Execution of your asset strategy

Execution is an odd word. On the one hand, it means “the carrying out of a plan or course of action.” On the other, it means, “the carrying out of a death sentence.”

When asset managers talk about “executing a strategy,” they usually mean the former — putting an idea into action. But those efforts all too often end up meaning the latter. Execution is often where asset strategies go to die.

In conversation after conversation, the execution of a carefully developed asset strategy comes in as a key problem that evades many local authority asset managers that I talk with. Many acknowledge that they can’t seem to get it right. It’s one thing to design an asset strategy and quite another to get it operating at all levels of the organisation.

As the Japanese proverb goes, “Vision without action is a daydream. Action without vision is a nightmare.”

You have what you think is a solid strategy, and the Strategic Property Board, Cabinet and your leadership team are all aligned around it. You and your team have already reorganized the structure — new teams, revised roles, redesigned policies and processes — all to support your strategy. Perhaps you have even introduced a corporate landlord model to support the implementation of the strategy.

What is left to worry about? Well as it happens, there are a number of challenges that face both asset managers and organisations that are attempting to implement an asset strategy. If the execution of your asset strategy is faltering then you might find that one or more of my ‘top 10 challenges’ is a cause. Any one of them could prevent the execution of your asset strategy.

Challenge 1: The Big Prize

The first step in developing an asset strategy is that the organisation must commit to an identity through a shared understanding of its value proposition and distinctive capabilities. In short, the organisation must commit to focus on what it is going after, and then go after it. The hardest part of this is getting to that one most important thing, the thing that would be a catalyst for driving the rest of the strategy forward. The ‘Big Prize’.

Strategic issues and operational issues always compete for senior manager and member attention. If the day-to-day (operational) problems appear on the meeting agenda of your Asset Management Board alongside the longer-term (strategic) problems then, try as the chair may to achieve otherwise, the day-to-day will take precedence. All asset managers I know acknowledge this problem without hesitation.

But it isn’t just about the management of meetings. This competition between operational and strategic activities can permeate through everything the organisation tries to do in executing its asset strategy. That is why knowing your Big Prize is so important.

In the invasion of Iraq in 2002, the coalition Big Prize was to control Baghdad within 72 hours. 72 hours was the target because that is the time limit of how long a soldier can fight without sleep. In that invasion, when army units hit resistance, they simply avoided contact, called in an air strike, and kept focussed on the strategic objective, or Big Prize, which was controlling Baghdad within 72 hours. Some have called it ‘shock and awe’. In WW2 Hitler called it Blitzkrieg.

In contrast with the army, the marines got distracted. They did lots of fighting – marines like fighting – and it slowed them down. They were very successful in this fighting, but they won lots of unimportant battles and lost focus on the strategic objective. They had lost sight of their Big Prize.

What your Big Prize is will depend on what is important to you. If you are struggling with financial sustainability then the prime focus for you might be building new income streams, either through existing or new assets. If your organisation has just declared a climate emergency then the main focus of your strategy might be how you align your property portfolio to that commitment.

If you have a network of assets that are in the wrong place in terms of how service delivery models have shifted, then realignment with service needs will be your priority. Equally your big local issue might be condition of the building stock, or inefficient use of assets, or a lack of a corporate approach to property asset management. In all these examples the thing that you need to focus on will be different to someone else, and your Big Prize will be different to someone else. Identifying what your Big Prize is requires wide stakeholder engagement.

Once you can define the Big Prize, you can test it with a series of questions. If you answer “yes” to each of these questions, it’s likely that your Big Prize is on target:

• Will success in the Big Prize drive the mission of the larger organisation?

• Is the Big Prize supporting, and supported by, your primary business goals?

• Will achieving it make a statement to the organisation about what’s most important?

• Will it lead to the execution of your asset strategy?

• Is it the appropriate stretch?

• Are you excited about it? Do you have an emotional connection to it?

Once the Big Prize is clear, you can work to identify the people who are most essential to achieving the goal. Doing this is critical because you want to focus your efforts and resources on the people who will have the most impact on the Big Prize.

Once you establish the key people, you have to work with each of them and their managers to determine their:

• Key contribution to moving the Big Prize forward

• Pivotal strength that will allow them to make their key contribution

• Game changer, the thing that, if the person improves, will most improve their ability to make their key contribution

It is important to ask yourself whether the fire you are fighting now is going to prevent future fires. Is this the best use of your time? Can it wait? Should it be ignored or delegated whilst you focus on the Big Prize?

Challenge 2: No strategy at all

One major reason for the lack of action is that “asset strategies” are often not strategies at all. A real asset strategy involves a clear set of choices that define what the organisation is going to do and, as important, what it’s not going to do. Many asset strategies fail to get implemented, despite the ample efforts of hard-working people, because they do not represent a set of clear choices.

A set of a limited number of choices that fit together is easy to communicate, which is one reason you need them. You cannot communicate a list of 20 or 30 choices; staff and members simply will not remember them. And if they don’t remember them, the choices cannot influence their behaviour, in which case you do not have a strategy. Not only that, this would require far too much resource and considerable officer time. It would be a mammoth task.

I very often hear asset managers complaining about the strategy setting processes and meetings, or the asset strategy output. People tire of sitting down and writing out all the things that the organisation ‘could’ achieve, which then end up in the asset strategy, but which rarely get delivered. People often look back five years after adopting what they thought was a solid asset strategy, only to find that little of it has actually been achieved.

It is far better to aim for a few important things for each year of the asset strategy planning horizon and celebrate success when they’re achieved. The more you try to achieve, the less you’ll accomplish.

Challenge 3: Depth versus length

There are two aspects to this. Firstly, the size of the asset strategy itself, and secondly the planning horizon – in other words, how far ahead the asset strategy is looking.

On the first point, I have seen some very large asset strategies, that were so large that clearly nobody is ever going to read it. Not only that, but being so large, you just know that it cannot possibly be focussing on the main strategic objectives. The asset strategy needs to be punchy and to the point. Content is more important than size. If the strategy is too large then it will be impossible to communicate progress, and for people to understand where you are in the journey.

On the second point, asset strategy is about what you are going to be focussing on and why. And as mentioned above, what you are not going to be focussing on. It is a process of channelling your resources and commitment towards your strategic objective. In this sense the time horizon is far less important than you might think. What is more important is that you have put sufficient work into the thinking and planning process, so that you have got the right direction. It is not about the long term or the short terms, but about the fundamentals of what you are seeking to achieve. Strategy is not so much about what we are going to do in the future, but about what we are going to do now.

Challenge 4: Call to Action

Your Big Prize will be supported by a small number of other strategic outcomes as mentioned above at Challenge 2 and all these should link together. Each of these strategic objectives needs to be translated into action. One of the key things you need to do is to design an action-plan to capture the actions that will deliver your strategic objectives. You need to remember that ‘actions’ are not the same as ‘activities’, and you need clear and defined actions.

You must however take care not to be too rigid in your approach. Things change and your strategy needs to be able to flex to accommodate changes in context or internal or external environments. As such your call to actions need to change with time. An asset strategy should not be shaped on the basis of “head down, here we go, and see you at the other end!”

Strategy execution could be described as seizing strategic opportunities, whilst co-ordinating areas across an organisation and adjusting as necessary. If this is the case, then agility is important, as is the ability and desire to re-allocate resources through changing circumstances.

It is also worth remembering that whilst being agile is good and positive, it is no replacement for having a strategy. Agility without strategy equals chaos.

Challenge 5: Engaging narrative

One common big gap between strategy and execution is in the narrative around the strategy. The strategy itself may be sound, but what matters for execution isn’t what is said but what is heard.

Strategy is inherently about creating something new or getting somewhere new. But the way humans are wired, it’s difficult to process something that is completely unrelated to what we already know. Not only that some people are very nervous of change.

