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How Top Companies Close the Strategy Execution Gap

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14 min read
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Maybe this sounds familiar:

After months (or even years) of meetings upon meetings, a CEO and her team finalize an ambitious strategy. They sell the vision to the board and roll out the details to employees with excitement, generating much fanfare. They work in eager anticipation, watching for all of the moving parts to click into place. 

The months tick by. Then, as data on the results begin to roll in, the team discovers that those results are lackluster at best. The plan never came to fruition. Energy wanes, leadership loses traction with employees, and everyone loses confidence. It’s hard to muster fresh hope for the next round of strategic planning.

If that hits close to home, know you’re not alone. 

  • Faltering strategy execution is the #1 concern of CEOs and #1 risk identified by CFOs 
  • Slow strategic execution is a leading frustration for executives year after year
  • 70% of strategists are concerned they’re not able to close the strategy execution gap, despite believing that execution is more important now than it was pre-pandemic

The gap between strategy and execution looks more like a black hole when you take a broader view. A survey of 6,000 executives from companies of varying sizes, locations, and industries revealed: 

  • Only 1 in 3 leaders agree their company has a “well-defined” strategy
  • Only 1 in 3 believe their strategy will be ultimately successful
  • Less than 1 in 3 believe their organization has the capabilities to execute its strategy
  • 20% admit their company doesn't document strategic priorities
  • 40% of companies are classified as “adrift” in terms of strategy and execution

Are these business leaders — who for the most part do not see a bright future for their organization — just overly cautious? More afraid than the average executive?

Unfortunately, the answer is no.

A study published in the Journal of Management and Organization reveals these executives’ fears are not unfounded. Just 10% of strategic plans are ever fully implemented. If you’re part of that 90% and feel like you can’t get stuff done — like you’re left wondering “Where exactly is the breakdown?” — then keep reading.

Let’s start at the beginning. What will it take to start closing the gap? 

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How Top Companies Close the Strategy Execution Gap

What is strategy execution?

Strategy execution is creating a plan for how to best accomplish an objective (the strategy), then putting that plan into action (the execution). It’s meeting organizational goals on time, on budget, and on target. Of course, this is much easier said than done. 

Execution may involve any or all of the following:

  • Identifying and allocating the resources needed to meet the objective(s)
  • Translating the strategic plan into concrete steps for all levels in the organization
  • Assigning roles, responsibilities, and deadlines
  • Prioritizing and reprioritizing, then clearly communicating the changes
  • Determining how to best measure success
  • Tracking progress with data
  • Inevitably deviating from the original plan
organizations with successful growth strategies increase profitability by 77%

But for those who don’t, well… what goes wrong in the first place?

Learn more about The 4 Stages of Successful Strategy Execution

4 stages of successful strategy execution.png

What causes the strategy execution gap?

There's truth in the cliche, “failing to plan is planning to fail.” 

Research from the Harvard Business Review shows that the highest-performing executive teams invest 54% more time in setting initial direction, crafting their vision, and transcribing it into clear, tangible objectives before moving to action.

They then spend an additional 25% more time focusing on the practical and procedural aspects of the plan – things like establishing financial and operational metrics, correlating objectives with strategy, assigning resources, and reviewing key metrics.

What does that tell us? Execution starts before anyone moves a muscle. 

Teams who fail to close the strategy execution gap often have some or all of the following blind spots:

  • Failing to align the strategy with company vision and values
  • Poorly defining priorities, and/or having too many of them
  • Basing plans on faulty assumptions over facts (i.e. bad data or poor interpretation)
  • Neglecting to translate objectives into clear and actionable steps
  • Allocating insufficient resources (e.g. time, money, talent)
  • Failing to communicate consistently (leading to disengagement or misaligned targets)
  • Inadequately training, supporting, and resourcing managers 
  • Creating a rigid plan that blocks employee ownership, ingenuity, and flexibility
  • Failing to assess along the way (e.g. checking benchmark data, employee sentiment, and customer satisfaction at key intervals) 
  • Not adequately planning for necessary pivots
  • Ignoring employee sentiment and well-being (cynicism, disengagement, and change fatigue often arise from poorly-nurtured company culture)

How to close the strategy execution gap

As you can see, there are a lot of reasons why companies fail at strategy execution. But we're here to help you succeed. Let’s take the shortcomings and failures of strategy execution and reframe them as a must-do punch list. 

