Moving from Strategy to Results
When the senior management team invests their time and energy in developing corporate strategy, they expect to see measureable progress. When that’s not forthcoming, the time spent offsite brainstorming seems like just so much group catharsis. In my experience, the best mechanism to ensure execution against the strategy is the concept of Key Result Areas or KRA’s. These KRA’s represent business processes, skills or projects that have been identified as critical to the strategy – areas where the firm must excel. Examples might include product quality, lean manufacturing, fast product development, expertise in new markets or specific new products.
The KRA’s are a mechanism to move from long term strategic concepts and objectives to short term, executable projects. They are typically built into the annual plan for a business unit. Each KRA includes a description (explaining how it supports the strategy), metrics and a set of projects. These projects are where the action takes place - each has its own definition, owner, metrics and schedule. The owners are typically direct reports to a business unit VP and are expected to marshal internal and cross functional resources to achieve the desired outcome. To ensure progress, each KRA and its related projects are reviewed by the business unit VP on at least a monthly basis. In this way, the strategy is broken down into well defined pieces that can be implemented by working level managers and teams.
I’ve led traditional strategic planning exercises and I’ve led teams in the formation of an executable strategy using KRA’s. The former sat on the shelf until the following year with only some residual influence over the course of day-to-day business management. The KRA approach, in contrast, became an integral part our staff meetings and yielded an 85% hit rate on achievement of strategic goals. For additional information, see the white paper on my website at:
http://www.strat-edg.com/files/Strategic_and_Business_Planning2.pdf
