1. Lack of knowledge of strategy and of the strategy process. In hundreds of strategy
consulting engagements, I have found few senior teams who really have a solid grasp of
strategy and of the strategy process. The reason for this lack of knowledge is simple –
few, if any, senior executives have come up through a strategy function. Not surprisingly,
therefore, strategy oftentimes gets created, which is not strategy at all. No wonder the
execution is also a failure.
2. No commitment to the plan. People were not involved in its creation. As a result,
people don't "buy-in" to the plan and don’t feel committed to it. Equally serious, are the
legitimate objections to the plan that are never voiced, because either the leaders don’t
create an open environment in which people feel safe, or the culture doesn’t support it.
3. The plan was not communicated effectively. An article in the May/June 1999
Strategy & Leadership journal mentioned that the typical company gives access to the
plan to only 42 percent of managers and 27 percent of employees. In those situations
where it is communicated, it is oftentimes unclear what the strategy really is.
4. People are not measured or rewarded for executing the plan. In the same Strategy
& Leadership article, the authors say that less than 60 percent of companies tie incentive
compensation to achieving their strategic plans, while 97 percent tie compensation to
their financial plan results. Later, we will discuss how to tie the strategic plan to the
corporate performance management system.
5. The plan is too abstract; people can't relate it to their work. People do not see if or
how the strategic plan changes what they do. Alternatively, the plan is not translated into
the short-term actions that employees need to take.
6. People are not held accountable for execution. Accountability is very different from
responsibility. With accountability, I hold people ultimately responsible for portions of
the strategic plan and for predetermined results from that plan. Rewards and/or
punishments are administered accordingly.
7. Senior management does not pay attention to the plan. We see this in cases where
once the strategic plan has been created, senior management attention reverts to day-byday
business as usual. In change management dynamics, we find that “what management
pays attention to,” is one of the most powerful enablers of new initiatives.
8. Strategy is not clear, focused and consistent. As a result, people cannot understand
the priorities of the business; anything seems to go. Also, they cannot “internalize” the
strategy and act upon it.
9. Conditions change making the plan, as conceived, obsolete. No effort is made to
update the strategy on a regular basis.
10. The proper control systems are not in place to measure and track the execution
of the strategy. The organization also has no process in place to learn from the strategy
and to update it as necessary. I will say more about this later.
11. Reinforcers, such as, culture, structure, processes, IT systems, management
systems and human resource systems, are not considered, and/or act as inhibitors.
This is one of the major reasons for the failure of strategy execution. In this regard,
culture is especially critical. Each of these elements must align with the proposed strategy
for the execution to be successful. Later, I will discuss a framework to accomplish this.
12. People are driven by short-term results. Short term metrics and the need to
produce financial results for shareholders, drive people to focus on day-by-date tactics,
rather than long-term strategy.
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