You just finished creating your strategic plan. You know your strategic goals, immediate objectives, and your expected results. Now comes the most important part: execution. How are you going to operationalize your great plan and ensure your good intentions produce results?
That is the exact question you should be asking, and what we are going to explore below.
Half of all companies fail to execute their strategy
One in two organizations fail to execute their strategy. Fail, in this sense, means they do not achieve the strategic objectives they deem critical.
Why are so many failing? Consider that 61% of firms struggle to bridge the gap between strategy formulation and its day-to-day implementation and only 1 in 6 companies see implementation as strategic (Economist Intelligence Unit, 2013).
This underscores the real problem: The value of strategic planning is not realized by the plan itself. Instead, it is realized through successful implementation. Implementation is, arguably, more important than the planning itself.
So why are so many organizations investing all the effort to create a strategy only to fail at the execution phase? Let’s take a closer look at why some strategies fail and explore what you can do to give your organization the best chance of success.
Anatomy of strategy implementation
Before we examine reasons for failure, let’s apply the metaphor of a relay race to help us understand a successful strategy implementation.
A relay race contains many legs. To finish, a member of your team needs to complete a leg of the race, and then pass the baton to another team member who completes the next leg. If your team fails to complete any one leg, it fails to finish the overall race.
So, what does this strategy implementation relay race look like?
Does your strategy inspire? Respect your audience? Clarify what is expected? If not, then you should repeat this leg of the race.
Your strategy should give people a reason to care by helping them form an emotional connection with the Vision of your organization and clearly outlining how the strategy supports this vision. If you want to know more about how to make a meaningful, motivating Vision, read “What is Strategic Vision.”
Respect your audience
Your show respect for your audience by creating and sharing a strategy that is as concise as possible. Surveys clearly demonstrate that many organizations fail to meet this mark, including one survey that showed 55% of managers could name only one of their company’s top five priorities (D. Sull, 2015). That figure fell to 33% for their direct reports and just 16% for front-line staff. Clearly, many organizations struggle to create and share a memorable strategy.
There are many reasons for this dismal performance. People are busy. Strategies can often be too complex. Sometimes, strategies are not even shared.
One of our clients illustrated this point when, a new executive, after presenting a strategy they just created with their team, learned that the organization already had a strategy. Understandably, the new executive questioned why something so central to their role would not have been shared with them. It was not an intentional oversight. At that organization, they had not yet reached a level where people were systematically onboarded with an introduction to the strategy.
The conclusion from all of this should be clear: Take the time to write a concise strategy that ties directly to your organizational vision, share it, and refer to it often.
Your strategy should set clear objectives and clarify the key results that are expected. It is not enough to produce high-level, lofty statements of intent and leave the rest to be figured out by others.
Unfortunately, some organizations choose to do just that when they create strategic objectives like “Strengthen services” or “Adopt technology for better outcomes” without any other explanation.
These types of statements, by themselves, do not clarify what is expected. Instead, they leave expectations open to interpretation. Which services should be strengthened? What does it mean to strengthen the services? Why? Any two managers in this organization are unlikely to come up with the same answers to these questions.
To provide clarity your strategy needs to answer these questions. Returning to our example of “strengthening services", perhaps what this organization means by strengthening services is increasing their ability to compete on cost because of a shift in the market to oversupply. To increase their ability to compete on cost they need to negotiate lower supplier costs to enable repricing in the competitive environment while preserving profit. And perhaps this quarter they would like to achieve a milestone of estimating the potential cost savings for all suppliers and initiating cost savings negotiations with the three highest potential suppliers. And next quarter, they would like to achieve a 10% reduction in overall supply costs for these three high potential suppliers. This is what is meant by “clarify what is expected.”
Too often, strategic plans fail to provide clarity. If you are struggling to find the right level of detail, follow this simple rule: If you read the strategy in a month, will you remember what you intended to achieve?
On to the second leg of the relay: committed leadership. One in five organizations say their biggest barrier to strategy implementation is a lack of executive support and buy-in (Economist Intelligence Unit, 2013). However, it is likely that far more organizations experience this challenge, but for many it just may not be the biggest challenge they face.