We’ll dig deeper into each of these as we go:

  • Step 1: Align execution to strategy
  • Step 2: Share priorities widely
  • Step 3: Measure outcomes, not activities
  • Step 4: Make progress (or a lack thereof) visible
  • Step 5: Course correct quickly
  • Step 6: Embrace a growth mindset

Step 1: Align execution to strategy

It’s tempting to think that a great plan naturally leads to clear action steps. But that’s not a given. 

  • 74% of executives admit their strategies are not well-translated into concrete actions
  • 67% of integral functions in most organizations aren’t aligned with corporate strategy (wasted labor)
  • 74% of executives say their organization’s strategy asks employees to focus on too many priorities
  • 79% of executives are concerned their organization doesn’t allocate sufficient resources to implement their strategy

The bottom line? Even the best employees will miss the mark if their leaders aim them at the wrong targets.

Alignment is what happens when everyone in the organization — from top to bottom — understands the plan of execution and knows what to aim for. 

It means you can release your team of talented, intrinsically-motivated workers to do what they do best. So, assuming you’ve got a first-rate strategy already in hand, how do you translate it into action that stays true to your goals? It starts with a plan. 

Align execution to strategy 7-step chart

1. Clearly define priorities   

If everything is a priority, then nothing is a priority. Make it clear to everyone involved what is most important. Your goal is to focus your employees’ energy into a concentrated stream. 

Check, and continually re-check, that the priorities are moving your organization toward its vision. 

2. Make those priorities actionable & measurable   

You see it everywhere because it’s true — what gets measured gets managed. Providing numerical, time-bound reference points is the only way to know if you’re on track. 

Adopt a framework for defining what success looks like in the end (like OKRs), then another one for measuring it as you go (like key performance indicators or KPIs). 

3. Identify the resources, infrastructure, and support required   

You can’t just execute out of thin air. Many great plans have been brought down by a failure to wisely allocate resources. So align your spending with your strategy. 

A few critical questions asked early on can help: What will it take to see these objectives become reality? New technology? Additional training? More people? Increased funding for a particular geographical region or department? 

4. Develop a communication plan that spans the strategy’s life cycle   

Do the right people have the right information at the right time? From rollout to review, alignment depends in large part on communication. We’ll be taking a closer look at this in a moment. 

5. Invest in people and culture   

Your execution plan is only as strong as your people are talented. As you develop the action steps of your strategy, consider what has historically motivated and connected your employees. Leveraging cultural capital helps ensure your strategy makes it all the way through to execution.

6. Adapt or die   

Have you planned for pivots based on continuously gathered data and feedback? Remaining aligned during execution means embracing inevitable change. So create the necessary structures for tracking progress and adjusting before getting started.

7. Evaluate and reward success   

This is where strategy comes full circle. In order to stay aligned in execution, you must keep those clearly-defined priorities front and center. But what will you do once you get there? 

Buy-in for the next strategic plan will be conditioned on how well you care for (and recognize) employees in the execution of this one.

The most successful senior teams are agile in course-correcting when the needs of the business change, and are more easily prepared to shift organizational resources to ensure that the strategy is executed. 

Harvard Business Review

Step 2: Share priorities widely

It’s hard for employees to feel invested in what they don’t know or don’t understand. 

67% of employees don't know how strategy connects to work, 95% of employees don't understand strategy at all, 4 in 5 executives recognize this gap

That’s why executives who are at the top of their performance game spend 12% more time creating alignment through frequent communication. They break strategy into pieces, then push messages of clear, practical steps downward throughout the entire organization. The power of clear communication just can’t be oversold.

