What is Strategic Execution and Why it Matters for Your Business?
Strategy has a certain glamour to it. When we think of corporate strategy, our imaginations often conjure up board rooms, power suits, and tense conversations about the best way forward. We tend to see it through the lens of a Hollywood movie—multiple, lengthy scenes with witty dialogue and high stakes.
But what stands between strategy and the final victory? Execution.
Hollywood gives execution a very different treatment, usually shown as a montage. Upbeat music plays while slick editing speeds up the action until we get to the glorious moment when the plan finally comes to fruition. That’s because Hollywood understands a key fact about execution—it’s not glamorous. Sure, we want to see Rocky chopping wood or running to the top of a mountain once, but we don’t want to watch him do that every day for two months before the big fight. That would be…boring.
That boredom hides a stark reality: companies spend exponentially more time attempting to execute a strategy than they do coming up with it. Why, then, is execution given so little thought when the strategy is being created?
There are many answers to that question (and we’ll get to them), but the important thing to understand is that although this problem is pervasive, it’s also eminently solvable.
At MindStrength, we believe that instead of viewing strategy and execution as two separate entities—and never the twain shall meet—companies need to fuse the two together from the start. When they do, they’re able to harness the power of strategic execution by meeting goals, following through on plans for the future, and creating a long-term culture of execution. And crucially, research by PMI found that when strategic execution is improved, 65% of companies experience better financial performance than their peers.
But in order to strategically execute, you have to understand the essence of this crucial process.
What is Strategic Execution?
When an organization gives equal importance to the development of a strategy and the execution of that strategy from top to bottom, it’s practicing strategic execution.
Though it may seem easy enough to accomplish in theory, a Harvard survey of nearly 700 executives found that only 8% of top leaders are effective at both strategy and execution. The failure to implement a strategy—the “execution gap”—is one of those seemingly intractable problems that happens again and again in corporate settings. All too often, company leadership plots a course for the future and sets up a strategy for getting the business to its destination, whether it be increased profits, market share, or success. But a funny thing happens along the way. The route isn’t clear enough, so the company isn’t able to follow it to the destination. The team fails to execute.
Our team sees this execution gap as a failure to gain traction within the company. Traction is when an individual employee understands what their specific role is in making their company’s strategy successful and performs the responsibilities associated with that role. Which is why we focus on how to increase traction at an individual, group and company level while considering a company’s strategy.
Unfortunately, strategy without execution is just hot air. It’s a lot of impressive talking points and well-designed models that don’t actually amount to anything in the end.
Why Does Execution Fail?
Data behind the success and failure rates of strategy implementation isn’t perfect, but research points to some troubling trends. PMI’s report on the matter found that, on average, only 56% of strategic initiatives have been successful. Even worse, in a survey by Gartner, 80% of strategists admitted they don’t have the tools and skills to carry out strategic growth initiatives.
All this begs the question: If the problem is so pervasive and the answer so obvious, why do many companies still struggle to execute?
Sometimes the blame is placed on communication—the strategy wasn’t shared enough by leadership. Other times, it’s chalked up to a lack of alignment between teams, a failure to stick to the plan and see it through, or trouble with the company culture. In some cases, the strategy itself is to blame. Unfortunately, scapegoating the strategy often leads companies to call in third-party consultants to help them come up with a newer, “better” strategy.
In truth, we believe most companies already know in their corporate hearts what they need to do. They eat, breathe, and dream about their businesses, so they have all the information they need to make the best decisions for the future. What they need is execution, not a caregiver who will produce a deck that tells the company what they already know they should be doing. Third-party consulting firms are notorious for using generic solutions to develop strategies for their struggling clients—even when those clients are massive, specialized bureaucracies like U.S. intelligence services.
However, it doesn’t really matter whether a strategy is generated internally or externally because if it’s not executed properly, it’s useless. And execution will always fall short when it isn’t planned at the same time, or with the same intensity, as a strategy. So let’s explore what happens when execution and strategy are given equal weight.
What Is Effective Strategic Execution?
Strategic execution is taking all those talking points and models and turning them into a plan with measurable and tangible results. It’s about considering the how as much as the what, setting clear goals with proper sequencing and getting everyone within the organization on board with the plan.
Effective strategic execution answers questions like:
What are the metrics we’ll use to measure the implementation of this strategy?
What are the short-term goals we’ll focus on to eventually accomplish the long-term strategy?
How will we break down our strategy into initiatives that can be rolled out over the duration of our timeline?
How roles will need to change in order to execute initiatives at the individual level?
What information will employees need to understand and internalize knowledge?
Without thoughtful answers to questions about execution, a strategy will never be more than a handful of great ideas—existing only on paper and in the heads of company leadership.
Get buy-in from leaders and individuals at all levels.
Execution is carried out by the people with boots on the ground, so a company that wants its strategies to succeed needs to involve more than just the C-suite during planning. You need participation from division leaders and group leaders—anyone in regular contact with the folks who will be doing the day-to-day work of execution.
Psychologically, employees who feel involved in the process will have a greater sense of commitment to the strategy. In fact, a Salesforce study found that people are 4.6x more likely to feel empowered at work when they feel their voices are heard. By including people at every level of an organization, leaders will be better able to articulate what the strategy means to the individuals who are executing it. That’s essential because there are generally two ways individuals learn about and internalize their role in executing a strategy.
