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Maybe this sounds familiar:After months (or even years) of meetings upon meetings, a CEO and her team finalize an ambitious strategy. They sell the vision to the board and roll out the details to employees with excitement, generating much fanfare. They work in eager anticipation, watching for all of the moving parts to click into place.&nbsp;The months tick by. Then, as data on the results begin to roll in, the team discovers that those results are lackluster at best. The plan never came to fruition. Energy wanes, leadership loses traction with employees, and everyone loses confidence. It’s hard to muster fresh hope for the next round of strategic planning.If that hits close to home, know you’re not alone.&nbsp;<ul><li>Faltering strategy execution is the&nbsp;<a href="https://www.amanet.org/articles/what-is-strategy-execution/">#1 concern</a> of CEOs and&nbsp;<a href="https://www2.deloitte.com/us/en/pages/finance/articles/cfo-insights-solving-for-execution-risk.html">#1 risk identified by CFOs</a>&nbsp;</li><li>Slow strategic execution is&nbsp;<a href="https://www.gartner.com/smarterwithgartner/the-five-pillars-of-strategy-execution" target="_blank" rel="noopener noreferrer">a leading frustration</a> for executives year after year</li><li><a href="https://www.gartner.com/smarterwithgartner/3-ways-keep-managers-aligned-corporate-strategy" target="_blank" rel="noopener noreferrer">70%</a> of strategists are concerned they’re not&nbsp;able to close the strategy execution gap, despite believing that execution is more important now than it was pre-pandemic</li></ul>The gap between strategy and execution looks more like a black hole when you take a broader view. A&nbsp;<a href="https://www.strategyand.pwc.com/gx/en/unique-solutions/cds/the-strategy-crisis.pdf" target="_blank" rel="noopener noreferrer">survey of 6,000 executives</a> from companies of varying sizes, locations, and industries revealed:&nbsp;<ul><li>Only 1 in 3 leaders agree their company has a “well-defined” strategy</li><li>Only 1 in 3 believe their strategy will be ultimately successful</li><li>Less than 1 in 3 believe their organization has the capabilities to execute its strategy</li><li>20% admit their company doesn't document strategic priorities</li><li>40% of companies are classified as “adrift”&nbsp;in terms of strategy and execution</li></ul>Are these business leaders — who for the most part do&nbsp;not see a bright future for their organization — just overly cautious? More afraid than the average executive?Unfortunately, the answer is no.A study published in the Journal of Management and Organization reveals these executives’ fears are not unfounded. Just&nbsp;<a href="https://www.cambridge.org/core/journals/journal-of-management-and-organization/article/abs/strategy-implementation-what-is-the-failure-rate/6A048C7CC0D46D8CA22C6D4375CFC4BA" target="_blank" rel="noopener noreferrer">10%</a> of strategic plans are ever fully implemented. If you’re part of that 90% and feel like you can’t get stuff done — like you’re left wondering “Where exactly is the breakdown?”&nbsp;— then keep reading.Let’s start at the beginning. What will it take to start closing the gap?&nbsp;<hr>Don't have time to read the full article now? <a href="https://info.quantive.com/hubfs/Quantive_Guides/How_Top_Companies_Close_the_S%D0%95_Gap.pdf" target="_blank" rel="noopener noreferrer">Download the pdf</a> and save for later<figure class="image image_resized" style="width:50%;"><a href="https://info.quantive.com/hubfs/Quantive_Guides/How_Top_Companies_Close_the_S%D0%95_Gap.pdf" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1671870084/site-v5/close_SE_gap_aa7fcf0230.png" alt="How Top Companies Close the Strategy Execution Gap"></a></figure><hr>

Strategy execution is&nbsp;creating a plan for how to best accomplish an objective (the strategy), then putting that plan into action (the execution). It’s meeting organizational goals on time, on budget, and on target. Of course, this is&nbsp;much easier said than done.&nbsp;Execution may involve any or all of the following:<ul><li>Identifying and allocating the resources needed to meet the objective(s)</li><li>Translating the strategic plan into concrete steps for all levels in the organization</li><li>Assigning roles, responsibilities, and deadlines</li><li>Prioritizing and reprioritizing, then clearly communicating the changes</li><li>Determining how to best measure success</li><li>Tracking progress with data</li><li>Inevitably deviating from the original plan</li></ul><figure class="image image_resized" style="width:75%;"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1670601506/site-v5/stat_77_SE_5853209fb5.svg" alt="organizations with successful growth strategies increase profitability by 77%"></figure>But for those who don’t, well… what goes wrong in the first place?<hr>Learn more about <a href="https://quantive.com/resources/articles/strategy-execution" target="_blank" rel="noopener noreferrer">The 4 Stages of Successful Strategy Execution</a><figure class="image image_resized" style="width:50%;"><a href="https://quantive.com/resources/articles/strategy-execution" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1670611665/site-v5/4_stages_of_successful_strategy_execution_1c658351c6.png" alt="4 stages of successful strategy execution.png"></a></figure><hr>

There's truth in the cliche, “failing to plan is planning to fail.”&nbsp;Research from the Harvard Business Review shows that the&nbsp;<a href="https://hbr.org/2015/12/5-ways-to-close-the-strategy-to-execution-gap" target="_blank" rel="noopener noreferrer">highest-performing executive teams invest 54% more time in setting initial direction</a>, crafting their vision, and transcribing it into clear, tangible objectives&nbsp;before moving to action.They then spend an additional 25% more time focusing on the&nbsp;practical and&nbsp;procedural&nbsp;aspects of the plan – things like establishing financial and operational metrics, correlating objectives with strategy, assigning resources, and reviewing key metrics.<blockquote>What does that tell us? Execution starts before anyone moves a muscle.&nbsp;</blockquote>Teams who fail to close the strategy execution gap often have some or all of the following blind spots:<ul><li>Failing to align the strategy with company vision and values</li><li>Poorly defining priorities, and/or having too many of them</li><li>Basing plans on faulty assumptions over facts (i.e. bad data or poor interpretation)</li><li>Neglecting to translate objectives into clear and actionable steps</li><li>Allocating insufficient resources (e.g. time, money, talent)</li><li>Failing to communicate consistently (leading to disengagement or misaligned targets)</li><li>Inadequately training, supporting, and resourcing managers&nbsp;</li><li>Creating a rigid plan that blocks employee ownership, ingenuity, and flexibility</li><li>Failing to assess along the way (e.g. checking benchmark data, employee sentiment, and customer satisfaction at key intervals)&nbsp;</li><li>Not adequately planning for necessary pivots</li><li>Ignoring employee sentiment and well-being (cynicism, disengagement, and change fatigue often arise from poorly-nurtured company culture)</li></ul>

As you can see, there are a lot of reasons why companies fail at strategy execution. But we're here to help you succeed. Let’s take the shortcomings and failures of strategy execution and reframe them as a must-do punch list.&nbsp;We’ll dig deeper into each of these as we go:<ul><li>Step 1: Align execution to strategy</li><li>Step 2: Share priorities widely</li><li>Step 3: Measure outcomes, not activities</li><li>Step 4: Make progress (or a lack thereof) visible</li><li>Step 5: Course correct quickly</li><li>Step 6: Embrace a growth mindset</li></ul>

