Senior leaders, including chief learning officers, are under intense pressure to drive growth and deliver results. Navigating these challenges requires effective strategy execution.
Strategy execution starts with people. It is not the result of a solitary employee decision or action, but the consequence of a series of coordinated, enterprise-wide decisions over time. Building an organization’s fundamental business skills is a critical first step to realizing strategic priorities.
However, organizations are constrained by insufficient business acumen skills, according to a 2013 study by BTS, a global strategy implementation firm, and research company the Economist Intelligence Unit. (Editor’s note: The author works for BTS). The survey of more than 330 global senior leaders and managers explored the relationship between business acumen and strategy, the skills required at various levels of an organization and key trends in business education. It found that about 65 percent of senior leaders surveyed agreed that a lack of business acumen limits their organization’s ability to realize strategic goals.
To maximize impact, organizations are increasingly taking a strategic approach to business education. To better target the competencies critical at various levels of the corporate hierarchy, companies are shifting development programs and adopting new methods to reduce risk and accelerate results.
The classic approach to building business skills — accumulating on-the-job experience — is expected to fall by the wayside. While this is the most prominent method of building business skills today — 85 percent of respondents identified this approach as most the common — on-the-job experiences are projected to decline by nearly 40 percent during the next five years, according to the BTS survey.
Instead, companies are expected to move toward high-impact formal learning approaches to build the capabilities critical to execution in the next five years, according to the survey. However, not all methods are considered equally effective. While expert-led lectures are expected to decline, customized business simulations are projected to grow at a far faster rate than all other approaches.
Eleven percent of senior leaders indicated that business simulations are used within their organization. Moreover, 26 percent anticipated that this approach will be used in five years, a 140 percent increase, according to the survey.
In the current complex business environment, organizations recognize superior strategy execution as a critical opportunity. However, the research shows that many companies are constrained by a skills gap.
To bridge the gap and drive strategy execution, companies are best advised to:
Build awareness and alignment: In implementing strategic priorities, business acumen plays a critical role. To be successful, executives must consider, assess and develop their organization’s business acumen capabilities. Otherwise they are more likely to struggle with execution.
Consider the skills critical at different levels: The business skills required at the manager, senior manager and executive levels of an organization vary. Define the skills and gaps at each level of the corporate hierarchy, and target the capabilities critical for successful execution.
Focus on building talent internally: Surveyed leaders identified skills shortages as the second-greatest external obstacle to effective execution. Unlikely to be resolved anytime soon, talent shortages are and will continue to shift the focus away from recruitment activities and toward focusing inward on developing these critical skills internally.
Avoid unnecessary risks by shifting away from on-the-job experience: Though the most common development approach, on-the-job experience is not necessarily the most desirable way of developing business skills. Formal learning and development initiatives accelerate business skill development, avoid risk and ensure consistency.
Move from traditional learning and development methods to new approaches for building business skills: Learning business acumen — like studying a language or riding a bike for the first time — is difficult to master unless you actually do it. To bridge the skills gap, business simulations prove particularly effective, creating highly engaging, realistic experiences that lead to both behavior change and on-the-job application.
Rommin Adl is an executive vice president and global partner at strategy implementation firm BTS USA Inc. He can be reached at editor@CLOmedia.com.