Recent Gartner polls of strategy leaders reveal that slow strategy execution is a top challenge for 2019, but keeping everyone on the same page in today’s large and complex organizations is a distinct obstacle.
“ 70% of chief strategists express little confidence in their ability to close the gap between strategy and execution”
Eighty-three percent of senior strategists polled this year agreed execution is more important now than three years ago and yet 70% express little confidence in their ability to close the gap between strategy and execution. As companies pursue more ambitious and transformational strategies, closing this gap is becoming paramount. “Firms have significantly ramped-up the number and size of cross-enterprise initiatives — which will make or break their top and bottom lines,” says Marc Kelly, Gartner VP and Team Manager. “Not surprisingly, boards of directors now rate monitoring strategy execution as a top priority for the next 18-24 months.”
Managers struggle to stay aligned with strategy
Given the importance of execution, corporate strategists are spending more time than ever providing operational assistance to managers, guiding the alignment of their execution decisions. Many managers find it hard to stay aligned with strategy — though it’s not a question of commitment. Seventy-four percent of managers report strong commitment to corporate strategy, and most understand how the strategy relates to their own job. What managers struggle to understand is how the strategy (and their role) relates to the roles and activities of others. This is a problem in an interconnected world, where one set of managers executing against objectives can have unintended consequences on others trying to meet their own objectives.
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3 execution problems loom large
As organizations tackle more large-scale strategic initiatives like digital business transformations, and rely increasingly on multiple functions and business units (BUs) to execute those strategies, three dynamics complicate strategic execution.
- Cross-silo coordination. To achieve strategic goals, strategists say that cross-enterprise coordination is more critical than ever, but managers lack insight on how their decisions impact other teams. Without this context, managers may tweak execution plans in ways that completely derail others downstream.
- Fast-moving, uncertain environment. Line-level employees are under pressure to increase the adaptability and agility of execution efforts. But fast-changing conditions can also create a firefighting mentality in which managers can’t stick to their strategy and get pulled in all directions by near-term operational concerns.
- Decentralized decision making. Unexpected events may require shifts to the execution plan, but these pivots may need to be sparked by managers lower in the organization’s hierarchy — those with the frontline knowledge to ensure the pivots will work. If improperly handled, pivots may be under-resourced, untimely and doomed to fail.
Taking steps to address these three issues can narrow the gap between strategy and execution.
No. 1: Provide managers with insight on how their decisions impact other teams
Help managers to see how their world connects to others. Give teams a richer understanding of what partners are doing — how work is done and why it fits with the bigger picture. Provide this context before strategy execution gets going. During the planning process at one major U.S. utility, teams hold a series of discussions with people who have a direct stake in project outcomes. This helps them to uncover project risks and explore alternatives. But strategists also work with a range of stakeholders to identify other groups across the enterprise with similar or conflicting projects, and undertake joint problem-solving sessions so as to share project plans and resolve coordination gaps among businesses.
No. 2: Plan for the unexpected by anticipating how managers typically act
Surprises can stem from internal or external sources and include operational constraints, emergence of new opportunities, customer demands, competitor moves and performance issues. But “unexpected” shouldn’t mean being unprepared.
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One global manufacturing services company identified 20 critical decisions that can damage execution and worked with business unit leaders to develop scenarios for each. It also developed strategy-aligned response plans to implement when such scenarios become reality. At another global manufacturer, strategists lead workshops that explore the degree to which different information is relevant to their strategic assumptions. They define actual ‘assumption-to-knowledge’ ratios to uncover information that would invalidate critical assumptions — and therefore change strategy or execution. This approach helps managers to separate relevant information from distractions as they execute strategy.
No. 3: Make sure to resource the right pivots properly
Because frontline and middle managers have more insight into which pivots will work, they need the tools to identify pivots and plan their implementation. Help business unit leaders map connections between critical projects and develop metrics to track their progress. When metrics indicate a problem, business leaders should bring together managers from related projects. Together, these project managers can determine the best course of action. This ensures pivots are feasible and account for all cross-project needs.