Ensuring your strategy is going to create value
Have you ever had an idea for your business that on paper seems great, but somewhere along the line of its execution it gets “lost in translation?” This is an issue frequently faced by executives, who find that the strategies they work hard to put together simply don’t work out as they had imagined when put to practice.
INSEAD Professors Michael Jarrett and Quy Hey have been studying strategy execution for the past 15 years, and this month, INSEAD Knowledge published the results of their research: a six stage stress test for business plans:
1. Do you have a viable strategy?
2. Do you have a comprehensive implementation plan?
3. Do you know the hidden barriers to implementation?
4. Do you know how to overcome the barriers?
5. Do you have the critical skills?
6. Do you have a continuous learning system?
These questions help executives consider crucial factors, such as whether their ; the timing and pacing of their strategy execution; whether the key competencies needed to make change work are in place, etc.
When applied, the test “reveals the cold reality and problems in a business plan by showing the hidden elements of strategic execution as hidden traps in making the strategy work,” says Jarrett, an affiliate professor of organizational behaviour at INSEAD. He believes that things like emotions, the politics of an organization and even culture all play an important role in successful strategy execution. “IBM failed during the 1990s,” he says, “partly because its culture became gradually arrogant vis a vis its customers, and thus could not respond to the changing needs of the market at the time.”
In terms of “fine-tuning” the stress test, Huy says that although one can rely on a general set of frameworks to help executives in almost any part of the world, people from various countries and cultures can react to the same type of communication or management action very differently. And so their next research would be to take their framework and adapt it to even finer cross-cultural differences. Huy is a professor of strategy at INSEAD.