The importance of strategy is already known to most executives, but little research has elucidated how to translate strategy into execution. The authors attempt to debunk five popular myths about strategy execution to help large organizations that struggle with this issue.
The authors provide insights into executional excellence, which is one of the top challenges for most global corporate leaders. They discuss some of the myths in organizations that lead to poor execution: Execution equals alignment (i.e., lack of proper resources/coordination to execute), execution equals sticking to a plan (i.e., lack of flexibility), communication equals understanding (i.e., lack of a strong communication system), a performance culture drives execution (i.e., poor performance appraisal systems, policies), and execution should be driven from the top (i.e., lack of distributed leaders).
How Is This Article Useful to Practitioners?
The authors outline five major reasons for execution failure; reframing execution in terms of these reasons can help managers pinpoint why it is stalling. First, on the issue of leaders who believe management equals alignment, the authors state that coordination across departments and a lack of proper tracking of performance commitment make the difference. Second, because of the ever-changing dynamics in today’s world, adaptability and agility are required for real-time adjustments. According to a McKinsey study, firms that are agile and able to reallocate resources (e.g., capital expenditure) achieve a 30% higher shareholder return than companies that are slow to move funds.
Third, strategy must be well understood by and communicated to key stakeholders; that is, leaders must be able to relate to the key strategies and objectives and see interrelated and consistent messaging. Fourth, a culture that supports execution and recognizes/rewards such characteristics as agility, teamwork, and ambition rather than past track record is essential. Fifth, the authors emphasize the concept of distributed leadership, which works better longer term than top-down execution.
The article is based on the authors’ in-depth survey of 7,600 managers in 262 companies across 30 industries. The target companies are, by design, complex in nature and in volatile industries, and about a third are based in emerging markets.
Strategy and execution is a double-edged sword; one without the other can lead to failure for companies as well as leaders. The authors have done elegant work to differentiate their findings from previous research on why these issues matter, why a gap exists, and why it is necessary for current leaders to succeed and meet their goals.