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The 4 Stages of Successful Strategy Execution

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13 min read
Overlapping sequential squares to demonstrate the stages of strategy execution

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 strategy execution is about clearly defining what it is and is not.

Strategy execution 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.

Strategy execution as a concept 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.

Morgan, Levitt & Malek’s Strategic Execution Framework
Morgan, Levitt & Malek’s Strategic Execution Framework

Strategy execution is not turning on the lightbulb

If strategy execution was an all-or-nothing, flip-the-switch concept, it might not be a huge struggle for organizations. 

“70% of chief strategists express little confidence in their ability to close the gap between strategy and execution.” — Gartner

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. Strategy execution is a never-ending process 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. Strategy execution is complicated by nature. Take Kaplan & Norton’s Strategy Execution Model, with its distinct stages, complex information flow, and interdependencies: 

Kaplan & Norton’s Strategy Execution Model
Kaplan & Norton’s Strategy Execution Model

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 it down into four distinct stages:

  1. Strategy planning
  2. Strategy alignment and activation
  3. Strategy execution
  4. Strategy assessment and adaptation 

Stage 1: Strategy planning

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. 

Corporate Buisness Strategy Chart3.svg

Corporate strategy

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. 

To establish a thriving corporate strategy, a few simple, but important questions must be answered:

  1. What business should our company be in? (Niche)
  2. What distinguishes us as a company? (Vision)
  3. What are our company's comparative advantages? (Strength)

These questions help your company understand its identity and pursuits:

  • How the business is being run
  • The goals and objectives of the business
  • Which markets the business enters
  • How success is defined
  • Who is hired and why
  • How the budget is being created/spent 

Business strategy

Business strategy is the middle ground between corporate functional execution. It establishes and coordinates the positioning of the organization by applying the mission and vision to your organization’s competitive landscape.  

Business strategy explores the questions centered on value, like:

  • Where is our primary area of focus?
  • Why will our customers benefit from this competitive focus?
  • What about this focus ensures we have a unique value proposition?

If corporate strategy is focused on the internal environment, business strategy is focused on the external. 

Shaping and leveraging value creation impacts how functional strategy is developed — investing in a sound business strategy is key to your team executing as effectively as possible. 

Improperly positioned firms encounter competitive difficulties and can fail to sustain competitive advantages. 

Saylor.org

Functional strategy

With the second-tier business strategy created, functional strategy has its foundation.

Functional strategy is broken down into the departments, teams, and initiatives in an organization where the work is done. 

Separate areas of the business require different strategies, informed by their unique goals and aspirations as well as the set of values, needs, and desires of the department.

VPs and managers influence the key decisions in functional strategy. They have the responsibility of bridging functional strategy to the business and corporate strategy. 

Without this alignment, organizations experience an operational disconnect. While the functional strategy should meet the department's unique needs, it must connect to and impact the corporate and cross-departmental strategies.

Functional strategy example

Let’s take this one step further by examining how marketing and sales teams may work together. At the strategic level, they may share and depend on aligned information like:  

  • The organization’s value proposition
  • The ideal customer profile (ICP)  
  • How the organization delivers value for the ICP

It makes sense for these departments to align their strategies, as they work with similar goals in mind. When functional units align their strategies, their impact compounds. 

The collective functional strategy funnels up to the corporate strategy, forming a collaborative organizational strategy with multiple levels of alignment. 


Learn more about the role of planning in strategy execution.

mini strategy execution plan diagram

Stage 2: Strategy alignment and activation

In an ideal world, top-level leaders know exactly how the strategy is being deployed, it’s perfectly understood by managers and team members, and execution falls into place. 

In the real world where you and I operate, most of the organization doesn’t know the strategy, 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 level strategies to the execution phase.

During alignment and activation, corporate strategic goals are broken down at the business level. Leaders set goals aligned with the corporate strategy and progress the goals of the business strategy, and teams focus on the metrics and outcomes that matter.

