What is strategy execution?
The term strategy execution has been around for a long time, but what is it, and why are organizations (like Quantive) obsessed with it?
Strategy execution, in theory, is self-explanatory — it’s how the strategic focus of an organization aligns with its decision-making and execution.
Strategy is a living, breathing entity, not an A-to-Z journey. This means the process isn’t just about planning or executing a strategy. It must also be adapted and optimized, which informs a refreshed cycle of planning, alignment, and execution.
Yes, the term “strategy execution” is both all-encompassing as a process and a stage within the process itself, lending to its hard-to-understand nature.
So, where does strategy execution begin?
Strategy execution at 30,000 ft
Understanding business strategy execution is about clearly defining what it is and is not.
The strategy execution process is not one-directional
Certain models break down the strategy execution process with visuals and charts to represent the flow of information in an organization. The problem is none of them can 100% accurately reflect the complexity of the process.
Business strategy execution is best compared to a cycle or a web, where interdependencies inform various stages of ongoing processes. Yet even with these illustrations, there is no widely adopted strategy execution model because it’s highly contextual to the organization’s needs.
Strategy execution is not turning on the lightbulb
If strategy execution was an all-or-nothing, flip-the-switch concept, it wouldn't be a struggle.
“70% of chief strategists express little confidence in their ability to close the gap between strategy and execution.”
In reality, strategy execution is like building a fire — it requires constant attention and input to stay alive.
Strategy execution is a collaborative process, requiring focus and iteration to succeed. While top-level leaders can communicate strategy, your managers or teams may not understand it. As Harvard Business Review notes, aligning your organization from top to bottom (traditionally) doesn’t mean they operate well cross-functionally.
Leaders can’t just plan the strategy and cascade it down the organizational line. The strategy execution process is a never-ending cycle of planning, alignment, execution, and optimization.
Strategy execution is not simple
We didn’t title this article, “4 Simple Stages to Strategy Execution” for a reason. Successful strategy execution is complicated by nature. Take Kaplan & Norton’s Strategy Execution Model, with its distinct stages, complex information flow, and interdependencies:
With constantly moving processes, communication through hierarchies, and its overall subjective nature, strategy execution is an in-depth process for any sized organization. But mastering your strategy execution process begins with making the complicated simple.
At Quantive, we break down what good strategy execution requires into four distinct steps:
- Strategy planning
- Strategy alignment and activation
- Strategy execution
- Strategy assessment and adaptation
Step 1: Plan strategy execution
Key takeaway: strategy planning provides the overarching goal and approach to strategy execution, broken down into three levels — corporate strategy, business strategy, and functional strategy.
Planning strategy is the foundational step in the strategy execution process. Without an agreed-upon definition and plan for your strategy, the vision is unclear. Basically, your teams can’t go anywhere unless you decide on where you’re going.
Strategy planning can be observed in three areas — corporate strategy, business strategy, and functional strategy. Each of these areas is imperative to an effective strategy execution process.
Strategy execution: corporate strategy
Corporate strategy is the North Star for your organization. It’s defined by:
- Strategy mapping
- Strategy visualization
- Development of the mission and vision
This is where the fundamental questions of your business’s existence come into play. Corporate strategy exists to help you carve out your niche, your USP (unique selling point), and general advantages.
Corporate strategy is the “top-level” strategy that guides the organization. This is where strategy mapping, visualization, and vision-mission development occurs. This complex, foundational step ultimately determines the trajectory of your business.
Strategy execution: business strategy
Business strategy (in the hierarchical sense) exists between corporate strategy and functional strategy. It’s the first step in the market application of your business’s mission and vision.
Business strategy helps you establish:
- Competitive focus areas
- Customer benefit
- Proof of concept on the USP
Business-level strategy (i.e. department strategy) is the first major point of external focus for your overall strategy.
Gain new insights into business strategy
Strategy execution: functional strategy
Functional strategy is the result of a well-established corporate and business strategy.
This strategy is the closest association to tactical execution, influencing the initiatives of:
As the needs of teams differ throughout the organization, functional strategy is the tactical guide of strategy execution. It serves as the connector to the greater business and corporate strategy, while being a practical reference for those doing the work.
Learn more about the role of planning in strategy execution
Step 2: Align and activate strategy execution
Key takeaway: Aligning and activating strategy tests how teams coordinate on goals before the entire organization executes, creating a clear set of values, advantages, customer demographics, and building timelines around decision-making.
Picture this ideal-world scenario:
Top-level leaders know exactly how the strategy is being deployed.
It’s perfectly understood by managers and team members.
Execution falls into place.
In the real world where you and I operate, most people don't know the strategy execution plan, creating an impossible dynamic for alignment.
Luckily, the strategic alignment and activation phase tests how your teams are coordinating on goals before the entire organization executes.