But what does it mean to have leaders that are committed to strategy? Committed leaders follow the direction laid out in the strategy. Furthermore, they help their teams understand the strategy. And most importantly, they sacrifice or reframe personal goals to support strategic priorities.
Set a direction and follow it
Shockingly, 51% (D. Sull, 2015) of managers can find resources for major projects that are not strategic. If leaders are committed to the strategy, they should not be seeking funding for initiatives that are not in the plan, let alone receive funding for them. This behaviour undermines the very essence of setting strategic priorities.
Imagine your organization has set an objective to climb Everest. One of your leaders, critical to your ascent, decides it would also be worthwhile to commit half the team to summit an adjacent Himalayan peak while the rest of the team continues up Everest. Your ambitious leader discusses their proposal with the CFO, and the CFO gives them the resources to do it. Now you have two leaders and a large portion of your team whose attention is pulled away from the critical ascent.
When leaders stray from the strategy, pursuing new objectives, your organization is faced with a choice: It can either update the strategy or not pursue the new objective. If you choose to pursue the new objective without updating the strategy, then you undermine the strategy and the leadership team’s credibility by telling everyone in the organization it is okay to ignore the strategy.
Committed leaders sacrifice or reframe personal goals to support strategic objectives
Only 9% of managers say they can rely on colleagues in other functions and units all the time. 50% of managers say they can rely on colleagues most of the time (D. Sull, 2015).
What does this level of support mean for strategic initiatives? It means they are at a high risk of failure right from the start due to a natural tendency of departments to take care of their own needs first. In other words, organizations tend to operate in silos.
Organizations that function like this will encounter significant difficulty implementing strategy. Strategic initiatives require different parts of an organization to work together on challenging problems under urgent time pressure. These are precisely the conditions that test a manager’s commitment to the strategy and to their peers. When crunch time arrives, you are hoping your managers are part of the 50% that can count on their colleagues when they need it. If you have cultivated an organizational culture where people genuinely believe they all win or lose together like a relay team, then you are likely working with the right 50%.
If we want leaders to support each other and commit their best resources to the organization’s biggest problems, even at great personal expense, then we need to frame success and failure as something we experience as team.
Perhaps this challenge is best illustrated by a client undertaking a large project that was at serious risk of failure. One c-suite leader took this opportunity to ask “What is the difference between this initiative that is failing, and my initiative that is succeeding? My leadership.”
At a moment when the organization needed a constructive learning discussion to turn things around, this leader thought it was a good time to tell everyone how great they were, and by extension, what others were lacking. This is the precise opposite of a one-team mindset. Nothing strikes at the heart of a team faster than a leader that sees challenges and failures as an opportunity to blame others and unashamedly self-promote.
The CEO in the room missed a critical opportunity to clarify that an “I win, you lose” mentality is not acceptable. And that instead of seeking to blame or gloat, everyone is expected to do their best to support the team and get a much-needed win.
In the third leg of the race, you need to ask yourself “Have the people critical to executing the strategy been involved in its development?”
One in four leaders cite good communication as a main reason for successful implementation (Economist Intelligence Unit, 2013). In turn, leaders also see communication as one of the biggest barriers to successful implementation.
But successful implementation requires more than just communication. Take for example what this line manager said when asked what they would change about the recently released vision and strategy in their organization: “Someone developed it without input from others.”
This manager’s feedback captures why you need to go beyond communication and involve your people when developing strategy. This manager did not even want to discuss the strategy. When pressed, they agreed with most of the strategy, but also expressed disappointment to learn a strategy was being created only when it was completed, and to be excluded from any role in its development.
Change Management 101 – awareness and desire
There is a reason the first two steps of the Procsi ADKAR change management framework are Awareness and Desire. If you want to engage your people in strategy, they need to be aware that your organization is creating or updating one, why it is important to the organization, and most importantly why it is important to them.
A red flag in most strategic planning initiatives is a failure to consider engagement and communication at the outset. In other words, it’s not enough to form your planning team and complete a kickoff with them. You should be doing a kickoff with your broader organization.