It’s tempting to think that a great plan naturally leads to clear action steps. But that’s not a given.&nbsp;<ul><li><a href="https://www.strategyand.pwc.com/gx/en/unique-solutions/cds/the-strategy-crisis.pdf" target="_blank" rel="noopener noreferrer">74% of executives</a> admit their strategies are not well-translated into concrete actions</li><li><a href="https://www.gartner.com/smarterwithgartner/the-five-pillars-of-strategy-execution" target="_blank" rel="noopener noreferrer">67% of integral functions</a> in most organizations&nbsp;aren’t aligned with corporate strategy (wasted labor)</li><li><a href="https://www.strategyand.pwc.com/gx/en/unique-solutions/cds/the-strategy-crisis.pdf" target="_blank" rel="noopener noreferrer">74%</a> of executives say their organization’s strategy asks employees to focus on too many priorities</li><li><a href="https://www.strategyand.pwc.com/gx/en/unique-solutions/capabilities-driven-strategy/approach/research-on-strategy.html" target="_blank" rel="noopener noreferrer">79%</a> of executives are concerned their organization doesn’t allocate sufficient resources to implement their strategy</li></ul>The bottom line? Even the best employees will miss the mark if their leaders aim them at the wrong targets.<blockquote>Alignment is what happens when everyone in the organization — from top to bottom — understands the plan of execution and knows what to aim for.&nbsp;</blockquote>It means you can release your team of talented, intrinsically-motivated workers to do what they do best. So, assuming you’ve got a first-rate strategy already in hand, how do you translate it into action that stays true to your goals? It starts with a plan.&nbsp;<figure class="image image_resized" style="width:75%;"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1670601507/site-v5/Align_execution_to_strategy_fbabd59f96.svg" alt="Align execution to strategy 7-step chart"></figure><h3>1. Clearly define priorities&nbsp;&nbsp;&nbsp;</h3>If&nbsp;everything is a priority, then&nbsp;nothing is a priority. Make it clear to everyone involved what is&nbsp;most important. Your goal is to focus&nbsp;your employees’ energy into a concentrated stream.&nbsp;Check, and continually re-check, that the priorities are moving your organization toward its vision.&nbsp;<h3>2. Make those priorities actionable &amp; measurable&nbsp;&nbsp;&nbsp;</h3>You see it everywhere because it’s true — what gets&nbsp;measured gets&nbsp;managed. Providing numerical, time-bound&nbsp;reference points is the only way to know if you’re on track.&nbsp;Adopt a framework for defining what success looks like in the end (like <a href="https://quantive.com/resources/articles/okr-meaning" target="_blank" rel="noopener noreferrer">OKRs</a>), then another one for measuring it as you go (like key performance indicators or <a href="https://quantive.com/resources/articles/okrs-vs-kpis" target="_blank" rel="noopener noreferrer">KPIs</a>).&nbsp;<h3>3. Identify the resources, infrastructure, and support required&nbsp;&nbsp;&nbsp;</h3>You can’t just execute out of thin air. Many great plans have been brought down by a failure to wisely allocate resources. So align your&nbsp;spending with your&nbsp;strategy.&nbsp;A few critical questions asked early on can help: What will it take to see these objectives become reality? New technology? Additional training? More people? Increased funding for a particular geographical region or department?&nbsp;<h3>4. Develop a communication plan that spans the strategy’s life cycle&nbsp;&nbsp;&nbsp;</h3>Do the right people have the right information at the right time? From rollout to review, alignment depends in large part on communication. We’ll be taking a closer look at this in a moment.&nbsp;<h3>5. Invest in people and culture&nbsp;&nbsp;&nbsp;</h3>Your execution plan is only as strong as your people are talented. As you develop the action steps of your strategy, consider what has historically motivated and connected your employees. Leveraging cultural capital helps ensure your strategy makes it all the way through to execution.<h3>6. Adapt or die&nbsp;&nbsp;&nbsp;</h3>Have you planned for pivots based on continuously gathered data and feedback? Remaining aligned during execution means embracing inevitable change. So create the necessary structures for tracking progress and adjusting&nbsp;before getting started.<h3>7. Evaluate and reward success&nbsp;&nbsp;&nbsp;</h3>This is where strategy comes full circle. In order to stay aligned in execution, you must keep those clearly-defined priorities front and center. But what will you do once you get there?&nbsp;Buy-in for the next strategic plan will be conditioned on how well you care for (and recognize) employees in the execution of this one.<blockquote>The most successful senior teams are <a href="https://quantive.com/resources/articles/agile-meaning" target="_blank" rel="noopener noreferrer">agile</a> in course-correcting when the needs of the business change, and are more easily prepared to shift organizational resources to ensure&nbsp;that the strategy is executed.&nbsp;-&nbsp; <a href="https://hbr.org/2017/11/how-the-most-successful-teams-bridge-the-strategy-execution-gap" target="_blank" rel="noopener noreferrer">Harvard Business Review</a></blockquote>

It’s hard for employees to feel invested in what they don’t know or don’t understand.&nbsp;<figure class="image image_resized" style="width:75%;"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1670601506/site-v5/stat_2_SE_4557c6dd04.svg" alt="67% of employees don't know how strategy connects to work, 95% of employees don't understand strategy at all, 4 in 5 executives recognize this gap"></figure>That’s why executives who are at the top of their performance game spend <a href="https://hbr.org/2017/11/how-the-most-successful-teams-bridge-the-strategy-execution-gap" target="_blank" rel="noopener noreferrer">12% more time</a> creating alignment through frequent communication. They break strategy into pieces, then push messages of clear, practical steps downward throughout the entire organization. The power of clear communication just can’t be oversold.<h3>Here are some things to think about as you develop your communication plan:</h3><h4>Why communicate</h4>If the vast majority of organizational members don’t understand what the strategy is or how it impacts them, they won’t be able to execute it.&nbsp;This first step in strategy execution is being transparent about what your organizational objectives are, why they’re important, and how you plan to achieve them. It also builds trust between company leaders and team members.<h4>What to communicate</h4>The answer is&nbsp;everything you can. Err on the side of sharing&nbsp;more rather than&nbsp;less. A few things you'll want to communicate:&nbsp;<ul><li>Company vision</li><li>Targets</li><li>Roles and responsibilities</li><li>Leadership structures</li><li>Timelines</li><li>Process maps</li><li>Opportunities for reward</li></ul>While this is not an exhaustive list, it's a great starting point.<h4>With whom to communicate</h4>Start with managers, leaders, and influencers. Cast your vision, share the strategy, check for understanding, invite buy-in, and release them to steer others.&nbsp;The goal is to equip leaders with all the details they may need to empower teams.<h4>How to communicate</h4>The more outlets you use, the more people will likely receive the message. Use everything from all-hands meetings, 1-on-1s with managers, emails, and Slack to make sure things are communicated clearly.&nbsp;Hone your language to a fine point. It should be exceptionally clear, concise, and empowering.&nbsp;<h4>When to communicate</h4>Through&nbsp;all stages of the plan, from pre-rollout through the recap. Your communication plan for every phase should be established before you ever say a word to employees about what’s coming.<h4>How often to communicate</h4>Repetition is key. Communicate more often than you think you need to.

Outcomes are evidence. Activities — those day-to-day tasks being executed by individuals in your organization — do matter; but they will&nbsp;never, on their own, indicate how close you are to meeting your goals.This is where <a href="https://quantive.com/resources/articles/okr-meaning" target="_blank" rel="noopener noreferrer">a framework like OKRs</a> comes in. In addition to defining the end goal (or objective), you also define the evidence (the key results) that indicates whether or not that goal has been met.&nbsp;Then, and only then, is it time to draw the line between Point A (the objective) and Point B (the key results) and decide which activities will help you get there.<h3>An example of OKRs in action&nbsp;</h3>Let’s say the executive team’s strategy includes global expansion. They create a clear, actionable objective that will move their organization in that direction:<ul><li>Objective:&nbsp;“We will have an established presence in the Australian market.”&nbsp;</li></ul>Next, they offer numerical waypoints tied to a time frame:<ul><li>Key result 1: Host X number of events with prospective customers by December 2023</li><li>Key result 2: Hire X number of employees to support operations by July 2023</li><li>Key result 3: Complete X number of transactions in our Australian branch by July 2023</li></ul>Things like the type of events, who will be on the guest list, what defines the best new employee, and how transactions will be processed are all things you'll figure out. For now, what matters is that the ultimate end result (the objective) has been set, and the evidence of success (the key results) has been determined.From there, managers develop sub-objectives with their teams:&nbsp;“Our team will secure a location and initial staff in Sydney by October of 2022.”&nbsp;Managers then meet with individual reports to collaboratively set personal goals and establish metrics of success.&nbsp;“Employee X will hire 12 tellers and two managers by Q3 2023.”&nbsp;That employee is then empowered with trust, freedom, and resources to control the&nbsp;way&nbsp;the work happens. Your manager checks in at least weekly through a 1-on-1 meeting to offer support, coaching, and progress checks.<blockquote>“Good ideas with great execution are how you make magic. And that’s where OKRs come in… OKRs have helped lead us to 10x growth, many times over…They’ve kept me and the rest of the company on time and on track when it mattered the most.”&nbsp;- <a href="https://www.cnbc.com/2018/08/14/this-goal-setting-method-is-used-by-bill-gates-larry-page-and-bono.html" target="_blank" rel="noopener noreferrer">Larry Page</a>, Co-Founder of Google</blockquote>

Ongoing reporting empowers faster, smarter pivoting with less waste of time and resources. That’s why high-performing teams spend&nbsp;<a href="https://hbr.org/2017/11/how-the-most-successful-teams-bridge-the-strategy-execution-gap" target="_blank" rel="noopener noreferrer">14% more time</a> measuring progress against strategic goals by checking key metrics, then adjusting resources in response.Ask the right data and feedback questions during strategy execution planning:<ul><li>What data do we need to track progress toward OKRs?&nbsp;</li><li>What do we&nbsp;not need?</li><li>Who will gather, interpret, and share these numbers? How often?</li><li>How will we share progress with everyone involved?</li></ul>For example,&nbsp;<a href="https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/performance-management-in-agile-organizations" target="_blank" rel="noopener noreferrer">at Google</a>, all OKRs (including executives) are completely visible to every employee. This kind of <a href="https://quantive.com/resources/articles/okrs-in-business" target="_blank" rel="noopener noreferrer">transparency in OKRs has several benefits:</a><ul><li>Creates a collaborative mindset</li><li>Highlights interconnectedness among teams and departments</li><li>Fuels urgency</li><li>Keeps the big picture front and center</li></ul>Make progress data and objectives as widely visible as you can, then lean into employee and customer feedback. That’s what keeps strategy execution tied to reality and makes adaptation possible.<blockquote>“When team members are armed with clean, accurate, relevant, actionable data, presented in an easily consumable format, they’re equipped to make daily decisions that advance the organization towards its objectives — present and future.”&nbsp;- Nick Kelly, strategy consultant&nbsp;</blockquote>

Achieving strategy execution without expecting the unexpected is impossible. Economies, markets, and customer preferences change rapidly. Projects get complicated and then delayed. A key employee leaves for another opportunity.&nbsp;Seeing strategy through the execution phase demands agility.&nbsp;But how do you build it? McKinsey identified&nbsp;<a href="https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/performance-management-in-agile-organizations" target="_blank" rel="noopener noreferrer">5 characteristics of nimble organizations</a>:&nbsp;<ol style="list-style-type:decimal;"><li>A North Star vision communicated throughout the organization&nbsp;</li><li>Empowered, autonomous-yet-connected teams&nbsp;</li><li>Fast cycles of decision-making, learning, &amp; adapting</li><li>A people model that capitalizes on passion</li><li>Systems, technology/tools, and training that make work workable</li></ol><h3>A North Star vision communicated throughout the organization</h3>Leadership defines what the mission is. That mission is narrow enough to give direction and inspire, but broad enough to allow teams to define their own objectives.<h3>Empowered, autonomous-yet-connected teams&nbsp;</h3>Think of a large fleet of small ships, rather than a small fleet of large ships. You need a system of distributed decision making that’s carried out by capable people you can trust.There’s just no time to run every move by senior leadership. Empower teams to act within their areas of expertise.<h3>Fast cycles of decision-making, learning, &amp; adapting&nbsp;</h3>Who are the key players in making that work? Managers.&nbsp;The kind of performance management that leads to strong strategic execution centers around:<ul><li>Continual feedback and development conversations</li><li>Frequent input gathering</li><li>Savvy coaching, which includes<ul style="list-style-type:circle;"><li>Roadblock removal (technical, situational, or otherwise)</li><li>Skill-building</li><li>Collaborative goal-setting</li></ul></li></ul><h3>A people model that capitalizes on passion</h3>Managers build strategic alignment by tying employee actions to priorities, keeping objectives front and center in conversations, and acknowledging (and rewarding) effort and achievement.&nbsp;<h3>Systems, technology/tools, and training that make work workable</h3>Your strategy’s execution depends on strong performance management to power impact. Supply your managers with the systems, training, and data they need to keep their teams on track all the way to the finish.

The strategy you set today will likely not work for you five years from now. Successful strategy execution requires an environment that actively promotes&nbsp;risk-taking, failing forward, and adapting fast. In short, it requires a mindset of constant learning and growth.Made famous by&nbsp;<a href="https://www.youtube.com/watch?v=hiiEeMN7vbQ" target="_blank" rel="noopener noreferrer">Carol Dweck, the growth mindset</a> sees setbacks as a normal part of growth and meets them with curiosity.&nbsp;<blockquote>It says,&nbsp;“I’m learning, so of course I’m going to make mistakes along the way. That’s exactly what learning is.” Compare that perspective with the “fixed mindset,” which says,&nbsp;“I made a mistake. I can’t do it. I might as well give up.”&nbsp;</blockquote>The growth mindset:<ul><li>Embraces challenges rather than avoids them</li><li>Accepts constructive feedback as help rather than dismissing it</li><li>Works to find creative solutions (trying several if needed)</li><li>Finds inspiration and instruction in others’ success rather than feeling threatened</li><li>Sees continued effort as the path forward rather than giving in to feelings of futility</li><li>Is future-oriented which is key for achieving goals</li></ul> How do you integrate a growth mindset into your company culture? Teach it, reinforce it with rewards, then measure it with surveys.&nbsp;<ul><li>Teach it by integrating growth mindset training into your employee onboarding program.&nbsp;</li><li>Reinforce it by offering recognition and rewards to employees who model a growth mindset. (This is where it pays to notice&nbsp;activities over&nbsp;outcomes.)&nbsp;</li><li>Measure it by collecting employee feedback about how safe they feel making mistakes and offering new, out-of-the-box ideas, rather than feeling punished for making mistakes or ignored for being innovative.</li></ul>

Strategy execution is a complex journey. It takes a well-thought-out plan, an executive team that communicates clearly and consistently, and (perhaps most of all) a workforce that stays aligned through the process. That’s how the magic happens. And it’s absolutely possible.<hr>Learn how <a href="https://quantive.com/resources/articles/strategy-execution-platform" target="_blank" rel="noopener noreferrer">the right platform </a>can help you close the strategy execution gap<figure class="image image_resized" style="width:50%;"><a href="https://quantive.com/resources/articles/strategy-execution-platform" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1670611665/site-v5/what_is_a_strategy_execution_platform_7ff56a27a1.png" alt="what is a strategy execution platform.png"></a></figure><hr>Quantive is your bridge between strategy and execution. Founded on the objectives and key results (OKR) methodology, <a href="https://quantive.com/products" target="_blank" rel="noopener noreferrer">our Strategy Execution Platform</a> is where businesses plan successful strategy, focus and align teams to it, and stay on the leading edge of progress.As your company looks to achieve the best possible results, you need a modern approach to <a href="https://quantive.com/products/results" target="_blank" rel="noopener noreferrer">run your business</a> and change your business.<a href="https://quantive.com/modern-operating-model" target="_blank" rel="noopener noreferrer"> The Modern Operating Model </a>brings strategy, teams, and data together to help make decisions faster, optimize operations, and drive better business outcomes.Whether you’re a large enterprise facing competitive disruption or a small business leading the innovative charge, Quantive helps get you where you want to go.Ready to achieve the best possible? Start using <a href="https://quantive.com/products/results/pricing" target="_blank" rel="noopener noreferrer">Quantive for free.</a>

How Top Companies Close the Strategy Execution Gap

An operating model drives value creation and strategy execution across an organization. It represents the guiding principles of operations: how different parts of a business should work together to deliver value to&nbsp;customers and stakeholders. It also encompasses how an organization functions to meet core business objectives such as efficiency, growth, and adaptability. Organization structure, culture, processes, technology and decision-making procedures are key parts of an operating model.&nbsp;&nbsp;In the modern era, several factors impact&nbsp;how we think about conventional operating models:&nbsp;<ul><li>The lingering strategy execution gap &nbsp;</li><li>A fast-changing world across all dimensions of life &nbsp;</li><li>The fourth industrial revolution, the wealth of data and its application&nbsp;</li></ul>Considering these factors, an&nbsp;updated, modern operating model is needed to solve the lingering strategy execution gap and unlock the opportunities of an evolving world. In this article, we’re going to outline what the Modern Operating Model looks like. For detailed information on the context, challenges solved, and the opportunities of the Modern Operating Model, we will be releasing a second part to this article.