Alignment and activation encompass all decisions and activities required to drive corporate and business strategy execution.
During alignment and activation, corporate goals are broken down at the business level. Leaders set goals aligned with the corporate strategy and progress the goals of the business strategy — teams focus on the metrics and outcomes that matter through functional strategy.
Here are a few key elements to consider when aligning and activating strategy.
Distinguishing strategy alignment from activation
Although we combine the strategy alignment and activation phases, they are two unique aspects of the strategy execution process. It helps to visualize them as parallels to each other — separate, but co-dependent.
Creating a clear set of values, advantages, customer demographics, etc. in planning is a great accomplishment. However, if this strategy can’t be activated, it’s useless for the business.
The space between aligning a strategy and practically activating your teams to is a challenge for all business strategy execution.
Enterprises struggle with scaling strategy, start-ups struggle with maintaining a focus for strategy, and scale-ups fall somewhere in the middle.
A clear approach to alignment and activation shrinks this gap, and as a result, different strategic execution plans can be tested and implemented with a smaller lag.
Building strategy execution timelines
Timing is a crucial, underrated element in strategy activation. As business leaders, we’re focused on the “what” and “why” of strategy, but sometimes forget about “when” — a worldwide pandemic reminded us of the universal dynamic of timing.
Building timelines around decision-making is a crucial step in transitioning from activation to strategy execution. Important questions to consider for building strategic timelines:
- What do we do now? Why?
- What can wait for later? What should wait for later?
- How much time should X element of strategy take? Y element?
Knowing the business’s distinct value and comparative advantages — defined in corporate strategy — helps answer these questions. As Executing Organizational Strategy explains, well-informed timing helps the business leverage its strengths and understand market opportunities.
Timing is the underutilized strategic advantage.
A note on targets and goals in strategy execution
Knowing the difference between operational effectiveness and efficiency is crucial to maintaining focus on strategy deployment.
Targets and goals demonstrate the effectiveness of your strategy, but they are not the strategy itself.
Seven Steps to Strategy Execution notes that targets and goals such as speed, quality, and efficiency are not to be confused with strategies. These outcomes are the result of efficient strategy execution and may give insight into your process.
Performance management indicators, such as OKRs and KPIs, should be incorporated as part of the strategy planning process — a data-driven approach to tracking and monitoring these indicators primes your business strategy execution for success.
Learn more about the role of alignment in strategy execution
Step 3: Execute the strategy
Key takeaway: effective strategy execution requires cross-functional communication and the use of four fundamental building blocks: information flow, decision rights, motivators, and structures.
Strategy execution is the culmination of the hundreds (if not thousands) of decisions made in the planning and alignment/activation phases.
Effective strategy execution starts with everyone at each level of the business — c-suite leader, VP, mid-level manager, or functional contributor — understanding and aligning with the corporate strategy.
Information in this process flows freely from unit to unit, top-to-bottom, and bottom-to-top with little friction. But how does strategy become execution?
Connection and cross-functional communication
As we’ve mentioned before, strategy shouldn’t exist in a silo or only in c-suite leaders’ minds — team members need a bridge to strategy. They must feel the strategy is connected to their work, so they can create work that connects to the strategy.
Culture grows when alignment happens between people and process. The only way this happens is when strategy is no longer a vague concept or idealistic aspiration, but a practical conductor for how the organization operates.
However, a thriving culture built around strategy execution doesn’t always mean there's alignment. While most leaders focus on vertical alignment, one of the biggest struggles for organizations is cross-functional alignment.
The problem stems from goal cascading and a narrow focus on hierarchy — this inhibits alignment horizontally where the real work is done. So, what’s the solution?
According to Harvard Business Review, there are four fundamental building blocks to effective strategy execution:
- Information flow
- Decision rights
Supported by autonomous communication. Leadership clearly communicates the corporate strategy, and team members communicate the plan for its execution.
Clarity on delegation and authority. Managers know who is responsible for which decisions, reducing ambiguity and second-guessing on execution.
Enabled by improved information flow and decision rights. Motivators revolve around performance rewarding and other methods of incentivization.
Supported by clarity on information flow and decision rights. Structures involve building accessibility into company operations, enabling responsibility growth, lateral movement, and guaranteed influence.
Scaling the strategy execution process
A detailed strategic process is the gateway to scalability. However, process for the sake of process creates inefficiencies and organizational rigidness. How do you create balance?
Process needs strategy as much as strategy needs process.
Strategy must be monitored and linked through the hierarchy — corporate to business, business to team level, and so on — to ensure the right people are executing the right strategy at the right pace.
Properly investing in the building and oversight of process requires time, budget, and labor dedication on every front. Having advocates and manpower in process management is the best way to build effective, scalable strategy execution.
Strategy execution management
Strategy execution can feel endlessly deep and complicated. (We’re not going to overwhelm you with that here, but make sure to check out our 7 Tips for Better Strategy Execution).