A good narrative helps people move from the past to the future. Steve Jobs’s genius in announcing the iPhone was explaining it as three devices: a touchscreen iPod, a new kind of phone, and an internet communicator. He built a conceptual “horseless carriage” — a bridge between the old and the new. You need to think in these terms with the narrative around your asset strategy.

Challenge 6: The Ikea effect

When everyone in an organisation feels empowered to make decisions that can influence change, it creates a palpable energy: People tend to work harder, offer more ideas, and become far more invested in the process.

If every activity is the result of a command from on high, the organisation runs the risk of sucking all the energy out of the room. But the flip side can be myriad groups of enthusiastic change agents dashing off in multiple, uncoordinated directions.

The very nature of strategy objectives works against their execution. They’re developed at the organisation level but implementing them involves individuals across a number of service departments.

This requires very careful management to get the balance right. A good asset strategy will have at its heart the Big Prize discussed earlier. But this should not constrain those charged with its achievement into the way that achievement should be secured. There needs to be clear direction, but within that, freedom of movement and flexibility that taps into innovation at all levels.

There is an important connection between participation and ownership. In a phenomenon dubbed “the Ikea effect,” researchers have found that people preferred things they helped make to things that were preassembled, even if their creations were of lower quality. What applies to furniture also applies to asset strategy.

Often stakeholders are kept out of the strategy process out of concern that they will slow things down or compromise the quality of the outcome. But this is a short-sighted view. By involving stakeholders earlier, you give them a sense of ownership that speeds things up when it comes time for execution. When decision fall to be made, if those making the decisions were active contributors to the strategy development, they are far more likely to follow the strategic direction set. It is far more likely the asset strategy will stick to its flight plan, because those responsible for its execution will have a stake in defending it.

Challenge 7: Prize versus Targets

We’ve all heard the saying “what gets measured, gets done.” Well, it’s not quite right. Numbers are important, no doubt. They certainly help to attract peoples’ scrutiny, and they should be employed in any evaluation of your asset strategy. But what we really respond to is attention from other people – especially if that attention comes from those above and around us. The hierarchical structure of organisations dictates this.

As mentioned earlier, a vision of an inspirational Big Prize is essential for getting people to commit to change: a simple narrative that articulates not only why change is necessary but also what life will look and feel like once change is successfully implemented.

However, aggressive “mid-state” targets are also required to provide direction and to challenge people to give their all. An inspiring “prize” without challenging targets will see people going along with your strategy initially, but without a route map that tells you and them whether or not you are the correct course. That is not only inefficient but quite likely to see you not delivering your asset strategy. At various points along the way, people will start to question why they are doing what they are doing. People need a constant reminder of not only what the “prize” is, but how close you are to it.

It is true though that you only measure what you can see. And your mental models determine what is visible or invisible. I consistently see measurement as an afterthought in asset strategy development.

It is vital to assign someone in authority to be the person or body that will call strategic objective owners to account by regularly inquiring about execution progress.

Challenge 8: Capability versus Results

Many asset strategies call for significant changes in the ways an organisation works, which raises questions of whether the organisation needs to develop new capabilities. But the pressure on the asset strategy to deliver immediate results is often so intense that an organisation may be forced to forge ahead within its existing capabilities.

This is a dangerous thing for any asset strategy. It can inhibit the execution of the strategy, result in sub-optimal performance or delivery, create wider financial, operational or political risks and trigger calls for an unnecessary change in strategy direction. It is so easy for people to become critical of the strategy itself, when in truth the strategy is sound but the organisational capabilities were not strengthened when the strategy was developed, and it is that which is failing execution of the strategy.

Asset strategies are nothing if not about change. And a change in strategy often means a required change to capabilities.

Challenge 9: How you think

It’s not what you think. It’s how you think.

The thinking styles of the people who create strategy are often different from those of the people who implement it. You will often find that asset strategy is usually developed by people who have a big-picture orientation, while execution is often done by those with a detail orientation. Furthermore, asset strategy is usually done by people who are focused on ideas and connections, while implementation is done by those who focus on process and action.

