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Executing in a Fast Changing Environment

Executive Brief For Small and Midsized Businesses

SUCCESSFACTORS / EXECUTIVE WHITEPAPER ExECUTIng In A FAST CHAngIng EnvIROnmEnT For Small and midSized BuSineSSeS

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Executing in a Fast Changing Environment

For Small and Midsized Businesses
The current economic environment is changing rapidly and dramatically. Executives must be able to lead their companies to quickly adapt to new market forces. Under these conditions, an organizations survival depends in part on a sound strategy but even more on the effective execution of strategy. Because execution plays such a critical role in success or failure especially in times of crisis many companies are now turning to a new breed of technology solutions to ensure that they can deliver on strategies and emerge even stronger. Market conditions are changing faster and more dramatically than ever before. For example, consumer spending, new housing starts and auto sales have plummeted in the recent economic crisis, but they may later rebound in response to fickle consumer confidence. This sort of volatility, across so many business sectors, necessitates rapid changes in strategy. Any company that fails to adapt quickly and efficiently to market changes can miss important opportunities or even risk their very survival.

Having a New Strategy Isnt Enough

Developing a strategy in response to a fast changing market is difficult. Executing a strategy under such dynamic conditions is even harder. A study published in The Harvard Business Review shows that most companies typically realize only 63% of their strategies potential value due to deficiencies in planning and execution.* Clearly, businesses and their leadership must be able to recapture as much of that potential as possible if they are to thrive.

2% 2% 5% 7% 8% 8% 10% 11% 14%

Sources of Lost value from Execution Deficiencies

Inadequate or unavailable resources

20%

Poorly communicated strategy Actions required to execute not clearly defined Unclear accountabilties for execution Organizational silos and culture blocking execution Inadequate performance monitoring Inadequate consequences or rewards for failure or success Poor senior leadership Uncommitted leadership

12%

Unapproved strategy Other (including inadequate skills and capabilities)

* Harvard Business Review, Turning Great Strategy Into Great Performance, July-August 2005.

SUCCESSFACTORS / EXECUTIVE WHITEPAPER ExECUTIng In A FAST CHAngIng EnvIROnmEnT For Small and midSized BuSineSSeS

OVER 55% OF CEOS RATE EFFECTIVE EXECUTION OF STRATEgy AS THEIR NUMBER-ONE CHAllENgE, gIVEN TOdAyS glOBAl MARkETPlACE CHAOS.
The Conference Board, CEO Challenge 2008: Top 10 Challenges Financial Crisis Edition, March 2008

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Align your Workforce with What you Want to Accomplish

Business outcomes are significantly driven by workforce performance. In the best of times, its important that your managers and employees are aligned with strategy. During a downturn, its imperative. Any significant strategic change requires an equally fast realignment and reallocation of resources in order to be effective. Unfortunately, a dynamic environment coupled with strategy changes can leave employees confused and unproductive. Under these conditions, employees often continue working on old projects that dont serve the new strategy or they simply become paralyzed by fear. The best way to help is to give them a clear line of sight to your strategy. Cascading strategy and execution objectives from the CEO through each business unit, team and individual is the most effective way to clearly define the actions needed to execute strategy. Further articulating how each group will carry out a component of the strategy ensures that company-wide efforts are aligned. And finally, tying goals, performance measures and rewards to the individual execution of strategy holds every person accountable, increases motivation, and fosters the cooperation that leads to success.

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Market Change

Strategy Change

Course Correct

Align Teams to Execute Strategy Change

Arm with Talent to Execute Strategy Change

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Arm your Organization to Execute Strategy

A business must have the ability to move people, processes, budgets, and partners to support a new direction without disrupting the flow of business. Although this sounds straightforward, many companies rely upon outdated workforce practices that decouple strategic planning from resource allocation. Given todays lean workforce levels, it is more essential than ever to have the right people in the right jobs to carry out your new strategy. This will likely require identifying and redeploying people with needed skill sets to support critical projects. These redeployments may trigger a domino effect of position vacancies that require backfilling and succession planning. And even the smartest restructuring can leave gaps, which must be filled either by training existing employees to step up, or by hiring external talent adding yet another complex challenge to this critical process. After redeploying and filling talent gaps, you may still find execution impeded by structural deficiencies that you can never completely design out, despite your best efforts. To help deal with these inherent deficiencies, your new organization should provide tools that allow employees to dynamically team and collaborate across organizational silos to drive critical strategic initiatives to completion.

Be Prepared to Course Correct

Given the dynamic changes in the business environment, it is difficult to get your strategy right on the first pass. Until recently, executives lacked access to early warning signals needed to spot execution problems before it is too late such as whether critical actions have been carried out or resources deployed as planned. Worse yet, when problems eventually surface, it is difficult to correctly diagnose the root cause and avoid taking actions that could make matters worse. With todays Performance and Talent Management solutions, executives can now access forward-looking data that are leading indicators of future results. By monitoring these predictive performance drivers and tracking progress in real-time, you have a greater ability to make course corrections to stay on track and achieve your intended business objectives.

leverage Performance and Talent Management Solutions for Business Execution

Todays Performance and Talent Management solutions are helping companies to improve revenues by regaining value lost through execution failures, lower costs by running tighter operations, and achieve sustainable competitive advantage by driving effective business execution that is difficult for competitors to imitate.

About SuccessFactors
With more than 4.5 million end users in 185 countries, SuccessFactors is the leading provider of Performance and Talent Management solutions that enable organizations to drive business execution and deliver superior business results.

For more information, please visit www.successfactors.com.

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