Tactical execution management – what does this actually mean, and what is its value in business? Execution management is at the core of our business. It drives our closed-loop approach: first generating transparency through analytics, then utilizing AI and ML for decision support, and finally, supported execution. Dr. Andreas Müller and Dr. Boris Reuter met for an episode of our AIOpodcast to discuss their views.
Andreas: Hi Boris, happy to have you here. Today, we're discussing a topic at our company's core, execution management in complex supply chains. So why do strategies fail, and why does execution matter? A question that sounds simple but a far broader topic than we initially thought.
Boris: Absolutely: we currently see many strategic initiatives being initiated because supply chains are suffering from different issues. For example, shortage in availability. I think the strategy and the strategic initiatives launched right now are only as good as the decisions on how it is implemented afterward. By this, I mean, often, we cope with a lack of execution on an operational and tactical level.
Andreas: Why don't we look at one of the core topics. In today's global supply chains, I get the impression that 'VUCA' all of a sudden has become a reality. So we see huge increases in demands on the one hand, but also uncertainty and fluctuations on the other hand. So that's a new reality in supply chains and is unprecedented. Are we entering a shortage economy? Take, for instance, Canadian wood or the computer chips: the media has been all over it recently.
Boris: There are a lot of simple answers you can throw at the question of shortage. But I wouldn't go for these answers but rather look at the root causes. I'd like to do a sound analysis of the root causes and the situation before making recommendations for a strategic initiative or initiating tactical and operational decision-making.
Andreas: Analysis is good – but if I were in the shoes of the CEO, I would become rather impatient, especially when we talk about immediate action. I would like to see immediate action and be informed about the current status. I would like to see how progress develops. I want to know the outlook and get additional information to steer the company in the right direction.
Boris: Here, you're talking about the classical, strategic improvement initiatives that we've seen. And imagine: if you implement a specific improvement initiative in a large organization for the first time, people would not be aware of what is expected. So they would not know how to cope with that.
I think this is the first reason why strategies start failing because people are uncomfortable or unaware of their role and need to do so. Secondly, it's about the decision hierarchies that we see. If you want to be quick and run your initiatives fast, you would also be impatient. And if you are a large organization, you have to go through every decision-making hierarchy for every decision in the whole process while running your initiative. Thirdly, we see how digital management is done today. So, we are doing digital management with tools like Outlook, Excel, PowerPoints, and so on...
Andreas: In my professional career, with clients and large organizations or in consulting organizations, I have experienced the need for a tool enabling us to steer initiatives towards the goal in a decent time while managing top management's expectations. So there's always an expectation of getting things done quickly and mostly in short time buckets.
This expectation is too high and unrealistic. So this sets you up for failure, or at least not reaching your targets in time. We need to bring this to the next level because we have the information to do much better than in the past with analytics, Excel, and PowerPoint. So, what can we do about this?
Boris: As you said, analytics is an important aspect: it makes out the first half while 'understanding what has to be done' is the other half. If you are running an initiative, you also need to understand where you currently are. So you need to understand which of the measures and initiatives you started as part of your global strategic initiative are going in the right direction. You need to understand how efficient they are.
This is important for so-called configuration: starting the right measures. It also helps you see where the big roadblocks are coming up and understand the working of your organization, availability of transparency, are things happening in the right sequence, and so on. Here, you can ask yourself: do I have the right transparency? You need the data and the information on the correct level of detail on your KPIs and measures.
Andreas: Let's come back to our CEO. He wants to get things done swiftly. How can we enable any organization to start promptly without getting into this analysis–paralysis, when every minute counts?
Boris: This is why we developed our products. We are enabling our clients to start initiatives very fast on the one hand and, on the other hand, or even in parallel, bringing in real-world data, big data analytics to execute, steer, and support the development of the initiative. We call this 'run and connect' so that you can be fast if time matters.
Andreas: Absolutely. I also think this is a paradigm shift for the combination of analytics and execution management – and not the end of this conversation. Thank you!
Boris: Thank you, Andreas.