There are five core components that make up the Modern Operating Model, each with different parts within.&nbsp;<img src="https://res.cloudinary.com/gtmhub/image/upload/v1669894628/site-v5/visual_mom_detailed_5ca196388d.svg" alt="Modern Operating Model diagram"><h4>&nbsp;1) Define the destination&nbsp;</h4>Your <a href="https://quantive.com/resources/articles/mission-vs-vision#mission-and-vision-statements,-defined" target="_blank" rel="noopener noreferrer">mission, cultural values, vision</a>, and strategy work together to act as a north star for your organization. This sets the destination and goals that your organization needs to align towards.&nbsp;<h4>2) Change the business&nbsp;</h4>Strategic objectives, <a href="https://quantive.com/resources/articles/okr-meaning" target="_blank" rel="noopener noreferrer">OKRs</a>, and planning the work quantify and make reaching your destination a tangible proposition. They create alignment, structure, and focus to maximize efficiency, speed, and productive power toward your goals.&nbsp;<h4>3) Run the business &nbsp;</h4>Observability of KPI’s through a connected technology stack in addition to OKR reporting gives you powerful insights into what’s happening inside the business, in addition to progress toward goals. &nbsp;<h4>4) Do the work&nbsp;</h4>With the organization aligned, the plan is executed through daily work. Proper alignment through organization architecture, culture, and a clear line of sight between strategy and execution empowers your employees to do their best work.&nbsp;<h4>5) Assess &amp; adapt &nbsp;</h4>Through continuous monitoring, data-driven decisions are made to incrementally optimize, navigate threats, and seize opportunities. Strong top-down alignment liberates your organization to adapt quickly and move as one.&nbsp;Although there’s a chronological logic to the Modern Operating Model, all components of the Modern Operating Model work together in a feedback loop and need to be engaged simultaneously as an ongoing discipline. Let’s now dive into the different components of the Modern Operating Model and their corresponding parts in more detail.&nbsp;

Correctly defining the destination impacts alignment. At the highest level, defining your destination is about where you want to go, why you want to go there, what needs to be done, and how you will do it. If there’s a disconnect between how your team sees the bigger picture, conflict, erosion of trust, and misaligned execution may emerge.&nbsp;&nbsp;<h5>Defining the destination can be broken down into three core parts:&nbsp;</h5><ol><li>Mission and cultural values&nbsp;</li><li>Vision&nbsp;</li><li>Strategy&nbsp;</li></ol><h3>Mission and cultural values&nbsp;</h3><a href="https://quantive.com/resources/articles/mission-vs-vision" target="_blank" rel="noopener noreferrer">Mission</a> and cultural values play a role in alignment as everyone in your organization needs to approach their work from the same perspective. Otherwise, there will be a disconnect at the execution layer of the organization. For instance, having a common philosophy that prioritizes customer satisfaction over short term revenue will lead to different behaviors and decisions from your team.&nbsp;&nbsp;Mission and cultural values also affect engagement, especially in the context of a new generation of workers. Generation Z and Millennial workers aspire to work at organizations that have a greater purpose and more conscious culture. Failure to align your mission and culture with these changing attitudes means you may reduce employee engagement – another key part of effective strategy execution. As these generations value company loyalty less, you may also risk losing key personnel which leads to other execution challenges.&nbsp;<h3>Vision&nbsp;</h3>Like with mission and cultural values, your <a href="https://quantive.com/resources/articles/mission-vs-vision" target="_blank" rel="noopener noreferrer">vision</a> is important for alignment. Your whole team needs to see the future in the same way to maximize engagement and work in synchronization. Vision also has an impact on priorities and strategic focus. A clear idea of your destination means you can make better decisions about the relevant work that needs to be done, take advantage of the right opportunities, and importantly, not become side tracked along the way.&nbsp;<hr>Learn the key differences and similarities of <a href="https://quantive.com/resources/articles/mission-vs-vision" target="_blank" rel="noopener noreferrer">mission vs. vision</a><figure class="image image_resized" style="width:50%;"><a href="https://quantive.com/resources/articles/mission-vs-vision" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1679576222/site-v5/mission_vs_vision_4831a60599.png" alt="A green flag with hollow filling placed to the left of an outline of an eye, with the iris also outlined in green, all on a green background, to signal mission vs. vision"></a></figure><hr><h3>Strategy&nbsp;</h3>Your <a href="https://quantive.com/resources/articles/business-strategy" target="_blank" rel="noopener noreferrer">strategy</a> is the first tangible link between defining your destination and generating the momentum to get there. Your strategy represents why, what, and how your company will navigate at the highest level and informs how you set strategic objectives and OKRs, which play key roles in the next component of the Modern Operating Model.&nbsp;&nbsp;

