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Strategy Execution

Revision as of 18:47, 20 January 2021 by User (talk | contribs)

When asked to define strategy execution, most managers respond with statements like, “It’s the successful implementation of a strategic plan” or “It’s getting your strategy done.” While these perspectives are certainly valid, they aren’t very helpful in terms of understanding what needs to be done to actually drive business results. Here’s a look at some mainstream approaches to strategy execution:

  • Strategy execution as a process. The most notable book to date on strategy execution is Execution: The Discipline of Getting Things Done, by Larry Bossidy and Ram Charan. Bossidy, a retired CEO, and Charan, a renowned management consultant, make the case for execution as a discipline or “systematic way of exposing reality and acting on it.” They explain that “the heart of execution lies in three core processes":
    • People
    • Strategy
    • Operations

They explain the processes and descriptions managers use to successfully drive business results.

  • Strategy execution as a system. The information presented in Execution is certainly useful, but the authors don’t fully explain how an organization can implement their three core processes to achieve strategy success. There have been significant advancements in this area since Execution was published in 2002. In 2008, Harvard Business School Professor Robert S. Kaplan and his Palladium Group colleague David P. Norton wrote The Execution Premium: Linking Strategy to Operations for Competitive Advantage. In it they present their management system, which houses six sequential stages intended to help organizations capture what they call an “execution premium”—a measurable increase in value derived from successful strategy execution. They outline six stages in this system:
    • Develop the strategy
    • Plan the strategy
    • Align the organization
    • Plan operations
    • Monitor and learn
    • Test and adapt[1]


What Matters Most to Strategy Execution[2]
When a company fails to execute its strategy, the first thing managers often think to do is restructure. But our research shows that the fundamentals of good execution start with clarifying decision rights and making sure information flows where it needs to go. If you get those right, the correct structure and motivators often become obvious.


What Matters Most to Strategy Execution
What Matters Most to Strategy Execution


A brilliant strategy, blockbuster product, or breakthrough technology can put you on the competitive map, but only solid execution can keep you there. You have to be able to deliver on your intent. Unfortunately, the majority of companies aren’t very good at it, by their own admission. HBR invited many thousands of employees (about 25% of whom came from executive ranks) to complete an online assessment of their organizations’ capabilities, a process that generated a database of 125,000 profiles representing more than 1,000 companies, government agencies, and not-for-profits in over 50 countries. Employees at three out of every five companies rated their organization weak at execution—that is, when asked if they agreed with the statement “Important strategic and operational decisions are quickly translated into action,” the majority answered no.

Execution is the result of thousands of decisions made every day by employees acting according to the information they have and their own self-interest. HBR identified four fundamental building blocks executives can use to influence those actions—clarifying decision rights, designing information flows, aligning motivators, and making changes to structure. (For simplicity’s sake they are referred to as decision rights, information, motivators, and structure.)

In efforts to improve performance, most organizations go right to structural measures because moving lines around the org chart seems the most obvious solution and the changes are visible and concrete. Such steps generally reap some short-term efficiencies quickly, but in so doing address only the symptoms of dysfunction, not its root causes. Several years later, companies usually end up in the same place they started. Structural change can and should be part of the path to improved execution, but it’s best to think of it as the capstone, not the cornerstone, of any organizational transformation. In fact, our research shows that actions having to do with decision rights and information are far more important—about twice as effective—as improvements made to the other two building blocks. (See the exhibit above “What Matters Most to Strategy Execution.”)

  1. What is trategy Execution? American Management Association
  2. What Matters Most to Strategy Execution HBR