There is not enough focused effort to address the gap between strategy and execution. George Ambler’s blog The Practice of Leadership, has found a great survey on the Disconnect between Strategy and Execution. This is a must read for anyone who is looking beyond easy answers. The survey is by OnPoint Consulting and hits a home run in its observations. Most organizations have a strategy that is at least adequate, with some being clear and inspiring. Most organizations have an execution capability with capable people using standard or best practices. Still 49% of firms surveyed see the gap in their ability to execute sound strategies. Of this 49% of firms, 64% don’t have confidence in their ability to close the gap. OnPoint provide a list of eight factors that they feel provide this strategy to execution gap.
I sometimes wish that I could describe just eight things for organizations to change that would close the gap between strategy and execution. What I have decided is that there is another way to look at the strategy to execution gap. It is based on the fact that no organization has enough resources to achieve all their targeted outcomes. Just addressing eight things isn’t always enough. This is a great list and well worthwhile tracking. I’d like to suggest creating a tighter link between specific targeted business outcomes and execution success. What that means is that you have to understand what your targeted outcomes are, the relative importance between them and then apply your resources towards achieving them. Together these begin to create a strategy to execution roadmap. You can then identify those areas of execution risk that need to be managed. This is where you can apply resources to increase the certainty of success.
If you had all the resources you needed to close the strategy to execution gap, you would be moving along a path towards CERTAINTY of success. I believe that no organization will ever have enough resources to achieve certainty. What you have to look for is that point along the path that gives you a sufficient level of certainty for the resources you can afford to commit. To build cross organizational commitment to the success, you can create a visual model of what initiatives you are funding, the resource that are committed that take you along that path. You increase buy-in if you can make these targeted cross organizational outcomes and initiatives visible to all the participants.
If you choose to call your execution starting point “HOPE”, then you have the start of a strategy to execution roadmap. A good model for this is to think of moving your organization along a line from Hope of success to Certainty.
I use the word Hope, because it adequately describes most organization’s execution method. What I mean is that few people own all the resources necessary to achieve any important targeted outcome. You have to rely on other parts of the organization to provide resources to achieve success. Current management processes don’t provide you with sufficient control over all resources needed to achieve key outcomes. You have to Hope that other parts of the organization will meet their commitments to provide committed resources.
Even after resources are committed, you don’t have adequate insight into other parts of the organization’s conflicting demands and priorities. You don’t often have sufficient warning to know when another part of the organization will fail to meet their commitments. As the survey shows, expectations aren’t met at least 49% of the time. (Most other surveys I’ve seen suggest well above 65% of strategic programs fail to meet CxO (CEO, CFO, COO etc.) expectations.
The solution is to find those outcomes and initiatives that will move the certainty of success for targeted outcomes sufficiently along the path towards certainty. For some critical business outcomes that will be very far along the path to certainty. In other cases, your organizational and gut-level experience will tell you that you have a good chance of success given past history. For those outcomes and initiatives, the addition of initiatives to ensure success can be lower.
The great part is that you can balance the need for higher levels of certainty for the most important outcomes against a lower level for less important outcomes. This way you can apply your resources to the most critical outcomes. You can go a long way in building commitment to success by creating this visual line of sight between initiatives that are designed increase success and the targeted outcomes that achieve business value.
Congratulations to George Ambler for finding this great survey and highlighting its value. It’s a must read.
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You bring up some very good points. The more repeatable processes there are in an organization, and the more visibility into the drivers of value, the more certainty there is.
At least 4 of the “8 things” include process & technology around:
1. DEBATING – can we actually achieve what we have set out to do, and have we set the right targets? This would involve financial & operational modeling (P&L, Debt, M&A vs. Organic, headcount, etc). Once we agree on the “do-ability” of the model, the model must inform the next step:
2. DECIDING – we must make a commitment to deliver what we said was do-able, and what was aligned with our strategy. This usually takes the form of budgets, plans & forecasts (including Operating plans, Capex plans, Workforce plans, Revenue & Expense forecasts, etc.) When the plan has been finalized, we deliver to plan.
3. GATHER – As we are delivering on the plan, we must see how we are doing. So we report variance, we present business intelligence, we do exception reporting, etc.
4. ANALYZE – We look for ways to improve what isn’t working and to replicate what is. We look for cause & effect relationships and “learn” from the business…feeding back that learning (results, rules, workflows, etc) back into the models used in “Debate” and the drivers of the plans used in “Decide.”
So we close the loop and make executing on strategy a repeatable process.
Thanks for the blog.
-Ron
Ron,
I stumbled upon your blog. I have always been interested in the connectedness between Strategy and Execution. I am trying to identify a word, real or created, that captures the the fusion of these two words. The purpose is to come up with a name for my company. If you feel like throwing out a couple names that would be greeat. By the way, I am a graduate ’98 of USF’s MBA program, have held many positions focused on strategy and currently work in real estate development.
Any thoughts?
Peter