One is tactical—there has to be a way for employees to comfortably engage with the specific information they need to execute in their day-to-day roles. The other is conceptual. If an employee has questions about the bigger picture and how their work relates to it, they must be able to talk to a leader—say, the group VP—and have those questions answered. Of course, every CEO would love to be able to sit down with each employee and walk them through the vision for the next year, put it in context, and then explain exactly what that individual will be doing to support these initiatives throughout the year. This just isn’t possible given the limits of time, space, and scope.
But if the group VP has been privy to discussions about the strategy and has a holistic understanding of how the members of their team relate to the whole, then they can explain it conceptually when a lower-level employee asks about their place in the plan.
Ultimately, strategic execution is only possible when there are people at every level of an organization who understand the strategy and can walk others through it.
Set clear goals with proper sequencing.
Companies usually do a great job forecasting financial goals and understanding how money flows from top to bottom. They rely on quarterly and monthly planning to keep an eye on finances and get an in-depth look at what’s happening within their businesses.
Companies need to tackle execution with that same rigor.
For example, let’s say there’s a company that has been successfully producing PCs for the last 20 years. It has all the infrastructure in place—from manufacturing and partnerships to customer support and sales—to keep the momentum going and expand its offering. Now, it wants to produce tablets.
By the end of the year, leadership decides it’s feasible for the company to have 20% of the tablet market. But it’s going to take a lot of hard work and many detailed steps to reach that annual goal. Instead of creating an execution plan that’s heavily focused on the first month, the company would be better off first considering how to properly sequence all of its tablet initiatives throughout the year. For instance, the first month would be focused on the traction needed for research and development, rather than final box shipping or the return process. There will be a sequence to address all of the other initiatives in due time. But if the company tries to push all the information out at once and focus on every goal that needs to be accomplished, none will gain enough traction with employees to be successful. If it plans sequentially, they’ll likely reach their goal of capturing 20% of the tablet market by the year’s end.
By properly sequencing the information and the initiatives that employees are responsible for integrating into their work, companies can continuously educate and position their workers to support different initiatives related to the strategy throughout the year.
Establish metrics to track performance.
Once a company outlines its goals and gets buy-in from the entire company, its leaders may believe they’re ready to execute. But one key component is missing—the proper metrics to evaluate progress.
It’s smart to have annual or quarterly goals to work toward, but to the average employee, the long-term goals seem detached from the day-to-day work. And that’s often because many companies focus on lagging indicators (measurements of the outcome) rather than lead indicators (measurements of what influences the outcome).
Let’s return to the example of the PC company trying to break into tablets. If their goal is to capture 20% of the tablet market by the end of the year, they can easily become focused on metrics that measure a lag indicator—market share. So execution would be based on the number of tablets sold as the year goes on. But measuring execution by a lag indicator isn’t helpful for most employees because it’s not easy to connect the work they’re doing to any changes in that metric.
Lead indicators, on the other hand, are metrics that employees can aim to achieve directly through their work. For example, if for every 10,000 calls the sales team makes, market share increases by a certain sliver of a percent, then achieving a set number of calls each day becomes a lead indicator that employees can tie to their daily work. By setting tangible benchmarks to achieve this metric, they influence the lag indicator—market share—as the company progresses toward its goal.
Not only does the company have better metrics to help its leaders understand whether they’ll hit their goals, but the employees have a clear sense of how their actions influence success.
Why Does Strategic Execution Matter for Your Business?
It’s clear that the global digital transformation has amplified competition among companies. In industries that already see fierce competition, the pace of change, disruption, and iteration are becoming more frenetic. Technology companies, for example, continuously release updates every few months, rather than on an annual or semi-annual basis.
That behavior means most industries are shifting year-long strategic goals to semi-annual or quarterly goals, increasing the already desperate need for strong execution. If there’s a delay in reaching these goals due to a traction gap, especially in more dynamic and competitive markets, the loss of traction is often irrecoverable. Failure to execute one strategy means the next strategy has to be adjusted to take that failure into account. Companies caught in this cycle easily become stuck in a no-man’s-land, where the cascading and compounding effects of their non-execution lead them to the brink of disaster.
Think about one of the reasons why startups are able to compete with much larger businesses (and win)—they’re able to execute better and faster. That’s not to say an established company with thousands of employees can’t innovate, but to do so, it has to focus heavily on execution and use its strengths well.
In other words, the company needs to practice strategic execution.
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Strategy and execution are like two muscles working together to take action, like your bicep and tricep. In order to move your forearm up and down, they have to work in tandem, each muscle contracting at the right moment to produce the action you want. Without one, the movement isn’t achieved.
Fortunately, the gap between strategy and execution is preventable. If companies make traction a goal while developing their strategies—if they use both muscles—they’re bound to execute their initiatives. And just as poor execution compounds and quickly becomes endemic, great execution builds on itself, creating more momentum for future initiatives.
If you want to learn more about how your business can overcome the traction gap and take advantage of the compounding effects of execution, then let’s get started!