- Remain focused on strategy
- Determine critical initiatives to focus company time and resources
- Communicate initiatives to all levels of the company
- Measure initiatives against pre-determined measures
At the Bloomberg Breakaway summit, members break into workshops where they dive deep into innovative growth strategies with top management experts and practitioners. These hands-on, immersive experiences allow members to work together and create solutions to succeed in today’s disruptive business environment.
Bloomberg Breakaway Annual Summit, May 3, 2017
Lisa Kaplowitz, Assistant Professor of Professional Practice, Rutgers Business School
Too often, the finance department is thought of as only about financial controls and raising capital. But while it’s true that its critical functions are to ensure accurate reporting and preserve capital and assets, the finance department’s strategic value is often overlooked. CFOs and their teams can and should partner with CEOs when it comes to developing, and more importantly, executing strategy.
Effective strategic execution needs, first and foremost, a performance-based culture in which transparency and accountability are the norm, data is trusted and relied upon, and everyone in the organization is aligned with the mission.
As the keeper of the metrics and measures, finance understands the value of data integrity and is good at “getting stuff done.” This makes the department the de-facto driving force for ensuring that critical initiatives are completed in accordance with the timeline established.
Effective execution of strategy requires:
- Communicating aims to middle managers/line workers
- Defining success
- Allocating resources
- Aligning incentives
- Being transparent and accountable
In addition to creating a performance-based culture, companies need to look beyond the typical financial Key Performance Indicators (KPIs).
Within each category, there are critical initiatives for which teams and individuals are held accountable. Each initiative has a timeline, a predetermined target value of success, and a direct causal relationship to the company strategy. By creating this link, employees at all levels quickly understand where to focus their time and can understand the impact their daily work has on the overall company.
To further motivate employees, it is important to create an incentive compensation structure that is aligned with the execution of the company’s strategy. Employees should have their own personal Balance Scorecards, focused on achieving individual targets, which then serve as the basis for incentive compensation.
For the personal Balanced Scorecard to be most effective, the employee needs to buy into the target measures and believe that it is within his/her control to achieve them. By linking compensation to hitting targets, the company is communicating to employees at all levels that success is dependent on the achievement of each individual.
Interactive Poll: Our company’s executive team/senior leadership meets regularly to review progress on the strategic plan.