A few days ago, my 5-year old son was playing with his iPad and then he asked me if there are apps for everything. That is an interesting question indeed as we are more and more entering a digital world. And in a digital world it seems that there are unlimited opportunities for what an app can do. But are there apps for executives?
One of the most important things executives in an organization need to focus on is to drive execution of strategies. Based on my experience, working with large corporations around the world, it is usually the execution part which is the challenge. In many cases a lot of money, time, and effort have been spent on developing the strategy. Some companies are even successful in communicating the strategy in terms of where they are heading, why and how they will get there. Yet, few companies can say that they are successful in the deployment and execution. One of the reasons is that there is a weak link between the strategy and the operational plans such as the budget.
As a matter of fact, in today’s challenging business environment, it is not enough if a company can execute, there is a need for executing strategies faster than in the past. Especially if a company wants to be a disrupter and not being disrupted by someone else.
If strategy execution is one of the most important things for executives, shouldn´t there be an app for it?
Based on my experience, a tool for strategy execution should include the following components:
- A summary scorecard which shows the focus areas included in the strategy formulation. For each focus area there should be four to five KPIs for measurement (forecasts and targets)
- An action plan connected to each focus area and KPI, where identified initiatives with expected results are shown
- A forecasting model where an initiative owner enters the forecasted value realization vs the target. These forecasts should then be automatically aggregated to the summary scorecard
An important success factor for strategy execution is to be able to create “early warnings”. This is achieved by regular provided forecasts which is recommended to be done for the life span of the initiative. An example could be if a company has communicated to the market that they should save $500M in costs. To achieve the cost saving, they have launched five initiatives or projects. Each of them should contribute with $100M. If the management team receives, at a later stage, a notification meaning that the forecast is only indicating $450M, then there will most likely be additional initiatives defined in order to close the remaining gap. This example could be compared to a traditional way of working meaning a focus on the budget and variance reporting (actuals vs budget). The problem with this way of working is that “early warnings” would be limited, which at the end could mean that the market expectation is not going to be met. The consequence might be a negative impact on the stock price and thereby a reduced value of the company.
An app for strategy execution needs the features described above. This requires a powerful IT tool as an enabler. The tool should be cloud-based to effectively provide accessible and user-friendly functionalities, data storage, interfaces to source systems, and an efficient maintenance. As Anaplan meets the needs there is a foundation for such an app in the market.
Will an app such as a strategy execution app and other apps replace traditional processes and IT systems?
The answer is not yet given but in my mind our near future will tell as there is a revolution going on. The idea with an app is that it is to a large extent already developed and only minor adjustments are needed to fit a specific company´s needs. Also, an app is quick to implement, easy to integrate with ERP systems and other source systems, and very user friendly. User friendly in a way which makes it easy even for senior executives to use.
Our firm, Executit, has developed two apps for leaders. The Strategy Execution Tool which is the tool for leadership teams to monitor execution of strategies and initiatives and the Business Management Scorecard which is the tool for managing the organization at all levels. Both of these apps are based on proven concepts for strategy execution and are available at the Anaplan App Hub.