Friday, 17 November 2017 15:35

Strategy-Execution Gaps

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The statistics on strategy execution are dismal:

  • 59% of middle managers fail at resolving conflicts in corporate strategy.
  • 45% of middle managers cannot name one of the top five corporate goals.
  • 64% of cross department/functional issues are poorly resolved.

And maybe as you could expect from this:

  • 53% of companies cannot react timely to new opportunities.

You do not need to be a rocket scientist to know that this trajectory is not going to launch most companies’ latest strategic plans successfully. In fact, these data might make you feel that middle management would be better suited as test dummies for the next generation of manned space-vehicle. Granted, the data show there is a dearth of leadership in middle management, but executive tier has a culpable hand.

What This Tells Us

These data are the initial findings of Charles Sull, et al, from interviewing hundreds of companies to determine the problems in executing on strategy. I found the same issues while doing research for my latest book on gaps that inhibit companies from executing strategy. The data supports my premise that most organizations have gaps resulting in:

Pie charts of data

  • an absence of "common understanding,"
  • goal-project misalignment,
  • lackluster leadership,
  • ineffective governance,
  • disengaged executive sponsors, and
  • poor change management.

The only gap Sull's data does not directly support is poor change management, but when people do not know the corporate goals, it would be of no surprise that changes to achieve those goals rarely stick.

By looking at the first four pie charts in the figure, you can get a more complete picture of these data and it should be clear that the executives seem to be shirking their fiduciary duties. That leads to the last piece of data that Sull's team uncovered:

  • 64% of companies address employee performance issues poorly.

Once the problem is seen, whether the breakdown is with executives or middle managers, little is done about it. In fact, when Sull and his team took a closer look at the data the entire concept of collaboration and getting others to do the right things is lost in their reviews. They discovered individual actions are what make up most employee performance reports; collaboration generally does not have much weight. In other words, as long as my boss can see I get something done, it matters little what the team did.

No Wonder So Many Projects Struggle

This goes to the heart of what causes project failure. It transcends initiative size, an organization's experience, and project complexity. How can a project achieve company goals if neither project managers nor their bosses know what those goals are? The CEO, or a team of executives, can set the goals but they have to be translated into executable projects. Furthermore, as businesses try to adapt to business environment changes, those changes, too, must be converted into new directions for projects—even if that means canceling a project or two. If the middle tier cannot communicate either the goal or the change or make the tough decisions, projects will always struggle to be successful.

Some companies use executive sponsors to shepherd projects down this road. This is a great option. Even sponsors will struggle in this environment. Engaged executive sponsors can help address project issues, but they do little to solve the plight of functional and operational managers. Everyone has to have a clear picture of the company's goals. The only way to solve the problem is with solid leadership at the top: leadership that hires the right people and makes tough decisions. The senior executives need to be decisive and focused.

The Solution

In my research, it was clear. The issue is bigger than just saying we need better communication. It is a basic as vernacular: executives talk about execution, troops talk about implementation, executives want value delivered from a project, yet their metrics are on scope, schedule, and budget. It is in our actions: executive sponsors need to be engaged in the company's projects, yet they are too busy working on "higher priority" issues. If there are so many higher priority problems than the ones our projects are projects addressing, then our projects must be addressing the wrong problem.

Executives need to create and communicate clean concise direction. They need to engage their lieutenants in distributing those goals and spearheading the details plans to implement it. Repeatedly, we have seen that distributed leadership is more effective at driving our businesses. Before that can happen, though, senior executives need to become leaders that work on hiring the right people, cultivating employees, and creating a culture of leadership. A culture where a common understanding of the corporate direction a way of life.

Learn More

These six gaps—absence of common understanding, disengaged executive sponsors, misalignment with goals, poor change management, ineffective governance, and lackluster leadership—are explored in detail in my new book Filling Execution Gaps: How Executives and Project Managers Turn Strategy into Successful Projects available on Amazon or your favorite bookseller.

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