Company Strategy Execution and Habit Formation

Michael Mankins and Richard Steele recommend steps to bridge the gap between company strategy and performance. It is heavily discussed in their article Turning Great Strategy Into Great Performance. The article aims to aid a company that suffers from misalignment of strategy and performance for some reasons.

A company’s performance or operational effectiveness can be determined by the execution of plans. Members of the team are expected to produce quality and efficient results, guided by top management. These collective efforts help the massive and heavy flywheel start turning. But how can the company help translate these efforts to its employees using the concept of positive habit formation? and why is it important?

Changing people’s beliefs requires them to change their perceptions, which in turn can lead them to change their behavior. An individual contributor, no matter how large or small their actions are, can fuel positive change and help the company avoid unintended consequences.

I’ll try to compare Mankins and Steele’s “Rules for Successful Strategy Execution” and James Clear’s “Laws of Atomic Habits” to show how the awareness of individual habits mirrors the execution of the company strategy.

The different stages of habit can be divided into two categories: problem and solution. The problem phase includes the cue and the craving, and it is during this phase that you realize something needs to change. The response and reward phases are included in the solution phase, and this is when you take action and achieve the desired change.

Keep it simple and Challenge Assumptions.

High-performing companies avoid complicated descriptions of goals or KPIs and stick to the action plan in a language that everyone understands.

Habit formation can be an awareness of unwanted habits. A process of change always starts with awareness, we need to be aware before we can change something. Every habit is context-dependent, most of the time, the structure of our environment shapes our habits.

In company performance, it is prudent to reconsider the context of poor performance because the environment is more likely to influence poor task execution. Along with these, it is critical to determine which issues should be addressed separately, which should be addressed collaboratively, and which should not be prioritized.

Speak Common Language and Discuss Resources Early

A team must agree on a common tool to assess performance and evaluate the resources to execute the company’s strategy.

In habit formation, when behaviors support us in fitting in, they are attractive. The more attractive the opportunity, the more likely it is to become a habit.

In company performance, the more tools and processes are familiar to the team members, the more likely they become engaged and collaborate.

Identify Priorities

Planning requires a few actions taken at the right time and in the right way. These priorities must be communicated explicitly to the team to have a clear sense of what direction to pursue and where to channel resources effectively and efficiently.

It is just as important to plan what not to do as it is to plan what to do. In a world abundant with ideas and opportunities, inaction can be considered an action. We did, however, mix action and motion on occasion.

When you’re in motion, you’re planning and strategizing, and learning. Those are all good things, but they don’t produce a result. Action, on the other hand, is the type of behavior that will deliver an outcome. That is how James described it in his book. He emphasized that motion is useful however, action delivers the outcome.

Execution and Feedback

We cannot change what we are not aware of. A team should have a conscious effort to continuously monitor performance and execution. It is beneficial to encourage team members to focus on the process rather than the outcome.

In habit formation, people who track their progress are more likely to improve than those who don’t. Because when the evidence is right in front of you, you’re less likely to lie to yourself.

Summary

Companies that create tight links between their strategies and plans can experience a cultural change, and long-term change is possible if it is engraved at the individual level.

By aligning what we are trying to achieve with what we are doing, the awareness of habit formation and company strategy execution provides the structure and tools necessary to drive results and outcomes.