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Operational pitfalls to strategy execution

Too often managers tend to believe that execution equals alignment and failure in execution means a breakdown in the command chain. For example, Mintzberg revealed 1987 that only 10% of strategies were executed as planned. In the previous blog we focused on the structural barriers to strategy execution. In this blog we will focus on operational strategy execution barriers due to weak preparation.

According to various studies, 60 – 80% of a organization’s employees are not engaged as they fail to see how their effort is tied to the company’s overall strategy. Companies with high employee engagement have according to studies 4 times higher profitability compared to peers.

Lack of focus

A strategy involves a set of choices that define what the organization is going to do and what it is not going to do. Lack of focus is a problem that most organizations face. It is not too uncommon for a small organization to have over 100 ongoing projects without clear prioritization, which ultimately frustrates the employees as nothing seems to happen.

The success of strategy execution relies on performance in the projects or activities that make it up. Therefore, it is critical to make sure you have the right portfolio and the prioritization is properly set up. An effective organization needs to restrict strategic choices to just a handful of objectives. The number of strategic projects and initiatives contributing to just a few objectives may already be high because a single objective can entail many projects. Deciding what the organization is not going to do, or which projects are down-prioritized is a very difficult task for any management team. However, if the management team fails at this, the organization usually loses its ability to execute strategic projects due to lack of resources.

Lack of engagement and alignment

Many organizations rightfully translate strategy into objectives, which are cascaded down the organization and then the progress of these objectives is measured. Low engagement is usually related to the fact that employees are not involved in strategy creation, or at least their opinion is not considered. Without open discussion people feel that strategy is being dictated to them. Furthermore, the objectives are not specific enough and the red line between the strategy and objectives and the employee’s own job is not clear; the answer to the question “what’s in it for me?” is missing, and thus the strategy isn’t engaging.

Horizontal alignment between units is considered the single biggest challenge in strategy execution. Silos between organizational units are strong, and nowadays, internal cooperation is needed more than perhaps ever before. More and more projects are crossing many organizational units and resources are used across the organization. Achieving alignment with internal stakeholders improves internal cooperation and execution ability, but it takes lot of time to achieve.

Weak performance management

Managers wish to have an agile organization; however, agility requires the right attitude to experiment and the organizational culture and management system routines either makes this appealing or frightening. Many strategies are transformational, which means that small incremental improvement is simply not enough.

It is often expected that people should seize opportunities and have the courage to take on challenging assignments. Such behaviour has its merits, but it also presents a major risk to one’s career and recognition.

Management routines and exception handling form the backbone of performance management. It is not possible nor feasible to build strategic plans with details that anticipate every event that might help or hinder reaching objectives. In the case that an organization doesn’t have clear performance management routines, such as frequent reviews, the reaction time to any problem or opportunity slows down. Typically, employees in a weak-execution organization have neither a clear understanding nor the information to understand the bottom-line impact of their decisions, and therefore decisions end up with top management.

Another phenomenon regarding weak-execution organizations is the ambiguity of their objectives. Some organizations may have objectives like: “we will be number 1 in our industry”. This doesn’t provide the necessary framework that, for example, SMART goals (Specific, Measurable, Achievable, Realistic, Time-based) would provide.

Improving an organization’s performance culture starts with focusing on performance management.

Fading communication

Often organizations do communicate strategies at launch events, but the amount of information provided and communication fade rapidly over the time. A typical problem in many organizations is to have too many focus areas, corporate priorities, objectives and strategic projects. Management teams may have been preparing strategies for weeks and therefore might remember most of it, but employees hear it once. People get confused and consequently they feel that communication is not good enough.

Only a few organizations have strategies condensed in easy-to-understand documents that are readily available to employees. A typical case is having a 200+ page PowerPoint strategy hidden somewhere in the management folders. Without having access to written material, it is simply not possible to digest a strategy.

Because the strategy execution is a series of actions, a kick-off meeting info is not enough. Only continuous communication and effort to maintain new habits will result in permanent change. Usually, only a fraction of employees are involved with strategy execution. Consequently, without continuous communication of achievements, most people don’t know if strategic plans are progressing.

Strategy is what people do – what do you want your people doing?

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