Kheepe Moremi
Kheepe Moremi

How to bridge the promises and results gap

The strategy discipline, in all its manifestations, has grown in popularity, stature and usage, especially considering the fact that Peter Drucker was forced to change the title of his book from “Business Strategies” to Managing for Results partly because then strategy was deemed to belong to the military or perhaps political campaigns but not to business. These days, businesses, government departments and non-profit organisations, big and small, and at different stages of their evolutionary cycles embark on strategic planning exercises every year to develop long-term, medium-term strategies as well as annual operating plans. It is also now commonplace for different divisions and subdivisions within these entities to embark on these processes.

It is no wonder that strategic planning ranked first in Bain’s 2007 Management Tools and Trends top 10 most used tools. Though it is not within the scope of this article to delve into the key driving forces behind this trend but, at the face of it, it would appear as though the trend towards strategising or planning is being driven by policy, legislative or governance requirements. At least this appears to be the case within the South African public service. To note, Treasury Regulations, chapters 29 and 30, as well as the Framework for Managing Programme Performance Information require government entities to, among other things, develop strategic plans specifying the entity’s objectives, indicators and targets that then get translated into annual operating plans and also form the basis of quarterly and annual reporting.

Although the planning trend is set to grow in the South African public service, my sense is that the focus will now shift towards the quality of planning and also towards ensuring that government departments produce impactful and deliverable plans. There are two underlying reasons for this. Firstly, the recession, which South Africa seems to be tentatively coming out of, has wiped off a substantial portion of the government’s revenue base, as a result the scarce money will have to be allocated to areas that make the most difference. Given the global economic uncertainties that we may live with for some time, I suspect this move will not be a once-off event. Secondly, the planning, monitoring and evaluation moves initiated by the Presidency aimed at, among other things, developing a coherent and coordinated national strategic plan as well as ensuring that sector and entity level plans are geared towards outcomes, combined with the fact that the Auditor General is set to start giving audit opinion on the performance of audited entities against set objectives, I sense that this interplay will lead to qualitative improvement in planning and service delivery in the public service.

Though the moves cited above are welcome and provide a positive signpost, I think policy makers and government officials will be well-advised to take into account the universal strategy cracks that have been spotted and documented by practitioners and academics around the globe. Though some of the cracks have been incorporated into the frameworks and green papers cited above, I do believe that it may worthwhile for government officials and policy makers to glance through some of the insights shared, who knows, this may trigger a “eureka moment”.

The biggest identified crack is the “planning and doing gap” or the “promises versus delivery gap”. For instance Morgan, Levitt and Malek in Executing Your Strategy (2007) indicate that less than 10% of effectively formulated strategies carry through to successful implementation, thus suggesting that 90% of companies fail to execute their strategies. Kaplan and Norton (authors of The Balanced Scorecard) in The Execution Premium (2008) also quote surveys which suggest that 60% to 80% of companies fall far short of the targets expressed in their strategic plans. In addition to the above, Gilbert, Buchel and Davidson in Smarter Execution (2008) also cite surveys which suggest that only 3% of executives believed that their companies executed their strategies effectively.

There are numerous reasons advanced for this state of affairs, for instance, Kaplan and Norton attribute the problem to the following factors:

1) Only 40% of companies linked their strategies to budgets.
2) 30% linked compensation to strategy, fewer than 10% of employees in the majority of companies surveyed reported that they understood their company’s strategy, as such cannot link their daily activities to its successful execution.
3) 85% of executive teams spent less than one hour per month discussing strategy, with 50% reporting that they spent virtually no time on strategy discussions.

Collins and Rukstad in the Harvard Business Review article “Can You Say What Your Strategy Is?” (April 2008) believe that the problem lies with the failure by entities to synthesise their strategies (defined as objectives, scope and advantage) into a simple and clear strategy statements, as a result the strategy does not cascade properly throughout the organisation, hence it does not get executed properly.

Though many of the reasons advanced above are valid and definitely contribute to the state of affairs, I believe that in most situations the main contributing factor lays with inadequate strategy formulation processes. In the Harvard Business Review article “What Is Wrong With Strategy?” (Nov-Dec 1988) Campbell and Alexander indicate that most planning processes do not come up with any new or effective strategies because the strategies that emerge are not anchored or premised on the basic ingredient of a good strategy, namely insight. Because of this, Campbell and Alexander argue that most planning processes set unrealistic or unachievable objectives.