The next component of the model is changing and aligning the business. Changing the business is about deciding on the initiatives and goals you want to focus on to reach your destination. Alignment is about getting the whole organization in sync and moving in the same direction.&nbsp;<h5>Proper organizational alignment improves strategy execution through:&nbsp;</h5><ul><li>Greater efficiency: working on the right things means less waste in the form of time and resources&nbsp;</li><li>Higher engagement: having a clear line of sight between strategic objectives and daily execution means employees can see how their work impacts the organization</li><li>Prioritization and focus: alignment means the whole team focuses on the objectives and activities that are mission critical</li></ul>Alignment plays an important role in organizational adaptability. If there are any big changes or shocks to the business, your organization needs to be able to move together as one unit. If parts of your organization are misaligned, they may lag behind if your destination changes which can lead to operational roadblocks. In addition, the megatrends of <a href="https://quantive.com/resources/articles/hybrid-work">remote and flexible work</a> mean getting alignment right has become more difficult due to a more distributed, asynchronous, and multi-cultural workforce.&nbsp;&nbsp;Alignment starts with clear top-down communication about the destination and what needs to be done to get there. This is achieved through setting strategic objectives and OKRs, in addition to careful planning of how your team will execute the work.&nbsp;<h3>Strategic objectives and OKRs&nbsp;&nbsp;</h3>The first part of aligning the business is setting and communicating strategic objectives and OKRs. In many cases, the communication of strategy can get lost as it filters through the multiple layers of the organization. This is made worse due to strategy being more abstract and high-level, with language that may not be easily understood by the execution layer of the organization.&nbsp;&nbsp;Strategy without objectives is meaningless — it needs to be clarified, quantified, and plotted against a timeline. This is what strategic objectives enable — they break down your strategy into tangible goals that can be easily communicated and worked toward as a team. &nbsp;With strategic objectives set and communicated, your organization can then set OKRs (<a href="https://quantive.com/resources/articles/okr-meaning">objectives and key results</a>). These break down your strategic objectives even further by quantifying the specific outcomes different parts of the organization need to achieve. These also need to be communicated across the organization to ensure alignment. Where strategic objectives work on a yearly or multi-year timeline, tactical OKRs function on a quarterly or yearly basis. &nbsp;<h5>Strategic objectives and OKRs impact strategy execution by:&nbsp;</h5><ul><li>Plotting ambitious yet achievable goals to stretch the team’s capabilities while preserving morale.&nbsp;</li><li>Creating vertical alignment so everybody is working toward strategic objectives.&nbsp;</li><li>Enabling horizontal alignment so interdependencies between departments can be mapped out, increasing collaboration.&nbsp;</li><li>Boosting efficiency, engagement, prioritization, and focus through bottom-up involvement in goal setting.&nbsp;</li><li>Creating an outcome focused organization as opposed to activity which doesn’t generate results.&nbsp;</li></ul><hr>Learn more about <a href="/resources/articles/okrs-in-business" target="_blank" rel="noopener noreferrer">the benefits of OKRs for businesses</a><figure class="image image_resized" style="width:50%;"><a href="/resources/articles/okrs-in-business" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1670703147/site-v5/OK_Rs_for_business_656a5f0108.png" alt="OKRs for business.png"></a></figure><hr><h3>Planning the work&nbsp;</h3>With strategic objectives and OKRs set and communicated, planning the governance and execution of work is next.&nbsp;<h5>A few things to consider during this phase are:&nbsp;</h5><ul><li>Culture design: Your operational culture must be transparent, continuously learning, and braced for constant transformation. This enables effective use of the OKR method and continuous adaptations. At the leadership level, there must be a shift from control and compliance to trust and transparency.&nbsp;</li><li>Organization architecture: Your organization structure needs to be adaptable to account for asynchronous, remote, and flexible ways of working.&nbsp;&nbsp;</li><li>Policies and procedures: Decision making should be made at the edge of the network — closer to the source of data and point of execution, as opposed to centrally. In the modern era, there’s no longer time to go up and down the chain of command to make decisions. Greater communication and transparency efforts need to be pushed to eliminate information silos and shadow organizations.&nbsp;&nbsp;</li><li>Playbooks and processes: Mapping out the strategies and tactics of the work to be done.&nbsp;</li><li>People: Deciding who will be doing what.&nbsp;&nbsp;</li><li>Tools: Choosing the right software tools to enable work. With the Modern Operating Model, special emphasis is placed on connecting all your data sources for better observability and assessment.&nbsp;&nbsp;</li><li>Resource allocation: Setting budgets appropriately to meet different OKRs.&nbsp;&nbsp;</li><li>Programs and initiatives: Organizing work at a high level in conjunction with strategic objectives and OKRs. &nbsp;</li><li>Approaches to work: Deciding on how work will be carried out with task management, workflows, projects, sprints, etc.&nbsp;&nbsp;</li></ul>Effective work planning increases the efficiency of your strategy execution. Conducting work in the right manner means time and resources are saved through error reduction, in addition to faster and better work outputs.&nbsp;&nbsp;

As work is conducted, there needs to be continuous monitoring of both data and information. In a Modern Operating Model, monitoring incorporates and goes beyond traditional management check-ins and annual and quarterly performance reviews. KPIs are gathered from all parts of the business in addition to the application of the OKR method. Working in conjunction, <a href="https://quantive.com/resources/articles/okrs-vs-kpis">OKRs and KPIs</a> create a more powerful picture of what’s happening in the business and how it affects progress toward strategic goals.&nbsp;&nbsp;As part of the internal monitoring aspect of The Modern Operating Model, KPIs are pulled from a connected technology stack to provide <a href="https://quantive.com/products/signals">business observability</a>. With the right tools, you can sync your KPIs to continuously update alongside your OKRs, in addition to gaining insight about potential risks and opportunities. To add to this, OKRs provide quantitative data in the form of key results and confidence assessments toward meeting objectives. They also provide qualitative information in the form of weekly OKR reviews and quarterly retrospectives.&nbsp;&nbsp;<hr>Learn more about <a href="https://quantive.com/resources/articles/okr-cycle" target="_blank" rel="noopener noreferrer">OKR reviews and retrospectives</a><figure class="image image_resized" style="width:50%;"><a href="https://quantive.com/resources/articles/okr-cycle" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1670611666/site-v5/The_OKR_Cycle_999afeea92.png" alt="The OKR Cycle.png"></a></figure><hr>External monitoring is also a necessary part of the Modern Operating Model. This involves constant surveillance of your business environment to identify changes, threats, and opportunities. This could be in the form of <a href="/resources/articles/modern-operating-model-manifesto#new-trends-impacting-the-strategy-execution-gap" target="_blank" rel="noopener noreferrer">understanding megatrends</a> such as the next wave digitization or keeping tabs on startups that could potentially disrupt your space.&nbsp;Together, internal and external monitoring are used to compress learning feedback loops and boost business observability, which can then be used to make more accurate decisions about changes and adaptations to your strategy execution.&nbsp;

The next component of the model is doing the work. At the surface level, this involves the basics of completing tasks, inputs, transformations, and outputs. But under the Modern Operating Model, the essence of how the work is done is different.&nbsp;<h5>When applied correctly, the ideal state of work should look like this:&nbsp;</h5><ul><li>Fully engaged employees who expend discretionary effort to improve their craft and solve problems.&nbsp;</li><li>Collaboration and communication between teams to work toward common objectives.&nbsp;</li><li>Continuous learning and feedback based on regular OKR reviews and KPI observability.&nbsp;</li><li>Greater ownership and accountability of work through transparency.&nbsp;</li><li>Decisions made locally in a data-driven way.&nbsp;</li><li>Greater focus on outcomes, as opposed to tasks and activities.&nbsp;&nbsp;</li><li>More experimentation and embracing failure.&nbsp;</li><li>Recognition and reward based on merit and adherence to company values.&nbsp;&nbsp;</li></ul>Although this ideal state of work doesn’t happen overnight, the components of the Modern Operating Model are designed to optimize your strategy execution over time, bringing this ideal closer to reality over time.&nbsp;<hr>Learn about the intersection between <a href="https://quantive.com/resources/articles/okr-and-agile" target="_blank" rel="noopener noreferrer">OKRs and agile methodologies</a><figure class="image image_resized" style="width:50%;"><a href="https://quantive.com/resources/articles/okr-and-agile" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1670611666/site-v5/OK_Rs_and_Agile_3dd7e4cb90.png" alt="OKRs &amp; Agile.png"></a></figure><hr>

With the right data and information through business monitoring, assessments can be made to adapt strategy execution to help you stay the course. The process of assessing and adapting involves looking at the data and information you have collected, extracting the insights and narrative, and turning them into knowledge which can be used for decision making.&nbsp;&nbsp;At the macro level, the purpose of this component is to help you navigate the threats and opportunities of a fast-changing world. This means you may need to make changes to your destination and how to get there at a strategic level. In addition to the points mentioned above, these could include navigating changing economic, political and social conditions, adapting to innovation, and ESG (environment, social, and governance) concerns.&nbsp;&nbsp;At the micro level, you want to assess and adjust your strategy execution for:&nbsp;<ul><li>Overall effectiveness: Optimizing the different components of the Modern Operating Model such as how work is done.&nbsp;</li><li>Progress towards OKRs: Looking at key results metrics for each objective and uncovering the reasons for possible underperformance. Deciding whether the OKRs set are still relevant in terms of achievability and being critical to current strategic objectives.&nbsp;</li><li>Internal warning signs: Gaining insight and foresight, as opposed to hindsight, about operational problems through AI and KPI data. This could be technical issues such as servers going down or business challenges such as a high churn rate among a customer demographic.&nbsp;&nbsp;</li><li>Internal opportunities: Spotting patterns and trends to map out new opportunities. For instance, looking at customer support data to identify unmet or emerging customer needs.&nbsp;</li></ul>As adaptability is central to the Modern Operating Model, you will continuously adjust different components of your strategy execution based on the data and information you collect. You may only need to make small changes to a work tactic, for instance, or realize there is one threat or opportunity you need to focus on. But as time progresses and the business environment changes, you may need to adjust at the strategic level. Full adaptiveness of strategy execution at both the macro and micro level is the promise of the modern operating model.&nbsp;