Here are some things to think about as you develop your communication plan:

Why communicate

If the vast majority of organizational members don’t understand what the strategy is or how it impacts them, they won’t be able to execute it. 

This first step in strategy execution is being transparent about what your organizational objectives are, why they’re important, and how you plan to achieve them. It also builds trust between company leaders and team members.

What to communicate

The answer is everything you can. Err on the side of sharing more rather than less. A few things you'll want to communicate: 

  • Company vision
  • Targets
  • Roles and responsibilities
  • Leadership structures
  • Timelines
  • Process maps
  • Opportunities for reward

While this is not an exhaustive list, it's a great starting point.

With whom to communicate

Start with managers, leaders, and influencers. Cast your vision, share the strategy, check for understanding, invite buy-in, and release them to steer others. 

The goal is to equip leaders with all the details they may need to empower teams.

How to communicate

The more outlets you use, the more people will likely receive the message. Use everything from all-hands meetings, 1-on-1s with managers, emails, and Slack to make sure things are communicated clearly. 

Hone your language to a fine point. It should be exceptionally clear, concise, and empowering. 

When to communicate

Through all stages of the plan, from pre-rollout through the recap. Your communication plan for every phase should be established before you ever say a word to employees about what’s coming.

How often to communicate

Repetition is key. Communicate more often than you think you need to.

Step 3: Measure outcomes over activities

Outcomes are evidence. Activities — those day-to-day tasks being executed by individuals in your organization — do matter; but they will never, on their own, indicate how close you are to meeting your goals.

This is where a framework like OKRs comes in. In addition to defining the end goal (or objective), you also define the evidence (the key results) that indicates whether or not that goal has been met. 

Then, and only then, is it time to draw the line between Point A (the objective) and Point B (the key results) and decide which activities will help you get there.

An example of OKRs in action 

Let’s say the executive team’s strategy includes global expansion. They create a clear, actionable objective that will move their organization in that direction:

  • Objective: “We will have an established presence in the Australian market.” 

Next, they offer numerical waypoints tied to a time frame:

  • Key result 1: Host X number of events with prospective customers by December 2023
  • Key result 2: Hire X number of employees to support operations by July 2023
  • Key result 3: Complete X number of transactions in our Australian branch by July 2023

Things like the type of events, who will be on the guest list, what defines the best new employee, and how transactions will be processed are all things you'll figure out. For now, what matters is that the ultimate end result (the objective) has been set, and the evidence of success (the key results) has been determined.

From there, managers develop sub-objectives with their teams: “Our team will secure a location and initial staff in Sydney by October of 2022.” 

Managers then meet with individual reports to collaboratively set personal goals and establish metrics of success. “Employee X will hire 12 tellers and two managers by Q3 2023.” 

That employee is then empowered with trust, freedom, and resources to control the way the work happens. Your manager checks in at least weekly through a 1-on-1 meeting to offer support, coaching, and progress checks.

“Good ideas with great execution are how you make magic. And that’s where OKRs come in… OKRs have helped lead us to 10x growth, many times over…They’ve kept me and the rest of the company on time and on track when it mattered the most.” 

- Larry Page, Co-Founder of Google

Step 4: Make progress (or a lack thereof) visible

Ongoing reporting empowers faster, smarter pivoting with less waste of time and resources. That’s why high-performing teams spend 14% more time measuring progress against strategic goals by checking key metrics, then adjusting resources in response.

Ask the right data and feedback questions during strategy execution planning:

  • What data do we need to track progress toward OKRs? 
  • What do we not need?
  • Who will gather, interpret, and share these numbers? How often?
  • How will we share progress with everyone involved?

For example, at Google, all OKRs (including executives) are completely visible to every employee. This kind of transparency in OKRs has several benefits:

  • Creates a collaborative mindset
  • Highlights interconnectedness among teams and departments
  • Fuels urgency
  • Keeps the big picture front and center

Make progress data and objectives as widely visible as you can, then lean into employee and customer feedback. That’s what keeps strategy execution tied to reality and makes adaptation possible.

