A recent survey of more than 400 global CEOs revealed that the ability to execute strategy was their #1 challenge. Why?
Several reasons, says MIT Sloan Senior Lecturer and global strategy expert Donald Sull, including the inability to identify and understand company goals, the disconnect between strategy and initiatives, and the failure to allocate resources in accordance with strategy. His ongoing research has found that eight out of 10 companies struggle to implement their strategies.
In light of his findings, how can leaders improve strategy implementation? According to Sull, by translating the complexity of strategy into guidelines that are simple and flexible enough to execute. In his MIT Sloan Management Review article, “Turning Strategy Into Results,” Sull encourages leaders to develop a small set of priorities that everyone can get behind to produce results. Strategic priorities should be forward-looking and action-oriented and should focus attention on the handful of choices that matter most to the organization’s success over the next few years.
Getting these strategic priorities right is harder than it may seem. During the course of Sull’s ongoing research—including an in-depth survey that has been administered to 11,000 managers and 400 companies and CEOs to date—many executives have reported that their strategic priorities approach isn’t working as well as they had hoped.
“To set the strategic agenda and drive implementation effectively, we have found that strategic priorities need to balance guidance with flexibility, counterbalance the inertia of business as usual, and unify disparate parts of the business.,” writes Sull.
In his article, Sull defines seven characteristics of effective strategic priorities, explains why they matter, and suggests practical diagnostics managers can use to assess their company’s strategic priorities.
The strategic priorities checklist
The following objectives will help you craft strategic priorities that will be effective in setting a shared strategic agenda for your organization.
- Limit objectives to a handful: Limiting strategic priorities focuses on what matters most and can serve as a forcing mechanism to drive difficult trade-offs among conflicting objectives.
- Focus on the mid-term: Strategic priorities typically require three to five years to accomplish. Annual goals are too tactical, and longer-term goals too abstract to provide concrete guidance.
- Pull towards the future: Strategic priorities should focus on initiatives that position the company to succeed in the future, not reinforce business models or strategies that worked in the past.
- Make the hard calls: Strategy is about choice, and strategic priorities should tackle head-on the most consequential and difficult trade-offs facing the company.
- Address critical vulnerabilities: Strategic priorities should address the elements of the strategy that are most important for success and most likely to fail in execution.
- Provide concrete guidance: This should be concrete enough that leaders throughout the organization could use the strategic priorities to decide what to focus on, what not to do, and what to stop doing.
- Align the top team: Strategic priorities should provide a framework for how the company as a whole will succeed. To do so, they must be agreed upon by all members of the top leadership team.
By following these guidelines, you can articulate a strategy that can be communicated, understood, and executed in your organization.
You can access the full article on MIT Sloan Management Review. You may also learn from Sull first hand—and among c-suite executives from around the world—in Sull’s upcoming, two-day program, Closing the Gap Between Strategy and Execution.