Optimizing your strategy execution is relevant to every company regardless of size, stage, or industry. Working together, all components of the Modern Operating Model boost alignment, focus, adaptability, and efficiency in your strategy execution.&nbsp;Through adopting the Modern Operating Model, you can better navigate the threats and opportunities of a fast-changing world, in addition to achieving your strategic goals faster. To learn more about the broader context, challenges solved, and opportunities of using the Modern Operating Model, we will be releasing a second part to this article.<hr>Quantive is your bridge between strategy and execution. Founded on the objectives and key results (OKR) methodology, <a href="https://quantive.com/products" target="_blank" rel="noopener noreferrer">our Strategy Execution Platform</a> is where businesses plan successful strategy, focus and align teams to it, and stay on the leading edge of progress.As your company looks to achieve the best possible results, you need a modern approach to <a href="https://quantive.com/products/results" target="_blank" rel="noopener noreferrer">run your business</a> and change your business. <a href="https://quantive.com/modern-operating-model" target="_blank" rel="noopener noreferrer">The Modern Operating Model</a> brings strategy, teams, and data together to help make decisions faster, optimize operations, and drive better business outcomes.Whether you’re a large enterprise facing competitive disruption or a small business leading the innovative charge, Quantive helps get you where you want to go.Ready to achieve the best possible? Start using <a href="https://quantive.com/products/results/pricing" target="_blank" rel="noopener noreferrer">Quantive for free</a>.

What is the Modern Operating Model?

Business dashboards have been a staple in almost every company, team, and industry since <a href="https://quantive.com/resources/articles/digital-transformation" target="_blank" rel="noopener noreferrer">digitalization</a> began in the 1980s.&nbsp;They’ve given insight into what has happened in companies by using historical data to track trends and KPIs – the key word here being historical. But what happens if you don’t want history to repeat itself?What if you want to change the course of the future through swift and immediate action?<blockquote>Dashboards are no longer capable of driving change for your business in the modern world.</blockquote>Business dashboards are becoming obsolete, and we’re here to uncover why. We believe business leaders like you are missing out on better solutions and an early competitive edge. &nbsp;To understand why we’re advocating for a future free of dashboards (as they exist today), we’re going to explore:<ul><li>Why business dashboards still exist today (capabilities)</li><li>Why dashboards are becoming obsolete (risks/challenges)</li><li>What does a future without dashboards look like (solutions)</li></ul>

The need for data curation has never been greater. Yet, modern businesses still rely on dated methods (business dashboards) to cater to new demands, resulting in unique challenges.<h3>Capabilities of business dashboards</h3>Historically, dashboards were optimal (and at one time revolutionary) as the pace of business was slower. You could live with occasional data pushes in bulk because that was the technological standard. The data was still manageable, and you didn’t have to worry about your competition outdoing you with real-time data because it didn’t exist.<blockquote>The business dashboard as we know it today is no longer revolutionary — it’s the bare minimum.</blockquote>While business dashboards give us a high-level overview of data, they're static in nature — what you see is what you get. Built with push signaling behavior, communication is only ever one-way, which is the first unique challenge.<h3>Where business dashboards go wrong</h3>Amid a world of uncertainty, one thing is clear — you don’t need 100% of your business data dumped on you at once, especially if it lacks context or clarity. Rather, your teams need data catered to their unique challenges — &nbsp;data that allows them to go in-depth to find true insight.<blockquote>There’s no shortage of information, but a shortage in the right information.</blockquote>It’s 2023, and it doesn’t take a book on business strategy to know we all, in every business and industry, are flooded with push updates.The traditional dashboard is just another ping, alert, and/or buzz we’re probably not paying attention to. Users, aka your teams, don't care whether these notifications are important because there are simply too many to manage.The one-way philosophy of business dashboards neglects vital details: &nbsp;<ul><li>Which data is relevant? (quality vs quantity) &nbsp;</li><li>How up-to-date is this data? (accuracy) &nbsp;</li><li>How does this data help us find insights? (communication) &nbsp;</li><li>How accessible is this data? (usability)</li><li>How granular does the data get? (depth)</li></ul>These issues are chipping away at the relevance of dashboards in our fast-paced business environment.&nbsp;

Your organization can be in any stage — startup or stagnating, rapid scale or pursuing profitability — but that doesn’t mean the influx of data is slowing down.Over time, we’ve accumulated thousands of metrics to help us gauge business performance. However, traditional business intelligence (BI) dashboards have poorly supported these metrics, inhibiting informed decision-making. &nbsp;According to a <a href="https://www2.deloitte.com/us/en/pages/about-deloitte/articles/press-releases/deloitte-survey-analytics-and-ai-driven-enterprises-thrive.html" target="_blank" rel="noopener noreferrer">Deloitte</a> survey, executives are feeling this exact pressure. &nbsp;<blockquote>67% of executives said they weren’t comfortable accessing or using data from their existing resources, while 63% say although they are aware of analytics, they lack technological infrastructure and are still working in silos.</blockquote>Now let's see specific examples of how dashboards come up short in the modern business.<h3>Problem: Building dashboards is an ongoing, lengthy process</h3>Business intelligence dashboards take weeks or months to build. Your business may not have the luxury of sparing this time in data purgatory.&nbsp;Even when the dashboard is complete, it may not hold all your data, which means more resources are needed to input what remains. Some portion of your data must be extracted, managed, cleaned up, and organized, adding days and weeks to a process that should be immediate. &nbsp;As a result, updating traditional business dashboards may cost you just as much time as they save.<h3>Problem: Data collection relies on manual input</h3>Manual input subjects your business to risk from two perspectives:<ul><li>Time ROI and missed opportunities</li><li>Making decisions based on outdated data</li></ul><h4>Time</h4>While manually inputting data is an inconvenience, time is the double-edged sword of traditional dashboards. Not only is a time gap created with updating dashboards, but pulling data and dedicating labor to these tasks are sunk costs. &nbsp;If your teams are so focused on churning away at data processing, who is doing the work that actually drives the business forward? Tasking away at data isn’t effective for strategy execution. &nbsp;<h4>Decision making</h4>The global pandemic taught us how taking weeks or months to make a decision can put any business at extreme risk. Human input creates dependencies and lag effects, which affects confidence in your reporting. &nbsp;As a result of this uncertainty, we begin to understand why leaders in the Deloitte survey weren’t comfortable relying on their data to make decisions.&nbsp;<h3>Problem: Lack of prioritization</h3>No single person in your organization can possibly manage all your data at one time. Yet, this is how traditional dashboards function.Your people care only about the data relevant to them — anything else is stealing focus away from what needs to be accomplished.<blockquote>A good dashboard provides actionable information. There needs to be a reason for it. When you see a dashboard, you should immediately know what needs to be done.</blockquote>Unfortunately, dashboards don’t provide this visibility. The best they can do is display the data available, leaving you wondering:<ul><li>What are the important KPIs?</li><li>Where are they located?</li><li>What change is considered normal, and what is abnormal?</li></ul>Therefore, the data on these dashboards is neither distinguishable nor actionable — and any additional manual filtering or analysis they require defeats the sole purpose of having them.<figure class="image image_resized" style="width:75%;"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1675369588/site-v5/image_221a768fbb.png" alt="comic demonstrating the irony of having too many kpis and have a kpi to show how well the data is understood"><figcaption>Comic via <a href="https://marketoonist.com/2019/11/kpi-overload.html" target="_blank" rel="noopener noreferrer">Tom Fishburne</a></figcaption></figure><h3>Problem: Lack of AI and machine learning integrations</h3>Manual inputs create the dilemma of catching problems or signals too late.&nbsp;Without AI and machine learning, users will need additional time to detect anomalies and assess their relevancy based on static thresholds. &nbsp;<blockquote>We are approaching the point of <a href="https://en.wikipedia.org/wiki/Technological_singularity" target="_blank" rel="noopener noreferrer">technological singularity</a> — “A hypothetical moment in time when artificial intelligence and other technologies have become so advanced that humanity undergoes a dramatic and irreversible change.”</blockquote>With business behavior constantly evolving, critical questions arise:<ul><li>Shouldn't capabilities like KPI thresholds evolve too?</li><li>How do decision makers know when and how to adjust metrics?</li><li>How do we know inputs aren’t laced with human error?</li></ul>A lack of intelligent automation increases the chance that minor incidents slip through the cracks. Once gone undetected, they can quickly spread, turning into larger problems with a lasting negative impact on your business.<h3>Problem: Data is surface level</h3>Decisions need to be made with as much detail and context as possible. &nbsp;A modern business “dashboard” needs three successive capabilities:<ol style="list-style-type:decimal;"><li>Tell you what has occurred</li><li>Give you a deep dive into why</li><li>Uncover the driving force behind it &nbsp;</li></ol>A traditional dashboard, at its best, will somewhat accomplish capability #1, but lack the depth to inform you of #2 and #3. <a href="https://hbr.org/2017/01/3-ways-data-dashboards-can-mislead-you" target="_blank" rel="noopener noreferrer">Harvard Business Review</a> reports, &nbsp;<blockquote>“Although they can convey snapshots of important measures, dashboards are poor at providing the nuance and context that effective data-driven decision-making demands.”</blockquote>Consequently, dashboards can’t connect and correlate unexpected changes across different metrics, i.e., anomalies. Therefore, decision makers will waste time trying to understand the whole story behind the data and risk making misinformed decisions.<h3>Problem: Alert fatigue</h3>As mentioned, traditional dashboards rely on static thresholds, which constantly need to be reset based on changing business behavior. &nbsp;However, relying on human input to constantly update these thresholds is both impractical and inconsistent. Thus, alerts may be suddenly (and inaccurately) triggered across different KPIs, putting many operations teams into overdrive.<blockquote>They become fatigued after spending time sifting through “alert storms,” ultimately taking the sense of urgency out of the alert’s purpose.</blockquote>Without urgency, there is no focus, which ultimately harms <a href="https://quantive.com/resources/articles/strategy-execution-gap#step-1:-align-execution-to-strategy" target="_blank" rel="noopener noreferrer">the execution of your strategy</a>. Yet, the challenge remains of identifying which alerts are worth considering as an anomaly, false positives, repetitive, or minuscule. &nbsp;In dealing with the challenges of your modern business, the solution should be to reduce the quantity of alerts, while maintaining their quality.&nbsp;

