In 2007, a few of us at SAP were asked to contribute to a book entitled “From Strategy to Execution – Turning Accelerated Global Change into Opportunity”. The abstract of the book is “At the intersection of disruptive and accelerated change in the environment with globalization, business leaders around the world are trying to embrace change and incorporate innovative business models in the basics of their businesses. While innovation in their products and services remains a priority, it is the focus on rethinking how customer value is developed and delivered, and rethinking the profit formula and the financial model, and finally making corresponding changes to the core resources that are coming under increasing emphasis. This book presents new and innovative ideas and approaches that are increasingly becoming a key to business success in a rapidly changing world.”
One of the chapters in the book, “From Strategy Execution to Performance Management” summarizes a lot of thinking that informed what eventually became SAP’s CPM Strategy. It was co-written with Sanjay Poonen and Adam Thier, both of whom I have the privilege of working with at SAP in crafting the CPM strategy over the last two years and have more than three decades of experience in this space between them. You can buy the chapter by itself on-line by clicking here. It’s a quick read, and I would hope that anyone involved in the CPM space would find something of interest within it. I also highly recommend a chapter written by a some other SAP colleagues on “Agile Strategy Execution — Creating Strategic Alignment“ which discusses SAP’s own internal challenges around managing strategy and rolling it out to our employees.
Chapter Summary: The fundamental business goal remains constant: make a profit and return value to shareholders. The objective is straightforward: sell a product or a service to customers for more than it costs to produce and deliver it (profit = revenue — cost). Executing a strategy to achieve this objective in today’s unforgiving business environment is not nearly as straightforward. Global markets, intense competition, compliance constraints, disruptive technologies, and talent shortages are all pressuring companies to become more agile so that they can constantly adjust to a world of accelerated change. This condition of constant adjustment forces companies to embark on a non-stop cycle of strategy development, execution, measurement, and refinement. Companies that can effectively manage their performance within this steady cycle of change are well positioned for success; companies that can’t are likely to suffer a less fortunate fate.