Four Reasons Why Your Strategy Falls Short

Think about the brands you love—your smartphone, preferred streaming package, fast-casual restaurant. Or the retailer that manages your customer experience while having the stuff you need, every time. These organizations embody the spirit of execution: You know what you’ll get, and they deliver on that expectation.

It’s one thing to execute well over an extended period using the same strategy, and quite another to do this within a dynamic environment. Many organizations today are shifting their focus due to new conditions spawned by the COVID pandemic. At the core of most strategy discussions is a looming post-pandemic reality in which organizations incapable of competing—that is, executing at a high level—are weeded out.

Since the Execution Program at Smith School of Business launched in 2014, the first of its kind in Canada, we have discussed execution challenges with hundreds of senior leaders. These challenges coalesce into four execution barriers that shift the mindset away from tactics and planning toward addressing challenges caused by deep-rooted corporate inertia. These barriers are well recognized and agreed upon yet poorly addressed. 

Lack of resources

One of the most significant barriers to execution is the perceived lack of resources within a firm to achieve desired goals. It’s not only constrained funding; resources also include people, space, time, skills, motivation, data and technology capabilities. To execute well, leaders must advocate for what they need but also make the most of what they have. "Making do” helps leaders realize that budget is only one resource. Clear roles and responsibilities, employee engagement and technology are other resources that create expected value. It’s often said that the most important responsibility of executives is the allocation of scarce resources. Allocating resources more effectively towards the goals of the organization reinforces those goals as priorities.

Symptom: Organizational and process design challenges that are evident in unexpected queues, missed orders or outputs misaligned with the needs of end users.

Low priority work

Too often, execution challenges arise from team members and leaders spending time and energy on lower priority work. These situations signal ineffective prioritization, poor communication and a lack of clarity about how strategic objectives connect to day-to-day work. Even those organizations that have a clear idea of where they want to go struggle to be clear on why people need to work on a particular initiative now or later. Lack of resources and low priority work are like two sides of the same coin. When these barriers are removed, people dedicate time and energy to working on activities that draw on the right resources to reinforce the most important priorities.

Symptom: Inability to act on longer-term strategic objectives. For example, digital transformation, sustainability and equity, diversity and inclusion are recognized as important initiatives. But they often take a back seat to quarterly targets, finishing a project on time or closing on a merger or acquisition.

Poor change management

Structural improvements seem to be the go-to lever for organizational leaders trying to manage strategic change. Leaders dictate new reporting structures, create new positions, establish processes and policies, adjust key performance indicators and rework incentives, assuming these structural adjustments will improve the organization’s ability to change and drive results. Execution barriers emerge when these adjustments come face-to-face with the way people are used to working. Even more concerning is when people change their behaviour only to learn the structural changes didn’t deliver the results that leaders were looking for.

Symptom: Workarounds and change fatigue. Workarounds emerge when people perceive a new structure to be ineffective. Fatigue results from too many structural changes being made.

Competing value drivers

The final barrier to execution is when organizations are unclear about which stakeholder execution efforts take precedence. Multiple stakeholders impose different, and sometimes opposing, expectations. Distinguishing between tangible benefits-based value and intangible emotions-based value (such as the balanced scorecard) will help guide organizational members in their execution efforts. But the real challenge is in optimizing value drivers in corporate decision-making. Consider a decision by a retailer to cut funding for child-care services because corporate executives feel the need to reduce non-revenue generating offerings. The execution barrier becomes evident in-store as the customer experience suffers. Different layers of leadership see value generation from different points of view, so a balanced scorecard is a good start, though not a silver bullet.

Symptom: Customer dissatisfaction. In today’s complex environment, every organization faces difficult trade-offs and, too often, the corporate agenda interferes with offering customers what they want and deserve.

Are you misfiring on your strategic initiatives? Do this instead

• Shorten your planning horizon. Consider a 90- or 120-day planning window. Prioritize activities today that not only deliver on short-term needs but also contribute to longer-term value. And don’t hesitate to execute your new strategy in phases to line up with the short planning horizon. This approach will enable re-prioritization and metrics validation as the longer-term strategy is implemented.
• Connect the plan to the work. Get visibility on the actual work and assign names and dates to key initiatives. Be clear about what work is most important and why, reinforce the plan and implement followup processes to bolster accountability.
• Test and learn. Increase the use of organizational experiments and data analytics as ways to test out new structures and evaluate the impact of complex corporate decisions. This would not only give people an opportunity to see the benefits and be motivated to change behaviour; it would also allow executive teams to evaluate the impact of the change, learn from the experience and make necessary adjustments before attempting to scale.
• Know your internal and external customers. Identify the core stakeholder group that must receive value from the execution effort. Get creative with key performance indicators and test them to ensure people make effective trade-offs between value-driven elements within the organization.

In short, think about what you and the organization need to be doing today—and doing well—to deliver the future value that will define the organization. How will you shape and structure that activity? How can scarce resources be allocated in a way that demonstrates your priority to people that will bring it to life? How do we ensure those around us share the same sense of purpose and alignment towards customer-driven goals and objectives?

That is the essence of execution. 

Kathryn Brohman, Barry Cross, Jay Handelman and Paul Roman all teach at Smith School of Business.