8.1 Effective Execution of Corporate Strategy Copy
A well-formulated business strategy, powerful product or breakthrough innovation can put an organization on the competitive map, but only sustained strategy execution can assure long-term success. However, navigating from strategy development to execution is one of the biggest challenges for today’s leading CEOs and few are successful. An Economist survey found that a discouraging 57 percent of firms failed to efficiently execute strategic initiatives over the past three years.
The impact on competitive advantage and profitable growth is profound. Harvard Business Review reported that companies on average deliver only 63 percent of the financial performance their strategy promised. Today’s leading organizations spend millions of dollars on formulating new strategies that are designed to propel the company past the competition. However, to execute the strategy, these same organizations invest significantly less, especially when it comes to the people side of the equation. This surprising reality is a missed opportunity. Organizations can achieve successful execution, converting strategic plans into results, by investing in a robust, multi-phase strategy execution process.
Strategy execution is not the result of a solitary employee decision or action, but the consequence of a series of coordinated, enterprise-wide decisions and actions occurring over time. It is comprehensive and must bring the people in the organization along for the ride. Execution may start at the top of the organization, but must cascade down to be successful. Traditional approaches to execution typically involve one-way information flows from senior leaders to lower levels in the organization: town hall meetings, blogs, PowerPoint presentations, or off-site events.
However, these events fail to drive the necessary organizational alignment, mind set and capabilities needed to achieve effective execution and business results. Not surprisingly, a five-year Harvard Business Review study, involving 125,000 executives representing more than 1,000 companies from 50 countries, found that employees at three out of every five companies considered their organization weak at execution.
Without significant organization involvement, a strategy that sounded good in principle begins to dissipate and move in 1,001 different directions. Even the most promising business strategies can be unsuccessful.