Strategy drivers of business success
The strategy factor which most closely correlates with expectations of future business success is the establishment of clear accountabilities. What re the other factors? Read the Jan 2022 analysis of our Strategy Development and Execution Assessment survey results here.
StratNavApp.com' Business Strategy Development and Execution Capability Assessment survey is now in its second year. With several hundred data points now collected, we're pleased to present this analysis as of January 2022.
In this analysis, we look at the correlation between:
- respondents' ratings of the 11 factors against which we assess strategy development and execution capability, and
- respondents' ratings of the statement "I believe my organisations will be more successful than average in the future".
This allows us to rank the factors from the most highly correlated to the least highly correlated. Here are the factors, ranked in that order:
- "My organisation has established clear accountabilities and responsibilities for executing its strategy."
- "My organisation's business strategy is based on rational analysis of empirical evidence (as opposed to opinions, intuition and personal agendas)."
- "Business strategy development and execution is not a separate exercise, but is integrated into all of our management processes."
- "My organisation's strategy is as clear about what we shouldn't do, or should stop doing, as it is about what we should do."
- "My organisation uses fit-for-purpose systems for strategy development and execution instead of relying on general office productivity tools."
- "My organisation has a clearly articulated and well communicated business strategy."
- "My organisation regularly assesses progress against its strategy and adjusts its plans accordingly."
- "My organisation's business strategy is cascaded down into divisional, departmental, team and personal objectives across the entire organisation."
- "My organisation uses multiple scenarios describing different futures to ensure its strategy is robust in the face of uncertainty."
- "My organisation has clear plans for delivering its strategy."
- "The execution of my organisation's strategy is tracked using a balanced set of Key Performance Indicators (KPIs)."
We offer the following commentary on each factor. We use the same order of ranking.
Factor: "My organisation has established clear accountabilities and responsibilities for executing its strategy."
Many years ago, a senior executive advised me: "If you want something to get done, put someone in charge of doing it."
This advice is borne out by our survey.
Business strategy is about people. People analyse the situation, opportunities and risks. People make the decisions. People set the goals and objectives. People plan the execution. And people execute those plans. The purpose of strategy processes and tools is to help them to do so more effectively.
And so it is fitting that people and accountabilities top the list.
The management of stakeholders, accountabilities and responsibilities is baked into StratNavApp.com throughout using the RASCI framework. In particular, the Goal, Initiative and Action RASCI matrices can help you to ensure that the right people are accountable, responsible and otherwise engaged in every stage of your strategy. They will also help you to identify and plug any gaps. Equally, the Scorecard and Initiative Status reports will help to ensure that everyone is kept informed of progress in a timely and consistent manner.
2. Rational analysis and empirical evidence
Factor: "My organisation's business strategy is based on rational analysis of empirical evidence (as opposed to opinions, intuition and personal agendas)."
As Jim Barksdale famously said: "If we have data, let's look at data. If all we have are opinions, let's go with mine."
We are long-term supporters of the belief that business strategies should be based on the rational analysis of empirical evidence. And so we are pleased that this factor has come out as the second most highly correlated with anticipated success.
The Analysis quadrant in StratNavApp.com contains an array of models and frameworks for collecting, documenting, analysing and linking insights together to form and support business strategies. And its social features help to ensure that all members of your team are kept up to date and easily and able to easily see the potential impacts on your strategy as the evidence changes over time.
3. Integrated strategic management processes
Factor: "Business strategy development and execution is not a separate exercise, but is integrated into all of our management processes."
There was a time when many strategies were set by a handful of executives at an annual corporate retreat. Many of these strategies then sat on said executives' shelves for a year until the process was repeated. Fortunately, those days are mostly behind us now.
Traditional static documents don't support easily support integrated processes. They're out of date almost as soon as they're written. They do nothing to support execution. They're hard to update as you make progress or circumstances change.
StratNavApp.com is a living and collaborative system. Not a static document. It will help you to execute your strategy. It will help you to track your progress and confirm your strategy is working. And it will help you to adjust your strategy when you need to.
And so, it is ideally suited to integrating strategy development and execution into your other management processes.
4. Deciding what not to do
Factor: "My organisation's strategy is as clear about what we shouldn't do, or should stop doing, as it is about what we should do."
Michael Porter said: "The essence of strategy is choosing what not to do."
Too often, new strategies involve new things to do. Too seldom do they outline what an organisation should stop doing. Is it any wonder that already busy people struggle to execute them?
Strategy invariably involves hard choices. There are always more things that could be done than there are things that should be done. Pet projects and organisational politics make this clarity hard to achieve. But this is part of the job of doing strategy well.
