Download Effective Strategy Implementation Best Practice that Really Works

Symposium on International Safeguards:
Linking Strategy, Implementation and People
Vienna, Austria, 20-24 October 2014
Effective Strategy Implementation
Best Practice that Really Works
Primary Author
Dr. Roger Howsley, Executive Director
(World Institute for Nuclear Security)
Co-Authors
Vesna Gradt
Raquel Delgado
(World Institute for Nuclear Security)
Effective Strategy Implementation - Best Practice that Really Works
Abstract The application of Business Performance Management (BPM) was traditionally associated with the
Balanced Scorecard developed by Keppler and Norton over 20 years ago and used primarily in commercial
organisations where Shareholder value was the priority. This paper describes how the approach has evolved
to focus on Stakeholder priorities rather than profit, how it has been applied successfully to the management
of nuclear security performance, and how it can be applied to any type of organisation—whether in the
public or private sector. Strategy Mapping clarifies organisational priorities, allows staff to understand their
role and contribution much more clearly, and has a significant motivational impact on most organisations to
which it is applied.
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Effective Strategy Implementation - Best Practice that Really Works
Introduction to WINS WINS was launched in September 2008 with the mission to provide those who are accountable for nuclear
security with an international forum in which to share and promote best security practice. In the words of
Mohamed ElBaradei, the former IAEA Director General at the launch of WINS: “WINS fills an urgent gap
in our need to strengthen the nuclear security system.”
WINS was created to be a complement to the IAEA and supports its objectives. Our message, consistent
with IAEA guidance, addresses the urgent need to improve the security of nuclear and other radioactive
material worldwide. Whilst the IAEA is rightly seen as the key intergovernmental organisation to promote
civil nuclear security guidelines and recommendations, WINS plays a complementary role in its mission to
help practitioners in a wide variety of relevant professions learn from operational experience, identify and
share best nuclear security management practices, and achieve Nuclear Security Excellence.
In barely six years of operations, we have:
- Grown our membership to over 2,300 members in 108 countries;
- Organised over 55 international workshops and facilitated events in 21 countries using innovative
techniques, including the pioneering of theatre-based training for nuclear security;
- Published 33 Best Practice Guides, over 33,000 of which have been downloaded/distributed;
- Certified our Quality Management System against the ISO 9001 international standard;
- Launched (in 2014) the first certification programme in the world for nuclear security management.
Surveying the impact of our work and measuring performance are a routine part of our mission. We
frequently ask our members for their views on WINS’ approach, products, contribution and service attitude.
Feedback from practitioners that use WINS to help improve nuclear security is exceptionally positive. One
of the most important findings from the 2014 membership survey is that 99% of our members find WINS a
valuable forum, and over 90% of our members have modified their approach to nuclear security as a result
of their interactions with WINS. However, we constantly strive to improve our operational performance and
strategic vision and have found that Strategy Mapping is an effective tool for linking strategy,
implementation and people.
Strategic Objectives IAEA Guidance makes clear that States should “Ensure that prime responsibility for the security of nuclear
material, other radioactive material, associated facilities, associated activities, sensitive information and
sensitive information assets rests with the authorized person.” In our opinion, this means that security
should be managed as an enterprise-wide activity at a strategic level within relevant organisations.
We believe that an effective nuclear security strategy should (in this order):
1. Help every Board Director and Executive Manager understand the relevance of effective security to
their organisation;
2. Contribute to their understanding of how security supports their personal success;
3. Manage security as a business discipline and not as a regulatory burden.
Achieving excellent, effective strategy implementation is a challenge to every organisation, whatever the
scope of that strategy, and identifying and addressing the challenges and hurdles is fundamental to
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Effective Strategy Implementation - Best Practice that Really Works
successful implementation. Research has shown that common hurdles to strategy implementation exist, as
summarised in the following chart:
COGNITIVE An organisation wedded to the status quo POLITICAL Opposition from powerful vested interests THE HURDLES RESOURCE Limited resources MOTIVATIONAL Unmotivated staff The Harvard Business Review researched more than 26,000 people in over 31 organisations and identified
the most important factors influencing the implementation of effective strategy. According to this research,
successful organisations (as measured by the achievement of their strategic objectives) do the following
things better than less successful organisations:
•
•
•
Ensure employees and departments have clear accountabilities and understand the implications of
their decisions,
Communicate well and share best practices, and
Communicate across organisational boundaries.
