Lack of Strategic Clarity – Only One Reason Your Strategy is Failing

Is Lack of Strategic Clarity Killing Your Performance?

The lack of strategic clarity is a performance killer.  Much has been written about strategic clarity and why it is so critical to effective strategy execution. When strategies are unclear or unbelievable, plans never make it across the finish line.

And what good is a strategy if it is not translated into day-to-day actions and priorities that carry the organization forward?

Effective Strategy Execution is Not easy
We know that executing strategy is difficult.  A study by IBM found that less than 10% of well formulated strategies are effectively executed.  For a strategy to make a true difference, it must be properly executed.

For Strategies to Be Fully Implemented…
Once your corporate strategy retreat is over, strategic priorities and plans must be understood enough, believable enough, and implementable enough by all key stakeholders to be consistently executed across the company.

Strategic Clarity Accounts for 31% of the Difference
Our organizational alignment research found that strategic clarity accounts for 31% of the difference between high and low performing companies in terms of revenue growth, profitability, customer loyalty, leadership effectiveness, and employee engagement.  Surprisingly, few firms communicate their strategy so that the rank and file (and even top management) understand it ways that help them take actions and make decisions in alignment with corporate strategic objectives.

Four Additional Reasons Strategy Execution Fails
The first step toward successful strategy execution is making sure everyone knows the plan and how their job fits into it.  Beyond the lack of strategic clarity, here are four other reasons we found that strategies are ineffectively executed:

1. Lack of Coordination and Trust Across Functions
   Our clients report real disconnects on how things get done as their employee populations increase and the complexity of their business grows. While most people feel like they can depend on their own teams to deliver on promises, the vast majority do not have the same confidence in co-workers from other functions or in different regions.

   This is often a significant problem for strategy implementation that must count on collaboration across teams, functions and geographies.  Conflicts between departments inevitably occur and gum up the works. The lack of coordination causes delays, duplication of effort and a breakdown of accountability.

2. Lack of Agility
   Even the best laid plans cannot foresee the future. Strategies and leaders need to be flexible enough to accommodate unexpected internal and external developments — both to change direction to overcome unexpected obstacles or to capitalize on unanticipated opportunities. Many executives rely too strictly on the original plan and consider any deviation a wrong move.

   But a company needs to be able to adapt to changes that threaten success or to grab onto an opportunity that supports their plan for success. When it comes to strategy execution, change agility

3. Lack of Distributed Leadership
   We believe that leaders should guide, not drive, execution. When strategy implementation resides in a more distributed leadership model, execution is more likely to succeed for the long-term. Yes, a strong CEO can be effective in a top-down approach at the outset.  But the real decisions and actions that support ongoing strategy execution reside at the management level.

   Empower your managers to do the right thing without having to report up all the time, slow down execution, or undermine their ability to get things done efficiently.

4. Lack of Encouragement for Worthy Cultural Behaviors Beyond Financial Performance
   Certainly, performance matters and a record of high performance should be recognized and rewarded. But there are other behaviors that deserve encouragement also. Simple performance based upon financial targets alone is not enough to create meaning for most employees.

   A successful organization needs employees who work well with one another, value learning, and innovation, and promote open communication.

The Bottom Line About the Lack of Strategic Clarity
Strategic clarity is the starting point to strategy execution. But it needs to be supplemented by coordination across functions, flexibility, distributed leaders and support of desired behaviors.

To learn more, please download 3 Big Mistakes to Avoid When Cascading Your Corporate Strategy