Making Strategy WORK is more difficult than MAKING strategy

The third quarter of the financial year has ended and most companies will now have estimated (give or take a few lakhs) the sales revenue for the year. Frantic efforts will be made in the last quarter to bridge the gaps in targets versus achievements. Reviews and management committee meetings will be held to identify the reasons for the gap. More likely than not the conclusion will be that the strategy was good but execution suffered.

Making strategy work is more difficult than making strategy!

Let us consider some research findings.

• According to the Harvard Business Review, on an average, companies deliver 63% of the financial performance their strategy promised[1].
• An Economist Survey states that 61% of respondents acknowledge that their firms often struggle to bridge the gap between strategy formulation and its day-to-day implementation. Moreover, in the last three years an average of just 56% of strategic initiatives have been successful. [2]
• Just 3% of executives believe their companies are successful at execution claims an AMA Survey[3].
• Welborn and Kasten  in their book ‘Get It Done!: A Blueprint for Business Execution’ state that 80% of C-level executives believe the ability to successfully execute is nearly impossible to achieve[4].
• A five-year Harvard Business Review study, involving 125,000 executives representing more than 1,000 companies from 50 countries, found that three out of every five employees considered their organizations weak at execution[5].
• From my own experience of the last 30 years, consulting with companies, I have seen first hand how a great strategy  can get derailed due to gaps in execution. Which brings to mind the old Scottish poem by Robert Burns “the best laid schemes of mice and men, go often askew, and leave us nothing but grief and pain, for promised joy!”

Larry Bossidy and Ram Charan in their book  “Execution[6]’ make the point that strategy is “no longer an intellectual challenge… you can rent any strategy you want from a consulting firm.” Strategy on paper is longer the prime differentiator. Making strategy work is!

Therefore the moot issue is – why is execution so difficult? Numerous reasons can be cited – lack of clarity in strategy, inability to translate strategy into clear goals, accountability grey areas, inability to get buy-in from the implementation teams, lack of timely resources to enable strategy, and competitor’s disruptive innovation among others.

Execution capabilities

But one key and controllable aspect, which can be addressed effectively but is often neglected is “the need to build execution-focused capabilities within the organization”. The skill and drill to execute strategy is vital especially as the best-laid plans go awry when confronted by market realities and competition.

Leadership practices also greatly influence strategy execution. Organizations need to develop leaders who can execute strategy. However, there seems to be an overall deficit in leadership development in this area.

To make strategy work, leaders must devote time to execution. In practice, business leaders devote their energy to formulating strategy and delegate the execution to others.  In other words, strategy is  executed by PEOPLE. Therefore, people and their execution capabilities become critical to the success of strategy.

As Tom Peters puts it “You can have the best strategy, you can even frame it and put it up on the wall, but if you’re not executing…it’s just artwork”.

It is time to bring the focus back to ‘execution’ and focus on building execution capability – both of leaders and teams- which then can become a prime differentiator in an organization.

[1] Mankins Michael, Steele, Richard. (2005) Turning Great Strategy into Great Performance. Harvard Business Review, July- August 2005

[2] Economist Intelligence Unit., Why Good Strategies Fail-Lessons For The C-Suite.  2013

[3] AMA/HRI survey “The Keys to Strategy Execution http://www.amanet.org

[4] Welborn, Ralph., Kasten, Vince. (2005) Get It Done!: A Blueprint for Business Execution. Indiana: John Wiley & Sons, 2005

[5] Neilson, Gary., Martin, Karla.,  Powers, Elizabeth. (2008)  The Secrets to Successful Strategy Execution. Harvard Business Review, June 2008

[6] Bossidy, Larry., Charan, Ram. (2002) Execution: The Discipline of Getting Things Done. Crown business, June 2002