. It also requires analysis of retention risk and spotting high potential people who are in the wrong jobs. In addition, nonperformers are identified and either moved to jobs that fit their capabilities or moved out altogether.
In order to link people processes with execution, Human Resources must be integrated into business strategy and operations. This requires HR staffs to expand their capabilities beyond their traditional functions and to develop business acumen, critical thinking skills and the ability to make the linkage between strategy and execution.
The Strategy Process: Link People with Operations
An effective strategic planning process identifies and defines critical issues, questions the assumptions on which the strategy is based and determines organizational capability to execute the strategy. A strong plan will include several key components:
- Assessment of the external environment
- Understanding of existing customers and markets
- Determination of the best way to grow the business profitably
- Analysis of the competition
- Analysis of the company’s ability to execute the plan
- Balance of short term and long term requirements
- The Operations Process: Link Strategy with People
The strategy process defines the destination for the business, the people process identifies who will get it there and the operations process lays out the pathway, breaking down long term goals into short-term targets.
While the business leader must be must be intimately familiar with all these processes, he or she is not the only one involved in defining the roadmap for execution. All the people accountable for executing the strategy must participate in operations planning.
There are two key things to remember:
- Synchronization: The entire organization – all its interdependent parts – must have a common understanding of the external environment and other critical factors. That way, they can match their goals and link their priorities with those of the other parts of the organization.
- Assumptions: A clear understanding of the underlying assumptions allows the organization to build the budget on realities and to set realistic goals and milestones.