Do your execution efforts overlook the obvious? Why do businesses need a separate organisation to run a strategic program? It’s a good question.
Why can’t the normal functional structure manage them alongside business-as-usual? After all, the functional organisation has been around for a long time. Everyone understands how they work; it’s the way most people have been trained.
Why do we need to do anything special?
It’s true some companies can run certain types of program within the functional structure – but they’re mostly straightforward. If a business is not complex and can pass the baton smoothly between functions, without dropping it, these programs don’t need any special treatment.
The business-as-usual organisation (BAU) can handle uncomplicated programs with relative ease – even though they’re often inaccurately labelled strategic programs.
But here is the crux of the issue . . .
Programs fall into two classes – regular and complex; there’s not much in between. While many companies have got to grips with regular programs, they still make a complete mess of complex, business-critical ones.
“Regular” doesn’t mean programs aren’t demanding; they’re just more common. But the term “strategic program” is now a management catchphrase; it’s so widely abused that when an authentic, business-critical program does come along, companies aren’t able to create any true distinction.
Confusion then thrives – because all programs are treated the same. This simple blunder triggers a chaotic chain of events that is hard to stop.
Programs are called “business-critical” because they’re complex and cutting-edge; typically, the future of the business depends on them. They’re awkward, expensive and demand high-speed interactions between functions and major suppliers.
Execution speed is fundamental to success. While functional organisations might figure out what to do in the long run, they are notoriously one-paced. They have their processes – and they go through these glacial, slow-moving routines, no matter what.
By which time, it’s usually game over.
Too often, companies’ naively believe that a functional structure is capable of executing a business-critical program. Executives with deep industry experience find it hard to question treasured beliefs. Many prefer to squeeze out yet another increment of efficiency, rather than change their world-view, no matter how many times it’s screwed their lives up in the past.
Past victories make people complacent, lazy and blind – a harsh condemnation of management teams, wrestling with dizzying levels of change.
It’s rare to find an executive who wouldn’t say that his function can do almost anything. This is instinctive but really bad judgement. You can’t equate the capability of two or three rock stars at the top of a function with the capability of an entire team – not by a long shot.
But that’s what many senior managers do; they forget there are lots of people in every function who don’t even have the most primitive skills for the crushing demands of fast-paced, game-changing program work.
You’d have a better shot at winning the jackpot in Las Vegas.
Business-critical programs must be done alongside delivering excellence in ongoing operations. Doing both through the functional organisation is virtually impossible. But many companies try.
Even questioning this approach is a foreign concept to most senior managers.
Functional organisations are permanently resource-challenged – and creaking at the seams. How can it make sense to dump one or more, game-changing programs on top of their normal workload – and not expect serious consequences?
Like unexploded ordnance, these triggers remain just under the surface, for many months, before exploding out of the blue. Quite simply, organisation choices for strategic programs do have a dramatic impact on financial results.
So, let’s pause for a moment…
Functional structures were designed for repeatability and predictability by the Ford Motor Company and General Motors one hundred years ago. They were never designed for tackling business-critical programs. Back then, the stresses and strains of business–critical programs were never imagined or understood.
There are basic irreconcilable clashes between normal business operations and business-critical programs. No matter how much senior management like to overlook the issue.
These clashes are unavoidable and guarantee the two are always in conflict.
This fundamental truth goes to the very heart of how managers are trained, how organisations are designed, how people behave in them – and how performance is measured.
Management practice in normal business functions has almost nothing in common with the management principles for running business-critical programs.
That’s why functions quickly run into a brick wall with any program that’s not run-of-the-mill.
Some executives argue passionately that it “ought to be possible” to run complex programs alongside BAU. This is “drive-by” management. Theoretical drivel based on little more than gut-feelings, half-truths and misconceptions – mostly by people who have never successfully done it before.
Unless programs are separate from normal operations, business-as-usual is king. That’s a fact.
Day-to-day tactical work always overshadows the change agenda. Programs are starved of critical resource and essential change work is put on the back-burner; teams are just too busy with other work.
But, over time, the logjam of back-burner work becomes so severe that BAU almost shudders to a halt – and a special program is required to accelerate essential change work that’s moving at a snail’s pace.
If programs are truly business-critical, you simply can’t expect to get program work done with slivers of people’s time. It’s a fantasy- and no amount of cunning wizardry can change that.
And you certainly can’t get it done without processes and a management system (governance) that is as robust as normal business unit processes – like you’d find in Finance.
Executive management constantly closes their eyes to this, unintentionally or otherwise.
The truth is most businesses don’t have a recognisable process for program setup execution. There may be a program management manual somewhere, defining what the processes ought to be.
But even if it’s relevant, it’s rarely used. Manuals are used as doorstops, or even for propping up screen projectors.
You think I’m kidding?
If you can’t describe what you are doing as a process, you don’t understand squat about what you are doing.
Many businesses don’t have rigorous processes on business-critical programs and sponsors don’t seem to mind, no matter how many times it screws up important programs.
This kind of circular cognitive dissonance sets companies back years.
If people are asked to rate their business’ ability to craft strategy, on a scale of 1-5, (5 is high), most people would score 4 or 5; they believe their business is good at generating ideas and strategies.
But ask them to rate their business’ ability to convert strategy into concrete results, the score typically plunges to a 1 or 2; they believe their business is mediocre, or worse, at executing strategy.
So why is this? Is it because ideas are easy to come by and execution is hard?
Execution is hard – but no harder than strategy. Making much clearer – and coherent – choices about where a business plays and how it will compete sharpens execution focus. Better choices about target customers, propositions – and the superior capabilities needed to deliver those propositions – allows a business to consistently out-execute competitors with mediocre strategies.
Strategy is a professionalised process in most companies; it’s well understood. But there are not many professionalised execution processes in operation; they’re patchy or non-existent. But exceptional results don’t come from execution alone. You can’t have good execution without good strategy.
Compounding the problem, organisational choices for strategic programs are made by managers who don’t understand the practical challenges nearly as well as they should.
Boards crawl all over strategies before they sign them off, but they don’t pay the same level of attention to how work will get done.
This is a colossal mistake.
The critical question for the board to ask is what type of program are we running? Is it regular or complex? Is it time-critical and cutting edge?
If it really is a regular program, go ahead and run it through the functional structure. If it’s a complex business-critical program, don’t kid yourself that you can run it through BAU. Smarten up. You need a separate standalone team, a capable leader with its own resources, unconstrained by BAU management practices.
Executive teams must be in a position to make informed decisions on priorities and resource allocation – with transparent data. Clarity fixes confidence.
You don’t get transparency from groups with blurred accountabilities. Specifically, running critical programs with fragments of people’s time. It’s impossible to understand who is working on what.
What you get is vomit information. It would be easier to split the atom.
Transparency on business-critical programs comes from separate, standalone teams with true accountability.
So, don’t skate over it. Ask the right question – if you don’t want permanent also-ran status. Is the program regular or complex?
You take a major step toward celebrating a rare program success if you answer this question frankly and honestly. And, crucially, act on the information.
The choice is literally the difference between playing checkers or chess. Even a brilliant checkers player will get wiped out using checkers rules to play chess.
But that’s what too many executive teams do.
If you want to know more about strategy execution from industry specialists, download Mentor’s ebook “It’s Deja Vu all over again”. It discusses how management blindspots come about and suggests ways in which they can be completely sidestepped.