Strategic Planning Tools Balanced Scorecards (BSCs) were developed by Kaplan and Norton in the 1990s to help organisations
manage the implementation of their strategies. Now, two decades later, almost 60% of the world’s leading
organisations use BSCs to support strategy implementation. In its simplest form, the BSC breaks down
performance monitoring into four interconnected areas:
However, the four-box model has some shortcomings. For example, organisations can easily create a
number of discrete objectives and measures for each perspective without linking them to the others. This
can lead to siloed activities and attitudes, as well as to strategies that lack cohesion and are poorly
integrated.
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Effective Strategy Implementation - Best Practice that Really Works
Because of this, the four-box model has evolved to become what is known as a “Strategy Map.” A Strategy
Map places four perspectives (Financial, Customer, Internal Processes and Learning & Growth) in a
hierarchical relationship to show how each objective supports the others. Strategy Maps were initially
designed for commercial companies whose underlying goal is to make profit for their shareholders, but the
framework has now found widespread use in the public and government sectors.
Although the four perspectives are valid for all organisations, the ultimate aim for the non-profit sector is
different from that of the commercial sector. This is because non-profits exist to meet the needs of a wide
range of Stakeholders whilst working toward an overall vision and mission. This change of emphasis is
reflected in the chart below:
Commercial Sector
Non-­‐profit Sector
Financial Perspective
Maximising Shareholders’ Value
Customer Perspective
Serving Stakeholders’ Needs
Customer Perspective
Financial Perspective
Internal Process
Internal Process
Learning and Growth Perspective
Learning and Growth Perspective
Strategy Mapping – WINS as an Example Well into its sixth year of operation, WINS has evolved in both mission and vision, as has the external
context in which WINS operates. Driven by these factors and increased strategic experience, WINS has
commenced a structured review of its objectives using Strategy Mapping.
Numerous and diverse Stakeholders are associated with WINS, and their roles, associations and objectives
vary. They include operators, regulators, suppliers, competitors, policy makers, international organisations,
civil society and our funders. It is important in our strategy mapping process to identify all of our
Stakeholders and to focus on how WINS can best support their priorities and objectives within our overall
mission.
In short, the essence of Strategy Mapping is to act as a tool to help WINS satisfy the needs of our
Stakeholders whilst managing our finances, designing and implementing our internal processes and
controls, and ensuring that we have the right empowerment, alignment and competencies amongst our staff.
In order to achieve this, we need to:
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Effective Strategy Implementation - Best Practice that Really Works
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Establish the cause and effect relationship for each of WINS’ Stakeholders;
Ask ourselves how we satisfy our stakeholders’ needs;
Ask how we might operate differently to better meet their needs (continuous improvement);
Establish how we add real value through the use of meaningful metrics.
The validation of our contribution and added value is an important component of our strategic approach. It
begins with a philosophy that makes an honest assessment of external attitudes toward our work.
Validating our Performance Self-assessment of performance can be misleading. We believe that the only meaningful measure of
strategic performance is what Stakeholders believe; hence, we strive to avoid the trap of the Emperor’s New
Clothes. We call this the “Outside-In” perspective.
The$“Outside,In”$Approach$
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This means that wherever possible, we use external assessment of our performance, including formal
reviews of our quality management systems, financial accounts and procedures, staff coaching and
competency, and member/customer feedback.
Internal Processes: Performance Management An effective and living quality management system In keeping with our belief that continuous improvement and the sharing of best practice are both effective
and financially efficient, we submit our management systems to external audits as part of the internationally
agreed standards for Quality Management. WINS was awarded certification in accordance with ISO 9001 in
December 2012 and was recertified in December 2013. We work hard to not only maintain quality in all we
do, but to further develop our systems and processes, as well as to develop our capacity for further
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Effective Strategy Implementation - Best Practice that Really Works
certification and accreditation by external bodies. We continue to engage with our external stakeholders
under the guidance and oversight of our international Board of Directors, whose work is now an integral
part of the Quality Management System and subject to performance review. Internally, we are focussing on
strengthening our individual and organisational competencies and capacity so we can further serve our
mission and objectives.