You should address why your organization is creating a strategy, how it will help, the steps you will follow, and when people can expect to be involved. You should also be giving everyone a chance to air their concerns, and take them seriously by acknowledging them, answering their questions, and making changes where appropriate. As you produce key parts of your strategy like Purpose, Goals, Scorecard, Objectives and Results, you should share working drafts, with the intent of gathering feedback to inform the next version of the strategy. In short, it should be an iterative, inclusive process.
Leadership’s role is to set strategy
Some organizations confuse the idea of engagement with accountability. In an effort to engage, these organizations may inadvertently confuse people by leading them to think strategy decisions are made by vote and committee, and any area of the strategy they disagree with is an example of failure to engage. This is a mistake.
To be clear, the executive leadership team, led by the CEO and empowered by the Board, holds the final decision-making authority and responsibility for setting the strategic direction of the organization.
Hopefully, the CEO is the kind of person that can harness the best from their organization so that 80%-90% of the strategy emerges thanks to the contributions of others, leaving just a few critical decisions where the CEO spends their leadership capital to direct the organization.
If this sounds like a leader in your organization, you have a good chance of meaningfully engaging leaders and people across the organization as you develop your strategy. Constructive conflict around decisions at the core of your strategy will be crucial. Staff will become aware of and support the strategy because they have had the opportunity to see it, ask questions, and challenge. It’s likely they’ll even come to terms with strategic decisions they just plain disagreed with at the start.
In the fourth leg of the race, you should be looking to ensure the resources necessary for success have been allocated according to the strategic objectives and related initiatives.
Only 11% of managers say their company’s strategic priorities have the resources they need for success. (D. Sull, 2015). That means eight out of nine managers believe their organization has not committed sufficient resources to their most important strategic objectives.
Biggest. Worst. First.
Every organization would like more highly skilled, experienced, self-motivated, and capable people. But barring winning the people lottery, every organization faces a similar challenge: where to assign their best people?
The answer is straightforward: Your best people should work on your biggest, most complex problems. And yet, this fundamental rule is too often overlooked. Why do so many organizations put their best people on trivial problems? Perhaps they are halfway through a project and do not want to incur a cost to re-assign them. Perhaps managers like these exceptional team players and become territorial.
However, this is misguided. If leaders truly believe in the strategy, then they should understand what is critical. And if leaders put the interests of the organization first, not their own interests, they should be willing to make sacrifices for the good of the organization.
Deliberately re-assign resources
Only 20% of managers say their organization does a good job of shifting people across units to support strategic priorities (Economist Intelligence Unit, 2013).
This sounds like an easy problem to fix, but it can be tricky. As part of strategy development, organizations should review how resources are assigned, starting with what is in the best interest of the organization. Managers should be encouraged to offer up their best resources to the most difficult projects. In turn, staff should be encouraged to take on difficult assignments and supported when they do so. But most important of all, organizations should be deliberate in making sure their best people are assigned to their most challenging problems.
Take for example a client who asked us to review their project portfolio. We prepared a strategy with their leaders and knew they had set ‘improving customer satisfaction' as a critical objective because of increasing service challenges. We looked at the portfolio and noticed the organization’s most important initiative had not yet been assigned a Project Manager, despite there being several seasoned PMs within the organization, including an exceptional PM assigned to another, less important project.
After we pointed this out, the PM was reassigned and our client simply said “Thank you, I don’t know why we didn’t see it.” This client has highly capable leaders, but they did not sit down and explicitly consider re-assignments.
Like many organizations, their default perspective was that staff will be assigned to new priorities when they have finished what they are currently working on. In many cases this can be a useful way to ensure unnecessary risk due to resource changes isn’t introduced to a project mid-flight. But the downside of this approach is that the biggest, most complex problems will rarely have the best people assigned to them. And, we would argue, having your best people assigned to your biggest challenges is worth the cost of disruption.
