The 5 Pillars of Successful Strategy Execution

Organizations spend enormous time, effort and investment formulating their objectives and strategies, but more than half fail to execute those strategies effectively. For greater success, tackle five issues early on: 

1. Strategy formulation: Verify the strategy can be executed.

2. Execution planning: Set expectations for those tasked with executing the strategy.

3. Performance management: Assign accountability for key actions.

4. Strategy communication: Build buy-in among those who will execute.

5. Organizational bandwidth: Give managers the capacity to execute.

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“Sixty-one percent of corporate strategists say poor strategy execution is the primary reason that new growth initiatives fail,” says Marc Kelly, VP at Gartner. “It’s more of a problem than the strategy itself or the funding of that strategy, and it stems from a range of issues.”

Recent Gartner research confirms several key differences between organizations that are and are not good at strategy execution:

• Organizations that are fully successful are 1.6x more likely to establish clear strategies and expected business outcomes.

• Organizations that struggle to execute strategic objectives face three common barriers or challenges: 

  • Ambiguous responsibilities

  • Inability to cascade objectives to teams and individuals

  • Lack of clear priorities

• Organizations that are fully successful are 2x as likely to recalibrate and adjust execution plans in response to insights provided by execution metrics or changes in the business context.

To combat strategy execution challenges, learn from successful peers and address the following factors upfront.

Eighty-three percent of strategies fail due to faulty assumptions. Test assumptions about the executability of strategy as you formulate it. 

History is littered with examples of organizations where growth stalled based on flawed assumptions about customers, competitors or internal capabilities. Lack of clarity leads to unwanted surprises during execution and reduces managers’ ability to monitor uncertainties and respond accordingly. To get execution right, clarify and test relevant assumptions. Use mechanisms to both identify and challenge strategic assumptions so your organization can avoid unanticipated issues that derail implementation.

Sixty-seven percent of key functions are not aligned with business unit (BU) and corporate strategies. It's not unusual for large organizations to conduct strategic planning sessions that cost millions of dollars and hundreds of employee hours each year. Despite these efforts, strategic goals are often unclear or misaligned, creating resourcing challenges that limit successful execution.

Focus the planning process on vertical alignment between the corporate center and the BUs and horizontal alignment across BUs and functions. To avoid confusion, clarify objectives and roles for those in the business tasked with execution upfront.

Fifty-eight percent of organizations believe their performance management systems are insufficient for monitoring the success of strategy. 

Markets can shift between a firm’s strategic planning cycles, invalidating assumptions and the strategic plan. Without an effective system to monitor the performance of the strategy, organizations may execute the wrong plan for months — or even years — before correction.

For timely course-correction, use performance management systems to hold employees accountable for key goals. Frequent reviews of the plan can determine if underperformance was the result of a bad market assessment, wrong strategy or poor execution. Also consider a more adaptive approach to strategic planning.

Sixty-seven percent of employees do not understand their role in new growth initiatives. Lack of buy-in only reduces employee commitment and motivation for action, and messages that lack credibility increase organizational resistance to change. Foster a two-way dialogue about the strategy to ensure organizational buy-in with a cohesive communication strategy. 

Without a playbook to keep employees on board and actively engaged in achieving the company’s objectives, employee motivation goes down and resistance goes up, increasing the cost of execution.

When organizations can successfully unlock capacity to execute new growth strategies, they increase profitability by 77%. 

But many organizations fail to allocate the resources (assets, time, people, etc.) necessary for implementing new growth strategies. They rely too heavily on strategy creation, planning, performance metrics and communication. 

Strategists must locate where the organization loses the ability to execute due to poor coordination, which results in reduced total capacity of the enterprise. 

To unlock organizational bandwidth:

• Deploy diagnostics to test organizational capacity before launching growth efforts.

• Use new tools for clarifying midmanager trade-offs about resourcing growth bets.

• Construct new frameworks for freeing trapped resources.

• Create support structures for integrating growth projects into existing businesses.

This article has been updated from the original to reflect new events, conditions or research.