Strategy Execution framework – The 8 Model
It’s crudial to have a strategy execution framework!
Perhaps you’ve seen ‘the 8’ somewhere and your curiosity has been aroused … or maybe you already know The 8 Model for Strategy Execution and you’re looking for more insights.
Well, this is the place to start!
If you have a specific question, check out the strategy execution Q&A section in our free performance library.
If you’re looking for general information, start right here:
The 8 Model visualises 3 crucial Strategy Execution elements…
…… the crucial link between organisational and individual performance
You can look at performance from an organisational perspective or an individual perspective. And the two must be linked in order to realise your strategy. Most will agree with this statement, but few actually make it happen. There are plenty of reasons why companies fail, but the three major ones are: the fragmented views from finance, HR and – if present – the strategy department; a lack of ownership by middle management; and the absence of a simple methodology.
…… the top-down and bottom-up strategy execution highway
Everyone – from the CEO to the blue-collar worker − is involved in strategy execution. Their roles might be different, but each individual contributes to the organisation’s overall performance. Successful Strategy Execution includes both top-down as well as bottom-up processes.
…… the never-ending story
If you tilt the 8 strategy execution model over onto its side, you get the sign for infinity. Strategy Execution is not a one-off exercise. It’s a continuous, ongoing, ‘endless’ process. Most companies aim for an annual, recurring cycle. But in challenging times like today, the cycle goes much faster. With each cycle, you can improve your execution capability and get a better performance return on your strategy.
The 8 Model for strategy execution – easy to remember … and to communicate!
Strategy Execution is a vast, complex topic − but this doesn’t mean that your communication about it needs to be that way too. Presenting Strategy Execution in a focused, easy-to-remember way gives a great recognition boost in your organisation. And recognition is one of the first steps you need to take when you want to change behaviour.
The 8 Model doesn’t cover all of the ins and outs of the Strategy Execution process. It’s not supposed to. But it does provide a necessary, easy framework for Strategy Execution.
“When I learned about the 8 during a workshop, I was surprised: a complex topic translated into a simple drawing. But it tends to stay with you. It becomes part of your vocabulary.”
Wim Wuyts, Head of Tax,
The 8 Model for strategy execution and the manager
The manager is a key Strategy Execution actor. He/She participates in all activities, including: strategy communication, translating the strategy to department, division or team, setting his/her own objectives, defining objectives for the team, coaching for performance, and evaluating performance.
The quality of your Strategy Execution is strongly linked to the effectiveness of your managers. The better your managers carry out their Strategy Execution role, the better the results you will achieve.
Strategy execution model
Here’s a short video by Jeroen De Flander explaining the 8 model.
The 8 Model – strategy execution process steps
Here’s an overview of the different building blocks:
1. Update Strategy
Your strategy is your long-term action plan designed to achieve your vision. Each strategy is unique, and it should also be measurable and easy to understand. Depending on the industry you are in, it maps the road your company should take for the next 3 to 10 years.
On a regular basis − most companies should do this annually – a company needs (and wants) to update its strategy based on changes in its competitive environment and on the Strategy Execution feedback from the previous cycle.
We include strategy updates in our execution framework as they take place on a regular, recurring basis at all levels of the organisation. The real strategy work, conducted only once every 3 to 5 years at the top of an organisation, is excluded.
2. Communicate strategy
As soon as your strategy (or strategy update) is finalised and approved by all stakeholders, you should focus on strategy communication. Transparent and easy-to-understand communication creates the necessary understanding and engagement for the new/adapted strategy.
It is essential to use all available communication platforms. One big strategy event and a single strategy e-mail are not nearly enough. Use other meeting platforms, discussion groups, informal and formal encounters, performance management sessions, intranets, websites, screensavers, coffee corners, billboards, etc. to communicate the strategy. You cannot over-communicate your vision and strategy!
