There’s often a gap in the appropriate tracking from planned benefits to their actal realisation. Benefits realisation management (BRM) is an approach used to close that gap and help companies correct their strategy misalignment.
What can be the possible causes of strategy misalignment? An organisation needs to respond and adapt to the changing business environment in order to achieve and sustain its competitive advantages. So business strategy is an important discipline and organisations need efficient paradigms in strategy to deal with change. Not realising the extent of organisational change required to realise the benefits is a common reason for misalignment, as well as:
- Lack of enterprise alignment ownership;
- Absense of an environment that fosters regular dialogue to secure alignment; and
- Low maturity of value delivery capabilities.
How do champion companies meet their original goals/business intent? Why do they have high-delivery capabilities?
They have a competitive advantage. They practice successful change management by addressing outcomes, capabilities and residual risks.
Michael E. Porter, Professor of Business Administration at the Harvard Business School developed a much praised MBA course on Industry and Competitive Analysis and he lectures widely on competitive strategy. He’s a guest columnist for the Wall Street Journal and he thinks that the word “strategy” is overused and very often misunderstood.
“Perhaps the most alarming part is that most organizations believe they have a strategy when in fact they have none.” — Forbes
The Competitive Forces Model proposed by M.E. Porter in 1980 is a dominant paradigm in strategy discipline. It focuses on the external factors of the company’s environment to develop their competitive strategies. However, this approach of focusing on the external factors does not explain why some companies are more competitive in the market than others.
Perhaps they have a “real strategy”.
And that’s where J. Magretta comes in to explain with the book “Understanding Michael Porter: The Essential Guide to Competition and Strategy.”
I have a confession to make.
I’ve read so many articles and books on management written by men that I honestly thought J. Magretta was a guy.
Joan Magretta writes that, “Strategy isn’t a stir-fry; it’s a stew.” It takes time for the flavors and textures to seep in and develop. Over time, all a company’s constituents — internal and external — come to a deeper understanding of what a company can offer them, and a raft of activities become better tailored to the strategy and better aligned with each other.
Not embeding change capability can yield the wrong outcomes.
“A lot of organizations treat change management as only discrete pieces of work that need to be carried out as a part of a project. With this approach, these organizations have hired mainly contractors with some permanent change managers purely focused on project execution. Whilst this work is absolutely required to successfully land initiatives, these resources come and go and at the end the organization is often no better off in managing change.”
Finally, everyone agrees that the efficacy of BRM depends upon timely decisions and communications. However, realising the expected benefits requires some time. Afterall, strategy isn’t a stir-fry; it’s a stew. I bet Joan cooks wonderfully.
Also read the Best Practices for Change Portfolio Management: