Strategy Execution Management (SEM)
Aligning Execution with Strategy to accelerate Business Transformation
Gartner calls Strategy Execution Management a core component of Strategic Portfolio Management. It’s how organizations connect the work being done with the reason it’s needed in the first place, while still ensuring it consistently delivers value. But it’s not something typically found in traditional project execution.
Align Company Project Management Execution with Strategy
Attaining the level of business agility required to drive business transformation requires organizations to move beyond simple project delivery. But for too many businesses, the work being done to drive transformation – projects, programs, products, etc. – is typically executed in a variety of methods (Tri-Modal Reality), disconnected from strategy, with critical data locked away in silos.
Moving from generic project management to strategy execution management
A wide variety of challenges arise when there is no real connection between the work being done and the broader strategies it is intended to support. Moving from project execution to an Strategy Execution Management approach enables the organization to address shortcomings such as:
- A sub par investment planning approach: bottom-up project demand misaligned with top-down strategy
- Inability to effectively communicate strategy across the enterprise
- Lack of standardization in both financial and non-financial measures / metrics
- Failure to set and communicate targets for associated measures / metrics for each strategic objective
- Difficulty connecting actionable initiatives to the strategies and measures they are funded to impact
- Inability to continually re-forecast benefits through the life of investments
- Low maturity in reconciling and tracking results for each strategy / metric
What are the key elements of strategy execution?
In order to derive all initiatives from strategy and establish a framework to assesses and track performance across all work, organizations must address these key pillars of Strategy Execution Management:
- Evolving to the right investment management approach to derive execution from strategy
- Clearly defining and communicating that strategy along with the associated measures
- Deriving actionable investments and gauging portfolio sufficiency against targets
- Standardizing the approach to effectively track and measure results
Evolving to the right investment management approach
Shifting how work is defined and prioritized means examining the planning and investment management approach so that it’s not simply choosing the best from a bad list of projects. Specific areas an organization might want to consider adjusting include:
- Shifting from a traditional project based model to a program / product based model
- Continue evolving to embrace a capability aligned investment approach
- Elevating governance and oversight to the product and program level
- Funding at the program / product level and continuously validate funding decisions
Clearly Defining and Communicating Strategy
It’s critical that everyone in the business understands what is being done and why. Effective Strategy Execution Management fosters a culture that:
- Works with executives/business leaders to clearly define strategic objectives across the organization
- Effectively communicates the strategic objectives and make them discoverable
- Ensures all objectives are actionable so that teams can derive initiatives from them
- Ensures that strategic objectives are time-based
In addition to standardizing financial metrics, more challenging non-financial metrics must also be established to measure performance against each strategy
- Invest time to standardize metrics / key results for each strategy (top-down)
- Build an inventory of both financial and non-financial measures / key results
- Set Targets for each measure / key result
- Allow for additional measures / key / results to be defined bottom up and then adopted top down
Deriving actionable investments and gauging portfolio sufficiency against targets
Strategic objectives must drive all investment decisions and that’s supported by
- Moving to program / product based investment approach to derive execution from strategy
- Making it easy to align an initiative / investment to one or more strategic objectives
- Ensuring investment owners can easily capture time-phased benefit estimates for each of the measures / key results associated with the strategy
And then to gauge portfolio sufficiency against targets requires
- The portfolio manager to quickly determine whether proposed investments will meet or exceed target for key metrics
- Finalizing of investment decisions and funding based on portfolio sufficiency against targets
Standardizing the approach to effectively track and measure results
Use benefits realization tools to continuously monitor outcomes and re-forecast in response to shifting circumstances. Don’t lock benefit estimates up in business cases, never to be reviewed again
- Establish the process to continually track and re-forecast benefits for each investment (e.g. monthly, by gate etc.)
- Provide the flexibility to track benefits top-down or bottom-up
- Roll-up strategy and metric performance for executives in consumable dashboards and reports
- Adjust investment decisions and funding if targets are not projected to be realized
- Roadmapping software helps maintain strategic roadmaps to assess investment / initiative performance
Why is strategy execution management important?
Successful strategy execution is the culmination of all organizational planning and management. Unless benefits are realized and investments generate a return, the organizational strategic plan will have failed. In recent years organizations have recognized this and embraced adaptive planning. They have made progress adjusting their strategies to shifting operating environments and competitive landscapes.
But they still fail to connect initiatives and investments to those strategies, and that’s undermining corporate performance as well as eroding all the good work that is going into strategic planning. It is also reducing returns on investment and encouraging individuals and teams to focus on the project, not the benefit.
Strategic Portfolio Management Software
UMT360’s powerful strategic portfolio management software supports every element from roadmapping to resource management to portfolio analysis. By integrating the software into how you plan, fund and manage your work, your key people are freed up to focus on strategy execution.
- Your portfolio management function has total insight
- Business units can manage their own strategies and outcomes
- Strategic planning can be tied directly to strategic outcomes
- Integrated data provides a single source of truth for all activities
UMT360’s Proven VIC Framework
UMT360’s VIC framework offers a proven approach to help organizations identify and activate the exact capabilities needed to help them more effectively drive business agility. Our experts can quickly assess what’s needed to help you incrementally establish the right foundation, then help you move from tactical execution to become more strategic.