Donald Sull, Stefano Turconi, Charles Sull, and James Yoder wrote an article for MIT Sloan Management Review titled Turning Strategy Into Results (September 28, 2017).
« Strategy is inherently complex… A strategy for execution must provide concrete guidance while leaving managers with enough flexibility to seize novel opportunities, mitigate unexpected risks, and adapt to local conditions. »
« Strategic priorities should be forward-looking and action-oriented and should focus attention on the handful of choices that matter most to the organization’s success over the next few years. »
« S&P 500 companies use a variety of labels, ranging from the mundane (strategic priorities, areas of focus, strategic objectives) to the exotic (Microsoft Corp. referred to “interconnected ambitions”) »
« They typically extend three to five years — shorter than that is too tactical, longer too visionary. »
« The discipline of honing priorities down to a handful can force a leadership team to surface, discuss, and ultimately make a call on the most consequential trade-offs the company faces in the next few years. »
« Military planners often visualize the field of operations as a complex system of enemies, allies, infrastructure, popular support, and other features that collectively influence who wins and who loses a war. They then [home] in on the so-called “centers of gravity” — the parts of the system that are both critical to the enemy’s success and most vulnerable to attack.
Business leaders can deploy a similar approach by identifying the “critical vulnerabilities,” the elements of their own strategy that are most important for success and most likely to fail in execution. »
« Rather than relying solely on financial targets, leaders should start with the key actions required to execute their strategy, and translate these into metrics that provide concrete guidance on what success would look like… Top executives can quickly assess whether their strategic priorities are sufficiently concrete by asking middle managers what they would stop doing based on the priorities. »
« Strategic priorities should reinforce one another to ensure the different parts of the company are moving in tandem. At a minimum, the priorities shouldn’t conflict with one another or pull the organization in opposing directions. The best strategic priorities hang together and tell a coherent story about how the company as a whole will create value in the future. »
« To steer activity in the right direction, a strategy should be translated into a handful of guardrails that provide a threshold level of guidance while leaving scope for adaptation as circumstances change. »
« Consider Trader Joe’s Co… It focuses on educated, health-conscious customers, which influences where it locates its stores, which products it stocks, and the type of employees it hires. The company’s choices reinforce one another to increase customers’ willingness to pay, reduce costs, and thereby drive profitability. The dense interdependencies among the choices prevent rivals from imitating Trader Joe’s winning strategy. Piecemeal imitation of a few elements — for example, the store format or the focus on private labels — wouldn’t work. Instead, a rival would need to replicate the full set of interconnected choices. »