Identifying the right strategy to navigate through challenging times is one thing, but what chance do people have of executing company strategy if they don’t know what it is? With global power shifting from west to east, the emergence of new competitors, an aging workforce, a growing skills gap, and social-media connectivity, business strategies are being developed and executed in some of the most uncertain times in several generations.

Business leaders who recognize potential organizational shortcomings and bridge this strategy and execution gap will emerge as the winners in the Next Economy. An independent survey we conducted in conjunction with Accenture found that companies today are not effectively executing against strategy and the business leaders know it—with 80% recognizing they are not doing their best to communicate strategy throughout the organization, let alone execute against it. Many companies are already realizing that a well-informed workforce is a productive and effective workforce.

Simply by improving how you align your people, motivate and empower them to collaborate more effectively, you will see your organizational productivity improve dramatically.

Sound Familiar?

> Enterprise organizations are failing to monitor, motivate and retain employees. Only 17% of organizations know all its top-performing employees and are looking to develop them for future roles.

> Two-thirds of organizations have a pay-for-performance policy, but of those, only one–in-five ensures that rewards are always aligned to contributions accurately.

> Only 12% of respondents who monitor staff goals and their execution have an IT system that delivers the information needed for goal management and execution. Nearly 40% of organizations are trying to measure the time to real performance, but lack the necessary data and systems to support this goal.

If any of the above sounds all too familiar, you should read the full story in our research report, ‘The Link Between Strategic Alignment and Staff Productivity’, and the accompanying SuccessFactors and Accenture whitepaper, ‘Winners & Losers in The New Economy’. You can download both articles at The Next Economy.

Connectivity Scorecard is a global ICT index – the first of its kind to rank 50 countries not only on their deployment of ICT infrastructure but also to measure the extent to which governments, businesses and consumers make use of connectivity technologies to enhance social and economic prosperity, so called “useful connectivity”.

Connectivity Scorecard 2010 highlights the continued need for investment in information and communications technology (ICT) to stimulate a return to economic growth. Here is the top 10 list for 2010. If you’re interested in comparing the development over time I suggest you visit their homepage and download the whole report.

With the winter Olympics just starting I was hoping that this list would be as contagious to the medal count as is a flu in a kindergarten. Bring it on.

There are significant differences between different regions that are noteworthy. In the US productivity (in per hour terms) actually grew 2.5%. This was explained by how companies in the US quicker and more drastically reduced their workforce to make the cost side of the productivity equation smaller. Productivity growth in the US is projected at 3%.

It’s interesting to contrast this to the European productivity growth that turned negative in 2009 where output per hour fell 1 percent.

“These are unusually large differences in productivity growth between the United States and Europe,” said Bart van Ark, chief economist of The Conference Board. “U.S. employers have reacted much more strongly to the recession than their European counterparts in terms of cutting jobs and hours. In 2010, both Europe and the United States will see higher productivity growth coming out of recession. However, a jobless productivity recovery is the most likely scenario in both regions.”

It’s also very interesting to see how for example the Chinese market at the same time had a productivity growth of 8.2%.

Good luck with your growth and productivity gains in 2010.

I read this blog from a recent customer of ours http://www.core3solutions.com/home/ A small niche IT -solutions provider.

As a small business in a service industry, productivity and profitability depend almost entirely on our employees performing at their full potential. The challenge is then how do you effectively manage performance? How can a small organization streamline human resources through meaningful performance reviews, aligning employee goals to organizational goals, and make informed decisions when recognizing top performers…

For them the answer is to leverage our Business Execution software.

By the way you have to check out Roxie – their Director of Entertainment

According to an adviser David MacLeod to the group behind this research Department for Business, Innovation and Skills (Bis) there’s a huge loss at stake.

“This is just one example of how poor employee engagement can put the brakes on improved business performance. If leaders don’t explain where the business is going and what it’s seeking to achieve, how can people be motivated or know what they’re meant to contribute? Clear goals are a key ingredient for achieving performance and productivity – but worryingly this research suggests many employers haven’t yet grasped this for 2010.”

