How often do you hear people ranging from senior executives to managers, operators and analysts refer to their “strategy,” their “plan”? How often do you hear the same people talk about how their corporation or their division or department became sidetracked, and business had not gone quite the way everyone expected?

Strategy implementation is the process that turns strategies and plans into actions to achieve set objectives and goals.

According to a Fortune magazine story some years ago, nine out of ten organizations fail to implement their strategic plan for many reasons:

• 60% of organizations don’t link strategy to budget
• 75% of organizations don’t link employee incentives to strategy
• 86% of business owners and managers spend less than one hour per month discussing strategy
• 95% of a typical workforce doesn’t understand their organization’s strategy

There is plenty of evidence that organizations are no better at implementing strategy today. Commitment to delivering on strategic actions requires managers to allocate resources in long-term strategic plans, in operating plans and finally in budgets to move a strategic plan from a vision of actions intended to drive their business into the future. It is a sorry observation that people talk so highly of their strategic plans but so often their organizations fail to implement them.

Important to know:

• The strategic plan addresses the the what and why of business actions, whereas implementation addresses who, where, when, and how.
• Strategy implementation is the process that turns strategies and plans into actions to achieve both a vision of the future and associated financial and non-financial goals (like customer satisfaction).
• Implementing your strategic plan is as important, or even more important, than creating your strategy.

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In other words, the big challenge is for managers to be held responsible for doing different things and doing things in different ways to implement the strategy. Managers also have to be given the resources, authority, and accountability to do them.

Clearly there is no obvious antidote for an irrelevant strategy, but for one that is relevant, there are critical implementation steps. Many of these steps involve the Financial Planning and Analysis departments and well-orchestrated activities rolled out to the whole organization:

• Align strategic financial long term/medium/short term plans (budget)
• Build all department annual plans around the strategic plan
• Produce specific versions of the plan for each business unit or service
• Establish a system of scorecards for tracking and monitoring performance to plans
• Establish and align performance management and reward system
• Establish reporting to monitor progress/performance
• Set up frequent strategy implementation status meetings and
• Set up financial simulation modeling, forecast updates, and what-if analysis
• Set up annual strategic review dates
• Create a long-term calendar plan

Finance staff, CFO’s, Controllers are more important to the success of the organization they serve than has ever been the case before. That is because the measurement of success is “value creation” where the emphasis is on future expectations and strategic directions. FP&A departments are the key people for assessing decisions with future-oriented analysis and a high degree of discipline because volatility, the exponential rate of change and the rise of significant risk demand it, and senior executives and all stakeholders deserve the opportunity to benefit from making well-informed decisions.