In the last few months I have taken Daniela Kudernatsch’s strategy execution benchmark study to hand and used it to “mirror” ongoing projects. This gave rise to five essential claims. I already set out three in September; This article is about two more.

You will certainly agree with the statement that key roles in the context of strategy implementation should not be filled with “compromise persons”. Nevertheless, it is often done because – according to the reference – “there are no alternatives” or “these are too expensive”.

You will certainly agree with the statement that quantified (not only qualitative) strategic goals must be made known continuously throughout the organization and transferred to operational activities as part of both controlling and regular evaluations. Then why does it happen so rarely – often with the hint that you have to “remain agile” and that this “takes up so much time”?

Requirement to competencies

The competence to an implementation-oriented control of strategic projects is a sustainable competitive advantage. The way in which the implementation-oriented control of strategic projects is largely determined by the interplay of organizational and individual competencies:

  • At the individual level, mainly the following skills play an important role: cognitive skills – this includes an ability to make judgments based on the strategic causal or effect chain! -, action and problem-solving skills, language and communication skills.
  • At the organizational level, primarily management and control skills should be mentioned. In accordance with the corporate culture, this competence becomes one of the essential success factors; in the opposite case to a potential brake on growth. This competence also includes the abortion competence, the competent interruption or abandonment of a chosen implementation path!

Business schools and especially development measures for executives should combine exploration and exploitation against this background. Exploration stands for a long-term increase in flexibility and radical changes, exploitation for a short-term increase in efficiency and small, incremental changes. An exclusive concentration on only one learning mode leads to long-term failure. The balance is important for the success of the strategy implementation!

Both of the above Levels distinguish between three dimensions:

  1. Cognitive dimension: This dimension describes the ability to recognize the patterns of perception that ensure the competent handling of the complexity and uncertainty of strategic projects (iceberg model). The control takes place via corporate culture values.
  2. Technical dimension: This dimension describes the actual, concrete creation of social connections between the most varied of resources, at a specific point in time and in a specific setting. So this is about the right relationship between project and line organization. The control takes place via formal structures, processes and methods.
  3. Affective dimension: Successfully treading uncertain and complex paths does not happen without emotion. Affective components such as anger, fear or resignation play a not insignificant role. Emotional control is primarily done through incentive systems and leadership behavior.

In the interplay of the three dimensions, the prerequisites can be created in organizations so that more than 10% of the strategic projects are successfully implemented. The involvement of the management (see Part 1: Requirements for responsibilities) is an essential key factor for a successful project and can therefore be understood as an expression of the project-sensitive corporate and management culture (cognitive dimension of the company’s competence).

Demand for the controlling of strategic projects

Project reports are only really honest and complete in exceptional cases. That is a sober statement, but unfortunately it corresponds to the facts. One of the reasons for this is that reviews of the degree of implementation of the target achievement are seldom based on a system or control loop such as the PDCA cycle, which enables systematic learning.

Strategy implementation projects are unique and involve a high level of uncertainty, i.e. risks. A risk report, in which opportunities and risks are analyzed and assessed before and during the project implementation, is therefore an essential part of a report.

Competence monitoring, i.e. competence management through monitoring, should complement classic reporting and controlling. I see a content-related interlinking with the strategic workforce planning as absolutely necessary and remind you that one of the BSC perspectives is called “learning and development perspective”! This must plan, control and continuously “keep an eye on” the skills, know-how, skills and experience of employees.
The subject of such competence monitoring is therefore the conscious observation and control of the implementation-critical individual and organizational competences (see explanations above), as well as their interaction.
Concrete educational measures are often geared towards the development of individual competencies, and only organizational competency can ensure the optimal conditions for strategy implementation. This includes the horizontal cooperation between the business units (“silos”) (see Part 1: Catchball process).

Avoiding conflicts between competence sets means accepting an obstacle or prevention of the strategy implementation.

Now one last point: The direct object of changes in the context of strategy execution is always the business model. If you want to use a strategy to make a company’s current business model even more successful, the various parts of the strategy that have been translated into strategic initiatives and projects should be compatible with the overall strategy. The strategic target system of a Balanced Scorecard (BSC) therefore always includes projects, initiatives and measures assigned to strategic goals.
I also recommend showing the difference between the actual business model and the vision in the business model canvas: strategic projects (P), strategic initiatives / preliminary studies (I) and tasks delegated to the line organization (L). Analysis of strategy coverage is only the first step in portfolio analysis. This is followed by the determination of the order of precedence in economic efficiency and the calculation of the necessary funds. These perspectives are summarized in the action planning and reporting & controlling based on this.

Conclusion

Strategy implementation “with a clear line” I have overwritten the announcement of the last three posts on strategy implementation.

A clear line in the operationalization of the strategy means first of all to observe the requirements for strategy development (“reality check”) and to clarify the responsibilities in terms of a client-contractor relationship. In addition, it is important to consistently use the right methods and procedures. In addition to the BSC (performance-oriented approach), the integration of the Hoshin Kanri method (process-oriented approach) makes sense in several places.

A clear line in the institutionalization of the strategy relates primarily to change management and the skills required for implementation. The best methods and tools do not work if competence does not meet commitment!
Gaps in competence represent the greatest individual risk of strategy implementation and must therefore be given a similarly high priority in analysis and evaluation as profitability. For the positioning and prioritization of projects, initiatives and measures, I recommend the net present value-competence gap matrix.

This brings me to controlling & evaluation of the strategy. A clear line in this regard begins with meticulousness collection and quality assurance of relevant (company-external and internal) data involving risk controlling and competence monitoring at the individual and organizational level. In addition, the continuous connection to the business model, in particular the projects, initiatives and measures positioned therein, is part of the control and evaluation. Focus on effectiveness is at least as important as focus on efficiency.
Viewed in this way, the strategy map with the mapping of strategic causal or cause-effect chains is far more than a “nicely presented picture with arrows and boxes”, but more or less a “management summary”, an important management and communication tool for strategy execution.