Secrets to Executing a Successful Strategy

When examining cost-cutting strategies, companies often focus on reducing staff and flattening organizational charts. But this action often ignores underlying issues, and doesn’t result in long-term success. After several years most companies add back layers to their organizational chart, and end up in the same position as before – with increased costs.

Successful companies look past shrinking their workforce, and focus on strategies that address underlying costs. Focusing on areas with potential for greater efficiency, such as decision making accountability, will produce lasting results.

Focus on Execution Strategies
The key to creating effective execution strategies is ensuring every manager understands their decision making responsibilities. This prevents confusion about who is responsible for which decisions and allows managers to understand the scope of their authority. As a result, companies experience a boost in efficiency, and mangers spend less time justifying decisions to upper management.

Streamline Decision Making
Many companies have a single person, such as the Chief Executive Officer, making all of the decisions. This can severely bog down the decision making process and waste the CEOs valuable time. Instead, reserve the most important decisions for the CEO, and delegate the majority of decision making to several mangers, each with their own responsibilities and accountability. This will allow customers to be served better with quicker decisions and easier communication flow.

Make an Accountability Visual
Once management understands the scope of their decision making authority, compile the information into a grid. The visual should clearly demonstrate who is responsible for what decisions. This solidifies the process, and can be used as a communication tool for business units to understand who is responsible for what. Plus, having an official document will hold individuals accountable.

Clarify the Approval Process
Once decision making responsibilities are finalized, employees need to understand the approval process. Processes should be designed to promote the seamless flow of communication, resulting in fast decisions. Employees should receive a copy of the accountability visual, accompanied by protocols for requesting approval.

Avoid Second Guessing Decisions
Decision makers need to feel empowered and supported in their decisions. For this reason, second guessing activities should be avoided. Preventing these activities will prevent productively and communication issues.

Streamline Communication
Another important component to successful execution, is educating employees about how their actions impact the company’s bottom line. Strategies and measurement tools should be implemented to remind employees consistently of their ability to impact business. Plus, procedures should be put in place to promote the upward flow of communication from the front line to upper management. This will give management the ability to quickly solve problems such as pricing and service issues.

Keep Decision Making Close to Activities
When too many decisions are made at the corporate office, the reality of what’s going on with customers can be lost. This is because information moving from front line employees upward can get fine tuned and refined before reaching upper management. This results in decisions based on disseminated information, which produces unsuccessful strategies. The solution to this issue is keeping as many decisions as possible close to where the activities are occurring. This allows individuals with first-hand experience to resolve issues.

Increase Lateral Management Opportunities
Many companies discourage lateral management moves because they think it isn’t productive. However, allowing these moves can be a smart strategic decision. When laterally moving managers, other business units can benefit from cross-unit cooperation. The company may also experience less turnover, because middle-level managers won’t get bored and feel like opportunity is limited.

Foster Cross-Unit Collaboration
Execution strategies can be improved by examining communication flow between business units. This will result in more accurate forecasts on costs and lead times. Potential demand and production challenges will also be identified earlier, allowing quicker reaction and increased customer satisfaction.

Increase Rewards for Positive Contributors
If your company doesn’t already have an incentive plan, adopting one is a good decision. This action will assist in supporting your company’s strategies and goals. Assign measurable goals to employees, and hold individuals accountable for their performance. Positive motivation can be established with monetary compensation, gift cards, or other rewards. This allows individuals to be rewarded for their positive contributions.

Encourage Staff to Move Across Business Units
Like managers, having staff move into lateral positions makes a more well-rounded business model. Your business units will enjoy enhanced productivity and employees will be more stimulated and feel more valued.

Reshaping the way your company thinks about executive strategies will assist in identifying and cutting underlying costs. As a result, your company will enjoy success that won’t disappear in several years. And your company will benefit without cutting jobs and flattening your organizational chart.

Resource:
Gary L. Neilson, Karla L. Martin and Elizabeth Powers.” The Secrets to Successful Strategy Execution.” Harvard Business Review.

Mark Jordan is the Managing Principal of VERCOR, an investment bank that creates liquidity for middle market business owners. He is the author of “Driving Business Value in an Uncertain Economy,” “Selling Your Business the Easy Way,” “Enhancing Your Business Value…The Climb to the Top,” and co-author of “The Business Sale…A Business Owner’s Most Perilous Expedition.” For more information, contact him at 770.399.9512 or email him.