There’s only one thing we know about our future in business — there will always be more data to sort, organize, and manage. No matter how advanced your current solution is, you can’t out-dashboard bad data management.<blockquote>Rather than trying to curate dashboards into a perfect-in-the-moment, yet fragile combination of visualization and sourcing, it’s time to rethink the idea of dashboards themselves.</blockquote>As a modern business, you’re seeking ways to make your data work smarter. Why continue spending hours of your week tediously checking in on endless KPIs, trying to make sense of what the endless stream of data means?With the surge of AI making headlines everywhere this year, any reluctance to what everyone claims is the “next big thing” is understandable. Business observability solutions provide advanced analytics, visualization tools, and predictive capabilities, all to help you identify problems and create solutions quicker.After reading this article, though, you have an understanding of why business dashboards are becoming obsolete. Embracing business observability as a concept is the next evolution in your business operations.<hr>Check out our <a href="https://quantive.com/resources/articles/business-observability-software" target="_blank" rel="noopener noreferrer">ultimate guide to business observability software</a><figure class="image image_resized" style="width:50%;"><a href="https://quantive.com/resources/articles/business-observability-software" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1676645665/site-v5/Business_Observability_Software_TEMP_FILE_e21de24662.png" alt="Business Observability Software"></a></figure><hr>Quantive is your bridge between strategy and execution. Founded on the objectives and key results (OKR) methodology, <a href="https://quantive.com/products" target="_blank" rel="noopener noreferrer">our Strategy Execution Platform</a> is where businesses plan successful strategy, focus and align teams to it, and stay on the leading edge of progress.As your company looks to achieve the best possible results, you need a modern approach to <a href="https://quantive.com/products/results" target="_blank" rel="noopener noreferrer">run your business</a> and change your business. <a href="https://quantive.com/modern-operating-model" target="_blank" rel="noopener noreferrer">The Modern Operating Model </a>brings strategy, teams, and data together to help make decisions faster, optimize operations, and drive better business outcomes.Whether you’re a large enterprise facing competitive disruption or a small business leading the innovative charge, Quantive helps get you where you want to go.Ready to achieve the best possible? Start using <a href="https://quantive.com/products/results/pricing" target="_blank" rel="noopener noreferrer">Quantive for free.</a>

The Ultimate Guide to Business Observability Software

Why Business Dashboards Can No Longer Keep Up in the Modern World

The past decade was defined by unprecedented growth and technological advancement, fueled by a never-ending “more, more, more” mentality. Yet, there is only one constant in business — it’s always changing.What’s changed?<ul><li>Global sociopolitical and economic uncertainty?</li><li>The “first adopter” competitive edge diminishing?</li><li>Outdated methods not working as they should? &nbsp;</li></ul>This is where the topic of business observability begins. When it comes to your business, and especially your data, “more” is no longer the answer. How we employ and utilize our data at scale seems to be the ultimate question across industries.But what is business observability, and why are AI-supported solutions suddenly so important?&nbsp;

You might have heard the term “observability” before. Usually applied in the context of monitoring IT performance or engineering environments, observability has slowly found cross-functional applications.<blockquote>Business observability is the ability to properly collect and manage business data, then make informed decisions using insights from that data.</blockquote>Business observability allows you to minimize failure or disruption through a business lifecycle that never stops evolving, granting you visibility into everything happening across your organization and/or teams.Your company can leverage business observability to:<ul><li>Monitor and measure the performance of KPIs in real-time</li><li>Quickly identify trends, issues, and opportunities &nbsp;</li><li>Fuel decision making informed by data</li></ul>Whether affected by internal or external factors, your day-to-day operations are becoming more complex. Data-informed decision making and business agility are no longer "nice things to have” — they are a necessity in any modern operating model.<hr>Learn more about <a href="https://quantive.com/resources/articles/what-is-the-modern-operating-model" target="_blank" rel="noopener noreferrer">the Modern Operating Model</a>&nbsp;<figure class="image image_resized" style="width:50%;"><a href="https://quantive.com/resources/articles/what-is-the-modern-operating-model" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1672763612/site-v5/what_is_MOM_e096dd39be.png" alt="modern operating model diagram"></a></figure><hr>So, why should you consider business observability for your business?&nbsp;

Without proper business observability, silos worsen, decisions are made without context, and inconsistencies in your data go unaddressed. This makes detecting and diagnosing potential issues a serious vulnerability, impacting your business and customers alike.So what is business observability really all about? Automation.Yes, the buzzword that has infiltrated business rhetoric and every ambitious professional’s dictionary. Business observability and automation go hand-in-hand through three key capabilities:<ol style="list-style-type:decimal;"><li>Data collection</li><li>Data organization</li><li>Trend identification</li></ol><h3>Data collection</h3>Automate KPI dashboards and monitoring software by organizing all your data in one place. With one source of truth for all your business data, there’s no shifting between applications or guessing which data is most accurate.<h3>Data organization</h3>Handling the sheer volume of data by our (human) selves is no longer possible. Business observability solutions take your data a step further by improving how you sort and organize data.&nbsp;Data becomes accessible and insightful with little-to-no manual input.<h3>Trend identification</h3>Business observability solutions go beyond one-way alerts offered by traditional solutions like dashboards — they leverage the power of machine learning and AI to enhance automation.Data is first inspected without human intervention. Green, yellow, and red flags are identified to users, with key operational metrics providing insight into what’s happening.&nbsp;As a result, decision-making loops are streamlined and automated, saving your business time and resources.&nbsp;

