How many times have you heard the term “Business Transformation?”  Have you ever wondered about the exact meaning of this widely used term?  I have.  Basically it is a change management strategy which has the aim to align people, process and technology initiatives of a company more closely with its business strategy and vision.

Assuming we can generally agree with this definition, I’m wondering why so many transformational strategies fail.  More specifically, why is that only 9% of companies are rated excellent at execution and only 56% of strategic initiatives are successful? [i] Why do only 11% of managers believe that all their company’s strategic priorities have the financial & human resources needed for success and 30% of managers cite failure to coordinate across units as their greatest challenge to executing their company’s strategy? [ii]

The answer to these complex questions lies at the juncture of two fundamental realities:

• Reality 1 – Management often does not recognize execution as a formal management discipline. Recognizing this reality is absolutely integral to strategy execution.  When management does not understand the critical role it plays in breaking down silos to lead and communicate transformational change, the swirling sound of the drain can be heard. [iii]
• Reality 2 – Portfolio and project management professionals too often do not have a comprehensive view into the thinking behind the organization’s overall strategy, nor a mature strategy mindset required to drive transformational change.[iv]

 To make sure your organization’s transformational strategy doesn’t go down the drain, there are 2 solutions that will help unplug these realities and keep your organization’s strategy clear.

SOLUTION 1:  Effectively and efficiently implementing an organization-wide strategy requires many factors to come into alignment before successful implementation can occur.

• An accountability model must be clearly defined and embraced for each element of the organization’s strategy.
• The organization-wide strategy must be effectively cascaded down into the business units, support functions, teams and individuals down through the organization.
• Adequate resources (time, budget, skills and capacities) must be available. It does great harm to an organization to spend valuable time and money to develop a going forward strategy, only to find out it does not have sufficient resources to implement the plan.
• Managing transformational change on a consistent and professional basis is vital. Change management is the primary responsibility of the executive leadership team and involves the understanding and managing of internal and external change and understanding the influencers of change.
• Establishing a performance culture is a fundamental requirement for effective implementation and a frequent failure point in many strategic planning and management processes.

SOLUTION 2:  Even with SOLUTION 1 in place, transformational strategies often times fail because the project management professionals who lead implementation all too often have a tactical perspective, rather than a strategic one.

• An increase in the Project Management Professionals^® (PMP^®s) strategic management knowledge and competencies will increase the strategic thinking behind the initiative or project. A clear understanding by project management professionals of organization’s strategic environment, longer term strategic direction, enterprise level strategic operating plan, and the portfolio of initiatives and investments being made to achieve success is fundamental.
• An investment by project management professionals in adopting an enterprise wide strategic mindset will reduce the frequency of gaps in understanding as strategy flows from the top of the management hierarchy down through the project professionals who are so vital to execution.

In summary, there is growing awareness as strategy comes down from the top of the organization that a problematic gap occurs for those who are charged with implementing strategy.  Absent a clear understanding of the who, what, where, when and how of strategy, project management professionals are left to execute strategic initiatives and projects by making assumptions and optimizing tactical considerations versus understanding the strategic thinking behind the initiative or project.

Clear strategic thinking, deliberate communications and attention to detail from the management team, and strategic management competency building by the middle management/project management team will go a very long way towards making sure your organization’s transformational strategy doesn’t go down the drain.

[i] PMI Pulse of the Profession: The High Cost of Low Performance, February 2014
[ii] Harvard Business Review. Why Strategy Execution Unravels – and What to Do About It, by Donald Sull, Rebecca Homkes and Charles Sull, March 2015
[iii] Execution: The Discipline of Getting Things Done by Larry Bossidy and Ram Charan, 2002
[iv]Projects at Work. Gartner Insights: PPM’s Role in Driving Real Business Transformation, Vlad Vecerzan – June 21, 2016

To effectively and efficiently implement an organization-wide strategy requires many factors come into alignment before successful implementation can occur.

First, an accountability model must be clearly defined and embraced for each element of the strategy.

• Who owns each objective in the plan?
• Who is responsible for each of the organization’s strategic initiatives?
• Who is responsible for defining, collecting and reporting on the organization’s key performance indicators?

Second, the organization-wide strategy must be effectively cascaded down into the business units, support functions, teams and individuals down through the organization.

Third, adequate resources (time, budget, skills and capacities) must be available. It does great harm to an organization to spend value time and money to develop a going forward strategy, only to find out it does not have sufficient resources to implement the plan.

Fourth, managing change on a consistent and professional basis is vital. Change management is the primary responsibility of the executive leadership team and involves the understanding and managing of internal and external change and understanding the influencers of change.

However, as the process of implementing change becomes a continuous effort growing in scope and complexity (both strategically and operationally), a set of change management roles begin to emerge that require recognition, training, and development.

Change management roles are not formally included on the organization chart, they are ones that must be filled to manage any significant process related to change. They include the following:

• Sponsors—the leaders, executives and managers with the authority to make changes in the current strategic direction, the organization structure, and/or the processes required to implement and manage it.

• Champions—the individuals throughout the organization that identify strongly with the need for given changes. They are self-appointed and need the unwavering support of management to be recognized by other managers and staff members.

• Change agents—the individuals responsible for any part of the implementation process. They can also be sponsors and champions of change, as well as targets of change themselves, but primarily they understand change, know how to manage change, and deal with the people involved in the changes they undertake.

• Targets of change—the people within the organization directly impacted by implementation of the operating plan and the changes it brings about. Those who will be affected must be identified to assess how they will be affected, what changes they can expect, and why. Since people vary dramatically in how they react to change, their potential for resistance needs to be understood and dealt with constructively.

Fifth, establishing a performance culture is a fundamental requirement for effective implementation and a frequent failure point in many strategic planning and management processes. Larry Bossidy and Ram Charan in their book entitled Execution: The Discipline of Getting Things Done point out the following:

• “Execution is not only the biggest issue facing business today; it is something nobody has explained satisfactorily” (see Bossidy and Charan, p.6)

• “Strategies most often fail because they aren’t executed well. Things that are supposed to happen don’t happen. Either the organizations aren’t capable of making them happen, or the leaders of the business misjudge the challenges their companies face in the business environment, or both” (Ibid, p.15).

• An organization can execute only if the leader’s heart and soul are immersed in the company…The leader is the only person in a position to achieve that understanding. And only the leader can make execution happen, through his or her deep personal involvement in the substance and even the details of execution” (Ibid, p.24).

Another key insight comes from Darryl Conner in his work on the notion of a “Burning Platform.” Conner maintains the key to successful implementation of change is for the team to conclude that failure to execute the strategy (or make the change) is better than the status quo.

Strategy professionals have an important role to play in helping top executives and their leadership teams understand and embrace these fundamental requirements.