In a constantly evolving world, the effective execution of strategy is often the biggest challenge faced by organizations, regardless of their size. Studies and observations have shown that two-thirds of SMEs and three-quarters of large companies struggle to execute their strategy. This raises a crucial question: why do so many companies fail in their strategy execution? An obvious answer is the lack of transparency and alignment between different stakeholders coupled with a non-high-frequency adaptation of the plan. This is where a strategic execution platform comes in.
Understanding Strategic Execution Software
A strategic execution software, or SEMs (Strategy Execution Management), is a corporate software technology designed to support the dynamic portfolio management needs of corporate strategists, steering committees, strategy execution offices, and corporate portfolio management offices. These tools focus on defining strategy, planning investments, aligning with strategic objectives, and achieving desired business results.
Key Features of a Strategic Execution Software
Strategic Execution Software offers several features needed to help companies successfully operationalize their strategic plans. Put simply, to succeed in strategic execution.
- Strategy Definition: SEMs translate the company’s strategy into clear and measurable objectives. This ensures that all organization players understand the strategic priorities and work in the same direction.
- Investment Planning: SEMs assist in planning the investments needed to achieve strategic objectives. They help allocate resources optimally and make informed decisions about projects and initiatives to undertake.
- Organizational Alignment: Aligning all stakeholders with the strategy is essential for its successful execution. SEMs facilitate communication and collaboration between different teams and departments of the organization. They enable the sharing of relevant information and data, thus promoting alignment and cooperation.
- Progress Measurement: SEMs offer mechanisms to measure progress made in strategy execution. They provide dashboards and key performance indicators (KPIs) to track results and take corrective measures if necessary.
- Change Management: Strategy execution often involves significant changes within the organization. SEMs help manage these changes by providing tools to plan, monitor, and assess the impact of change initiatives on the company’s overall strategy.
Challenges of Strategic Execution and the Role of SEM Software
Strategic execution is a complex process that has many challenges. Strategic execution software plays a crucial role in addressing these challenges and ensuring the success of strategy execution. Here are some of the common challenges of strategic execution and how SEM software can address them:
- Two-way Communication: Effective communication between stakeholders is essential for successful strategic execution. SEM software facilitates two-way (top-down & bottom-up or transverse) communication by providing real-time collaboration and information sharing tools.
- Solid Portfolio Management: Portfolio management is a key component of strategic execution. SEM software offers advanced portfolio management features, allowing companies to evaluate and prioritize investments based on their alignment with strategy.
- Strategy Definition: SEM software helps companies define their strategy clearly and coherently. They provide tools to document and communicate the mission, objectives, and strategic initiatives, ensuring that all players understand the overall vision.
- Resource Allocation: One of the major challenges of strategic execution is the effective allocation of resources. SEM software helps companies optimally allocate resources by providing information on costs, available resources, and strategic priorities.
Some Key Figures:
- 70% of companies fail to implement their strategies: According to a study by Harvard Business Review, nearly 70% of companies fail to successfully execute their strategies. This underscores the importance of implementing effective processes and tools to support strategic execution.
- 60% of companies attribute strategic execution failure to a lack of communication: According to a survey by Project Management Institute (PMI), 60% of companies see the lack of effective communication as one of the main factors contributing to the failure of strategic execution.
- 80% of CEOs believe their company lacks capabilities to execute their strategies: According to a study by McKinsey & Company, 80% of CEOs believe their company lacks the capabilities needed for effective strategy execution.
- Only 33% of employees understand their company’s strategies: A global survey by Harvard Business Review found that only one-third of employees understood their company’s strategies and how they contribute to its achievement.
- 63% of companies struggle to allocate adequate resources to strategic initiatives: According to a PwC study, nearly 63% of companies face challenges when it comes to allocating the necessary resources to implement their strategic initiatives.
These figures highlight the importance of adopting strategic execution software tailored to your business context and scalable to meet the common challenges of strategic execution and improve the chances of achieving goals.