“When team members are armed with clean, accurate, relevant, actionable data, presented in an easily consumable format, they’re equipped to make daily decisions that advance the organization towards its objectives — present and future.” 

- Nick Kelly, strategy consultant 

Step 5: Course correct quickly

Achieving strategy execution without expecting the unexpected is impossible. Economies, markets, and customer preferences change rapidly. Projects get complicated and then delayed. A key employee leaves for another opportunity. 

Seeing strategy through the execution phase demands agility. But how do you build it? McKinsey identified 5 characteristics of nimble organizations

  1. A North Star vision communicated throughout the organization 
  2. Empowered, autonomous-yet-connected teams 
  3. Fast cycles of decision-making, learning, & adapting
  4. A people model that capitalizes on passion
  5. Systems, technology/tools, and training that make work workable

A North Star vision communicated throughout the organization

Leadership defines what the mission is. That mission is narrow enough to give direction and inspire, but broad enough to allow teams to define their own objectives.

Empowered, autonomous-yet-connected teams 

Think of a large fleet of small ships, rather than a small fleet of large ships. You need a system of distributed decision making that’s carried out by capable people you can trust.

There’s just no time to run every move by senior leadership. Empower teams to act within their areas of expertise.

Fast cycles of decision-making, learning, & adapting 

Who are the key players in making that work? Managers. The kind of performance management that leads to strong strategic execution centers around:

  • Continual feedback and development conversations
  • Frequent input gathering
  • Savvy coaching, which includes
    • Roadblock removal (technical, situational, or otherwise)
    • Skill-building
    • Collaborative goal-setting

A people model that capitalizes on passion

Managers build strategic alignment by tying employee actions to priorities, keeping objectives front and center in conversations, and acknowledging (and rewarding) effort and achievement. 

Systems, technology/tools, and training that make work workable

Your strategy’s execution depends on strong performance management to power impact. Supply your managers with the systems, training, and data they need to keep their teams on track all the way to the finish.

Step 6: Embrace a growth mindset

The strategy you set today will likely not work for you five years from now. Successful strategy execution requires an environment that actively promotes risk-taking, failing forward, and adapting fast. In short, it requires a mindset of constant learning and growth.

Made famous by Carol Dweck, the growth mindset sees setbacks as a normal part of growth and meets them with curiosity. 

It says, “I’m learning, so of course I’m going to make mistakes along the way. That’s exactly what learning is.” Compare that perspective with the “fixed mindset,” which says, “I made a mistake. I can’t do it. I might as well give up.” 

The growth mindset:

  • Embraces challenges rather than avoids them
  • Accepts constructive feedback as help rather than dismissing it
  • Works to find creative solutions (trying several if needed)
  • Finds inspiration and instruction in others’ success rather than feeling threatened
  • Sees continued effort as the path forward rather than giving in to feelings of futility
  • Is future-oriented which is key for achieving goals

How do you integrate a growth mindset into your company culture? Teach it, reinforce it with rewards, then measure it with surveys. 

  • Teach it by integrating growth mindset training into your employee onboarding program. 
  • Reinforce it by offering recognition and rewards to employees who model a growth mindset. (This is where it pays to notice activities over outcomes.) 
  • Measure it by collecting employee feedback about how safe they feel making mistakes and offering new, out-of-the-box ideas, rather than feeling punished for making mistakes or ignored for being innovative.

Take the next step in strategy execution

Strategy execution is a complex journey. It takes a well-thought-out plan, an executive team that communicates clearly and consistently, and (perhaps most of all) a workforce that stays aligned through the process. That’s how the magic happens. And it’s absolutely possible.

Learn how the right platform can help you close the strategy execution gap

what is a strategy execution platform.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.

Ready to achieve the best possible? Start using Quantive for free.

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