It won’t do your organization any good to say, “Here’s the strategy, please follow it,” but fail to check in or manage it. If people followed every direction given to perfection, we wouldn’t be writing this article.
Strategy management is an ongoing part of the entire strategy execution framework, emphasized in the execution phase. Strategy management involves:
- Developing time-bound goals and objectives
- Incorporating initiatives into goals
- Ensuring alignment with the strategy
Whether it’s one person or an entire team, businesses must connect strategy with performance to ensure strategic guidance is being followed.
Learn more about the role of execution in strategy execution
Step 4: Assess and adapt strategy execution
Key takeaway: assessment and adaptation are the SWOT analysis of strategy execution — emphasize strengths, fix weaknesses, identify opportunities, eliminate threats.
Optimization is the continuous “last” stage of strategy execution — the place where good strategy becomes great strategy.
Companies that create tight links between their strategies, their plans, and their performance often experience a cultural multiplier effect.
Optimizing strategy execution requires critical thinking, reflection, and data analysis at multiple levels of the organization. When looking at this stage, ask yourself:
- How well does our information flow?
- Are there gaps in our strategy planning, activation, or execution?
- Can we eliminate wasted time by shifting/dropping/adding initiatives?
The full scale of strategic processes in the organization, also known as SPM (Strategic Performance Management), can help us answer these questions.
The chart below from Seven Steps to Strategy Execution illustrates different components of SPM:
While this image is a bit busy, let’s break down the SPM process and what each pillar means.
Strategy management involves definition, deployment (formulation), execution, and optimization. It is the traditional governance system that connects planning and performance.
Portfolio management covers the inventory, analysis, execution, and monitoring of the organization’s resources. Resources affect the business’s strategic emphasis, so portfolio optimization and strategy optimization are symbiotic.
Program management involves the collection of projects that feeds into the strategic goals of the organization. Projects are functional initiatives that move the needle, while programs organize and align these projects.
Performance management is more granular by comparison. Tied directly to the execution phase, performance measurement creates a unique strategic cycle that overlaps with overall strategy optimization.
How does SPM optimize strategy execution?
As the SPM chart above demonstrates, certain (bolded) processes are critical to the strategy execution process. Reviewing processes that are equally different and important allows for a balanced approach to strategy optimization.
In principle, strategy adaptation is simply plugging the data and insights from the very “end” of the strategy cycle — execution — into the “top” half of the strategy funnel: definition and deployment.
Leaders use the data to reflect on the effectiveness of the defined strategy, identify weaknesses and opportunities in deployment, and endless other possibilities to close the gap between strategy and execution.
Learn more about the role of assessing and adapting in strategy execution
Strategy execution best practices
Optimizing the strategy execution process — from planning straight through iteration — is crucial for effective strategic management.
Here are three key best practices to consider.
1. Focus on a limited number of priorities
By narrowing down their objectives, leaders should avoid spreading themselves too thin. This prevents overwhelm, improves engagement, ensures effective resource allocation, and yields better results.
2. Adopt a strategy execution framework
A strategy execution framework provides guidance and structure for leaders throughout the implementation journey, encouraging a systemic approach that enables the replication of successful methodologies. Without it, uncertainty and inconsistencies may arise across different business units.
3. Balance short-term operations with the long-term strategy
Leaders tend to prioritize day-to-day operations, overshadowing strategy execution and causing employee disengagement. Balancing operational concerns and strategy execution through regular discussions around updates, objectives, feedback, and lessons learned can help leaders maintain employees' focus and keep strategy execution as a top priority.
Read more tips for better strategy execution
Take the next step in mastering strategy execution
Strategy execution isn’t simple, but you don’t have to go it alone. Understanding the phases of strategy execution and how they relate to one another is a great first step.
In this article, you’ve learned about the four distinct phases of strategy execution and their interdependencies.
Planning the strategy is an honest conversation about the organization’s direction.
Aligning and activating the strategy is the tactical setup that bridges strategy to execution.
Executing the strategy is decision-making aligned with each level of the hierarchy.
Assessing and adapting the strategy is improving process at scale.
You now know how these phases overlap, the importance of each, and how to connect the concept of strategy to practical execution. By reading this overview, you’ve got the necessary foundation for understanding strategy execution.
Quantive is your bridge between strategy and execution. Founded on the objectives and key results (OKR) methodology, our Strategy Execution Platform is where businesses plan successful strategy, focus and align teams to it, and stay on the leading edge of progress.
As your company looks to achieve the best possible results through effective strategy execution practices, you need a modern approach to run your business and change your business. The Modern Operating Model brings strategy, teams, and data together to help make decisions faster, optimize operations, and drive better business outcomes.
Whether you’re a large enterprise facing competitive disruption or a small business leading the innovative charge, Quantive helps get you where you want to go.
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