In turn, because the strategies and tactics are not premised on solid insights, they are also ineffective or not implement able. Campbell and Alexander go on to argue that “planning processes are not strategic unless they initially focus on defining insights from which a strategy will be developed … and developing strategy without insights is dangerous because it leads to unrealistic plans”. Net, my sense is that it is important for private companies and government to spend time and effort identifying and articulating insights on which any strategy or operational plan will be based as this increases the odds of success. Insights, will help identify key drivers that will deliver the set outcomes, as well as the internal operating and social levers that will need to be pulled to create movement towards the desired outcomes. This will also makes it easier to determine how changes within the broad operating environment will impact on the outcome drivers and also what changes and adjustments to make well in advance.

  • Jon

    Talk less; do more.

    (Only 4 words needed.)

  • nyimpini

    Great article,agreed. In addition to Kheepe’s thoughts, the gap to execution is due to lack of ownership of strategy by the exec, i.e. transfer from team that developed (most consultants as facilitators) to those who will implement (mostly internal staff). have seen this at play mostly in government/ public institution where internal participation in strategy development is minimal.The insight gap is so profound, especially regarding competitive insights. Most companies do competitive analysis, not intelligence. More companies believe they understand competitors than they really do, and continue to be surprised by competitor actions. Real competitive intelligence can lead to a company being able to ANTICIPATE a competitor action. Lastly leadership continuity is also an issue, management turnover is relatively high, and a ‘new broom’sweeps cleaner, new leaderhship want to come up with own strategy – yet general staff gets tired of this new strategy annually. Companies that do well, especially on implementing strategy have a long term view – implementing a 5 year strategy, than one that changes annually

  • The Sage

    [looks out of his office window towards the Union Buildings]

    Hope someone up there gets a copy of this, and circulates it around all departments.

    I always find it amazing when use phrases such as ‘pie in the sky’ and ‘out of touch with implementation realities’ when a strategy is is not implemented succesfully. You call them in for a strategy review, and their mindset changes.

    Great article!

  • Peter Joffe

    Why has the budget for the gravy train remained untouched and has in fact increased?? Clearly this very important aspect of our economy has preference. Service to the gravy train is all that matters as all the other ‘promises’ are simple electioneering. If you cannot deliver and don’t even intend to deliver a lie will do and the electorate will look forward with bated breath to the ‘promise’ coming true but, if it does not come true then give the politicians another 5 years to see if they can do better!! All the promises, plans and special committees set up to solve delivery problems are there to see to it that those in power stay there no matter what. South Africa has to few producers to pay for the needs of all the non producers. Education is the only answer but the government in their wisdom have destroyed what little there was and replaced it with worthless paper certificates.

  • http://www.tebucapital.co.za Makhosini Ndlovu

    Issues raised regarding the implementation of government strategies are relevant this also applies the the private sector. What is lacking in the goverment space are the resources to implement the designed strategies.

    Most of the government brilliant strategies are written by outsourced consultants and they are passed on to government personnel. Most of them lack the necessary skills to implement or even comprehent the intended objectives be it short/medium/long term.

    What is critical is for any strategy to work efficiently is to look at the entire value chain. This means that the team that designed the strategy should be given the opportunity to implement and live it until the intended objectives are fulfilled.

    This will eliminate a lot of gaps mentioned by Kheepe in his article “How to bridge the promises and results gap” and it will drive accountability both from the outsourced consultant and government personnel. If this takes place it will eliminate consultants that just write strategies which are unrealistic as mentioned by Kheepe, directly or indirectly this has a huge bearing of cost saving and improvement in the delivery.

    Also if well capacable consultants get involved in the life of projects there will be a transfer of skills to government personnel given that they will form part of the team that will involved in the delivery of the intended objectives.

    Overall very good insights Kheepe which can be expanded further infact this also give the gvt the opportunity to revaluate their procument criteria.

  • MLH

    Please don’t encourage government to do more planning. At it is, it sits around on its butt for 8 hours a day, four days a week planning. What it needs to learn is to act on complaints, answer telephones and do some work. Most government employees consider themselves ‘consultant managers’. I.e. they attempt to manage work they don’t know how to do themselves, which is why they have no idea of ‘going rates’ and project management.

  • Edwin Roberts

    Great article Kheepe, thanks for sharing your research and oppinion. The insights afforded by Kaplan and Norton also highlight why annual strategy sessions are so ineffective, 85% of executive teams spent less than one hour per month discussing strategy, with 50% reporting that they spent virtually no time on strategy discussions. Cultivating insights through scenario modelling is equally important and provides the context for ongoing review and refinement of the strategy. Anyone who’s read 24/7 Innovation by Stephen Shapiro will appreciate why strategy cannot be an infrequent exercise.
    My motto is “CHOOSE YOUR FUTURE OR BECOME A CASUALTY OF IT”.

