Strategy to Execution

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Background

“Strategy to Execution” (also known by the abbreviation “S2E”) is a term that emerged out of the discipline of business architecture and consulting firms such as Accelare who owns the trademark on the phrase. Broadly speaking, “Strategy to Execution” is an umbrella term under the family of strategic management practices that unities strategic planning with strategy implementation.

“Strategy to Execution” is distinguished from other strategic management approaches in that it has a focus on improving an organization’s business capabilities and associated operating model. Inherent in this approach is a focus on assessing and improving an organization’s business capabilities, which are supported by organization’s underlying operating model (e.g., talent, processes, technology, information). Ross, Weill and Robertson posit in Enterprise Architecture as Strategy that an organization’s strategy is often either poorly articulated or in a state of flux; that it is more practical to focus on a firm’s capabilities and constituent operating model. The fundamental definition of capabilities (the "WHAT") of an organization are consistent year-over-year, and provide a more consistent platform for analysis and continuous improvement.

There are several publicly available frameworks from consulting firms that articulate the underlying processes of Strategy to Execution. The Business Architecture Guild also offers a structured approach to creating the underlying analysis and supporting artifacts for these processes via their Business Architecture Body of Knowledge, or BIZBOK. There are also approaches that have been borne out of academia, such as the Strategic Execution Framework created at Stanford University.

Process Overview

While there is no one definitive “Strategy to Execution” process, most publicly available models agree on the sub-processes outlined below. Each process has a set of supporting tools of varied lineage but are generally part of strategic management best practices that have been broadly syndicated.

1. Define Strategy

Inputs: Environmental scanning, macro-trends, industry trends, industry analysis, competitive intelligence

Activities: Strategic planning activities include strategy development among the organization's leaders and personnel to develop a common understanding regarding the competitive environment and what the organization's response to that environment (its strategy) should be. This could include looking at common synergies across individual operating plans, that may aggregate into strategic themes.

Outputs: Competitive positioning, strategic choices, strategic plans, strategic roadmaps

Common Tools/Frameworks:

• PEST analysis
• Porter's five forces analysis
• Porter's generic strategies
• Business Model Canvas
• Scenario planning
• SWOT Analysis
• Where to Play / How to Win approach

2. Clarify & Communicate Strategy

Inputs: Competitive positioning, strategic choices, strategic plans, strategic roadmaps

Activities: Activities largely consist of communicating the strategy or strategic plan throughout the organization. It can also include aligning the incentives of the organization back to the strategy to ensure the its successful execution. Oftentimes, this cascading of communications includes goal alignment in either calendar or fiscal year time frame.

Outputs: Organization awareness, organizational buy-in, incentive alignment, key performance measures

Common Tools/Frameworks:

• Objectives, goals, strategies and measures (OGSM)
• Objectives and Key Results (OKRs)
• Annual operating plans or financial plans
• Strategy on a Page

3. Identify & Assess Required Capabilities and Supporting Operating Model

Inputs: Organization’s strategy, organization’s capability model (if existing), key performance measures

Activities: activities include identifying the capabilities necessary to successfully execute on the organisation's strategy, an evaluation of the current state of the organization’s capabilities relative to the strategy, compare and contrast current state end future state capability maturity levels, and oftentimes a desired future state (target operating model) for what the maturity level of the organization’s capabilities will need to look like to ensure success.

Outputs: Capability Framework, Operating Model, Target Operating Model, Capability Gaps, Capability Classification (e.g., what are an organization’s “advantage” capabilities)

Common Tools/Frameworks

• Business Capability Models
• Value Stream Models
• Strategy maps
• Industry Reference Models (e.g., OMG reference model, APQC, COBIT for IT processes and capabilities)
• Industry Benchmarks or Capability Maturity Models (to understand what "good" looks like)
• Capability Assessment Tools / Approaches
• Target operating model

4. Identify & Prioritize Investments

Inputs: Key capability gaps, Target Operating Model

Activities: Investment management processes that ensure that investments are aligned to the set of strategies that the organization is pursuing; also can include alignment of overall resources (people, capital, etc.) to ensure successful execution

Outputs: Prioritized Investments, Portfolio / Program management structure

Common Tools/Frameworks

• Project Portfolio Management
• Project Management
• Financial Management
• Risk Management

5. Activate & Execute Strategy

Inputs: Prioritized Investments, Portfolio / Program management structure

Activities: Project execution, Product execution

Outputs: transformed business capabilities (talent, process improvement, software/technology enablement)

Common Tools/Frameworks

• Organizational Change Management
• Program / Project Scorecards
• Agile Software Development / Scaled Agile Framework (for software enablement)

6. Monitor & Adjust Approach

Inputs: Key performance indicators, success metrics for the strategy

Activities: Building a balanced scorecard or a similar construct that measures the organization’s progress against the KPIs established when creating the original strategy. It also includes the necessary adjustments to the strategy or to the execution to ensure that the KPIs are achieved.

Outputs: Dashboards, Scorecards, Adjustment to Strategy or to required investments

Common Tools/Frameworks

• Balance scorecard
• Program / Project Scorecards
• Objectives, goals, strategies and measures (OGSM)
• Objectives and Key Results (OKRs)
• Key performance indicators (KPIs)

Oftentimes the process is completed on an annual basis in accordance to an organization's overall strategic planning cadence.

References

Strategy to Execution

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