Driving Strategy Execution with Strategy Maps, KPIs & OKRs
Introduction
Our client, an international technology consultancy firm, has a track record of growing revenue, winning blue-chip clients and delivering high growth with attractive margins. This success was built on clear thought leadership and a business model that sees clients won in major international centres but serviced using 'near shore' staff in lower cost, regional service delivery hubs.
Andrew’s help was sought by a leader within one of these service delivery hubs as they faced two challenges;
Due to rapid growth and in the wake of widespread working from home during COVID-19, the quality of service delivery had dropped significantly, leading to tensions emerging between stakeholders within the firm and a lack of clarity about who is supposed to be playing what role, operationally and strategically.
As a result of local growth, this regional service delivery hub was evolving from simply servicing international clients to winning and servicing local clients while continuing to service global clients.
After a short discovery exercise, we developed an approach which combined Strategy Map, Objectives and Key Results (OKRs), Key Performance Indicators (KPIs), and the RACI (Responsible, Accountable, Consulted, Informed) model to drive the change required to meet the firm's challenges.
Designing and Communicating Strategy: The Strategy Map
The first step was to develop and communicate the regional strategy to all levels of the business. We used the Strategy Map as a visual tool to depict the strategy and align it with the firm's overall mission and vision.
The map served as a catalyst for strategic conversations within the regional business, fostering a shared understanding of its strategic priorities. It also helped identify and manage conflicts and trade-offs between servicing international clients vs winning and servicing local clients.
Additionally, the Strategy Map was used by the regional executive team to communicate their strategy to the corporate headquarters, including outlining the resources required to deliver the strategy.
Operationalizing the Strategy
Once the Strategy Map clarifies the regional strategy and immediate strategic objectives, the next step was to cascade the objectives, and align business processes and initiatives to those objectives. This created a clear framework within which the strategy could be delivered; additionally, by stopping several initiatives that were no longer relevant, the local management could secure some early cost savings.
Tracking Execution: The Role of KPIs
With a clear set of objectives supported by an aligned set of business processes and initiatives, the next step was to track the performance of processes, initiatives and track the execution of these objectives using a suite of KPIs, each linked directly or indirectly to a strategic objective on the map.
These KPIs provided a tangible, quantitative way to measure the performance of business processes and initiatives on a weekly basis and to track progress against strategic objectives on a monthly basis.
Clarifying Accountability: The RACI Model
We implemented the RACI model across the firm to ensure clarity of roles and prevent overlaps or gaps in accountabilities. Each strategic objective from the Strategy Map, and each business process and initiative, had a corresponding RACI matrix to clarify who was Responsible, Accountable, Consulted, and Informed for each activity.
The RACI model helped eliminate confusion about roles and responsibilities, ensuring that each team knew precisely what was expected from them.
Making Strategy Personal: The Deployment of OKRs
OKRs were already used within the regional business as a tool for managing and monitoring personal objectives; therefore, it made sense for the project to build on these to drive individual alignment with the business's strategic objectives. Each team and individual in the regional business had quarterly Objectives and Key Results that were aligned with the strategic objectives from the Strategy Map.
The OKRs made the firm's strategy personal, allowing employees to see how their work contributed to the larger strategic objectives. It reinforced individual and team accountabilities, promoted focus and engagement, and drove a results-oriented culture.
Conclusion
At the time of writing this case study, the regional business had been 'live' with their new strategy execution framework (and enabling software) for 3 months, and early results are promising.
Firstly, about £500k capex was saved during the project by stopping initiatives that were no longer aligned with the business's strategy.
Secondly, our client has witnessed a significant improvement in staff engagement around their objectives and the level of strategic execution, which is reflected in both business KPIs and personal OKRs.
Finally, the most crucial benefit of the project to date, which the strategy map delivered, was a clarification of the regional business's identity as it evolved from a near-shore service delivery business to a business unit that originated, won and serviced blue-chip local clients. As the CEO of the region said, "Without the strategy map, we didn't have a consistent way of telling our evolving story that balanced the traditional business with the new business. The Strategy Map, as designed by Andrew and his team, captures on a single page our strategy with its trade-off, contradictions and accountability; thus, it is the basis of everything we now do."
DecideWright is a UK-based consultancy that delivers solutions in the areas of Strategy Execution and Enterprise Performance Management, Enterprise and Operational Risk Management, Operational Resilience including DORA and Measurement & Metrics, including KPIs & OKRs.
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