Business Execution – An integration of Hoshin Planning, Lean Six Sigma and Balanced Scorecards

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Paul Docherty

In the first of what I hope will be a number of articles on the emerging discipline of Business Execution, I will cover the basics of what Business Execution is, why there is a need for it and the benefits being experienced by organizations that are already taking this approach. I will also briefly touch on how Business Execution software can integrate the well-established and much-utilized best practice management methodologies of Hoshin Planning, Lean Six Sigma and Balanced Scorecards – although I plan to cover each of these in more detail in future articles.

Understanding Business Execution

Business Execution is already causing senior leaders of global organizations to rethink not only the way in which they are driving execution, but how they implement and measure their organizational practice and performance.

This new approach to strategy execution allows CEO’s for the first time to link together how goals are defined, how projects are driven forward and how performance is measured in a closed-loop process. Put simply, Business Execution software brings together and tightly integrates the three core execution capabilities of goal management, program management and performance management, which, in turn, enable organizations to define the plan, execute the plan and measure the resulting impact.

Addressing a Clear Need within Organizations

It is often quoted that only 20% of organizations consistently deliver on their financial goals with the other 80% spending time and money on strategy development with not enough attention being paid to implementation and execution. This is backed up by the fact that in surveys of Global 5000 CEO’s, execution is often cited as their number one challenge. Part of the reason for this is because less than 20% of employees within the company understand how they actually contribute to the goals that have been put in place. Such is the need then for a joined-up, closed-loop process to ensure that these goals and strategies are consistently executed efficiently.

This is where Business Execution software comes into play. Imagine for a second that you are a CEO of a global company. Without a Business Execution system in place, the task of mobilizing many thousands of employees in pursuit of your goals is frustrated by a set of uncoordinated and fragmented planning processes that ultimately results in misaligned actions and misunderstood priorities.

In contrast, integrated Business Execution software allows you to work in real time. The software links projects to outcomes and allows for clear visibility of not just how well each project is performing but also if, in aggregate, the projects are likely to deliver the results targeted. By integrating management disciplines such as Hoshin Planning, Lean Six Sigma and Balanced Scorecards the probability of delivering on goals is dramatically improved when taking a Business Execution approach.

Helping Organizations to Execute

Organizations are already seeing the three-fold benefits of Business Execution. Not only does it deliver a definitive percentage point change in an organization’s ability to execute, but it also increases the speed at which strategic initiatives are executed and provides increased agility, through earlier flagging of potential execution risks. For example, i-nexus clients have seen up to a 40% reduction in project cycle times and a 25% improvement in project success rates.

I predict that in five years time, organizations without an integrated Business Execution software platform will find themselves at a distinct competitive disadvantage. Ultimately, what Business Execution software really does is address a very real communication gap for organizations, particularly large ones, where strategic objectives need translating into 100s if not 1,000s of goals at operational level. This emerging discipline creates clarity of accountability throughout the organization, helping to drive project and actions through to completion.