Meaningful lagging and leading Key Performance Indicators (KPIs) After identifying all the strategic and operational objectives in each perspective of the Strategy Map, it is
essential to identify the best way to measure performance. Two types of KPI are commonly used: lagging
and leading indicators. Lagging Indicators relate to events that occurred in the past. They are important but
generally tell you little about what your organisation is doing to implement improvements. On the other
hand, Leading Indicators focus on future performance and continuous improvement.
All KPIs are intended to measure performance in order to identify potential problem areas, stimulate
actions, document management efforts and reinforce improvements in behaviour. Similarly, all KPIs should
be based on a realistic assessment of cause and effect. In other words, the indicators should:
•
•
•
•
•
•
Adequately map and identify causal linkages (root causes, precursors, events and outcomes)
Consistently, accurately and reliably measure what they are supposed to
Provide information that is relevant to required management decisions and actions
Facilitate accurate and detailed comparisons
Lead to the correct conclusions
Be understood by the personnel responsible for implementing change
Impact on staff competence and performance Strategy should not be a document that is written by the Executive Management Team and filed in the
CEO’s desk. It is a vision for the entire organisation that must be owned by the entire organisation. The key
reason strategy execution fails is because staff in the organisation don’t support it. If your staff and critical
stakeholders don’t understand the strategy and fail to engage on it, the strategy will fail. For the vision to
succeed, all stakeholders must engage with, live and breathe it. Aligning the organisation behind the
strategy is therefore fundamental to its success.
Conclusions 1. Strategy Mapping is powerful, highly recommended tool; the strategy mapping process is a key
factor for successful strategy implementation.
2. It is essential to identify your External Stakeholders and to use a meaningful Outside–In
perspective and assessment.
3. Be honest in your assessment of Performance and strive to avoid the traps of Corporate Kidology
and the Emperor’s New Clothes.
4. Carefully analyse Potential Strategic Obstacles to Change because Cognitive, Political,
Motivational and Resource obstacles must be understood and addressed if the strategy is to succeed.
5. Include influential employees, not just Executive Management Team members, in the planning
process.
6. Focus on communication by ensuring that all staff members understand the strategic vision and
themes, as well as their role in delivering them.
7. Be sure to clarify that all employees are aware of the expectations placed on them.
8. Always measure the outcomes of Leading and Lagging Metrics at least once a month because this
knowledge is essential to your programme.
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Effective Strategy Implementation - Best Practice that Really Works
And as a final consideration it is important to remember that all organisations, and departments within
organisations, are dependent on each other in some way. Sometimes this can lead to a view of “How can we
possibly conduct a strategy review, or map the priorities, or introduce quality management systems until the
organisation or department above us takes action first?”
We believe that if there are obstacles or unmovable hurdles above you, or a lack of interest or competency
to think strategically, it is still worth the effort to align the strategic objectives and processes that are under
your control. Your performance, alignment and staff satisfaction will be much higher as a result.
External Sources Much of the information provided in this paper is available in the form of reports or other documents on the
WINS website; www.wins.org
IAEA Nuclear Series No 20; Nuclear Security Fundamentals, 2013
Jones, P. (2011). Strategy Mapping for Learning Organizations: Building Agility into Your Balanced
Scorecard. London: Gower.
Kaplan, R. S., & Norton, D. P. (2006). Alignment: Using the Balanced Scorecard to Create Corporate
Synergies. Boston: Harvard Business School Press.
Kaplan, R. S., & Norton, D. P. (2005, July). The Balanced Scorecard: Measures That Drive Performance.
Harvard Business Review, 71-79.
Kaplan, R. S., & Norton, D. P. (2004). Strategy Maps: Converting Intangible Assets into Tangible
Outcomes. Boston: Harvard Business School Press.
"The Emperor's New Clothes" was first published on 7 April 1837 by C.A. Reitzel in Copenhagen as the
third and final installment of the first collection of Andersen's Fairy Tales Told for Children.
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