Commercial Insights

How to Execute a Winning Business Strategy

It’s one thing to develop a business strategy, and another to execute it. Look closely, and you’ll find the two can’t really be separated. Just ask any big business.

When strategic planning meets disciplined, flexible execution, the results can be inspiring. For leaders of most real-world organizations, that may seem like something you only hear about.

In fact, less than a third of executives believe their strategic planning produces winning business strategies, according to a Bain & Company report; and 61% of executives told The Economist that they struggle to implement their strategic initiatives.

But despite those struggles, strategic planning remains invaluable. That’s why many companies have begun to overhaul their strategic planning and execution processes to better communicate, collaborate and support one another—because even the most dynamic implementation teams can’t fix a poorly thought-out strategy, and even a genius strategy needs the means and flexibility to be implemented successfully.

“There’s a big difference between crafting a plan on paper versus getting your people and resources aligned to make a change over time,” says Megan Lawrence, Assistant Professor of Strategic Management at Vanderbilt University’s Owen Graduate School of Management.

Here are three principles that can steer your organization toward strategic success.

1. Define and Align

“Know thyself” isn’t exactly cutting-edge wisdom. Yet it’s easy to lose sight of your company’s unique identity as you absorb and analyze a dizzying array of industry trends and competitors’ strategies. It’s valuable to recognize situations where your organization’s particular identity and priorities mean that you should zig even when your competitors zag.

“Some of the most important strategic decisions you make are the things you decide not to do,” says Hinton Taylor, a Senior Vice President of Corporate Strategic Planning at Regions.

When considering and executing a new strategic plan, a business should begin the process simply—with a list of the principles that sit at the core of its identity. These can be things like an emphasis on quality, customer focus or enhanced risk management. It’s important to get these essential attributes right at the outset of creating a strategic plan. Every potential new initiative should align with those principles and priorities in order to be pursued, or else they should be discarded, Taylor says.

For example, many businesses have consolidated their brick-and-mortar locations in recent years as a cost-cutting initiative, and in reaction to the rise of ecommerce. But for some businesses, the personal relationships they’ve developed with customers, along with the higher levels of service and deeper customization, are a key differentiator and a competitive edge. Such companies should be careful about a strategic plan that might close too many locations and diminish their relationships with customers, or hinder their ability to offer the levels of service that are key to their identity in the marketplace.

2. Implement and Adapt

According to a survey by The Economist, 61% of respondents “struggle to fill the gap between strategy formulation and its day-to-day implementation.” That number alone points to a major shortfall between overarching strategy and the tactics necessary to make that vision a reality. And it’s a gap that exists across industries.

“You have to find a balance between your big-picture strategic plan and the detailed implementation plan,” Taylor says. “At the same time, you have to have some flexibility for that implementation, because you’re going to learn as you go along.”

To find that balance and to locate the places where your plan may not align with the realities on the ground, Vanderbilt’s Lawrence recommends pilot programs. Smaller-scale implementations can be a useful tool for testing the assumptions that inspired and shaped your strategy in the first place. “Pilot programs can be a very effective way of soliciting feedback and making refinements but still maintaining the level of standardization that’s often necessary,” she says.

3. Retire the Old Ways of Doing Business

When crafting new incentives and training systems for their employees, business leaders must take special care to address the staff motivations that have been reinforced over many years. Even after a business has settled on a program that incentivizes the right goals, it may still have significant retraining ahead to refocus old behaviors.

It’s important to remember that your company is, first and foremost, made up of people. And changing their mindset is essential to the success of any strategic initiative, according to Sam Hansen, Executive Advisor, Strategy, at Gartner Group.

Hansen tells the story of a Fortune 500 retail company shifting from a focus on operational excellence to a more customer-centric approach. But what the employees had learned over the years did not die out with the strategic shift. Those employees were ritually checking their in-store displays to make sure they conformed with corporate standards.

As a result, their backs were often turned to customers looking for help. “You have to understand that when you pivot your strategy, there are not only going to be new behaviors that need to be exhibited, but there will also be legacy behaviors that need to be retired,” says Hansen. “Your line-level employees need permission to let go of those behaviors.”

4. Flexibility, Humility, Discipline

Capitalizing on the full potential of a strategic plan requires more than smart market analysis and vision. Successful implementation involves flexibility, humility and discipline, just as it does creativity and insight. It’s when all those elements are combined that organizations maximize their strategic efforts—and, ultimately, their competitive advantage.

“Without the right framework, as well as the organization of business and support units, your strategy can fail before it even gets started,” says Houston Cook, Executive Vice President of Strategic Planning for Regions. “But if you get it right, you can get alignment across the organization to get outsized returns.”