5. Fit for purpose systems
Factor: "My organisation uses fit-for-purpose systems for strategy development and execution instead of relying on general office productivity tools."
We confess a personal interest in this particular factor.
StratNavApp.com was founded in part on the frustration with the inadequacy of general office productivity tools for doing business strategy. MS-Word and PowerPoint may enable you to produce 'pretty' documents'. But they add value to the process. Many strategies are created simply by filling out templates. There is often little internal consistency or logic between them.
Business processes benefit from systems support. We now have systems for financial management, customer relationship management, marketing, HR management, manufacturing control, etc. StratNavApp.com was created to offer the same benefit for strategy development and execution.
We hope this factor will soon drop off the bottom of the list. Not because it becomes less important. But because using fit-for-purpose systems becomes the norm.
6. Clear articulation and communication
Factor: "My organisation has a clearly articulated and well communicated business strategy."
It might seem odd that this one does not score more highly. But we've ranked than answers. So some have to score lower down.
Perhaps also, this factor is a seen as necessary-but-not-sufficient for success? In fact, we might need to say the same about all of the factors on the bottom half of the list.
Either way, if your strategy is not clearly articulated and well communicated, don't expect your team to do a great job of executing it.
7. Assess and adjust
Factor: "My organisation regularly assesses progress against its strategy and adjusts its plans accordingly."
Most people seem to think that the world is now changing more rapidly than it ever did in the past. It's hard to know if that is really true - what objective test of change could we have - or whether it's just a result of recency bias.
But if we believe it is true, then it's even more important to assess progress and make adjustments on an ongoing basis.
StratNavApp.com encourages an outcomes-based approach for tracking progress. That, it tracks not only whether your organisation has done what it said it would do, but also whether doing it achieved the outcomes you thought it would.
And because StratNavApp.com is an integrated repository-based tool, it makes it easier to work out when and how your plans need to be adjusted.
Factor: "My organisation's business strategy is cascaded down into divisional, departmental, team and personal objectives across the entire organisation."
It is interesting not how far below Accountability (in the #1 spot) this scored. Is this because:
- if accountabilities are established, cascading takes care of itself?
- strategies are seen as being more integrated and less of a cascading hierarchy of priorities?
- cascading is less of an issue for the large number of small organisations than it is for the small number of large organisations (thereby skewing the results).
Factor: "My organisation uses multiple scenarios describing different futures to ensure its strategy is robust in the face of uncertainty."
It is disappointing that this factor did not score more highly. Given the recent uncertainty caused by things like COVID we'd have thought it would have scored more highly.
But it is perhaps not surprising. Scenario planning is one of the more difficult and subtle areas of strategic thinking to master. Even if you have a tool like StratNavApp.com to help you do it.
But, unless the world suddenly gets more predictable, we think it is an area that most organisations should be investing in.
Factor: "My organisation has clear plans for delivering its strategy."
There seems to be a clear message here. People have lost faith in planning. Planning is no longer correlated with the expectation of success.
Taking the ranking of all of the factors in combination, perhaps the message is that if you get the other factors right, then it's enough to leave the accountable people to just get on with it. That planning will only slow them down and reduce their ability to manoeuvre and adapt.
As the world becomes increasing enamoured with Agile there may be some merit to this. But we'd not give up on planning entirely.
As Dwight D Eisenhower said: "Plans are nothing; planning is everything."
We still think there is an important role for planning. But it does need to be more flexible in its approach than many organisations have traditionally been. StratNavApp.com is built around the idea of flexible plans that change in response to changing circumstances, rather than just poor execution.
Factor: "The execution of my organisation's strategy is tracked using a balanced set of Key Performance Indicators (KPIs)."
The low score of this one did surprise us. If you're not tracking your strategy using KPI's how do you know if it is working or not? The answer can surely not be "blind faith and optimism".
The methodology behind this research is simple:
- Respondents were asked to state the degree to which they agreed with each factor on a scale from 1 to 10.
- Respondents were asked to state the degree to which they agreed with the statement "I believe my organisation will be more successful than average in the future."
- We calculated the correlation between their score for each statement in step 1 with the score for the statement in step 2.
- We then ranked the statements from step 1 by the R2 of the correlation.
The usual caveats apply:
- Correlation does not prove causation.
- There may be sampling bias in the responses or other statistical anomalies in the analysis.
You can help by taking the assessment yourself. You will get instant feedback on how your responses compare to everyone else's. And, of course, you will be providing us with more data from which to get better analysis. Simply click here to take the assessment now.
Or finally, if you have any other questions or would like to talk to us about how you can improve your own strategy development and execution capabilities, we'd love to chat.