In today’s corporate circles, strategic planning and its execution are commonly identified as two separate endeavors – one is built in the boardroom, the other completed at the ground floor of the business. Leaders routinely express frustration about what is termed the strategic execution gap – how the strategy they created is rarely executed smoothly or as it was intended. At the ground level where the strategy is to be deployed, employees complain that the strategy is so vague as to be unactionable or else it is altogether misdirected. The result of such failures is strategic stagnation and lost opportunities to gain market share. While a host of theories have been proposed as to how to minimize the strategy execution gap, I believe the best approach is to eliminate it all together – to make strategic planning and execution a concretely connected endeavor using a Business Process Management toolset.
Every organization is comprised of a network of processes that operate in tandem to deliver saleable outputs. This process system is the actualization of the organization’s strategy – the unique way it attempts to deliver value for a customer while simultaneously generating financial returns for the organization. But rarely is the system optimized and functioning as intended. Significant parts of the organization may well be underperforming and in the worst cases – destroying value on a daily basis. Taming this turmoil and aligning it to the organization’s strategic plan is perhaps the greatest opportunity for the strategically impaired organization.
Historically, Business Process Management (BPM) aims to improve the functioning of an existing area of an enterprise by reducing costs, improving quality, expanding throughput or through the achievement of another operational goal. At its base level, every strategic undertaking can be decomposed into a collection of process adjustments. Any product or service can be fundamentally altered through the utilization of new inputs or by adjusting its manufacturing process. Additionally, the customer experience can be improved by developing new delivery options or by launching new shopping channels. Any one of these improvements can be defined as a set of process improvement activities. By completing these adjustments, the capabilities to execute the strategy are developed.
As an example, a large retailer wanted to launch a new banner to serve an upscale customer group. This strategy was defined by the process adjustments to bring the new banner to fruition. The decomposition was similar to the breakdown below.
- Strategic Planning – analyze customers and competitors and develop superior value proposition
- Store Development – produce blueprints with store layout supporting new concept
- Marketing – build brand, brand strategy, visual elements, and core messages
- IT – develop website to promote concept
- Merchandising – identify and purchase products to fill store
- Supply Chain – analyze and develop inventory plan including distribution routes for new stores
A major benefit of using this approach is the ability to define strategic initiatives with an increased level of clarity and precision. As the strategy is created, the specific processes impacted by the initiative are identified – as well as the intended outputs of these processes. On occasion, a process might not exist to produce the desired outcome. This situation is remedied by noting the process to be created as well as the intended outputs of the new process. In this way, all the requisite processes to be adjusted to execute the strategy can be identified. As a consequence of this description of a strategy, we also simultaneously identify the departments or specific individuals to be engaged in an initiative’s execution.
A second equally beneficial outcome is a forging of a link between the strategic intent and its execution. Assuming the strategy is set correctly, its success is predicated on fundamentally altering how employees perform work – that is the processes they execute on a daily basis. For once, strategy and execution are intertwined, as they should be.
Injecting BPM into the strategic planning arena in any organization requires some prework. Strategists still focus on the customer wants and needs as well as the competition’s actions, but now they frame strategic initiatives in process adjustment terms and this requires basic process management skills. This includes both an understanding of the process structure and its capabilities to produce specific products and services. This information is the background to plot strategic moves as process adjustments and reap the aforementioned benefits.
Many leadership teams are not prepared to operate at a process level today. But the potential benefits of doing so are immense. Once this approach is deployed, the organization gains power steering – the ability to strategically direct the organization with a precision and flexibility previously unknown. In a highly competitive world, such strategic nimbleness is often the determining factor as to which company gains market share and which loses.
