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Dear Captains of Industry, Business Leaders the World Over, Friends and Neighbors,
Developing your business strategy is 'no longer an intellectual challenge. You can rent any strategy you want from a consulting firm.'
If this sounds like some kind of bleak or 'blue sky' pronouncement from a fringe outpost on the great theoretical frontier, think again: Larry Bossidy, former CEO of Honeywell, wrote it in his book Execution (co-authored by Ram Charan).
And your shareholders are now buying into this notion big-time.
Recent studies by Ernst & Young tell us that investors believe the 'execution of strategy' is more essential than market position, innovation, or even the quality of strategy itself!
We at Root Learning can vouch for this. We all too often find that our clients' strategies are eerily similar, right down to the metrics, values, and catchphrases each selects after much debate.
That got us to thinking...
According to Robert Kaplan and David Norton, authors of The Balanced Scorecard, fewer than 10% of well-formulated strategies are successfully implemented.
Clearly, strategy on paper can't be any business's prime differentiator. The road to truly delivering results must lie in finding a way to give strategy a life beyond the paper on which it was written.
Yet, experience told us that most leaders devote their energy to the intellectual aspects of the strategy and then delegate its execution to others. This sends a powerful and precarious message that proclaims that the quality of the strategy trumps its execution.
Beginning to see why 90% of all business strategies fail to deliver? Yeah, so were we.
Fueled by this level of insight, we began thinking harder.
We asked 'If strategic execution is the key, then what is the key to strategy execution?'
Well, Bossidy and Charan state that the 'heart of execution lies in three core processes: the people process, the strategy process, and the operations process.'
More and more, companies recognize people as the cornerstone of the three. In fact, when Watson Wyatt's Human Capital Index rated companies in managing their human capital performance, they found that "scoring high in 30 key areas of people management relates to about 30 percentage points of return to shareholders. On the flip side, 70% of all change initiatives fail due to people issues - inability to lead, lack of teamwork, unwillingness to take initiative, inability to deal with change, and other areas.
That not only sounded right to us, but experience told us it felt right... prompting yet more focused thinking on the matter.
"If our strategy and operations are critical arteries," we mused, "then our people are at the heart of strategy execution. This means we must connect people in meaningful and integrated ways around our strategies and operations. It means we must translate our strategic ideals to tangible individual accountability, responsibility, and action at all levels of our companies. It means we must reach people beyond pep rallies or intellectual exercises. To deliver sustained results, we must engage employees in ways that are real, meaningful, and compelling to them."
We know about 71% of employees today do not consider themselves actively engaged in their work. Disengaged employees are less focused, less effective, and less able to engage customers. Then, of course, we all have employees who are engaged in their work, who have all the best intentions to contribute and to deliver. However, many of these employees simply do not know how to deliver according to the expectations placed on them. In fact, only 43% of employees feel they are given the skills needed to fulfill their job responsibilities and achieve their company's goals. Uh-oh.
So, what are we doing to engage and prepare our employees? Many leading companies are organizing sophisticated learning programs, creating 'universities of excellence,' and delivering an abundance of talent management programs. This investment in human capital is commendable. But the real bellwether is in evaluating how our efforts translate to business results. So far, the results are murky at best.
So we thought about how the ways in which we currently engage and equip our people are pretty much ineffective. In fact, the majority of workers attribute only 10% of their own job proficiency to formal training courses and books. We also learned that:
- 20% of learning is affected through coaches and mentors.
- 70% of learning happens informally through on-the-job and off-the-job interactions.
Source: Lombardo and Eichinger, 2003
Yet, we typically see 90% or more of our training resources earmarked for the formal programs, which only deliver 10% of learning. We're thinking the return on that investment is certainly worth exploring!
Most formal training programs often start and end in the classroom, without any structured opportunity to practice 'on the job' where real learning occurs. Is the answer to remove the classroom? Of course not! But, there are two opportunities.
The first is to take advantage of the 70% and simply recognize that 'informal' doesn't have to mean 'random.' We have the power to proactively plan and manage the 'informal.'
The second is to redefine the '10%'to make it more effective. This means applying the core concepts of informal learning to the formal setting by engaging employees in strategic context, relevant information, and interactive application.
Next, training courses are traditionally designed as stand-alone, content-based events rather than behavior-based, end-to-end systems. Individual courses are disconnected not only from each other, but also from the bigger strategic picture. Employees are left wondering how the skills they are taught directly contribute to business results or career growth.
Now, having done all this thinking, it was time to do something with it. Enter Root Learning's proprietary 'Strategic Engagement Process' a representation of our finest, most revolutionary thinking to date.
Our 'Strategic Engagement Process' provides employees with opportunities to internalize learning like never before, in ways that allow them to apply their understanding in complex situations.
We think we've hit on something big here. For our complete White Paper on the topic, or to learn how to create a Strategy Engagement Process for your organization, contact us.
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