Can You Really Measure Strategic Execution?

Justin Banner
Director of Corporate Strategy
XanGo LLC.

XanGo explosive growth presented the company with a unique set of strategic challenges. In three years the company went from start-up venture to hundreds of millions in sales and over 500 employees in 15 international markets. In addition to the operational challenges, XanGo's strategic challenges included clearly defining their market position, employee and functional alignment, international brand consistency, and unclear long-term objectives.

To answer some of these challenges XanGo instituted a rigorous strategy development process, driven by a small (3) Department of Corporate Strategy. While the department's initial task was to define strategy, their primary focus would be to facilitate execution. The intent of this paper will be to demonstrate from a practitioners view how XanGo's strategic execution is measured effectively across all functions and markets while simultaneously aligning daily operational decisions with corporate strategy.

After defining the business, vision and several quantifiable long-term term objectives, the strategy team in conjunction with upper management selected several "Strategic Themes" at the corporate level that each department, country and employee could align with. These strategic themes defined in simple terms the market positioning of the product as well as key differentiators that they believed, if executed upon would lead to accomplishing the long-term objectives.

The original themes were as follows: Premium Product, Legendary Experiences, Personalized Service, Leadership Talent, XanGo Community and Invigorating Culture. To avoid ambiguity in interpretation, each theme was further clarified with a precise definition.

XanGo recognized that strategy formulation would be the least problematic component of the process; execution being what mattered most. To that end strategic planning was introduced into the company's annual planning cycle, preceding budgeting. In these preliminary sessions each function (22) created a Corporate Action Plan (CAP) by selecting two of the six strategic themes to influence over the next year. Each department then set two goals for each theme and defined a quantifiable metric by which it could measure progress toward the goal. The outcome of the planning sessions produced a specific plan by which every department in the company was aligned to and measuring progress toward the overall corporate strategy.

The next step in the planning cycle was to translate each of the corporate goals to localized realities for the international markets. Each market manager met with the corporate department heads to translate the corporate goals into a Market Action Plan (MAP) specific to their country. In the end each country also had goals aligned with the overall corporate strategy with quantifiable metrics.

The final measure was for the corporate strategy team to create objective measurement systems for each of the goals and to follow-up monthly reporting the outcomes.

The results of the new strategic planning system have produce marked results. An embedded strategy process has made strategic thought a part of active decision-making, not just a board room discussion. In addition, allowing the department heads to influence their own participation in the process creates inherent buy-in, focus and alignment of the organization, while facilitating measured improvements toward to corporate strategy.

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