CREATING YOUR UNIQUE STRATEGY AND EVEN MORE DISTINCTIVE SCORECARD TO ACHIEVE UNPRECEDENTED SUCCESS.
What do the world’s most acclaimed thought leaders have to say about strategy execution and why so many strategies fail to achieve their desired results? Professor Michael Porter, Dr Gary Hamel, Michael Hammer, Professor Robert Kaplan, The late CK Prahalad, Dave Ulrich, Ram Charan, Dr Dave Norton and Tom Peters’ thinking on Strategy Execution.
Tom Peters offers his 2 golden rules to guide your strategy – Rule # 1: You can’t beat Walmart on Price. Rule # 2: You can’t beat China on cost. In essence he says, “You can’t be remarkable by following someone else who is remarkable.”
Inside OR Outside Strategic Thinking
Michael Porter is globally acclaimed for his strategic insights and in particular his 5 Competitive Forces that Shape Strategy. This model calibrates the attractiveness of an industry and benchmarks your outcome against that of your competitors to shape your new strategy. This is external analysis that on its own, fails to consider the internal factors, processes and people needed to execute and achieve your desired success. This does not imply that Michael Porter is a non-believer in internal strategic triggers as he also notes, “Operational effectiveness and strategy are both essential to superior performance… but they work in different ways.”
Dr Gary Hamel argues that some of the best strategies come from employees within their organisations. This inside-out strategy is based on the premise that they are close to technologies, processes and customers. The late CK Prahalad studied and believed in co-creating unique value with your customers; an outside- in approach. Professor Dave Ulrich is obsessed with designing strategy from the Outside-in with customers defining your future HR strategy. Michael Hammer’s business process re-engineering has been applied by many organisations to improve internal processes that deliver superior performance.
P’s & Ham
In this instance, Peters, Prahalad & Porter’s insights offer you an external approach to shape strategy while Gary Hamel & Michael Hammer’s insights recognise the significance of internal processes. That said, they all acknowledge that these management interventions and ideas cannot stand alone. Michael Hammer has long been acclaimed for his innovative approach to improving internal capabilities and yet he concurs, “High performance operating systems are necessary but not sufficient for enterprise success.”
Today Strategy is EVERYBODY’S EVERYDAY Job
Ram Charan says that in the majority of cases (70%) the real problem isn’t bad strategy – strategies most often fail because they are not executed well.
With this wealth of wisdom and thought leadership, why are companies still failing to execute strategy?
Inside AND Outside Strategic Execution
Professor Robert Kaplan and Dr Dave Norton say that while there is a plethora of great strategic implementation tools out there, companies fail to integrate external and internal triggers that measure the cause and effect hypotheses in respect of the 4 key drivers of value in their business. A successful scorecard will show you how improvement in one area may be achieved at the expense of another. It breaks down silos and has a key shared understanding among all employees.
You can’t use a rugby scorecard for a cricket match |The “what to measure” dilemma
Traditionally people have tracked their performance against established standards and then taken corrective action. Exclusive reliance on financial measures as a management system was causing businesses to do the wrong things. These traditional measures offered lag indicators as they only reported on outcomes. Your scorecard should provide you with lead indicators – drivers of future financial performance. In a recent interview Norton confirmed that companies still rely too heavily on the quarterly report and use this as the life-cycle in their organisations.
A good balanced scorecard should tell your visionary strategy story
Norton and Kaplan confirm that companies also fail to execute their strategy when they fail to create a unique scorecard that is discernible and relevant to their business. Your strategy should be distinctive to your “do-well” existing and future capabilities. On Kaplan’s visit to South Africa in 2012, he was asked why companies, who widely publicise and communicate their scorecards, so liberally, do not fall prey to prying predatory competitors. He said, that in all of his years observing Balanced Scorecard interventions, he has failed to see competitors achieve success by simply adopting another company’s scorecard. Your scorecard becomes your organisations’ unique DNA, it captures the hearts and minds of the people who co-create it. Nicola Tyler, the CEO of Business Results Group and sought after strategic facilitator, has long argued that the closer a person is to the origination of an idea the more likely they are to act on it.
And if your strategy and your scorecard are not unique and distinctive, remember Tom Peter’s earlier words, “You cannot be remarkable by following someone else who is remarkable.”
In 2014, BRG & GIBS will present Dave Norton – Live and in Person: Executing Strategy: Balanced Scorecard Essentials. The 2014 programme includes the latest findings and experiences in strategy, measurement, leadership, human capital and cross functional priorities and solutions with tried and tested Balanced Scorecard essentials. In a recent interview Dave Norton highlighted that although he is comforted and assured of the effectiveness of the Balanced Scorecard by the 100 plus companies in The Balanced Scorecard Hall of Fame who have evidenced success using the Balanced Scorecard correctly and in its entirety; there are still 100’s of companies out there just doing it wrong.”
Dr Dave Norton has most recently been honoured by Thinkers 50 in their Hall of Fame sharing this acclaim with Tom Peters, Warren Bennis, Howard Gardner, Charles Handy, Philip Kotler, Henry Mintzberg, Kenichi Omae, Ikujiro Nonaka and his colleague Professor Kaplan, for their mammoth contribution to business management and leadership. Harvard Business Review recognised the Balanced Scorecard as one of the most influential management ideas in the past 75 years.