Although implementation of strategic goals is vital to business, the actual execution of strategic goals is not always highly successful. According to some estimates, as many as 80% of organizations fail to execute their strategy well.
What are the key stumbling blocks to strategy execution?
Strategy Execution Needs Stronger Intra-Company Cooperation
One impediment to successful strategy execution is cooperation between departments and units of a company. While managers cited in the Harvard Business Review feel that they can rely on their bosses and their direct reports more than 80% of the time to deliver on strategic goals, the number drops dramatically once they are asked if they can rely on cooperation between themselves and other units or functions of the organization.
Could they rely on managers in other departments or functions? They could rely on them all the time just 9% of the time and some of the time just 50%.
The authors of the HBR article suggest that specific objectives for intra-company cooperation be built into the company’s strategy goals.
Currently, the method of achieving strategy goals relies on a strategic plan with measurable goals and objectives that is aligned with departmental and other goals. While this part of standard practice has done much to communicate goals, it is not sufficient to fully operationalize them.
Communication: Lost in the Noise?
Another primary impediment to strategy execution is communication and understanding. The HBR study indicated that, even though upper management felt that corporate strategy goals were being well-disseminated throughout the company, successful receipt of the goals is less robust than they believe.
Part of the issue has to do with the method of measuring receipt of the goals. When managers are asked if they understand the strategic goals, a high number – nearly 85% – reply affirmatively.
However, when employees needed to answer completely open-ended questions about their company’s strategy, their comprehension plummets. When asked to name the company’s key priorities, for example, only 55% of managers could write down more than one. In other instances, just 33% could name more than two.
Why did employees have such difficulties naming strategic goals? Part of the issue seems to be a certain degree of corporate noise. Meetings are often used to introduce strategic goals to every level of employee. However, often, at the same meetings, a number of other changes are also discussed, including core competencies for employees and non-strategy-related corporate initiatives.
Employees may not filter or apply the strategy execution-specific parts of the plan because of the breadth of information.
Measurement is also an issue in why communication is such a large factor in the failure of strategy execution. Many companies measure successful communication of strategic goals by the amount of steps taken to achieve it. Successful communication via that metric, unofficial or official, can be counted in the number of company meetings, e-mail disseminations of strategy, and newsletters.
However, a better measurement is likely how successfully team leaders can spontaneously name what the strategic goals are.
Other solutions include a one-page strategic plan disseminated to every employee. The universal distribution contributes to employee engagement on every level.