Pay attention to the quality of your strategy communication. Senior managers, in particular − as strategy ambassadors − should be especially careful about how they communicate. In addition to the content itself, tone of voice and presentation skills are essential elements in transferring content and creating the necessary enthusiasm for others to pass on the message. Make sure you don’t kill your strategy by lousy, uninspiring communication.
3. Cascade strategy
When you cascade your company’s strategy, you break down objectives into smaller chunks for the next organisational level. The process stops at the smallest unit level − these are often teams. In the end, the size of your organisation will define the size of the cascade.
It is crucial to achieve macro alignment between all the objectives – horizontally and vertically – in your organisation. We call this MECE. Take a look at the first Strategy Execution law in our free library for more information.
On a micro level, you need to balance your objectives across perspectives. The 4 traditional perspectives are: financial, customer, internal processes, and people. You can add other dimensions, as appropriate.
In addition to the balancing act on the macro and micro levels, you need to select the right indicators – often called Key Performance Indicators or KPI’s − to track the objectives and define appropriate targets. The best know technique to cascade strategy is the Balanced Scorecard.
4. Compare & Learn
Your strategy is a hypothesis. It’s your best estimate of the route to success … but it’s still an estimation.
It’s crucial to take some time at the end of a cycle to go back and check your hypothesis, to compare your initial strategic assumptions with what you have learned from the reality of the Strategy Execution cycle that is being completed. By doing this, you will put yourself in the forefront − research shows that only 15% of companies take this step.
But at the same time, make sure you don’t just look back at your strategy: take a look at your Strategy Execution capability as well. All too often, we see companies jumping automatically to change their strategy, because they did not reach their projected performance. But, upon examination, there is nothing wrong with their strategy. The problem is in executing it. So, make sure you evaluate your execution capabilities as well!
This ‘compare & learn’ step will help you verify your hypothesis, update your strategy, and fine-tune your execution capabilities accordingly.
5. Manage initiatives
Initiative management is the activity in which your dreams run up against reality, your strategy meets operations, and resources are added to the strategy formula. This is one of the most difficult steps in Strategy Execution − and so it’s also where execution quite often goes wrong.
Initiative management is about selecting, prioritising and executing the right initiatives: those actions that will lead to the realisation of your objectives. Initiative management can be broken down into 3 main activities. See the answer to question 7 for more details.
6. Set Objectives / personal goals
Setting individual objectives is one of the best things you can do to improve performance − your own performance, and (if you have them) your team members’ performance. The positive impact of goal-setting is one of the most widely researched and scientifically validated aspects of today’s organisational science. Two key researchers of goal-setting and task motivation theory are: Edwin A. Locke (University of Maryland) and Gary P. Latham (University of Toronto).
Make sure you link all individual objectives with the strategy at the organisational level. If you don’t, you might have a great objective … but it’s of no use to the organisation!
Also, make sure you focus on the way you secure agreement on the objectives. It’s the quality of the objectives – including the link with the overall company objectives – AND the acceptance of the objectives that will make your individual objective-setting a success.
7. Monitor & Coach
Regular coaching motivates people and increases their chances of success dramatically. It also simplifies the final performance evaluation. In fact, regular coaching is far more important than the formal review meeting somewhere around the middle of the year.
Providing feedback in the right way − which is a key coaching skill − is a crucial step in boosting performance!
8. Evaluate Performance
Most organisations conduct a formal performance evaluation at the end of the individual performance management cycle. Ideally, the evaluation should answer the question: have the individual performance objectives been achieved?
Be sure you make an honest assessment. There are several techniques that can help you. One of the best known is the STAR technique.
Although many organisations link performance to remuneration, performance evaluation is − and should be − a separate process.
The extended 8 Model
Large organisations need several steps to cascade the company strategy to the individual level. The strategy cascade runs down through business units, functional lines, departments and teams.
When this is the case, the 8 is extended.
And finally, here’s a short video explaining what strategy execution is all about