Strategy Execution: Why It Often Fails
A senior executive recently shared with me: “I have been explaining our new strategy for months, and last week in a leadership meeting I got astonishing feedback. The main message was ‘we have no clue where we’re going with our strategy’. How is this possible?! Defining a good strategy, and executing this strategy successfully are two separate things. Why does strategy execution often fail?
The CEO of Philips, Frans van Houten, recently remarked: “We often have good ideas, but we have to execute these well, otherwise they are useless.”
In the words of former CEO of Royal Dutch Shell, Jeroen van der Veer: “The biggest danger for an organization is that you go too slow. You need to make clear choices and swiftly execute these.”
"Defining a good strategy, and executing it successfully are two separate things."
In my work I see a lot of executives struggle with the switch between strategy development and strategy execution. Executive teams put a lot of time and effort in defining the new strategy, they put it on paper, communicate it, and expect the organization to take over and roll it out as was communicated. But that hardly ever happens …
Successful strategy execution (especially in today’s business environment with a high rate of change and complexity) requires leaders to be aware of three essential pitfalls. Pitfalls that occur regularly, and that you maybe also witness in your organization.
1) The communication about our strategy is not creating focus
Communicating your strategy in a way that does not lead to a collective focus is very likely creating confusion, scattered actions, a lack of motivation, or even chaos. But still some leaders believe that a road show with a deck of slides filled with data and charts will do the trick.
Successful leaders approach it differently and pay special attention to creating a strategic road map, which communicates a clear message to everybody. And they engage their team or a group of key stakeholders in creating this road map; they make it ‘our’ road map. Their strategy road map describes:
- where do we want to go (our vision)
- why do we want this change (the gap with the current reality)
- which choices do we make to get there (our strategic priorities)
- what do we want to get out of it (our desired results)
- how do we want to achieve these priorities (the steps, timing and resources).
A powerful strategy road map is channeling the energy and actions of the people involved. It creates focus and drive instead of a feeling of ‘more workload’. Make no mistake, having a collective focus has a direct impact on motivation and performance (read more about this in this New York Times article), and therefore on successful strategy execution. A good strategy road map stimulates this.
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2) There is a lack of ‘disciplined execution’
Intermediate developments and issues that absorb people’s attention easily sidetrack strategy execution. Leaders are sometimes not aware of the negative consequences this can have on the longer-term success of their company. They sometimes even trigger this sidetracking by jumping on operational issues, which not necessarily have strategic relevance. They sometimes allow people to postpone strategy execution because of these operational issues. By doing this they create a feeling among employees that strategy execution is something that comes on top of their daily work; something that is actually less important.
Successful leaders understand the importance of creating a culture of disciplined execution. Jim Collins and Morten T. Hansen, the authors of ‘Great by Choice’, describe what this means in their article ‘How to Manage Through Chaos’ with the following nice example:
Imagine you're standing with your feet in the Pacific Ocean in San Diego, looking inland. You're about to embark on a 3,000-mile walk, from San Diego to the tip of Maine. On the first day you march 20 miles, making it out of town. On the second day you march 20 miles. And again, on the third day you march 20 miles, heading into the heat of the desert. It's hot, more than 100˚F, and you want to rest in the cool of your tent. But you don't. You get up and you march 20 miles. You keep the pace, 20 miles a day. Then the weather cools, and you're in comfortable conditions with the wind at your back, and you could go much farther. But you hold back, modulating your effort. You stick with your 20 miles.
Then you reach the Colorado high mountains and get hit by snow, wind, and temperatures below zero -- and all you want to do is stay in your tent. But you get up. You get dressed. You march your 20 miles. You keep up the effort -- 20 miles, 20 miles, 20 miles -- then you cross into the plains, and it's glorious springtime, and you can go 40 or 50 miles in a day. But you don't. You sustain your pace, marching 20 miles. And eventually, you get to Maine.
Now, imagine another person who starts out with you on the same day in San Diego. He gets all excited by the journey and logs 40 miles the first day. Exhausted from his first gigantic day, he wakes up to 100˚ temperatures. He decides to hang out until the weather cools, thinking, "I'll make it up when conditions improve." He maintains this pattern -- big days with good conditions, whining and waiting in his tent on bad days -- as he moves across the western United States. Just before the Colorado high mountains, he gets a spate of great weather and he goes all out, logging 40- to 50-mile days to make up lost ground. But then he hits a huge winter storm when utterly exhausted. It nearly kills him and he hunkers down in his tent, waiting for spring. When spring finally comes, he emerges, weakened, and stumbles off toward Maine. By the time he enters Kansas City, you, with your relentless 20-mile march, have already reached the tip of Maine. You win, by a huge margin. (read full article here)
Successful companies are recognized for being excellent in defining and achieving their strategy, but this is always related to having a strong culture of disciplined road map execution.
3) Our strategy road map is a static document (that everybody has already forgotten)
When I am asked by leadership teams to advise and support them with their strategy execution one of the questions I always ask is: ‘In what sense has your strategy road map changed over the past year’? Quite often the answer is ‘not much really’, or ‘oh yes, maybe we should revisit our road map once again’.
A successful strategy road map is not a static document. It is actually never complete, but always evolving. Your strategy road map should tell a story that people listen to and are eager to follow. It should be checked, discussed, updated, and communicated on a regular basis. The aim is to create a kind of rhythm, like a drumbeat, in the organization. Everybody knows it and it is simple for everybody to follow. Separate people can be the ‘owner’ of the strategic priorities in the road map. This means they update their part of the road map on a regular basis, communicate it, and gather feedback from colleagues. Business environments change, so do our strategic priorities, and so does our road map. If it never changes (or worse, nobody can remember it) something might be wrong.
Aad is a global business advisor, change leader, executive team facilitator, leadership coach, and frequently asked keynote speaker. He is founder and managing partner at HRS Business Transformation Services where he works with senior executives and leadership teams globally in three key domains: ‘leading complex change’, ‘cross-cultural leadership’, and ‘post-merger integration’. Find out more about Aad and HRS’ services. If you would like to invite Aad to your organization contact us.