Find and assign the skills and funding you need
When asked “What are the main reasons for the success of a strategic initiative?” 1 in 3 leaders said skilled personnel and 1 in 4 said sufficient funding. Conversely, when asked, “What is the biggest barrier to strategic implementation?” 1 in 3 leaders said, “initiatives are poorly resourced” (Economist Intelligence Unit, 2013).
Sufficient funding and skills are clearly important for successful execution. From a skills standpoint, the biggest gaps appear to be project management skills and change management skills (Economist Intelligence Unit, 2013).
These two skillsets have been highlighted as critical for project success for several decades. What can your organization do to address these gaps?
For starters, your organization should start by accepting that any major change requires these skills. When you identify major strategic initiatives, you should also be identifying resources with demonstrated experience in these areas. If you do not already have these skills in-house, establish partnerships with service providers that specialize in these skills to provide crucial support. Second, if you have not already done so, introduce training and development activities to develop these skills in-house for people who will likely be called upon in the near future.
But perhaps most important of all is to be honest about your capacity to take on all the initiatives you have selected. Most organizations suffer from hope-creep. That is, hope expands to fill the gap between what you need, and what you have. Hope-creep results in organizations burdened by too much work and lacking the time or resources to get the job done. This in turn results in a (mis)prioritization of resources across the organization, with people naturally sticking to the tasks they are most comfortable and capable of doing. These are often the least strategically important activities.
To illustrate, we worked with a client whose CEO wanted to support initiatives across the organization and committed resources to what senior leaders deemed was important in their respective areas. This “do it all” approach left the organization with too many initiatives and not enough capacity. One year on, progress had been made on only 16% of what was identified. Leaders were frustrated with the experience, and effort was spent on areas that were not the most urgent and important at the expense of areas of true need.
We advise clients to think of a strategy like a buffet: Do not overfill your plate with everything that catches your eye. Pick a few, fundamental things to start, and remember, if you finish those early, you can always go back for more.
Invest time, learn and adjust
In the final leg of the race, your organization should consider how it will invest its time after the strategic plan has been finalized, how it will learn by doing, and how it will adjust the plan to changing circumstances.
Invest time to implement the strategy
Leaders are accountable for managing day-to-day operations and strategically improving the organization, but how much time do leaders spend on these two different areas? There is not a lot of reliable data on this topic. Figures that are available suggest leaders and organizations in general spend too much time on operations, and not enough time on strategy.
We did find two surveys that analyze estimates of leadership time spent implementing strategy. One survey suggests the majority of leaders spend less than 10 hours per month (Bridges Business Consultancy), and another suggests leaders spend even less than that. Let us work with the higher number as a benchmark. If we imagine that a normal executive works only 8 hours a day, 20 days a month, that means as a guesstimate executives spend up to 10 hours out of 160 on strategy, with the remainder of their time spent on operations.
Is this the right balance? 6% strategy, 94% operations? Consider that time spent on strategy includes:
Communicating the plan
Leading change and sponsoring initiatives
Allocating and re-allocating resources
Updating the strategy as things change
From this vantage point, 6% is not nearly enough. Leaders should view the implementation of their strategy as one of their core responsibilities on par with their day-to-day operations.
We have come up with a very elementary way to evaluate how much time an organization spends on strategy. When we start working with clients, we ask a simple question: “What parts of your strategy have you achieved, and what remains to be achieved?” Some clients can answer on the spot, while others need to check and get back to us. Even with time, some clients are unable to answer the question, which is a clear sign their strategy is not being used, and therefore not guiding their work.
Learn by doing, and make use of what you learn
One of the fastest and most effective ways to learn is by doing. For strategic planning, this means organizations will learn an incredible amount about how to execute their strategy and achieve their objectives when they turn their attention to achieving key milestones.
This learning should be documented and used to improve the strategy. But often, organizations do not even have basic processes designed to capture and use these learnings. For example, 33% of organizations do not have a method or process to incorporate lessons learned back into the strategy (Economist Intelligence Unit, 2013). Consider the organizations spending less than 10 hours a month on implementation: Do you think they discuss what they have accomplished? Do they take time to reflect on what worked well and what needs improvement? Probably not.
