by: Alexander Osterwalder

In their 2001 book “The Strategy-Focused Organization” (SFO), the authors, Kaplan and Norton, refer to a survey made by management consultants which reports that fewer than 10% of effectively formulated strategies were successfully implemented. In a 1999 Fortune cover story they specify: “In the majority of the cases -we estimate 70%- the real problem [isn’t bad strategy], […] but bad execution.”

The overall challenge is: how can we best translate strategy into successfull action? In the same book, Kaplan and Norton outline what I think is one their most important findings: five principles aimed at improving strategy execution:

Our research of successful Balanced Scorecard companies has revealed a consistent pattern of achieving strategic focus and alignement. Although each organization approached the challenge in different ways, at different paces, and in different sequences we observed five common principles at work. (p.8)

The five principles Norton & Kaplan talk about are:

1. Mobilize Change through Executive Leadership
2. Translate Strategy to Operational Terms
3. Align the Organization to the Strategy
4. Motivate to make Strategy Everyone’s Job
5. Govern to make Strategy a Continual Process

I spent the last two years using these five principles (and their related tools: strategy maps and balanced scorecards) to implement a major change management program in a large organization setting. One question I had in mind was: “In my specific context, what’s the most appropriate way to implement these principles?” (which eventually turned into finding the right sequence to implement a series of best practices). It’s a legitimate question for a program manager. You are supposed to understand what kind of implementation you’re facing in order to estimate costs, allocate resources and commit to your plan. This is what I learned in terms of methodology and approach.

1. It’s neither linear…

SFO-waterfall
In the early stages, I had the naive belief that these five principles had to be implemented sequentially. I knew that “each organization approached the challenge in different ways, at different paces, and in different sequences”, however, part of my belief came from the (misleading) numbering and wording of the principles themselves, which is typical of sequential processes or sequential activities :

    1. Mobilize
    2. Translate
    3. Align
    4. etc.

    It is very attractive to consider these principles as phases, and treat treat them as one prioritized check-list. For those of you familiar with software development techniques, think of the Waterfall, or even worse, the Big Design Up Front methodology. In order to have a proper implementation, I thought each step had to be completed and perfected before the next one could start.

    Well, this view was unsuitable for a “real world” implementation. Kaplan and Norton named these 5 topics ‘principles’ and not ’steps’ surely for good reasons. I realized quickly that there would be no reason to mark any principle ‘completed’ at any time in my Microsoft project planning tool.

    2. … Nor parallel

    SFO-parallel
    Later, I thought of a parallel implementation, because each principle created a sort of legacy that required heavy ‘maintenance’. Later, that back and forth between principles made me think of a more “iterative”or “spiral” approach. Especially because at every “full circle” our team learned a lot… and the more we learned, the more we refined our previous work !

    3. But iterative

    This is what Wikipedia says about the iterative model:

    The basic idea behind iterative enhancement is to develop a […] system incrementally, allowing […] to take advantage of what was being learned during the development of earlier, incremental, deliverable versions of the system. Learning comes from both the development and use of the system, where possible. Key steps in the process were to start with a simple implementation of a subset of […] requirements and iteratively enhance the evolving sequence of versions until the full system is implemented. At each iteration, design modifications are made and new functional capabilities are added.

    SFO-prototyping
    This was already much closer to my exerience. To be more precise, I have seen two iterative scenarios emerge from my daily observations:

    A: The Relaxed Change Management

    SFO-pattern1
    In this scenario, leadership is truly on-board, but nothing is granted. This is often because of operational concerns (usual urgent vs. important stuff). You have to proactively come back and remember the change agenda to all senior managers involved. If you do not, it’s at your own risk. Don’t complain if you receive one of these “naive and politically correct” email bombs from the top.

    B: The Permanent Change Management

    SFO-pattern2
    In this second scenario, a constant effort is required to help your executive project sponsor to manage change at his or her own level. The mobilization effort never ends and might take up to 70% of your time as program manager. It’s a typical implementation in a successful company with a few political issues around.

    Conclusion

    Let’s come back the initial question: “In my specific context, what would be the most appropriate way to implement these principles?”.

    Well, if you ever attempt to implement a Strategy Focused Organization (SFO) using scorecards and strategy maps, remember that iteration matters. It’s an on-going learning process for every stakeholder. The more you iterate, the better the results.

    As a consultant or a program manager, do not try establish a perfect work breakdown structure (WBS) and strive for fixed deadlines. Go for a light, more iterative, spiral-based approach. Particularly, if you find it difficult to estimate the impact on corporate culture. More iterations mean a better understanding of the overall context, situations, cultural issues, and consequently a better framework for implementation.

    As a project sponsor beware: a successfull implementation takes time. The Kaplan/Norton method is built on simple concepts, but implementation is made of complex issues simply because organizations and situations are complex. The more time you spend playing with these five SFO principles, the more you’ll realize how powerful that framework is to help you align and focus your business.

    Original Post: http://www.arvetica.com/archives/2007/01/16/stefano-mastrogiacomo-focus-and-alignement-strategy-focused-organization-5-principles/

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