While 80% of leaders feel their company is good at crafting strategy, only 44% believe this is true for implementation. According to Harvard University, a recent survey of more than 400 global CEOs found that executional excellence was the number one challenge facing corporate leaders in Asia, Europe, and the United States, heading a list of some 80 issues.
Business intelligence (BI) solutions—in particular, dashboards developed using those tools—are often designed to support the execution of strategy. These dashboards provide a means of monitoring internal and external factors that influence success, providing insights on how execution is progressing. This information is invaluable because it enables the redeployment of resources to maintain focus on the activities and invest in the capabilities that make the biggest difference to results. These benefits are exactly why according to Gartner, global spending on BI and analytics will approach $18 billion in 2017. And yet despite all that investment in Business Intelligence, executional excellence is still the top challenge for CEOs.
During the execution phase of any strategy, it’s crucial to provide leadership with visibility to the factors that are driving or influencing success. Good measurement and reporting can highlight progress on the initiatives that influence results and provide the management team with critical insights that support more agile execution. Agility is important because it allows the team to more quickly change focus as new information comes to light. Of course, becoming more agile is not easy because it demands a higher level of comfort with change, and leaders and managers need focused, actionable and fast information to support efforts to make those changes.
Unfortunately, many companies are getting lost in the complexity of getting their arms around the big data revolution by taking a bottoms-up approach to data management and analysis. This approach results in data-related initiatives that are too large in scope, take too long, have a higher risk of failure, and deliver a lower ROI. The leaders that embark on this journey will find that prioritization pays higher dividends and delivers real value on an accelerated timeline.
In our experience, companies with good measurement and execution tie their efforts directly back to the strategy, and focus on the critical few areas where they can identify, understand and react to changes quickly. Some years ago, Jeff Bezos communicated the Amazon retail strategy to his team by sharing three very simple customer preferences: lower prices, bigger selection, and faster delivery. Each customer preference can be addressed by pulling on certain organization levers that can be readily measured—and that’s exactly where organizations like Amazon set their priorities for measurement.
This diagram, called a “value tree,” can be further developed to the right depending on how deep you want to go (e.g., local inventory on-hand requires warehousing facilities that are close to population centers, which in turn requires the efficient build-out of each facility). Unfortunately, organizations often start with the data they have or the infrastructure they think they need and not the business problem they’re trying to solve. In our experience, the five most common mistakes organizations make in building out their measurement infrastructure are:
Strategy development and execution is all about making decisions on the future direction of the organization; business intelligence is about providing insight to inform those decisions. If these things are not tightly connected, then dashboards at best become an unnecessary complication and, at worst, a misleading distraction. But there is a relatively simple, five-step process that is both efficient and delivers high-impact results.
Applying these five simple steps will give your team the information they need to more effectively monitor and adjust the execution of your strategy, leading to higher growth, profitability and realization of organizational goals.