Authors of worldwide bestsellers “The Balanced Scorecard” and “The Strategy-Focused Organization” hit the mark again, in my view, with “The Execution Premium.”
It’s not a light-reader, to be sure, but it will boost your business acumen. I found it to be chock-full of executive-level insights on the need to link a company’s strategy with its operations plans and budgets.
According to the authors, strategy without a proper alignment with operations is a common shortcoming in business today. They back up that assertion with several studies and decades of empirical evidence, noting, “Companies fail at executing strategy because they lack an overarching management system to integrate and align these two vital processes.”
One of the aspects of the book I liked most was the proven process for managing the execution of commercial strategy. It included really practical steps to develop a strategy, align organizational units and employees, and test and adapt the strategy.
The main distinguishing feature of the book is its explicit link between long-term strategy and daily operations. On that point, the authors suggest that there are two important questions leaders should ask:
- Which business process improvements are most critical for executing the strategy? This could include improving key processes, or I’d note that it also could involve launching entirely new ones.
- How will we link our strategy with operating plans and budgets? This question mainly deals with resource capacity planning and operating and capital budgets.
Embedded into the book, to an almost annoying degree, in my view, was the authors’ emphasis on using their Balanced Scorecard process. While I’m a firm believer in measuring and evaluating progress, the Balanced Scorecard has its shortcomings.
For example, too many companies have over-relied on following the numbers, without sufficient discovery as to the how and why behind the numbers. In one case cited in the book, it took a convenience store chain two years to discover why its Balanced Scorecard numbers were lagging. But when they conducted some customer focus groups and in-store surveys, the problem was quickly pinpointed.
That aside, the authors made a point I really appreciated, emphasizing employee communications when trying to align the organization’s efforts. That’s important, because it’s not enough for employees to be aware of the strategy, but rather they must fully understand the business strategy and align personal objectives accordingly.
In most cases, the authors used examples and case studies that did a good job of contextualizing and clarifying the concepts in the book. I found this especially beneficial because it made the book more applicable and useful.
One topic not discussed often enough in such books is the importance of regular strategy review and dialogue. On that count, this book does not disappoint. The authors’ own studies pointed out that 85 percent of executive teams spent less than one hour per month discussing strategy, with 50 percent indicating they spent virtually no time on strategy discussions – something they reinforced throughout their book, for good reason.
Bottom Line
For me, a little soft-selling of Balanced Scorecard would have been OK, but the authors overdid it. There are more tools to measure progress than theirs, and in some cases, better ones, too. Other than that rub, the book was good, and I’ll keep it on my bookshelf for sure. But if you find MBA or academic-style business books too cumbersome to read, then you may not like it.
Springfield-based consultant Mark Holmes speaks nationally on increasing sales, service and employee performance. He is the author of “Wooing Customers Back” and “Salesonomics: The Sales Method For Closing Competitive Accounts and Growing Existing Business” (fall 2011). He can be reached at mark@salesonomics.com.[[In-content Ad]]
