Barriers to Strategy Execution

February 10, 2009
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We were asked about what we’ve seen are some of the barriers to effective strategy execution and shared the following:1. No vetting of the strategy to see if it’s actually do-able (do we have the right capital, right products, right…

We were asked about what we’ve seen are some of the barriers to effective strategy execution and shared the following:

1. No vetting of the strategy to see if it's actually do-able (do we have the right capital, right products, right markets, right people)…no debate to refine the strategy,

2. Low/No agreement on what the strategy actually is – even among the C-suite executives (it’s always a surprise to see this),

3. Low connection between the corporate financial & operational business models (made in the vetting debate) and budgets, plans, & forecasts,

4. No buy-in to the budgets, plans, and forecasts (usually due to management overrides after a bottoms-up exercise),

5. No agreement on what the right measures are to see how well we're doing, and no visible connection between those measures and strategic objectives,

6. Low/No belief that the numbers seen are accurate (or at least the same version), as well as a lot of manual effort to get at the numbers,

7. Low/No understanding of the root causes as to why the company achieve, underachieve, or overachieve results,

8. No connection between root-cause analysis and tweaking the strategy ("hey, we are losing money on product x, and it's not a loss-leader, should we be in that business?"),

9. Low accountability for results.

When it does work, we've seen things like accounts receivable associates having a business intelligence dashboard that shows how what they have a daily impact on (days sales outstanding, cash collections for example) directly impacts strategic objectives (like profitable revenue growth).

And then there’s company culture.  I just got this book the other day called The Three Laws of Performance: Rewriting the Future of Your Organization and Your Life (J-B Warren Bennis Series)
by Zaffron & Logan (a Warren Bennis book). And while I'm only part way through, the key may be in how strategy, execution, and the entire company occurs for employees and leadership. In other words, what may keep people from doing what's required to execute on strategy is that they already "know" the outcome ("it won't make a difference," "yet another strategic initiative," "just wait and it will change," "I can't make a difference" and so on). It could occur to them as "doomed to fail," "weak," "not the way I would do it," "more of the same," and so on. This book is saying our performance correlates with how situations occur to us. So we would have to change how things occur to us first.

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