After saying “more, more, more” is no longer the answer for modern businesses, it would be hypocritical for us to suggest having just one “more” solution in your business stack will make all the difference.<blockquote>Rather, business observability solutions offer both “better” and “more” as a value. Better technical functions and more practical applications, versus more alarms and notifications.</blockquote>Let’s explore how traditional solutions like business dashboards fall short of your business demands.<h3>Lackluster reporting capabilities</h3>Business intelligence tools and KPI dashboards have been the go-to choice for monitoring performance. We’ve used them to create reports, visualize data, and send alerts. &nbsp;The problem? Much of this work relies on the assumption that:<ul><li>We know what to look for in our data</li><li>We can predict changes before they occur</li><li>We can dedicate all our time to manually monitoring them</li></ul>Sure, there have been improvements to these tools as the business landscape has evolved. But frankly, one-way business dashboards can’t keep up anymore. Their limited value is no longer sufficient given our greater, more comprehensive needs in the modern world.<h3>Alert fatigue</h3>Over time, data volume has increased and processes have become more complex. The dashboards we currently use not only lack scalability in relation to the growing number of metrics, but can't provide full context into KPI relationships within the organization.&nbsp;What once helped us distinguish the important now achieves the opposite. &nbsp;<blockquote>The previous sense of urgency and impact of dashboards has been diluted — we’ve over-notified, over-pinged, and otherwise, dashboard-ified everything to the point that nothing feels important anymore.</blockquote>This creates three obstacles for the modern business:<ol style="list-style-type:decimal;"><li>There's a larger scope for things to go wrong</li><li>It’s nearly impossible to identify individual deviations &nbsp;</li><li>Minor overlooked faults can lead to significant repercussions</li></ol>What’s missing is <a href="https://quantive.com/resources/articles/strategy-execution-gap#step-1:-align-execution-to-strategy" target="_blank" rel="noopener noreferrer">alignment and focus at the core</a>. Without that, strategy execution falters because nobody knows what to pay attention to or why.<h3>Flat data</h3>Perhaps the greatest opportunity loss with traditional solutions is extracting the most of your data. There’s a wide range to look at and analyze, but the best a static KPI dashboard can do is show surface-level data.&nbsp;<blockquote>Traditional dashboards and one-off monitoring tools can’t go the extra step when it comes to our data — adding context and depth.</blockquote>Your modern business requires a solution that doesn’t just display your data, but intuitively processes how complex, intertwined, and nuanced it is. How does a business observability platform account for this? By:<ul><li>Going granular with key metrics and qualitative segments</li><li>Uncovering the source of change with root cause analysis</li><li>Sending comprehensive breakdowns of trends and anomalies</li></ul>Evolving in operations isn’t possible until you can <a href="https://quantive.com/products/signals/collect" target="_blank" rel="noopener noreferrer">view, analyze, and act on your data</a> in one place.

Let’s be clear — business observability doesn’t just replace monitoring. It enhances it using data and insights to provide a holistic, comprehensive understanding of your ecosystem. &nbsp;<blockquote>Business observability provides an adaptive, autonomous, modern approach to data — identify changes, opportunities, and potential issues otherwise impossible with static business monitoring. &nbsp;</blockquote>Using the power of your KPIs across the organization, business observability guides you toward better decision-making and corrective action when necessary. &nbsp;Business observability can be achieved using the following framework: &nbsp;<ul><li><a href="https://quantive.com/products/signals/collect" target="_blank" rel="noopener noreferrer">Collect:</a> Unify data to reduce monitoring complexity &nbsp;</li><li><a href="https://quantive.com/products/signals/detect" target="_blank" rel="noopener noreferrer">Detect:</a> Proactively identify changes in business KPIs &nbsp;</li><li><a href="https://quantive.com/products/signals/inspect" target="_blank" rel="noopener noreferrer">Inspect:</a> Understand the root cause of any unexpected behavior &nbsp;</li><li><a href="https://quantive.com/products/signals/act" target="_blank" rel="noopener noreferrer">Act:</a> Optimize where appropriate or remediate the disruption &nbsp;</li></ul><h3>Collect data</h3>Business observability starts by capturing the right data.After all, you can't control what you’re not measuring. As such, the first step is figuring out which business KPIs to monitor and where they’re sourced from, as each set of metrics is unique and configured to user priorities.For example, in marketing, teams may track a KPI like Average Order Value (AOV) to assess customer segments and refine marketing strategies accordingly. Sales teams, on the other hand, may look at the number of Sales Qualified Leads (SQLs) as a broad metric.Business observability platforms expand on data collection with the ability to deconstruct each KPI in terms of geography, demographics, device, source, etc. &nbsp;<h3>Detect changes&nbsp;</h3>Once you’ve set up your data collection processes, you'll need to keep an eye out for unusual behavior. Anomaly detection is a core competency inspired by business monitoring.<blockquote>Examples of anomaly detection include: sudden spikes in check-out errors, shipments taking too long, conversions plummeting, customer churn, etc. &nbsp;</blockquote>To detect events effectively, you'll need to understand what the typical behavior of each KPI looks like, and if there are any interdependencies between them.&nbsp;A business observability platform will integrate these complex behavioral patterns into its detection framework, helping you account for their complexities.<h3>Inspect issues</h3>After identifying unexpected behavior, you’ll want to understand what caused it. The underlying reason might not be obvious, as important as other issues, or accurately reflect what’s happening in your operations. &nbsp;For example, if you're an e-commerce company and you notice an unusual dip in orders, you might assume there's an issue in your online store's payment system. However, the problem could also be in your paid advertising funnel or a simple reporting error in your host’s functionality.Business observability platforms go a step further in helping you identify and inspect the issue, not just send alerts.<h3>Act on insights</h3>Now you know what happened and why. &nbsp;<blockquote>The top differentiator in business observability versus traditional business monitoring is taking corrective action — fixing bugs, supporting customers, and correcting issues before they become costly.</blockquote>On the other hand, if an unexpected change was positive, your platform will help you understand what’s working in your favor and double down for optimal results. &nbsp;<hr>Learn more about the capabilities of a <a href="https://quantive.com/products/signals" target="_blank" rel="noopener noreferrer">business observability platform</a><figure class="image image_resized" style="width:50%;"><a href="https://quantive.com/products/signals" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1669896737/site-v5/visual_BO_detail_5ef78bf976.png" alt="Business Observability product demonstration"></a></figure><hr>

You've now know about business observability and what it can accomplish for your business.&nbsp;Now it's time to deep dive into the business observability process.<hr>Learn about the <a href="https://quantive.com/resources/articles/business-observability-stages" target="_blank" rel="noopener noreferrer">4 stages of business observability</a><figure class="image image_resized" style="width:50%;"><a href="https://quantive.com/resources/articles/business-observability-stages" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1678199993/site-v5/The_4_Stages_of_Business_Observability_9348b46877.png" alt="Four hollow circles in sequential order on a green background, each with different designs, surrounded by a cylindrical line with arrow, to demonstrate the 4 stages of business observability"></a></figure><hr>Quantive is your bridge between strategy and execution. Founded on the objectives and key results (OKR) methodology, <a href="https://quantive.com/products" target="_blank" rel="noopener noreferrer">our Strategy Execution Platform</a> is where businesses plan successful strategy, focus and align teams to it, and stay on the leading edge of progress.As your company looks to achieve the best possible results, you need a modern approach to <a href="https://quantive.com/products/results" target="_blank" rel="noopener noreferrer">run your business</a> and change your business. <a href="https://quantive.com/modern-operating-model" target="_blank" rel="noopener noreferrer">The Modern Operating Model </a>brings strategy, teams, and data together to help make decisions faster, optimize operations, and drive better business outcomes.Whether you’re a large enterprise facing competitive disruption or a small business leading the innovative charge, Quantive helps get you where you want to go.Ready to achieve the best possible? Start using <a href="https://quantive.com/products/results/pricing" target="_blank" rel="noopener noreferrer">Quantive for free.</a>