If one regards the Plan as “doing the right thing” the execution of the plan is “doing things right”. It's vital as a manager that one is capable of distinguishing between the two, particularly when it comes to an analysis of why your enterprise is not performing to expectations.
I view the development and execution of a strategic plan as analogous to the construction and operation of a wagon wheel. A wagon wheel has four basic components – a hub, spokes, a wooden wheel rim and an outer metal band that forms the contact between the wheel and the surface upon which it is rolling.
This what we are going to do
The hub represents “this is what we are going to do”. It combines the markets that the enterprise elects to serve, now and in the future, the products and services that it provides to these selected markets, the activities that the enterprise carries out to provide those product and services, a competitive strategy – the game plan – and the identification of its competitive advantage, something that makes it different and better than its closest competitors.
This is how we are going to do it
The wooden wheel rim represents the Support Functions, every function with the exception of HR and Finance that is needed by the organization to implement the hub – this is what we are going to do. It is separated from – but at the same time connected to – the hub by the spokes.
Each of the five components of the hub are considered in turn and the question being raised for each component is “what are the implication on every Support Function of providing products and services to the selected markets, using this competitive strategy and exploiting this competitive advantage” ? Once the responses to these questions have been agreed, the enterprise is in a position to assess the impact of the Support Functions on the two key Enabling Functions of HR – people – and Finance – money. Without people and money, no plan can be implemented.
The initial Action Plan
The enterprise is now in a position to develop an initial Action Plan – the equivalent of mounting our finished wagon wheel on an axle prior to operating it. Remember that strategic plans are developed from above but implemented from below. And the five key requirements for effective execution are
- organizational alignment,
- management of change,
- teams and teamwork and
- employee engagement
PLUS f. communication – the grease on the axle that keeps the wheel rolling with the minimum of resistance.
When planning and implementation is separated into these three components, a strategic approach to problem solving is now possible. The process begins by identifying the cause of the problem through the use of established techniques such as 5 Why, Fishbone diagrams, Mind mapping or suchlike.
Having neglected the cause or causes, one can begin the process of categorization beginning with the Execution requirements. If the cause is associated with poor alignment, inability to manage change or low engagement levels, then this is a problem associated with “doing things right” not “doing the right thing”.
Furthermore, because each of the five key requirements for effective execution is dependent on the factors that preceded it, management knows that it can not address an absence of teamwork without first addressing deficiencies in those factors that come before it.
If the problem is associated with a lack of organizational alignment that leads to uncertainty about the goals and people's roles in achieving them, then this is a problem associated with planning but still one of “doing things right”.
If the cause of the below par performance is associated with one of the Support or Enabling Functions, be it Sales, Distribution, Pricing, Information systems, Operations, HR or Finance etc, one has to determine whether the origin of the problem is within the power of the enterprise to correct or totally outside the enterprise's ability to influence. If the former, the solution may be a combination of “doing the right thing” and “doing things right”.
The belief that strategic plans , once formulated, are immutable is an outdated one. The goal might remain the same but the organization needs to be responsive to wind changes and make the necessary course corrections. And as an engineering friend of mine says – it's easier to change direction when you are moving than when you are standing still.
Developing the hub of the plan involves making certain assumptions – there will be no major change in exchange rates or no new major direct competitors will enter the market or that finance will be available at a certain interest rate. But what if the cause of the performance being below expectations is that an assumption made at the time of the strategic plan's formulation no longer holds true? What's more – it's a factor over which you have no influence. In these circumstances, you have no alternative but to revise the hub of the plan to account for this particular development. To solely focus on “doing things right” is a recipe for failure because if you are not “doing the right thing” how well you do it is immaterial.
A celebrated example of the need to review the hub of the plan happened to Virgin Australia in 2001 when Ansett collapsed and left Virgin to inherit one half of the aviation duopoly with Qantas. Being the third LCC (low cost carrier) focusing on the leisure market was no longer a tenable long term strategy.
Of course, it's rare that an enterprise's fortunes, good or bad, can be attributed to a single cause. More likely there is a combination of reasons for the change in performance. But they have to lie in three broad areas. If it's in the area of execution, then the answer is to do better what you already do – “do things right”. If the problem lies in the Support and Enabling Functions, it is likely to be a combination of “doing the right thing” and “doing things right”. If the cause is traced right back to the hub of the plan, then each component of the hub requires reassessment to make sure the organization continues to “do the right thing”.
Taking the time to adopt a strategic approach to problem solving will result in much greater clarity of analysis and shorten the odds that the cause will be addressed rather than the symptoms.