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The Real Reason Strategy Fails
There has been a "strategy revolution" over the last half century, driven by consulting firms like McKinsey, academic experts like Michael Porter and numerous prominent CEOs. So today's managers certainly know the importance of having a strategy—for their company, division, business unit, department or even project.
Strategic planning models are a dime a dozen, but in a recent Harvard Business Review article, Donald Sull and co-authors argue that execution is often the downfall of well-laid plans.1 Further, there seems to be a tremendous gap in business literature—and other resources—for guiding managers on executing well. We agree. Execution is critical. Poor plans executed very well often succeed, but "perfect plans" executed poorly almost always fail. Why do managers fail when it comes to execution, and what can be done about it?
Among the interesting findings from Sull’s research involving over 7,500 managers from 250 large firms is that only 20% think that their firm’s systems for getting things done are effective. That is, although more than 80% report having such systems, a small minority believe they are actually working. The greatest challenge is getting people from different areas to coordinate to achieve objectives. For instance, systems and processes such as cross-functional committees, service-level agreements and project management offices are seen as ineffective in “managing commitments across silos.”
Many pundits claim that the big problem in execution is that strategy is not aligned through the planning process (using tools like management by objectives or a balanced scorecard). But Sull argues that regardless of initial strategic alignment, when coordination between units is required, the plans break down. The survey cites 84% of respondents saying they can rely on their boss or direct reports to get things done, but only 9% say they can rely on other functions to get them done all of the time. Thus, Sull, et al., define execution as the “ability to seize opportunities aligned with strategy while coordinating with other parts of the [enterprise] on an ongoing basis” (p. 66).
Fortunately, despite how common it is for managers to fail in execution, there are ways to execute effectively on strategic plans. Here are four guidelines for getting it done:
Effective planning methodologies should link—directly—to execution. That is, managers should be able to identify and anticipate the relationships that will be critical to the success of the plan. Thinking through these relationships enables the planner to prepare and build capabilities that will help mitigate some of the inevitable pitfalls upon execution. The planning method should help the manager think through those challenges in a concrete way. For example, if the strategic objective is to implement a new point-of-sale system that allows for better sales monitoring and forecasting, the planning method should identify all the entities essential to getting the system fully implemented to achieve the intended results. There are always entities—inside or outside the firm—that without some kind of deliberate action or input will not automatically act in the best interest of the initiative.
Put decision-making in the right place. As noted by the authors, “No Gantt chart survives contact with reality.” (p. 61). When barriers are encountered because things change, or the unanticipated occurs, simply sticking to the plan is not a path to effective execution. Managerially, the way to address this is to delegate authority to the level where the barriers occur. Driving execution from on high is not the answer. No high-level strategic plan can anticipate what the people doing the work will encounter. It is at this activity level where both learning and innovation occurs, and a structure that places authority at the right level is more likely to get the desired results.
Assign clear outcomes rather than pontificating about larger consequences. At the macro-level of the company, objectives and priorities are often discussed, but they are not often easily or commonly understood. As an example, 84% of the managers from a large firm reported they clearly understood the top priorities of the firm. However, when asked separately what those priorities were in their own words, less than 33% could even name two of them. Communication—both in the planning and at the work level—can easily be muddled by a lot of vagueness and abstraction as managers often conflate lists of corporate priorities, core competencies, mission statements and company values. This noise confuses and confounds the critical understandings that must guide planning and action. This confusion can lead to significant dysfunction in execution, as those doing the work must interpret what really must be accomplished, and what will be measured.
Identify and remove barriers to cooperation. Work actually gets done in the white spaces between the boxes on the structure chart. When people come together and engage in some effort, this is where execution occurs. Execution requires bringing people together to achieve well-articulated common ends. From Sull’s surveys, fewer than a third of managers confront performance issues proactively, and a full third consider it taboo to do so. While the authors conclude that this is a structural problem, it is more often a product of barriers to cooperation when people are working together. This is the greatest failure impairing execution—and it is the single place where immediate managers have the most influence.
Managers can enable the essential cooperation by setting—and maintaining—the contexts for groups to engage. The people doing the work must have a clear, common purpose for the work, they must have clear and effective communication, and they must be committed to accomplishing what must be done. When the work breaks down, the manager must re-establish these three elements to restore cooperation.
When things go wrong, or when results are not achieved, it is easy to blame the plan, or misalignment, short resources or the structure. Sometimes this is correct, but making adjustments to these things requires time and a formalized effort, while results continue to suffer. More often, poor execution is the culprit. And managers can act informally, quickly and without cost to help establish cooperation and restore effective execution.
Execution is not strategy, but any good plan (or planning tool) will anticipate possible challenges to executing the work necessary for the success of the plan.
1"Why Strategy Execution Unravels—and What to Do About It," Donald Sull, Rebecca Homkes, Charles Sull, Harvard Business Review, March 2015.
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