5 misconceptions on strategy execution exposed

A survey of more than 400 global CEOs found that executional excellence is the No. 1 challenge executives in companies across Asia, Europe and the U.S. are facing, above other issues such as innovation, geopolitical instability and top-line growth, according to a Harvard Business Review report.

While there are a myriad of books and articles on strategy for business leaders, there are far fewer guides for successful execution.

Nine years ago, Donald Sull, PhD, a senior lecturer at the MIT Sloan School of Management, author and Harvard Business Review contributor, began a large-scale project designed to help organizations execute their strategies more effectively, including a survey conducted among nearly 8,000 managers in more than 250 companies. The study is ongoing, but five beliefs commonly responsible for the unraveling of strategy execution have already become apparent, according to the report.

Consider the following five myths associated with strategy execution, according to HBR.

1. Alignment guarantees execution. According to HBR, most executives who participated in Dr. Sull's survey relayed a similar description on how strategy is executed in their firms. The steps usually include converting strategy into objectives, assigning objectives down the hierarchy, measuring progress and rewarding performance. According to the report, when asked how they would improve execution, most executives pointed to using tools designed to increase alignment between assigned duties and strategy across the chain of command.

"In the managers' minds, execution equals alignment, so a failure to execute implies a breakdown in the processes to link strategy to action at every level of the organization," according to the report.

Despite this perception, it is not a deficiency in alignment of strategic objectives across functional silos that impede execution, but rather a lack of coordination in carrying out the objectives. According to the report, only 9 percent of managers say they can rely on their colleagues in other business units all the time, and just half say they can rely on them most of the time. This sense of unreliability leads to dysfunctional behaviors among managers that undercut execution, such as duplicating efforts, delaying deliverables or passing up opportunities. A lack of coordination also often leads to conflicts between units, which are not handled well two-thirds of the time.

2. Execution means a fixed strategic plan. Many executives approach execution by designing detailed strategic plans that map out responsibilities, timelines and available resources, and perceive any deviation from such plans as a lack of discipline that undermines execution, according to the report.

However, a fixed approach to execution may lead to a failure to adapt to unexpected obstacles and opportunities.

According to the report, "When managers come up with creative solutions to unforeseen problems or run with unexpected opportunities, they are not undermining systematic implementation; they are demonstrating execution at its best."

Another issue many organizations face is a failure to disinvest in declining businesses or put down unsuccessful initiatives fast enough, which causes a waste in resources.

A lack of agility — not a lack of adherence to execution plans — is a major obstacle to successfully executing new strategies.

3. Frequently communicating strategy and objectives leads to comprehension. Even when leaders frequently discuss strategic objectives with managers, according to the report, 55 percent of middle managers responding to the survey could not name even one of their company's top five priorities. In addition to a lack of understanding of strategic objectives, individual objectives often seem disjointed from one another and unrelated to the overall strategy, even inside the C-suite.

According to the report, this issue is largely due to the fact many executives measure communication in terms of volume of input or messages instead of assessing how well leaders, managers and employees understand what is being communicated.

4. A culture focused on performance promotes execution. According to the report, embedding a culture of performance into an organization does in fact influence behavior on a daily basis. However, though many companies do a good job of recognizing and rewarding good performance, this is not enough to support execution efforts.

The kind of culture that best supports execution must recognize and promote other characteristics in addition to performance, including agility, teamwork and ambition, according to the report. Perhaps because these things are harder to measure than performance metrics, they are often overlooked. Furthermore, because agility requires a willingness to test new ideas and processes, many managers avoid this to reduce the risk of failure.

Excessive emphasis on performance culture may lead to a failure to cultivate the coordination that is critical to execution. For instance, according to the report, past performance is two- or three-times more likely than strong collaboration skills to be rewarded.

5. Execution is a top-down process. There is a common notion that the CEO should be the driver of execution downward throughout the organization. According to the report, this idea is flawed for several reasons. First, the departure of a strong CEO runs the risk of undoing the entire execution process.

Additionally, employees at all levels of the organization are responsible for decisions and responsibilities that lead to execution. According to the report, "Concentrating power at the top may boost performance in the short term, but it degrades an organization's capacity to execute over the long run."

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