The Strategy Execution Challenge


We’ve all seen it–the flash in the pan companies that produce short bursts of high performance, only to burn out as fast as they came. And then there are the companies that seem to have their “moment” every few years, experiencing short-term cycles of success in their market.

While it may seem like those companies are fumbling, operating without a plan, the exactly opposite is typically true. After all, failing to plan is planning to fail.

Yet despite spending having a concrete plan–even a great plan–morale is low, employee teams don’t feel successful, and while the company is succeeding on paper, it’s underperforming significantly.

And therein lies the problem:  Where most fall short, isn’t in planning–it’s in executing those plans effectively.

Failing to plan align is planning to fail

According to Paul R. Niven, author of business best sellers, Balanced Scorecard Step-by-Step and Balanced Scorecard Evolution, only 1 in 10 companies have uncovered the key to consistently executing on their strategic plans.

If you’re wondering how that could be possible, look no further than this stat from Fortune magazine which estimates that as much as 95% of the workforce doesn’t understand their organization’s strategy…

With numbers like that, it’s no wonder organizations are having trouble executing on their plans–no one understands what the plan is.

It’s especially troubling when you consider that 70% of CEO failures are the result of poor execution–not poor planning or bad strategy. What we have is an epidemic of mis-alignment.

But all is not lost. 37% of large global business executives recognize that their company needs to improve alignment with their strategic plan. Some of the most common challenges preventing that alignment:

  • Internal resistance to change
  • Strategy is in conflict with the current organizational structure
  • Inadequate communication between individuals or business units
  • Unclear communication of responsibiity for execution of decisions or actions
  • Employees don’t feel empowered, and therefore don’t feel ownership of the strategy or execution plan
  • Don’t have a model to guide strategy execution
  • Lack of understanding of the role of organizational structure and design in the execution process
  • Inability to generate buy-in or agreement on critical execution steps
  • Lack of incentives to support execution objectives

The above list makes it amply clear that strategy execution is not one challenge but a complex network of issues with roots in organization-wide communication and alignment.

Managing Execution for Success

If the scope of the strategy execution challenge looks discouraging, remember that even if 9 in 10 organizations are struggling, the top 10% have found a way to consistently execute on their strategic plans.  The organizations that choose to find a way over the hurdles know that the rewards are great.

So how are they doing it?

By implementing formal processes and technology to track KPIs against the strategic plan.

By doing so, even large, multinational corporations have been able to provide clarity and alignment from the boardroom to the employees on the front lines of customer service, providing transparency into precisely how their role and objectives support the organizational mission. With that type of transparency, the “ownership” problem resolves almost immediately, giving employees a sense of empowerment that drives morale and performance.

In a study exploring successful strategy execution, the IBM Institute for Business Value found that 54% of the organizations surveyed had implemented a formal process for managing strategy execution. Of these, nearly 75% were outperforming their peer group.

While tracking and managing strategy execution can be a big job, software can help solve the major challenges associated with breaking down silos between business units, aligning objectives across the organization, and providing clarity, all of which can help put your organization on the track to successful strategic execution.

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