MacLeod further said that the financial benefit of engaging with staff is very real – if employer actions raise engagement by just 10 per cent, they could typically increase profits by up to £1,500 per employee per year.

Well I don’t know the details behind this particular study but it’s very consistent with tons of other research on the topic of the financial benefit from increasing people’s engagement levels from helping them know what to do. After all who’d argue that not knowing where the company’s heading nor not knowing what to do would make any sense at all.

Full post on the study results can be found here.

What is more important of course is to understand what drives individuals commitment or engagement levels. We know that understanding how what you do on a daily basis matters to the company and your customers is a key factor. What if you could get instant feedback on how you’re doing. I mean instant like in sports when people applaud or buh every move.

I just got back from a business trip to China and at the new airport in Beijing when going through customs you get the opportunity to provide instant feedback to the passport officer on duty. Talk about taking this seriously empowering the customer to provide instant feedback and the company in this case the government of China to take instant action to resolve any immediate issues as well constantly learn how to improve and become better.

On a side note if you’ve been through Heathrow lately I’m sure you understand and sympathize with me when I say that we all would want a way to provide feedback and help them improve as well. Happy travels!

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CEO’s continue to rate execution excellence as their top challenge. But what does “excellence in execution” actually mean? The CEO wants to turn the wheel and have the ship respond, but according to extensive research repeated year after year, only 10-15% of wheel turns get the ship moving in the intended direction. This means most ships are positioned poorly to weather a storm, and are also very likely to miss the trade winds of opportunity.

This disconnect between the captain, crew and ship is what I call the execution gap. Nobody argues there isn’t an execution gap in most companies. No one argues the execution gap isn’t costly – after all 85% of financial performance comes from execution. The big question is why? Why is there an execution gap? The basics of good business execution are thoroughly researched and described:

• Business alignment and
• People performance.

Excellence in execution requires an organization aligned around simple and clear business values. But the best practices on business alignment and people performance fly in the face of many of our deeply held but unexamined assumptions about leadership, teams and motivation.

There is a whole body of research around these deeply held but unexamined assumptions – social proof, fixed mindset, the liking effect, our oversimplified models of human behavior to name a few. Each of us has our own unique set of these assumptions, and companies are challenged to get complicated messages across such a diverse backdrop.

Excellence in execution is infrastructure, because processes and tools can incorporate and model best practices in execution to a degree and with a speed and flexibility not previously achievable for most organizations. And the results are clear. Companies that use processes and tools that incorporate execution best practices outperform their competitors.

Business execution software platforms like SuccessFactors propagate the company strategy to help the crew prioritize the one thing they need to do today from the 10,000 demands on their time. Crews who understand the priorities can apply their own wisdom and judgment – an execution best practice that increases company performance and individual motivation.

Together with social media software platforms like Spigit for internal innovation and Jive, SocialText, PBWorks, and Yammer for internal collaboration, these execution platforms create huge opportunities for companies to get their execution culture right and get it implemented. Internal collaboration and innovation tools create a dialogue within the company, allowing all crew members to inform the strategy and improve processes. Social networking communities, blogs, forums and Twitter let companies extend their culture and values beyond the organization and engage with their customers at a whole new level.

CEO’s no longer have to shout over the wind while crew members rush around trying to find and do their jobs, making their best guess as to what direction to set the sail. CEO’s can now steer an interconnected ship. The crew is connected to the CEO and to each other. The crew also has connections to the outside world that they can bring into discussions of the ship’s performance.

The execution gap is real, and is costing you money. The problem is not strategy, or analysis. “People know what to do but don’t do it”. Create a backbone for excellence in execution with tools and processes that model your values and incorporate best practices and you’ll fly across the seven seas.

I read the result from this survey from our friends at McKinsey & Co. where they found that there’s been a shift in how individual leaders lead during the past year. Respondents say that during the crisis, they have seen far more leaders focus on monitoring individual performance. This is a trail you have to walk carefully though. Leaders going micro managing and monitoring progress on activity are up for some problems.