  • Donald Liphoko

    Spot on Makhosini, Nyimpini. I think we can agree that the single glaring gap in public service strategy implementation is a lack of internal capacity. The best laid plans fail in the absence of competent execution. Has anyone forwarded this to Collins and Trevor?

  • evoTapiwa

    Woa good stuff there. Keep this juice following it will get through someday.

    I liked the concept of insight, most managers do not have adequate information for the strategy sessions and end up with poor scenario solutions. Managers must exhaust time sourcing information that relates to the strategy if they are to have insight based / driven strategies.

    Good article thanks a million!

  • http://mohaleslive.co.za mohale

    Well researched article Cde Kheepe. Alignment of organisational strategic objectives with business unit objective is also critical in order to achieve the overall organisational objectives.Most of organisation business units operate independently from each other and some time duplicate projects which can be shared within the organisation.Due to insecurity of senior staff most lower level staff are not involved in the development of organisational annual strategic plan and this lead to KPI of employees not align to the organisational operational plan which has been translated from the strategic plan.

    Unless colaborations of projects and involvement of all staff within organisations in development of organisational strategic plan is clarified most strategic objective will not be achieved.Ownership of organisational strategy should start from the factory floor staff to the top managment, then KPI of all staff will be easily implemented ,monitored and organisational strategic objective will be acheived.

    Tool of analysis will be used to assess organisational performance probaly through quarterly reviews and monthly report to improve staff and organisational performance.

    Aluta continua!!

  • Sikhumbuzo Thomo

    From what l have studied both in political sciences and warfare, an obsevation from this articlw is that strategy is reduced to the actual tactic. And from a policy perspective it would hav to be based on concrete objective realities not speculation.

    In a combat situation for instance the tactics would inform us how we position our troops to attain a particular subjective factor of the war while the strategy teaches us the overall coordination from infantry right through all the ranks to achieve the objective of the war.

    This is why in politics it is often refered to as both strategy and tactics not in isolation of the other, to bring in the implementation (tactic) post all the planning (strategising) and his is where the business definition falls short in my view.

    Now time to time the outlook of the overall strategy can be altered to suit the conditions at implemenation level and vice versa; the outlook of a political struggle can be summarised by the most viable tactic for instance. An example would be an armed struggle as opposed to say protestant deposition. Depending on which gains the reqiured results has the bearing in the overall planning process towards the goal to be realised.

    So its fluid not too rigid because conditions are always changing and strategists we need to adapt to all situations as they present themselves while preserving the traditions (expiriences) learned along the road.

    Sikhumbuzo Thomo

  • Bovril24

    Nice article – though I would caution that those who refer to Peter Drucker are referring to my business god!. He is a true philosopher of the business process. His paradigm that the only true purpose of a business is to ‘create a customer’ is so basic and true but is seemingly forgotten by business leaders today who are obsessed with their stock value (particularly their own) and not the customers who make their business possible in the first place.

    30-years ago, Drucker was way ahead of his time in forecasting the dangers of easy computer information as a substitute for real knowledge & wisdom (knowledge put to work.)

    Today we are suffering from the incompetence of the cut and paste generation, a mindless pastime designed to stifle original thought and mind- f–k CEOs and clients alike.

  • Fana Mazamisa

    Insightful article indeed, Mr Moremi.My view is that the strategy disconnect can be attributed to a number of tangible and intangible business reasons, some documented and some still undiscovered.I think its starts with an organizational inherent ability to craft the strategic direction through the retention of skilled managers (and workers) who possess the technical and emotional depth to drive the core strategic pillars of its organizational future.

    In my view strategy does not matter if it fails to enable the organization to remain competitive through unmatched product portfolio.A case in point, is the famous story of the Fortune 500 companY,Appl.Mr Jobs has got the hang of it, in that the speed of strategic innovation has enabled Apple to introduce “blue ocean” markets.Its the passion, its the creativity and lastly the ability to make strategic planning selfishly centred on crafting products, and brands that sell the strategic story.

    Finally, gone are the days when strategy had to be left to consultans, experts, academics etc.Its now increasingly becoming the realm of frontline workers, those that manage and drive customer/ consumer value at the transaction level.Strategy can only come to live if these workers are enlisted and are empowered to shape the company direction in the medium and long term.