By Alan Todd
In the early 1960s, the term “strategy” entered the business lexicon for the first time, quickly becoming a mainstay in how we understand management. Little has changed since then. What’s worse, the tactics we use to convey and generate feedback on the implementation of strategies across the enterprise—market surveys, town hall meetings, newsletters—are all decades old.
This is a problem: because while our approach to management has long been stagnant, the world itself is not. We’re in an age of artificial intelligence and machine learning. BlackRock, the world’s largest asset manager, has begun replacing some of its stock portfolio managers with computers. The largest hedge fund in the world, Bridgewater Associates, which manages $160 billion, is building an algorithm to make hiring, firing and other management decisions.
Bridgewater’s founder essentially wants to automate management, creating an artificial intelligence that can run the firm in his absence.
If you’re a CEO and are not paying attention to these changes, you’re falling behind. In fact, we know that many of today’s performance management tools are indeed failing. Existing enterprise technologies are simply layered on top of legacy management theories that focus primarily on strategy development and ignore implementation. The result is that 70% of new strategies fail. On average, companies deliver just 63% of the financial performance they promise. According to a recent study by The Economist, more than 60% of executives believe they are good at developing strategy, but only 34% believe they are good at executing it.
“A FORTUNE 100 RETAIL COMPANY THAT ADOPTED A STRATEGY ACTIVATION PLAN FOR 815 SENIOR LEADERS RESULTED IN THE COMPANY’S SALES WIN RATE IMPROVING BY 15%.”
But there is another way. Last year, a Fortune 100 retail client adopted a “strategy activation” plan for 815 of its senior leaders. The results: total sales revenue per sales representative increased by $700,000. The company’s sales win rate improved by 15%, from 62% to 77%.
What is Strategy Activation?
Strategy activation is about eliminating the gap between development and execution. Under this technique, they’re one and the same. It’s a continuous cycle of improvement, incorporating real-time feedback from a combination of humans and machines. Strategy activation recognizes that the human element will always have a critical part to play, turning the thousands of eyes and ears a company has on the ground into thousands of feedback points.
Strategy activation is about transforming internal communications from monologue to dialogue. It’s about making a step change in management theory by harnessing the collective genius of teams. It’s about data-driven management. It’s about designing systems around the strengths and limitations of both people—and technology—to create organizational superintelligence: networks that flatten learning curves, never forget and can’t be killed.
The opportunity for business growth is enormous with strategy activation. To take a first step in its direction, CEOs must start thinking about development and implementation of strategy as one and the same.