Strategy, Innovation and Sales
Office of Strategy Management (OSM)
An Office of Strategy Management (OSM) Increases Corporate Success
“Closing the gap between strategy
formulation and execution“
60 to 90 percent of all companies fail to successfully implement
their strategies. This is the finding of studies by renowned experts going back more than 10 years. The numerous attempts to
further develop strategy work incrementally have clearly been
unable to have a sustainable impact upon these statistics. At
the same time, however, organizations are facing increasing demands to implement their approved concepts faster. Moreover,
organizations must be able to adapt and modify their strategies
agilely and flexibly in times of dynamic change.
What initially sounds like an attempt to square the circle simply
spells out the enormous challenge facing the strategy function. In
order to better understand why companies lack the ability to implement strategies, we at Horváth & Partners have carried out our
own studies, analyzed specialist papers in recognized publications,
and integrated our decades of experience as strategy implementation experts. The results can be summarized in 10 points:
1. Poor coordination of processes relevant to strategy (beyond the
actual strategy process itself)
2. Insufficient support for the strategies from top management
3. Poor communication of strategy to employees and other stakeholders
4. Insufficient strategy substantiation and resource allocation for
implementation
5. Insufficient monitoring of strategy performance
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6.
7.
8.
9.
Lack of incentives for strategy implementation
Organizational structures out of synch with strategy
Lack of clarity concerning responsibilities for targets/ initiatives
Inconsistent and unstructured transition from strategic to operative planning
10.Lack of or insufficient leadership guidelines for management
face of this alarming state of affairs in strategy implementation
and the increasing external changes for strategy work, we need
to ask what answers strategy functions have to these challenges.
From our perspective of years of experience in this field, the Office
of Strategy Management (OSM) represents a solution to the need
for radical further development in the strategy work of companies.
Alongside these internal reasons for faltering strategy implementation there are also numerous external influences which increase the
pressure for change in strategy work (e.g. volatility of the markets,
new competitive situation due to start-ups, Big Data etc.). In the
Office of Strategy Management (OSM)
1
BSC
Mgmt.
Reporting
2
3
4
5
Poor coordination of
processes relevant
to strategy
Insufficient support from
top management
…
Poor communication of
strategy to employees
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
Insufficient budgeting/
resource allocation for
implementation
6
7
Organizational structures
out of synch with strategy
Strategie
…
8
9
Strategy
???
Lack of clarity concerning
responsibilities for
targets/ initiatives
Me
???
Strategie
Flawed transition from
strategic to operative
planning
Level 1
Level 2
Level 3
Level 4
10
Insufficient monitoring
of strategy performance
Lack of incentives for
strategy implementation
?
?
The 10 major causes of the failure of strategy implementation
Lack of or insufficient
leadership guidelines for
management
An OSM is also a strategy function – but one which is significantly
different. First, we see the OSM as an organizational unit which
supports the management in every task relating to the concept
design and implementation of strategies. At this level, the OSM
views the organization as a whole and becomes actively involved in
the design of structures, processes and performance management
systems to ensure they all conform with the company’s strategies.
Thus, the remit of the OSM goes far beyond that of the “classical”
strategy departments, who act as a type of “thought leader” for top
management and whose focus frequently lies on the coordination
of the strategy process and the resolution of conceptual issues. In
themselves, these tasks are not “wrong” but in the context of an
OSM they fall far short of what is necessary.
As the next evolutionary step for strategy functions, the OSM also
focuses on strategy work as a whole.
Strategy, Innovation and Sales
Office of Strategy Management (OSM)
Among other things, this includes:
■■ Consolidating all direct and indirect strategy processes into an
integrated process architecture (“end-to-end“)
■■ Coordinating and orchestrating functional tasks in strategy implementation, which today are carried out in isolation, in the
form of a central organizational unit
■■ Extensively automating data collection and analysis through
business intelligence solutions
■■ Designing and shaping a strategy-based shift in leadership and
the ongoing further qualification of the organization
Our Approach
Horváth & Partners have developed a Target Operating Model for
the introduction and anchoring of the Office of Strategy Management (OSM). This comprises four design dimensions which must
be implemented in an agile approach:
■■ Mission and Guiding Principles: Central idea and orientation
principles
■■ Organization and Governance: Organizational design details
and authority for setting policy
■■ Processes and Tools: Integration of processes relevant to
strategy across all levels and definition of tools and templates
for all operative procedures (e.g. creating a SWOT analysis)
■■ Leadership and Change: Guidelines for managers on how to
act as a role model and to ensure the necessary competences
are in place for the strategy work
The implementation process for an OSM itself has five stages
which, apart from the preceding health check, take place in parallel. This ensures that any insights arising during the implementation process are integrated back into process as quickly as possible. The five implementation stages are:
© Horváth & Partners
Take advantage of our experts’ know-how
OSM
Office of Strategy Management
Conceptual Dimensions
Mission and
Guiding Principles
Organization and
Governance
Target
Operating
Model
(TOM)
Processes
and Instruments
Leadership
and Change
Target Operating Model for the introduction of an OSM
1. Health Check: Analysis of the strategy work (leadership, organization, processes, systems)
2. Agile Concept Design: Basic concept design and detailed
modification of the four design dimensions (Mission and
Guiding Principles, Organization and Governance, Processes
and Tools, Leadership and Change)
3. Run & Roll-out: Go-live of the processes and simultaneous
optimization
4. Handover: Continuous increase in the client’s workload for
carrying out the process accompanied by change management
5. Enablement: Qualification of employees (certified training
courses, workshops, work shadowing, etc.)
When it comes to introducing an OSM, we at Horváth & Partners
pay particular attention to the continuous transfer of knowledge
and know-how to guarantee we can successfully hand the OSM
over to the client. Our OSM qualification program ensures that
all the pieces are in place for the long-term success of the OSM.
The Office of Strategy Management is a chance for your company to create an organizational unit which strengthens both the
concept design potential and the implementation expertise of
your company, thereby making a significant contribution to
your bottom line.
Horváth & Partners are leading, multiple award-winning management consultants in the fields of Corporate Performance Management and Performance Optimization. With over 600 employees and
both national and international offices, we are able to support large
and complex projects. Our experienced consultants develop bespoke
solutions tailored to each client’s individual situation.
Horváth & Partners have long been associated with designing both
the content and processes of strategy and innovation work, as well as
with their real-world implementation. We can look back on over 20
years of experience with companies of all sizes from all industries who
trust in our support – from DAX corporations through global mid-sized
companies to hidden champions. With us at your side you have a
partner who combines creativity and business know-how in a unique
fashion.
In this way, the Office of Strategy Management unites different elements from over 20 years of experience in strategy implementation.
Dr. Oliver Greiner
Competence Center
Strategy, Innovation & Sales
[email protected]
Dr. Tim Wolf
Competence Center
Strategy, Innovation & Sales
[email protected]