As the respondents in this survey also notices it’s really about inspiring others and defining expectations and rewards. We talk about this as a manager’s duty to monitor and measure performance but really manage potential. Helping individuals on the right track to get all their inherit talent to propel the business forward. The more you use your talent potential the more output and the more it grows. No one really signed up for doing only part of what they can anyway. Anyway hopefully we got some good coming out of this current storm are the same ones they say will help their companies thrive in the future. The right people want to get it done so help them with that or get out of their way. If they don’t then yes you change that or you get them out of their way.

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CEO’s continue to rate execution excellence as their top challenge. But what does “excellence in execution” actually mean? The CEO wants to turn the wheel and have the ship respond, but according to extensive research repeated year after year, only 10-15% of wheel turns get the ship moving in the intended direction. This means most ships are positioned poorly to weather a storm, and are also very likely to miss the trade winds of opportunity.

This disconnect between the captain, crew and ship is what I call the execution gap. Nobody argues there isn’t an execution gap in most companies. No one argues the execution gap isn’t costly – after all 85% of financial performance comes from execution. The big question is why? Why is there an execution gap? The basics of good business execution are thoroughly researched and described:

• Business alignment and
• People performance.

Excellence in execution requires an organization aligned around simple and clear business values. But the best practices on business alignment and people performance fly in the face of many of our deeply held but unexamined assumptions about leadership, teams and motivation.

There is a whole body of research around these deeply held but unexamined assumptions – social proof, fixed mindset, the liking effect, our oversimplified models of human behavior to name a few. Each of us has our own unique set of these assumptions, and companies are challenged to get complicated messages across such a diverse backdrop.

Excellence in execution is infrastructure, because processes and tools can incorporate and model best practices in execution to a degree and with a speed and flexibility not previously achievable for most organizations. And the results are clear. Companies that use processes and tools that incorporate execution best practices outperform their competitors.

Business execution software platforms like SuccessFactors propagate the company strategy to help the crew prioritize the one thing they need to do today from the 10,000 demands on their time. Crews who understand the priorities can apply their own wisdom and judgment – an execution best practice that increases company performance and individual motivation.

Together with social media software platforms like Spigit for internal innovation and Jive, SocialText, PBWorks, and Yammer for internal collaboration, these execution platforms create huge opportunities for companies to get their execution culture right and get it implemented. Internal collaboration and innovation tools create a dialogue within the company, allowing all crew members to inform the strategy and improve processes. Social networking communities, blogs, forums and Twitter let companies extend their culture and values beyond the organization and engage with their customers at a whole new level.

CEO’s no longer have to shout over the wind while crew members rush around trying to find and do their jobs, making their best guess as to what direction to set the sail. CEO’s can now steer an interconnected ship. The crew is connected to the CEO and to each other. The crew also has connections to the outside world that they can bring into discussions of the ship’s performance.

The execution gap is real, and is costing you money. The problem is not strategy, or analysis. “People know what to do but don’t do it”. Create a backbone for excellence in execution with tools and processes that model your values and incorporate best practices and you’ll fly across the seven seas.

As a business leader your job right now is to make sure that as the economy recovers (though we hear and see different outlooks on how fast and how soon), you are making the most out of it. Sit on your butt and take for granted that you’ll just grab a good, and maybe disproportionate, share of the increased demand, and you’re in for a big surprise. In a recession the strong survive and come out stronger. Customers are even more demanding and competition is stiffer. Especially from those looking to grow at your expense.

Whatever your plan for incremental business accelerating your growth with the recovering economy, there’s one thing you really need to make sure happens within the organization. In lieu of the weather and the economy, you really can do something about how you execute on your strategy. Your job is to make sure that you drive commitment and targeted action to what matters most: the execution of your strategy in this recovering economy.

We invite you to share your stories and ideas for maximizing your recovery in this economy here on the business execution blog