Strategy Execution – Reasons for Failure?

Strategy Execution – Reasons for Failure?

It is estimated that more than 60% of strategies are not successfully implemented. For years,  strategy execution has been the top challenge of CEOs.  In fact, even some of the great companies have been the best case studies of colossal strategy failures (e.g., IBM, HP,  Xerox).

In 1993 when Lou Gertsner took the reigns at IBM,  it was sinking at a scary pace.  He emphasized that a new vision wasn’t needed.  (Vision tells where you want to go.  Strategy outlines how you will get there.  Execution is the work to get to the vision.)  At the time,  IBM was a monolithic giant that was inept at adjusting based on changing markets and customer needs.   Instead, what was needed was  practical, dynamic strategies and outstanding execution.

Executives Love to Strategize

Senior executives love to develop strategies.  It is the heart of executive leadership. Unfortunately, most strategies do not link to actual operations –  never mind getting down to the employees who make constant decisions.   So you could say that most of the  strategies developed by executives are not very strategic – since they typically fail.

Employee Involvement is Key

Strategy execution is the result of hundreds of ongoing decisions make by employees at every level.   Each is making decisions based on their knowledge,  the information they have available to them, what they believe is best, and what is in their best interest.

5 Reasons Why Strategy Fails

It is important to understand the existing strategy. Why was it established? How does it work? What are structural elements that inhibit the organization from achieving its goals? Answering these questions properly, can help in uncovering true root causes.

There are two basic forms of strategy: predictive and emergent. Predictive strategy is top-down and sets a direction based on predictions about what the market will be like. This work is usually based on research, data and input from top experts. Emergent strategy is bottom up and is based on a wait-and-see approach. Both models have their strengths and weaknesses. A key may be to leverage the strengths of both approaches, and avoiding the inherent weaknesses of each as well.

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Strategy Execution

Highlights by David Willden