Know your business, your people, and yourself
Executing well requires corporate executives to live their business, get involved in the key details of the business model development and implementation to stay on top of what is happening, and learning what obstacles or risks lie in the path of good strategy execution and organisational performance. They know the context of their organisation, and internal and external circumstances. Implementing change without fully understanding and appreciating the dependencies and context is counterproductive to any strategic initiative.
Corporate executives should know:
- Their organisation, core processes, and critical success factors.
- Their capacity, capability, resourcing, and competencies to execute and perform well.
- Key-value drivers, risks, and controls that are linked to the corporate strategy, objectives, and key performance indicators.
- Organisational issues relating to performance, morale, and culture.
Organisations should build long-term organisational and individual capabilities, capacities, competencies, and flexibilities to support strategy execution. This includes developing, deploying, and maintaining:
- Workforce communication and engagement strategy and plan.
- Workforce succession, capacity, and capability plan that includes a human capital strategic readiness matrix.
- Individual skills and competencies plans.
- Individual training, development, and coaching plans.
- Organisational change management plan.
- Organisational compensation and benefits strategy and plan.
Develop a human capital strategic readiness matrix consisting of a strategic gap analysis to determine the required number of employees based on existing strategic job families, competency profiles, and skills available within the organisation.
Strategy execution is doomed to failure unless employees fully understand the corporate strategy, have the right skills, competencies, capabilities, and capacities to implement them, and are motivated and rewarded to do so.
Budget Air has developed a human capital strategic readiness matrix as shown in the figure below.
Understanding the organisation and its context
Context is king. It is important to evaluate and understand both external and internal context of the organisation since these can significantly influence the design and effectiveness of the following:
- Organisational structures and accountability line.
- Individual decision-making capabilities and accountabilities.
- Corporate strategy, strategic objectives, and key performance indicators.
- Framework and integrated management system for strategy execution.
- Strategy execution plan.
- Strategy execution process.
- Change management processes and practices.
Establishing the context will capture the essence of the corporate strategy, the internal and external environment in which organisations pursue their goals and key performance indicators, and diversity of risk appetite and tolerance thresholds — all of which should help reveal and assess the nature and complexity of their risks and controls.
Changing context should trigger different decisions and strategic initiatives in order to create or maintain sustainable value for stakeholders.