Strategy execution has always been notoriously difficult. Over the past four decades, scholars and consultancies have published numerous studies on failure rates, reasons for failure, and the most important challenges that executives experience when trying to execute strategy.
As illustrated in an earlier article, these studies have revealed failure rates of up to 90% and at least 20 key problems that hinder effective strategy execution.
And yet, despite all the research, despite all the challenges that have been identified and despite all the reasons for failure that have been found, the result is disappointing: ever changing fragmented lists of what are the most important strategy execution problems. And in response, ever changing and fragmented attempts to solve them.
Which, arguably, is one of the most pressing reasons why success rates have not substantially improved over the years.
Any attempt to define the most pressing problems is partly subjective and arbitrary, especially if targeted at defining the single most important problem.
But, the alternative—the long, changing and fragmented lists of problems—is not helping us move forward either. So, to make real progress, we have no choice but to identify the biggest execution problems that we should focus our attention on.
The Six Most Acknowledged Strategy Execution Problems
The first step in finding the biggest strategy execution problem is identifying the most important problems that are acknowledged already.
To this end, I went through all the lists of strategy execution problems and solutions that I have found in publications over the past decades and narrowed them down to the most important ones. This led to the following six key problems.
- Ineffective communication. The most mentioned problem in strategy execution is bad communication. This means communication that is too vague, too late, too early, too much, too little, to the wrong people, or otherwise ineffective. Some even go as far as saying that successful strategy is all about communication. While this is a substantial exaggeration, ineffective communication is an important inhibitor.
- Ineffective alignment. Bad strategy execution is also often seen as a misalignment problem. Alignment refers to achieving coherence and consistency between different levels of strategy: corporate strategy, business strategy, functional strategy and operational strategy. When there is misalignment, the overarching corporate strategy gets diluted at lower levels, resulting in silo behavior and not everyone being on the same page.
- Ineffective change management. Strategy usually involves a lot of changes. Accordingly, managing change is an important aspect of strategy execution. Problems in this area include resistance, lack of commitment, no buy-in, and keeping up appearances. These are largely emotional and mindset problems, resulting from not having involved and engaged people enough throughout the organization during strategy generation and execution.
- Ineffective performance management. As they say, what gets measured, gets managed, and what gets managed gets done. Therefore, performance management is a key ingredient of successful strategy execution. If done ineffectively, this leads to problems such as unclear or missing objectives and targets, wrong use of measures and performance indicators (KPIs), failing resource allocation, or counterproductive incentives.
- Ineffective project management. Good strategy execution requires systematic follow-up and project management. The lack thereof is a fifth key problem in strategy execution. It comes with missing or conflicting priorities, unclear responsibilities, exceeded budgets, bad time management, delays, and poor or missing leadership at various levels in the organization.
- Ineffective strategy. Not a pure strategy execution problem, but one that is often hindering effective strategy execution: having an unclear, unfitting, unconvincing, uninspiring, non-actionable or otherwise ineffective strategy. Effective strategy execution asks for a strategy that is executable in the first place, without that, failure is built in before the execution even starts.
Together, these six problems are responsible for a great share of failure in strategy execution. Not just today or in the 21st century. No, these problems have already been acknowledged in the 1980s.
And so have their solutions. Numerous books and articles have been written about them and numerous consultants have specialized in solving these six problems. As a result, the solutions to solve these aforementioned strategy execution problems are already well-known.
Of course, strategy and execution are complex and resolving these six problems can be extremely difficult. But, at the very least, the solutions are there and it should be largely a matter of systematically applying them.
If it were this easy, this article would end right here. But it is evidently not enough, because there is a seventh problem that goes largely unaddressed so far.
Problem #7: Ineffective Sensemaking
In my experience in helping companies solve strategy execution problems, they all struggle with the six problems above. Consistently, it is these six problems I’ve most explicitly dealt with over the years.
However, I found out that solving strategy execution problems involved solving an overlooked, seventh problem. While initially more unconsciously than consciously, a crucial part in making strategy execution effective was helping down-the-line managers and employees make sense of the (newly generated) strategy in their own specific context.
Sensemaking is the process by which people give meaning to the things they face and experience. We do it all the time when we experience—sense—something new and try to figure out what’s going on.
For example, when you arrive in a country where you don’t speak the language and don’t know the culture, you immediately start trying to make sense of the things you see and hear.
The same is going on during strategy execution. Like an unknown country, a new strategy tends to contain many new elements that people need to make sense of.
They need to give it meaning by relating it to their existing ideas, assumptions and beliefs. And it is often even written in a corporate language that does not immediately appeal to them and that they need to make sense of too.
Sensemaking in strategy execution refers to the process by which people give meaning to the new strategy. Indeed, give meaning. This means that each and every person that is involved in executing a strategy needs to give it a meaning that works for them.
They look at the strategy from their own specific perspective and context and need to translate, or “contextualize” it.
For solving the sensemaking problem, none of the aforementioned six types of solution works. Efforts to improve communication, alignment, change management, performance management, project management, or the strategy on its own will not work.
They may help to improve the success rate of strategy execution, but they don’t solve the underlying sensemaking problem.
What is needed is to help people make sense of the strategy. This means taking their unique situation as starting point and help them figure out what the new strategy means in their situation.
As referred to earlier, one way of doing this effectively is by discussing examples of what the strategy could mean when translated to their specific context—their business unit, department or job. You need to answer their questions as to how their work will change according to the newly adopted strategy.
People need these examples because they cannot make the connection themselves. Or at least, not initially.
As I’ve experienced, once they get the hang of it, they can do without further support. But until that, active help with sensemaking is the only way to effectively address this seventh strategy execution problem.
In the end, solving this seventh problem is all about empathy and putting oneself in the other’s shoes. If we can manage to do that, we might avoid becoming yet another statistic in the “Strategy Execution Failures” database.