Many organizations find it difficult to make time to regularly review their strategy unless someone is watching. As one client said to us, “The quarterly reviews with you really help keep us on track. I look at the calendar, and see that we have a review coming and I do not want to come to the review with nothing. It causes us to re-examine what we need to do right now to bring results.”
If this sounds like your organization, you are not alone. To help promote regular reviews, you should schedule specific strategy review sessions, appoint someone to oversee the reviews, and consider using a strategy management tool.
Adjust the strategy to match facts on the ground
A common complaint about strategy among organizations was summarized well by the Economist (Economist Intelligence Unit, 2013): “Strategy isn’t followed as closely as it should be. We often tend to formulate a strategy only to go in an opposite direction.”
While this may seem to suggest that most organizations set a strategy and then ignore it, we think it is equally likely that major events occur, knocking organizations off course. Leaders then find it hard to make time to recalibrate their strategy to incorporate new information.
Every organization is perpetually short on time and/or resources to complete their to-do lists – and this is even more true when major events happen.
Consider one of our clients who created a strategy and then suffered a major hacking attack rendering its core systems unavailable. They lost considerable data, and changed their focus to meeting core customer requirements, re-establishing their core systems, mitigating liabilities, and resolving underlying technology risks. One year later they revisited their strategy. For the first three months, it is understandable that they did not even think about updating their strategy. But once the immediate risk had subsided, leaders should do their best to reflect the new reality in their priorities. Otherwise, they risk establishing a culture that views strategy as a low conviction and low commitment activity. And strategy should be anything but that.
Implementation is strategy
Many organizations want to be more strategic; they want to invest time and effort in what matters most and help their people see the value and purpose in their work. Many of these organizations will create a plan and struggle with implementation. By starting your planning with the end in mind, you will increase your chances of turning a great plan into exceptional results.
If you want your organization to be part of the 50% that succeed in implementing their strategy, then you need to run a good relay race, linking together all of the necessary components. That means you should place as much emphasis on implementation as you do on planning, and you can do that by:
Creating a clear strategy
Encouraging leadership commitment to the strategy
Engaging your people so they take ownership of the strategy
Taking on only what you have the capacity to do
Investing the time to use and update your strategy
In short, you need to place the same importance on implementing the plan as you do on creating the plan.
Cândido, C. a. (2015). Strategy implementation: What is the failure rate? Retrieved from http://dx.doi.org/10.1017/jmo.2014.77
D. Sull, R. H. (2015). Why Strategy Execution Unravels – and What to Do About it. Retrieved from https://hbr.org/2015/03/why-strategy-execution-unravelsand-what-to-do-about-it
Economist Intelligence Unit. (2013). Why Good Strategies Fail. Retrieved from https://www.pmi.org/-/media/pmi/documents/public/pdf/learning/thought-leadership/why-good-strategies-fail-report.pdf/
 The failure rate reported by various studies and experts varies significantly. Some sources claim a failure rate as high as 90%. We reviewed several estimates of failure rates (Economist Intelligence Unit, 2013) and (Cândido, 2015), where failure is defined as not achieving critical strategic objectives. We also compared these estimates with our experiences working with more than 100 different organizations. If we define failure as not meaningfully producing the critical results identified in the strategy, each of these sources provides ample evidence to suggest that the failure rate is approximately 1 in 2. A failure rate of 90% is often quoted. The only properly sourced reference for a 90% failure rate we found was from 1984. This study did not provide sufficient information to allow us to assess this claim. Further, it is not consistent with our observations working with organizations.  We give credit to Patrick Lencioni in his book Five Dysfunctions of a Team for this concept.
 Guestimates acknowledge in their name that this is an estimate based on data that we know is incomplete. For the purposes of thinking the problem through, we will make a guess at an estimated value. In the case of executive time spent on strategic planning each month, we imagine many executives may not even consider the time they spend implementing strategy as strategic. So these surveys are likely underestimating the time. We also know most executives work more than 8 hours a day. However, the guestimate of 6% serves our purpose here by giving us a reason to ask “What is the right split of time”. Directionally, we think it is safe to say, most executives should spend more time on strategy and more time explicitly on implementation.