Barriers to Strategy Execution

We were asked about what we’ve seen are some of the barriers to effective strategy execution and shared the following:

1. No vetting of the strategy to see if it's actually do-able (do we have the right capital, right products, right markets, right people)...no debate to refine the strategy,

2. Low/No agreement on what the strategy actually is - even among the C-suite executives (it’s always a surprise to see this),

3. Low connection between the corporate financial & operational business models (made in the vetting debate) and budgets, plans, & forecasts,

4. No buy-in to the budgets, plans, and forecasts (usually due to management overrides after a bottoms-up exercise),

5. No agreement on what the right measures are to see how well we're doing, and no visible connection between those measures and strategic objectives,

6. Low/No belief that the numbers seen are accurate (or at least the same version), as well as a lot of manual effort to get at the numbers,

7. Low/No understanding of the root causes as to why the company achieve, underachieve, or overachieve results,

8. No connection between root-cause analysis and tweaking the strategy ("hey, we are losing money on product x, and it's not a loss-leader, should we be in that business?"),

9. Low accountability for results.

When it does work, we've seen things like accounts receivable associates having a business intelligence dashboard that shows how what they have a daily impact on (days sales outstanding, cash collections for example) directly impacts strategic objectives (like profitable revenue growth).

And then there’s company culture.  I just got this book the other day called The Three Laws of Performance: Rewriting the Future of Your Organization and Your Life (J-B Warren Bennis Series) by Zaffron & Logan (a Warren Bennis book). And while I'm only part way through, the key may be in how strategy, execution, and the entire company occurs for employees and leadership. In other words, what may keep people from doing what's required to execute on strategy is that they already "know" the outcome ("it won't make a difference," "yet another strategic initiative," "just wait and it will change," "I can't make a difference" and so on). It could occur to them as "doomed to fail," "weak," "not the way I would do it," "more of the same," and so on. This book is saying our performance correlates with how situations occur to us. So we would have to change how things occur to us first.

Comments

[Amelia Thornton]

Great post, Ron - I see #2, #5, and #9 all the time, and believe they are the 'critical few' of your list. I would also add one more -- #10. Too many moving parts. Organizations that execute effectively on their strategies typically have only a very few strategic goals versus many, and they are laser focused on them. Once a goal is completed, they 'reload' and move on to the next one.

[Robin Speculand]

In addition to your top 9 I woild also add:

No one sets out to fail when implementing strategy but they do nine out of ten times. Just as no one sets out to craft a bad strategy! The only way we know a strategy is bad is by implementing it. The only way we know if an implementation is working is by reviewing it.
A main contributor to strategy failing is that after crafting the new strategy leaders feel that they have completed most of their responsibilities and delegate what they consider the easier part, the implementation. They take their eye of the ball. This has been a recipe for failure for too long. The implementation changes and leaders do not know.

[Ron Dimon]

Amelia - I agree, otherwise organizations can suffer from 'initiative-du-jour' or strategy fatigue.

Robin - great point. Strategy and execution should be part of a closed-loop where feedback and learning take place. There is much to be done in the 'operationalizing' of strategy!

[sap bpc]

Traditionally Human Resource is viewed primarily as an administrative function. But things are not the same in the current environment.