Introduction

What are the best ways to set direction and move forward? This collection of articles from MIT Sloan Management Review explores how organizations can improve strategic alignment, translate strategic complexity into simple and flexible guidelines, and achieve strategic objectives.

From “How to Develop Strategy for Execution”:

• Strategic priorities often fail to align activity throughout the organization. Too often, objectives are rendered toothless by vague or generic terms or are riddled with buzzwords.
• Effective strategic guidelines get three things right: They link to the corporate vision, identify critical vulnerabilities, and focus on what matters most.
• When setting strategic priorities, teams should pull together data on each of the vulnerabilities so that all members of the team work from the same facts and keep discussion anchored in the critical weaknesses.
• Before debate begins, teams should agree on basic rules for how discussion will be organized, including guidelines describing the proper way to discuss alternatives, who gets to speak when, and how to select among multiple options.

From “No One Knows Your Strategy — Not Even Your Top Leaders”:

• Most organizations fall far short when it comes to strategic alignment. One analysis of 124 organizations found that just 28% of executives responsible for executing strategy could list three of their company’s strategic priorities.
• C-suite executives often assume that the entire company is on the same page when it comes to strategy, but this assumption is usually wrong. Most top teams studied by the authors failed to agree among themselves on company-wide priorities.
• Strategic alignment falls steeply from the organization’s top executives to their direct reports and then continues to decline, more gradually, among lower-level managers.
• To increase the odds that strategy is understood throughout the company, top executives need to make sure their direct reports understand the objectives and that they communicate what corporate priorities mean for the company overall.

From “Turning Strategy Into Results”:

• Describing a strategy favors complexity, but executing a strategy requires simplicity. To influence day-to-day activities, strategies need to be simple enough for leaders at every level of the organization to understand, communicate, and remember.
• Rather than boiling strategy down to a pithy statement, it’s better to develop a small set of priorities that everyone can get behind to produce results.
• Strategic priorities should be forward-looking and action-oriented. They should tackle head-on the most difficult trade-offs facing the company.
• Strategic priorities should focus on the midterm outlook — three to five years, rather than one year. And they should highlight the handful of choices that will matter most to the organization’s success over that period of time.

From “With Goals, FAST Beats SMART”:

• When setting goals, most managers follow a well-established set of practices: Hold one-on-one goal-setting meetings with subordinates, then review performance against those objectives at the end of the year, linking performance to promotions and bonuses.
• That’s the SMART approach to goal-setting, which involves goals that are Specific, Measurable, Achievable, Realistic, and Time-bound.
• But individual goals will only drive strategy execution when they are aligned with strategic priorities, account for critical interdependencies across silos, and enable course corrections as circumstances change.
• There’s an alternative approach to goal-setting that goes by the acronym FAST: Goals should be embedded in Frequent discussions, Ambitious in scope, Specific in their metrics, and Transparent to everyone in the organization.

From “How to Recognize a Strategic Priority When You See One”:

• A publicly traded company’s financial reports can provide critical insights into its strategy.
• Strategy is often mentioned in a company’s Form 10-K report, its annual report, letters from its chairman and/or CEO, the investor relations section of its website, and its analyst calls.
• A large company could have hundreds of worthwhile goals around financial, market, operational, human resources, and social matters, but those that qualify as strategic priorities are often listed as a small number of “objectives” (versus a long list of strategic “factors”) — evidence that managers have prioritized those goals.
• The presence of action verbs (grow, improve, increase) distinguishes strategic priorities from financial or market-share targets that provide no guidance on the actions required to achieve them.