‘Eighty percent of success is showing up.’ – Woody Allen
Strategy is only as good at the execution behind it. The issue received its first major exposure in 1999 with Fortune Magazine’s article “Why CEOs Fail”, which identified bad execution as the culprit, 70% of the time.
Most industries are defined by economic models, explicit customers expectations, as well as competitive structures that are known to all and are hard to change over a short period of time. This makes it extremely difficult and risky to have superior insights and develop a unique strategy.
Triumph over implementation thus becomes a potential competitive differentiator, with strategy as a hypothesis and its implementation an experiment. As results appear, executive teams learn more about what does and does not work, and adapt as quickly as possible.
However, research shows that the holy grail of successful implementation remains as elusive as ever. So why does execution fail in so many cases?
1. The strategy that is not a strategy
The strategies defined are often reminiscent of amorphous vision à la “to be the most respected and successful company”; goal setting exercises along the lines of “to increase market share by growing faster than the market through introducing new products”; and so called strategic objectives more akin to long to-dos list. Complex power point slides, full of buzz-words describing blue-sky objectives, usually skip over their impracticability or the fact that no one has a clue as to how to get there.
Instead, a strategy should figure out which purposes are worth pursuing and capable of being accomplished – in other words, it should be about choice and focus. To achieve higher performance, leaders must spot the relevant trends, identify the strategic issues that will have the greatest impact on future business performance and define the resulting critical challenges. They then develop a coherent approach to overcome those challenges.
A good strategy thus becomes a bridge between challenge and action. It is short on vision, long on tough-minded analysis, policies and actions identifying the 5 or 6 insightful and actionable things that the business needs to do, to deliver substantially higher performance.
2. Leadership missing in action
For much of the last 40 years, the focus in business has been on how to create the right strategy, which is seen as the leaders’ responsibility. Most still believe that, once this has been done, it gets executed. They forget to look inside the process and the implementation then becomes a fait accompli as they delegate the implementation responsibility i.e. they take their eyes off the ball. In reality, the hardest part – implementation – is just beginning.
Two companies might have the same strategy but each organisation’s implementation is unique. Senior management must first identify what needs to be done and then lead staff members to adopt and perform the required behaviour and work. In addition, they must keep the process alive: constantly discussing, overseeing and guiding the implementation. Where new focus areas are dictated by a new strategy, they become the champions or faces of change, helping staff (at all levels) understand what the implications are for them, personally.
Seniors of the organisations that successfully implement their strategies often state that they double the effort on implementation compared to what they had spent crafting it. That obviously requires them to free up valuable time and resources, and to avoid being caught in the day-to-day management of the business, potentially losing sight of their goals to implement a strategy and, as such, taking the wrong actions.
3. Confusing change management with strategy implementation
Change management is a systematic approach to dealing with change (both at an organisational and individual level) but implementation is a specific approach that drives the right actions today to deliver the strategy, tomorrow. As such, change management is a flawed methodology for implementing strategy – if we keep doing the same thing, we will keep failing, and strategy will fail.
While crafting a strategy is about making the right choices – implementation is about taking the right actions and it’s the role of top management to translate the strategy into daily actions. Their biggest blind spot is the failure to recognise that implementing a strategy requires a shift in day-to-day activities throughout the organisation. Very often, little attention is paid to whether staff members are taking the right actions i.e. those that drive the implementation forward. Leaders are responsible for identifying what is no longer important to the business from the old strategy, and what is key to the new strategy - i.e. the actions they do not want staff members to do any more and the ones they want them to do differently or start doing.
Thirty years ago, management was about control and change management was designed as command and control. Now, most business have moved to empowerment and team work. The challenge thus resides in putting new models in practice that might be counter to what the organisation is currently doing and stopping doing what does not work - they must take the right actions. Many leaders use change management out of ignorance, and end up taking the wrong the actions.
4. Failure to deploy the necessary resources
Many companies view strategy and operations as two separate activities. Once the strategy has been defined, everybody goes and run the business in the same way as before. Managers fail to re-allocate resources away from activities that are no longer necessary to the higher priorities that are now critical to the long-term success.
Generally, organisations focus on the short-term at the expense of the long-term. Line managers, given a choice between achieving short-term financial gains (that impact their bonuses) and allocating resources to issues that will impact the organisation in the longer term (when they may no longer be around), will not take long to choose.
Businesses need to institutionalise the connection between strategy, operations, and targets, as well as performance consequences. This creates a seamless thread to take strategy into the organisation via the budget process, to focus on high-level long-term strategic objectives rather than on short-term quantifiable targets.
As companies poorly aligned with strategy report weaker financial results than their peers, stakes are high. Getting it done, getting it done right, getting it done better than the competitor is far more important than dreaming up new visions for the future. All great companies out-execute their competitors day-in, day-out.
by Christelle Espinasse – inSTRATEGIA
