How To Link Strategy and Execution
In my book, The CEO's Strategy Handbook, I included interviews with some leading CEO's about how they lead strategy. One of these interviews was with Dennis Sadlowski, the former CEO of the US Energy and Automation business of Siemens. Dennis shared five key insights about how he managed to integrate strategy with delivery. Here's what he told me:
Having a clear strategy is paramount to the success of any business. Critically, however, strategy and execution are intrinsically linked. There can be no good strategy that is executed badly. All successful strategies take account of the resources and capabilities that are available to the organisation, so that you move forward with confidence rather than merely in hope.
Linking strategy and execution at the very start of the process makes it real for everyone and enables the CEO to engage key executives and managers immediately. I have five lessons for CEOs to take away from my three-year tenure as the CEO of Siemens, USA:
- Engagement of the leadership team is critical. Engagement starts with involvement, and I ensured that the executive team and key managers at the next level in the organisation were intimately involved in the development of our growth strategy. We didn't rely on external consultants to tell us the way forward; we led the work ourselves, doing our own blocking and tackling to make sure we understood the detail.
- The strategy must be developed outside-in. As an executive team, our total focus was on our customers, how we were going to be their #1 supplier and how we would lead our markets. The internal aspects of our strategy, and how we would achieve our objectives, were secondary. We started with getting to really know our customers.
- Strategy is as much about behaviours as it is about programs. Our customer focus meant that I spent significant time with our customers, finding out what was important to them and what they thought of us. I expected the same behaviours from my executive colleagues and our top 200 leaders. These changes in behaviours embedded our strategic priorities far better than any documents, plans or KPIs.
- Pay attention to who's not coming on board and address it. This is important at all levels, but for the CEO it starts with the executive team and the next generation of leaders.
- Don't mention the word 'change'. Instead, focus your communication on what the company will achieve in the future, how it will work and what factors will ensure its success. People respond negatively to the word 'change', but are positive about changing if they can see where they're headed.
The focus on the future, the engagement of the top team and the importance I placed on certain behaviours created genuine alignment. People understood our objectives and priorities and were able to make the right decision on a day-to-day basis. And, in the end, it is these decisions that will determine whether your strategy succeeds or fails.
Which of Dennis's five insights and approaches can you adopt to help you better link your strategic ambitions with delivery on the ground?