This difference in thinking styles creates a problem when asset strategy turns into execution. Those who create the asset strategy are often thinking about the destination, particularly the opportunity and intended outcomes. Meanwhile, those responsible for implementation are thinking about the realities of what it will take to get there.

When the asset strategy is presented, implementers naturally begin to ask questions about risks and roadblocks — a natural consequence of having a detail-oriented thinking style. But to asset strategists which is focused on the big picture, this can sometimes feel like resistance or obstinacy. They fail to understand why the implementers don’t they see the brilliance of their asset strategy. So, they get defensive and begin working on overcoming the “resistance.”

This conflict in thinking styles is not to be underestimated. I see it regularly impacting negatively on strategy execution. It is understandable once you look out for it. Whether it is the property maintenance team undertaking repairs or capital works to buildings that are actually scheduled for closure, demolition or disposal, or the estate manager that ploughs on with lease renewals even though the asset is going to be needed for another purpose. It could be the capital programme manager that adopts a capital programme that is influenced entirely around technical maintenance need rather than strategic outcomes.

There are ways to counter this difference in thinking, but you need to firstly be aware that it could exist, be able to identify it in your organisation and work at changing the way people think.

Challenge 10: The asset management habit

As seen above, your organisation’s biggest strategic challenge isn’t strategic thinking — it’s strategic acting.

However hard it is to devise a solid asset strategy, it’s ten times harder to get people to execute on that strategy. And a poorly executed asset strategy, no matter how clever, is worthless.

Most organisations rely on communication plans to make that shift. Unfortunately, strategy communication, even if you do it daily, is not the same as — and is not enough to drive — strategy execution.

Because while strategy development and communication are about knowing something, strategy execution is about doing something. And the gap between what you know and what you do is often huge. Add in the necessity of having everyone acting in alignment with each other, and it gets even huger.

The reason strategy execution is often glossed over by even the most astute asset strategy consultants is because primarily it’s not an asset strategy challenge. It’s a human behaviour one.

To deliver results, people need to be hyper-aligned and laser-focused on the highest-impact actions that will drive the organisation’s most important outcomes. But even in well-run, stable organisations, people are misaligned, too broadly focused, and working at cross-purposes.

A big reason many asset strategy implementation efforts fail is that they usually require changing people’s habits. And habits in organisations are notoriously sticky and persistent. Habits are deeply embedded and not easy to change. If they were then we would not have such a big problem with alcoholism, drugs, smoking and over-eating.

Habits certainly don’t change by telling people that they should act differently. People are often not even aware that they are doing things in a particular way and that there might be different ways to run the same process. The habit problem applies equally to individuals and to groups of individuals.

Identifying and countering the bad habits that keep your strategy from getting executed is not an easy process, but there are various practices you can build into your organisation to make it work. It just takes a little effort, alongside a willingness to accept that habits actually exist.

Summary

Where should you start? Organisations and teams that perform well across the strategy-to-execution dimensions do the following:

· Spent more time strategizing and translating that strategy into actionable goals

· Spent more time engaging all parts of the organisation, surfacing barriers and unmet needs and communicating direction and behavioural guardrails

· Spent more time interacting with key stakeholders to ascertain and anticipate roadblocks and opportunities

· Spent less time fighting fires

Take a glance at the activities of your teams over the last six to twelve months. Then, ask yourself the following questions:

· What percentage of the team’s time was spent fire-fighting or dealing with issues that could have been dealt with at the next level down? How much time was invested on the big-ticket strategic items?

· How much time did the team spend thinking proactively about the future of your organisation, the external political and social landscape, your target operating model for services, the regulatory landscape, and your customers, internal and external?

· What percentage of time did the team spend engaging and aligning with the organisation?

How about key stakeholders? Does the team have a decent pulse check on their blatant and latent needs?

Perhaps most important, ask yourself, “Have we successfully executed our strategy, and if not, then why might that be?”

Until you begin to think about the reasons why execution of your asset strategy is not happening, you will be powerless to change it. As Einstein famously said, “If you always do what you always did, you will always get what you always got.”