Five C's of Strategy Execution

Research from the University of Cambridge estimates that more than 50% of strategies fail when it comes to execution - and in an increasingly competitive context failure rates could rise even further. At Pace, we know organizations can do better, and we consider five key factors when helping translate strategy into action:

Clarity - The conventional strategic approach emphasizes having a compelling vision, setting clear objectives and communicating consistently. Yet, nearly half of middle managers are unable to cite even one of their organization’s strategic priorities. Authentic strategic clarity requires engagement throughout the organization. Clarity should be measured based on understanding, rather than communications output, and techniques like facilitated dialogue should complement plain-language explanations to help managers understand the connection between organizational strategy and unit-level priorities.

Commitment - Traditionally, encouraging commitment to an organization’s strategy meant implementing a cascading system of delegation and incentives. However, rigid hierarchies impede the rapid responsiveness required in today's volatile, uncertain, complex and ambiguous (VUCA) context. To remain competitive, a leader should foster commitment to their organization's purpose rather than to unit-level priorities. Forward-thinking companies are experimenting with tools - including corporate, divisional and individual narratives - to help staff connect their personal missions to the company’s overarching aims and to create an authentic emotional connection between the organization and its staff.

Capacity - All too often, organizations establish unrealistically ambitious targets. According to the Harvard Business Review, only 11% of managers believe their organizations have the financial and human resources necessary to deliver on the company’s strategic priorities. By stretching resources thin, organizations forfeit opportunities to invest in high-value initiatives. Instead, senior executives should weigh alternatives, outline specific strategies, and allocate realistic budgets that signal genuine executive commitment to the organization’s official priorities.

Coordination - In one study published in the Harvard Business Review, managers reported being three times more likely to miss performance commitments because of insufficient support from other divisions, rather than their own team’s failure to deliver. While most executives understand the importance of alignment within divisions, many still underestimate the value of coordination among them. Executives can encourage coordination by helping managers understand the linkages among strategic objectives, and by creating structures that incentivize inter-divisional accountability.

Change Readiness - Perhaps most importantly, organizations need to be prepared to pivot. In the VUCA context, effective execution requires an approach that leverages conventional management theory, while also encouraging nimbleness and resilience. In response, progressive organizations in various industries are incorporating agile methodologies, evaluating progress in shorter cycles, re-prioritizing rapidly, and encouraging fluid re-allocation of funding.

Ultimately, just like effective strategy, effective execution requires trade-offs. To truly master execution, organizations must balance these five factors, continuously re-evaluate the impact of internal processes and structures that support execution, and be willing to adapt quickly as market conditions and strategic priorities change.

Referenced Articles:

Cândido and Santos’ 2015 article titled “Strategy implementation: What is the failure rate?” http://dx.doi.org/10.1017/jmo.2014.77

Sull, Sull and Homkes’ 2015 article titled: “Why Strategy Execution Fails - and What to Do About It” https://hbr.org/2015/03/why-strategy-execution-unravelsand-what-to-do-about-it