Here are a few key elements to consider when aligning and activating strategy. 

The parallel between strategy alignment and activation 

Although we combine the strategy alignment and activation phases, they are two unique aspects of the strategy execution process. It helps to conceptualize them as parallels to each other — separate, but co-dependent.  

Creating a clear set of values, advantages, customer demographics, etc. in the strategy planning phase 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 execute the strategy is a challenge for all businesses. 

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 initiatives can be tested and implemented with a smaller lag. 

Building strategic 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 should teach us that the dynamic of timing should be a consideration for every business in every industry.

Building timelines around decision-making is a crucial step in transitioning from strategy activation to execution. Important questions to consider for building strategic timelines:

  1. What do we do now? Why?
  2. What can wait for later? What should wait for later?
  3. 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

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 a well-executed strategy and may give insight into your strategy execution 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 strategy execution for success.  


Learn more about the role of alignment in strategy execution.

visual_mini-SE-Align_DarkBG.svg

Stage 3: Strategy execution

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 doesn’t always mean the execution is aligned. While most leaders focus on top-to-bottom alignment, one of the biggest struggles for organizations is cross-functional alignment.  

The problem stems from goal cascading and a narrow focus on vertical alignment. Poor support for cross-functional commitments, due to strategic tunnel vision, inhibits alignment horizontally where the real work is done. So, what’s the solution?  

Successful strategy execution depends on two factors: a focus on the right strategic goals and the freedom granted to all parts of the organization. 

Successful Strategy Execution

According to Harvard Business Review, there are four fundamental building blocks to effective strategy execution:

  1. Information flow
  2. Decision rights
  3. Motivators
  4. Structures

Information flow

Supported by autonomous communication. Leadership clearly communicates the corporate strategy, and team members communicate the plan for its execution.

Decision rights

Clarity on delegation and authority. Managers know who is responsible for which decisions, reducing ambiguity and second-guessing on execution.

Motivators

Enabled by improved information flow and decision rights. Motivators revolve around performance rewarding and other methods of incentivization.

Structures

Supported by clarity on information flow and decision rights. Structures involve building accessibility into company operations, enabling responsibility growth, lateral movement, and guaranteed influence.  

Building strategy execution that scales

Incorporating a detailed strategic process is the gateway to scalability. However, process for the sake of process creates inefficiencies and organizational rigidness. 

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.  

Strategy management and governance 

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). Regardless of the number of steps in strategy, teams need help staying in line with it, which is where governance comes into play. 

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 execution governance is derived from strategy management. 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 these initiatives align with the corporate/business/functional 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.

visual_mini-SE-Execute_DarkBG.svg

Stage 4: Strategy assessment and adaptation

Optimization is the never-ending 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. 

Harvard Business Review

Strategy optimization requires critical thinking, reflection, and data analysis involving multiple levels of the organization. When looking at this stage, ask yourself:

  • How does our information flow through the organization?  
  • Where are the gaps in our strategy implementation and execution?  
  • How can we eliminate resource waste by shifting/dropping/adding initiatives?

To answer the questions of optimization, we must look at the full scale of strategic processes in the organization, also known as SPM (Strategic Performance Management).

SPM Processes

The chart below from Seven Steps to Strategy Execution illustrates different components of SPM:

SPM Processes.svg
Seven Steps to Strategy Execution

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. 

Why does SPM matter for strategy assessment and adaptation?

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.

visual_mini-SE-Adapt_DarkBG.svg

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.

Plan

Planning the strategy is an honest conversation about the organization’s direction.

Align and activate

Aligning and activating the strategy is the tactical setup that bridges strategy to execution.

Execute

Executing the strategy is decision-making aligned with each level of the hierarchy.

Assess and adapt

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. 

Now it's time to take this understanding to the next level.


Check out our “Read Next” article to learn the best tips for better strategy execution.

article-7 tips for strategy execution.png

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, 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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