The challenge of strategy execution is all too familiar: exhaustively studied by companies, consultants, and experts alike, strategy resets prove to be frustratingly elusive in their implementation. One of the most frequently cited statistics is from The Balanced Scorecard, whose authors, David Norton and Robert Kaplan, conclude that 90% of organizations fall short in the effort. Other studies come up with a wide range of failure rates, but they average out to about 50%.
So, what is the problem?
On the face of it, it’s not always clear why execution is so difficult. For some hard-driving, action-biased leaders, the task still seems simple, despite those pesky failure rates. Decide to do something, they say, then do it.
But here’s how—and why—so many resets go off the rails.
The initiative generally starts out with a small group of executives, and perhaps consultants, working for months to develop a complex data-driven and market-research-backed strategic shift. The plan is carefully examined, vetted, and debated to ensure that the company is headed for great success—whether that is rapid growth, a more secure competitive position, or the deployment of new, innovative products or services. When the plan is ready and the board has approved, the team prepares to launch and go live. Scripts are written, PowerPoints are built, numbers are double-checked, town halls are scheduled.
At first, the fanfare produces some energy in the organization. Conversations in the hall and at virtual meetings are sprinkled with references to the new strategy. People start using the right buzz words and adding slides from the road shows to their presentations. Some early experiments and initiatives begin to get traction and visibility. But, as time passes, people start to revert to their old ways of working. Often, it’s just that they are not sure what to do next. On a broader front, the path from the early experiments to making it real throughout the organization is unclear. The effort feels both hard and confusing, and leaders and their teams are overwhelmed by too many conflicting and hazy priorities tied to unrealistic expectations.
As more time passes, the executive leadership team becomes increasingly frustrated and more insistent on the need to move faster to produce results and improve shareholder returns. They send their deputies scurrying throughout the organization to find out what’s wrong. But the effect of all that attention, and the implied threat of punitive action, is hardly a good one: it propels information about the real challenges and barriers underground as the rest of the organization metaphorically avoids eye contact in hopes that, like the last big initiative, this, too, will pass.
So why does this happen again and again?
Our work with thousands of leaders and organizations has revealed a core disconnect that can undermine even the best of strategies in the most focused of companies. The disconnect is both simple and insidious:
Strategy creation and strategy execution are seen as two separate activities, rather than what they should be—an integrated, iterative process that generates a new reality over time for the company and for the people in it.
We have seen countless leadership teams get tripped up because they don’t understand the power of an integrated process for making strategies actionable and are stuck in an unproductive and eventually self-destructive two-step approach.
How can you end that cycle? The short answer is to do three things. One is to broaden the strategy—setting part of the initiative to think bigger and bolder and more flexibly, allowing for changing market conditions. The second is to more deeply engage the people who will have to implement that strategy, and to bring them into the process, and keep them there, from the earliest days to the very end. And the third thing is to marry the first two in a cohesive, seamless way. Those in the C-suite shouldn’t keep the blue-sky planning all to themselves—mid-level managers and front-line workers are often the first to spot storm clouds rolling in.