While many businesses have a strategy in place to guide their operations, they often fail when it comes to executing that strategy. According to Kathryn Brohman, associate professor, Smith School of Business, Queen’s University, “The prize for closing the strategy-to-execution gap is huge.” The question is, what is the best way to do that?
Speaking at a recent NationaLease meeting, Brohman talked about the five common causes of the execution gap.
- Complacency: You are not finding new ways to do things.
- Problematic KPIs: You have too many metrics or are measuring the wrong outcomes.
- Technology misses: You are not leveraging digital technology.
- Overbearing controls: People lack the authority they need to do their jobs.
- Misaligned incentives: Your incentives are driving the wrong behaviors.
During her presentation, Brohman cited this startling statistic: In 2012, 40% of organizations surveyed said they were successful at executing their strategy. This was down from 90% some 30 years earlier.
Brohman spent time talking about the Sustainable Execution Diagnostic Assessment, a tool that helps organizations measure their KPIs as they relate to execution of strategy and to identify salient executive barriers that get in the way of the successful execution of a strategy.
She also talked about drag as “a competing force to execution that obstructs the delivery of results and causes valuable organizational energy to be misdirected or wasted.” On average, 32% of organizational energy intended to support a change agenda or execute daily activity is wasted on drag caused by execution barriers, she added.
Some questions you should be asking yourself about how you are doing when it comes to executing your strategy include:
- Is my organization making the necessary investment in digital technology so people have access to the quality of information they need to do their jobs?
- Are employee incentives well aligned to the company’s most important goals and objectives?
- Does my organization drive efficiency by standardizing procedures in appropriate ways?
- Do people in my organization have the decision rights and authority they need to do their jobs?
Brohman explained that organizations need to strive for sustainable execution. She explained that the day-today whirlwind of activity focuses on short-term results and added that too many organizations are trading off long-term goals for short-term ones.
Poor communication, competing priorities and overbearing compliance can be problematic even in organizations that seem to be executing well. She gave the example of an organization that delivered quarterly results by setting unrealistic stretch goals that pushed employees to a state of fatigue and exhaustion.
Brohman asked the audience to rate themselves on a scale of 1 to 6 (strongly disagree to strongly agree) on the following statements:
- My organization effectively responds to market forces by making necessary changes that stick.
- My organization’s drive to meet short-term goals does not overlook symptoms that impede the long-term stability of the company.
- My organization is effective at managing our resources to meet our goals in ways that keep pace with our competitors or changing customers.
- My organization listens to feedback. We are excellent at identifying problems and bouncing back from difficulties.
In order to become more adept at executing your strategy, Brohman said you may need to make some changes.
- Rebuild the executive foundation: Remove barriers related to budgeting, alignment and prioritization. Set a strategy that stretches the organization and improves employee engagement.
- Remove distractions: Remove distractions so people have the information and control they need to do their jobs, know what is most important, and do not have to navigate cultural issues and challenges.
Brohman concluded her presentation saying, “When organizational leaders do a deep dive to explore what is really going on, they enter a valley where deep-rooted insights emerge that explain the root cause behind cultural issues and problems. By removing these distractions, behavior tends to naturally evolve into making decisions and choices that are right, best, and highly valued by everyone involved.”
She added, “To execute well in today’s complex and dynamic world, leadership needs to spend less time tactically planning how the organization will get things done and more time identifying and removing execution barriers so people can do what you pay them to do.”
