The execution of a strategy is the very heart of a company’s success. But are you really executing it effectively? The answer to this question lies in the way you manage your indicators and, above all, in the culture you associate with them. Do you have a results-oriented culture or a means-oriented culture? This distinction is crucial, as it defines your ability to adjust your actions in response to market realities and achieve the results you aim for. Managing with results indicators, or more precisely with impact indicators, rather than means indicators, allows one to stay focused on what matters: the impact of actions and strategic projects, not just their execution. In this article, we will explore this essential difference and show you how you can adjust your management practices to maximize the effectiveness of your strategy execution.
1. Results Culture vs. Means Culture: Understanding the Difference
Have you ever taken the time to analyze how you monitor the implementation of your strategy? Very often, companies focus solely on the proper execution of actions or projects planned to achieve strategic objectives. Are the projects launched on time? Is the progress of the projects in line with the initial schedule? Do the teams adhere to the action plans? Do the teams correctly use the allocated budgets?
These inquiries align with the concept of a culture of means. In this approach, leaders guide the strategy through means indicators, which assess if the planned actions, resources, and processes align with the initial expectations. While this approach holds significance, it does not provide insight into the actual performance that these actions yield.
In a results-oriented culture, the goal is to measure the impact of these actions and projects. Verifying whether the actions produce the expected performances and keep us on the strategic trajectory is just as important as ensuring their flawless execution. This distinction is fundamental: even if you perfectly execute all your actions and mobilize all the planned resources, your strategy will fail if it fails to generate the expected performance.
Example: Let’s take the example of a company launching a marketing campaign to increase its sales. In a culture of means, it could measure the amount of advertising broadcasted, the budget invested, and adherence to the communication schedule. But these indicators do not indicate whether the campaign has truly succeeded in attracting new customers. This is precisely what a results-oriented culture measures, for example, by tracking the number of leads generated by the marketing campaign.
2. Why Do Companies Remain Stuck in a Means-Oriented Culture?
Despite the importance of impact indicators, many companies continue to prioritize mean indicators. Why? The answer is simple: means indicators are easy to measure. They provide clear data on the actions taken, the budgets spent, and the progress of the projects. In short, they offer a sense of control.
However, this approach presents a great danger: it gives an illusion of performance. Executing the actions gives you the impression that everything is going well, but this does not guarantee the achievement of your strategic objectives. The culture of means is deeply rooted in traditional managerial practices, where the management of resources, processes, and schedules is valued sometimes at the expense of the actual performance achieved.
3. Manage with Impact Indicators: A Paradigm Shift
Impact indicators enable you to assess whether your planned actions are indeed yielding the anticipated outcomes.
To effectively manage a strategy, it is essential to shift from a culture of means to a culture of results. This paradigm shift means that leaders and their teams must constantly assess the impact of their actions and projects against the expected objectives.
3.1 The Advantages of Impact Management
One of the great advantages of impact-driven management is its ability to adapt in real time. Unlike the culture of means, which essentially follows fixed processes or action plans, management with impact indicators allows for adjusting actions based on actual reality and changing market conditions. This promotes greater flexibility and increased responsiveness.
Here are some key advantages:
• Alignment with strategic objectives: Impact indicators allow for near-real-time tracking of progress towards strategic objectives (what we call the strategic trajectory), ensuring that each action or project undertaken directly contributes to achieving these objectives.
• Adaptability: By focusing on impacts rather than means, a company can quickly adjust its actions based on the results obtained, market changes, or customer needs. Identifying a deviation from the strategic trajectory and analyzing its root causes enables the identification of necessary adjustments in actions and projects to revert to the strategic trajectory.
• Measurement of on-the-ground reality: Unlike input indicators, impact indicators show, at the earliest, whether the company is progressing in the right direction or if an adjustment is necessary, and this without waiting for the end of the year or the next “strategic seminar.”
3.2 What types of Impact Indicators
The main performance indicators used by all companies are financial indicators (revenue, EBITDA, cash flow, etc.). But by identifying the main contributing levers within your company to these financial results and associating them with impact indicators (and not means indicators), you will be able to identify discrepancies as early as possible and make the necessary decisions before these discrepancies affect your financial results. We deliberately differentiate between outcome indicators, primarily understood as financial indicators, and impact indicators, which are generally indicators that contribute directly or indirectly to financial results.
4. Adapt Actions Based on Results
In a constantly evolving economic environment, it is crucial not to confine oneself to a series of predetermined actions without considering the results obtained. True strategic management involves the ability to review and adjust the means implemented.
True strategic management through impact indicators allows for considering not only the quality of actions and resources but also taking into account market developments.
4.1 Responding to Market Changes
The market evolves, often in unpredictable ways. Whether due to new trends, changes in customer behavior, or technological innovations, a company’s environment is rarely stable. Strategic management based on impacts allows an organization to adjust its actions as the situation evolves.
4.2 Prioritization and Reallocation of Resources
Impact-driven management also allows for prioritizing actions based on their actual performance. Rather than clinging to projects that consume resources without generating results, a company can reallocate its efforts and resources towards more promising initiatives. This avoids wasting time and resources on actions that, although well executed, do not deliver the expected performance.
5. How Can We Establish a Results-Oriented Culture?
Shifting from a culture of means to one of results requires genuine organizational change. Here are some suggestions to facilitate this transition:
5.1 Clarify Strategic Objectives
Everything starts with clear and well-defined strategic objectives. It will be challenging to measure the desired results/impacts if all teams fail to clearly communicate and understand the objectives. Make sure every employee knows the expected outcomes and how their actions affect them.
5.2 Establish Relevant Impact Indicators
Once the objectives are defined, it is essential to establish specific and measurable impact indicators. Strategic objectives must closely link these indicators, enabling regular evaluation of the actions’ impact. However, you should not look for “ideal” impact indicators; just settle for the indicators that already exist within your organization or are easily collectible. These impact indicators will act as flags for deviations from the strategic trajectory. The Root Cause Analyses (RCA) will provide the explanation for these discrepancies, enabling you to identify the appropriate corrective actions.
5.3 Promote Transparency
Transparency is a fundamental pillar of a results-oriented culture. The teams must have complete visibility over the results obtained in order to understand the impact of their actions and, especially, the reasons behind the adjustments or changes requested by the management team. This also helps create a dynamic of continuous improvement.
5.4 Promote Adaptability and Responsiveness
For a results-oriented culture to work, the organization must be ready to quickly adapt based on the performance achieved. This involves open communication, team accountability, and having the flexibility to modify actions or projects in real time. By delegating decision-making to the lowest level of the organization, you optimize adaptability and responsiveness within your organization.
5.5 The Leadership Team needs to lead by example in this steering process.
Finally, to establish a true results-oriented culture, the leadership team must become exemplary, starting with the oversight of strategy execution. Why would you want your organization to adopt a results-oriented culture if you, as the leadership team, are only reviewing your strategic performance indicators once or twice a year and/or tracking the progress of strategic projects and action plans on a monthly (or even quarterly) basis? You must learn, as a team, to steer the execution of your strategy with continuous monitoring of impact indicators.
Conclusion: Steering Execution with Impact
Effectively managing the execution of your strategy means going beyond the mere implementation of actions and resources. Measuring their impacts on strategic objectives and maintaining flexibility to promptly adapt to expected results and market developments in the event of a deviation from the strategic trajectory are crucial.
Adopting a results-oriented culture rather than a means-oriented culture is a true paradigm shift. This allows companies to be more responsive, more agile, and, above all, more efficient in a constantly changing environment. Ultimately, it is this approach that will turn your strategy into measurable success.