TURNING GREAT STRATEGY INTO GREAT PERFORMANCE

Mankins and Steele

The Strategy-to-Performance Gap

• Performance is often well below what strategy predicts

• Survey of executives found that– Companies rarely track performance against long-

term plans– Multiyear results rarely meet projections– A lot of value is lost in translation (i.e., no one clearly

knows how effective a strategy is)– Performance bottlenecks are frequently invisible to

top management– The strategy-to-performance gap fosters a culture of

underperformance (lack of performance becomes acceptable and the norm)

Closing the Strategy-to-Performance Gap

• Rule 1: Keep it simple, make it concrete– (not too abstract and unclear to many)

• Rule 2: Debate assumptions, not forecasts– (understand the fundamentals and performance

drivers)

• Rule 3: Use a rigorous framework, speak a common language– Use a very thorough and sound framework– Make it possible for corporate center and units to use

this framework in their communications

Closing the Strategy-to-Performance Gap (2)

• Rule 4: Discuss resource deployments early (avoid last minute shortages of resources)

• Rule 5: Clearly identify priorities (don’t give equal importance to all tactical actions)

• Rule 6: Continuously monitor performance• Rule 7: Reward and develop execution

capabilities (need to motivate and develop employees)

The Results?

• An increase in performance of anywhere from 60% to 100%.

• More confidence among employees and managers

• Emergence of a culture of over performance

• Enhanced reputation within the industry