We turn to Michael Porter’s seminal work for a definition and clear understanding of strategy. But do we really know enough about execution that infuses life and meaning into strategy? Translating strategy into results tends to imply and focus, narrowly and ineffectually perhaps, on tactics. While two-thirds to three-quarters of large organizations find strategy execution a singularly challenging task, more than 400 global CEOs admitted in a survey that they continue to toil with wide-ranging issues of executional excellence, including top-line growth, innovation, and geo-political instability.
An ongoing large-scale research involving 8000 managers in more than 250 organizations has already generated eye-opening insights – that many established and widely accepted beliefs about strategy implementation are plain erroneous and counterproductive, that myths abound which must be debunked and replaced with fresh realistic perspectives.
Myth 1: Execution is alignment
When asked how strategy is executed in their firms, senior managers typically answer that strategy is first translated into objectives and cascaded down the hierarchy, progress is measured and performance is rewarded thereafter. To improve execution, tools are designed to increase alignment between activities and strategy down the chain of command. But why do large organizations, with sound processes and high performance levels, struggle to execute strategies?
More often than not, execution equals alignment in the minds of people, so failure to execute implies a breakdown in the processes linking strategy to action at every level in the organization. 84% managers surveyed opine that while executing strategies, personnel directly up and down the hierarchy (direct reports and bosses) can almost always be depended upon. Fluctuating levels of commitment and low accountability of personnel of other functions / departments inhibits full-tilt delivery and progress. Hence, when coordinating across silos and managing horizontal performance with insufficient support of other units serve as execution barriers, managers tend to compensate with dysfunctional behaviors – settling for less, substituting/duplicating efforts, letting go of opportunities, and delaying deliveries.
Myth 2: Execution presupposes that you adhere to the plan
Strategic planning lies at the core of execution. Investing a lot of time and energy, detailed roadmaps with timelines are prepared and budgetary/resource allocations are formulated. Consequently, any fall-through or deviation is perceived as lapse or lack of discipline, undercutting execution. Goes without saying, even the best laid plans cannot anticipate every event in a journey. Strategy execution, by its very definition, foregrounds that opportunities supporting a strategy be seized and creative solutions to unforeseen problems be embraced. Agile companies adapt to facts on the ground and make real-time adjustments, with fluid reallocation and redeploying of resources.
However, there are times when pre-decided paths are required to be changed to keep the very journey alive. Company leaders must know when to tweak plans or hold back. Successful strategy execution also calls for making timely exit decisions of failing businesses and unfruitful initiatives.
Myth 3: Communication equals understanding
Many leaders relentlessly communicate the organization’s strategy and key priorities through streams of e-mail or in meetings, without reckoning if they are adequately and appropriately being understood down the line. In some cases “even half the C-suite cannot connect the dots between strategic priorities.” Research shows that less than one-third of the direct reports of senior executives understand how major priorities and initiatives fit in with the overall strategy, and the figure nosedives to 16% for team leaders and frontline supervisors. Confusion increases when top bosses inadvertently change their messages, without considering the implications on the workforce. Perceiving as changes in brief, people down the ladder lose sight of the core objective and end up according disproportionate attention and efforts to peripheral considerations of little merit.
Myth 4: A performance culture drives execution
When organizations fail to translate strategy into results, executives tend to blame a weak performance culture. Despite robust performance cultures of some, successful strategy execution remains elusive there too. Though many organizations do a good job of recognizing and rewarding performance, a culture that supports execution must equally value and reward key intangibles, such as agility, adaptability, and team-play. When making a promotion decision, a manager’s ability to adapt and deliver in changing circumstances – a sign of agility required to execute strategy – tends to feature far less than achieving the numbers. Worse still, where there is excessive emphasis on performance and executives know that hitting the numbers will trump all else, they tend to play safe by making conservative performance commitments and avoiding challenging business models or new propositions. That apart, many corporate cultures also overlook coordination issues. When a survey asked what would happen to a manager who achieved his objectives but had a poor track record of collaboration and partnership quality, only 20% respondents expressed that such behavior would be duly addressed and promptly corrected in their organizations.
Myth 5: Execution must be driven right from the top
When the top bosses themselves drive execution hands-on, negotiate performance objectives, and monitor progress with managers several levels down, the approach pays off for a certain period but reveals many flaws eventually. Effective execution in large organizations results from countless decisions and actions at all levels of hierarchy and across the organizational matrix. While top-down execution often founders after the exit of powerful CXOs, frequent supervision from on high diminishes the middle managers’ decision-making process and ownership of results, encouraging the propensity to escalate issues instead of resolving difficulties at their levels.
Senior executives often try to address the problem of execution by reducing it to a single dimension. Rather, it pays to redefine execution as identification and leveraging of opportunities aligned with strategy, while coordinating with other parts of the organization and focusing on factors singularly crucial for translating strategy into results.
