Top 4 Strategy Execution Mistakes to Avoid

Top 4 Strategy Execution Mistakes to Avoid
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To Avoid Strategy Execution Mistakes, Think Strategic Clarity
Strategy execution mistakes can be avoided and mitigated with strategic clarity.  Our organizational alignment research found that strategic clarity accounts for 31% of the difference between high and low performing organizations in terms of:

  • Revenue growth
  • Profitability
  • Customer satisfaction and loyalty
  • Leadership effectiveness
  • Employee engagement and retention

A Strategy Can Only Succeed if it is Executed
You can spend all the time you like in a well-planned strategy retreat creating a clear strategy designed to improve and grow your business but, if you don’t execute consistently against that plan, what good is it?  Strategy execution mistakes happen most often because strategies must go through people and culture to get fully implemented — and that can get tricky.

Some Frightening Data on Strategy Execution Mistakes
Here is some research that shocks even those of us in the field of strategic clarity and execution.

  • Strategy Failure Rate
    There is a 90% failure rate. That’s right. According to IBM, only one out of ten organizations is able to successfully implement their strategies on a consistent basis.
  • Weak Strategy Execution
    And a study conducted by Booz & Company found that 60% of employees rated their companies weak at strategy execution.

Four Strategy Execution Mistakes to Avoid
Here are strategy execution mistakes to avoid based upon the four most common factors that employees report get in the way of effectively executing even the best of strategic plans:

  1. Poor Strategy Communication
    Many companies feel that simply by repeating their business strategy clearly and often, employees will get it. But repetition does not equal understanding or strategic clarity. Though your employees may say they understand where and how the company is headed, you should test them.

    — Do all stakeholders really know what the words mean?
    — Can employees and leaders articulate the strategy?
    — Does everyone fully comprehend what the strategy means behaviorally?
    — Do employees believe the strategies are implementable with your current company company?
    — Do teams across the company following through on their plans?
    — Is the line of sight for employee contribution clear?

    Ask employees to describe the strategy and how they and their team fit in using their own words. If you are like most of our clients, you may be surprised how few have translated leadership’s strategic intentions into the way they handle their jobs.It is not the number of times you communicate the strategy, but the quality of those communications.

    When it comes to strategic communication, our organizational alignment research found that 81% of high growth companies agreed or strongly agreed that communication and information flow was timely.   At unaligned and less profitable organizations, only 6% agreed that communication and information flow was timely.

  2. Overly Rigid Adherence To The Plan
    Yes, it’s important to stick to your plan. However, there are times when flexibility is needed in order to adjust to new and changing market demands. Sometimes a detour gets you back on the right path faster than persevering through a washed-out and heavily rutted path.

    No strategy can anticipate every future event. Companies need to adjust to the facts on the ground.  Those who are best at strategy execution and strategic clarity know when to seize opportunities that support the plan at the same time as they coordinate with other parts of the organization.

    When it comes to strategic agility, our organizational alignment research found that 92% of high growth companies agreed or strongly agreed that their leaders were highly responsive to relevant market and industry changes.  Not surprisingly, more than 50% of under performing companies reported that their leaders were not responsive to external market conditions.

    Make sure your leaders are inspiring others to creatively translate problems into opportunities and asking people to challenge assumptions and look at things in new ways.

  3. Lack of Accountability and Decision Making at All Levels
    Ultimately the CEO is responsible for strategy execution; it is the CEO who often bears the brunt of business failure or reaps the rewards of business success. But the CEO cannot be solely responsible for driving the strategy forward.

    It is the level of cultural accountability and effectiveness of decisions made at all levels throughout the organization that will, in the final analysis, determine if the strategy is properly executed.

    In terms of decision making, our organizational alignment research found that 88% of high growth companies agreed or strongly agreed that company decisions demonstrated a healthy balance of short- and long-term focus.  Not surprisingly, at under performing companies, 70% of employees feel the opposite.

    Top-down implementation can have a positive effect initially, but an organization’s capacity to adjust to changing circumstances can be diminished over the long-term. Too much oversight from top leaders can deteriorate into micromanagement and suppress the agility and cross-functional coordination needed for success.

  4. Over-Reliance On Unrealistic Targets
    Effective performance measurement is the heart of a high performance culture. But make sure you are measuring the right activities, outcomes, and behaviors in the right way.

    We have seen some organizations pay too much attention, for instance, to hitting financial targets at all costs — e.g., Wells Fargo’s sales scandal driven by impossible sales quotas.  If outcomes are all employees are rewarded for, they will tend to game the system or cheat, lower their projections, or avoid experimentation and innovation.

    They may “meet targets” but in a downward spiral of productivity and potentially toxic behavior that discourages growth and innovation.

    Think of balancing performance measurement between “Doing (the results)” and “Being (how things get done)”  to create the healthy and aligned culture to execute your strategic priorities.

The Bottom Line
To avoid strategy execution mistakes and to be among the 10% of companies that consistently implement their plans across the organization, communicate, adapt, create accountability and ensure clear metrics for success.

To learn more about how to avoid strategy execution mistakes, download 3 Big Mistakes to Avoid When Cascading Your Corporate Strategy

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