Poll: Causes of Poor Strategy ImplementationStrategy Execution Poll And Comments

July 15, 2010

What Is the Primary Reason for Poor Strategy Implementation?

Results, interpretations and conclusion of votes from a recent survey of a national business

audience.

Brian Shepherd

Shepherd Consulting LLC http://www.accountcaffeine.com/strategy-implementation-implementing-strategy/

www.linkedin.com/in/briansshepherd

San Francisco 415-516-8433

http://www.accountcaffeine.com/strategy-implementation-implementing-strategy/

www.linkedin.com/in/briansshepherd

2

Shepherd Consulting LLC [email protected]

“Our problem is not about the

strategy itself, but about our

execution of it” Tony Hayward, CEO of BP in 2007 (Robert S Kaplan, 2008)

3



Contents

Introduction 4

Top Level Results 5

Top Level Conclusions 8

Below the Top Level Results

Hierarchy Title Differences 9

Company Size Trends 10

Business-Building Functions 11

Conclusions 12

Quotes from contributors 13

Bibliography and Notes 20

4


Introduction

Kaplan and Norton concluded in a 2006 on-line survey of 143 performance management professionals “that having a

formal strategy execution system made success two to three times as likely as did not having such a program” (Robert S

Kaplan, 2008)1

From the recently HBS published book, One Strategy: Aligning Planning and Execution, Lantsiti points out that “Directed

strategy is what management believes needs to get done, while emergent strategy represents what actually gets done”.

(Lantsiti, 2010)

His conclusion? The chief impediment to successful strategy execution is inertia. He identifies Dell‟s direct sale model as

one example– “Execution continued along the old inertial path, and the organization failed to adapt”. (Comments at

http://www.accountcaffeine.com/blog/)

Purpose and Process of Polling

I wanted to understand how Lantsiti‟s conclusion compared to the perceptions of active business executives, managers

and role specialists. In June and July of 2010, I conducted an on-line poll of business connections, executive and strategy

groups on Linkedin.com. Without referencing Lantsiti‟s conclusion, I asked them what they believed to be the chief

impediment to successful strategy execution. I asked the following question and gave a choice of five answers.

Question:


Answer Choices:

1. Leadership is unsure of how to execute

2. The strategy is not well-defined

3. The strategy is wrong for the company

4. Priority is lost in daily problems

5. Not sure who is responsible for results

1 (Robert S Kaplan, 2008)

http://www.accountcaffeine.com/blog/

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The 78 respondents came from a cross-section of company sizes, job titles and job functions.

The poll included responses by C-level and VP, management and other contributors to strategy implementation. They

also identify themselves by company size. Two thirds identified their job functions in their companies.

The poll was taken between June 1 and June 20, 2010 on-line by a diverse North American business population. The

opportunity to answer the poll question was offered to over 300 business contacts and over 1000 group members on the

basis of their experience and interests relative to the question.

Top Level Results

The 78 respondents voted their reason for poor strategy implementation and some added comments in the poll and

discussion groups. Many of the best are reproduced in the “Comments” section later in this paper. I have extracted a few

here to illustrate the points made that bear directly on the reasons offered in the poll. Most respondents stated they were

drawing on their real-world business experience in casting heir vote or making their comment and this is the world I

wanted them to draw upon for their choices.

In order of preference, the single-most most common reason chosen for poor strategy implementation is

Priority is lost in daily problems: 46%

o “Face it; the toughest thing is to consistently attack/handle something on a repeated basis. There are too

many outside forces pulling in too many directions “

o “As a human being, it is quite normal that you come back to your fire fighting when a problem happens”

However, a second look strongly suggests the remainder believe the dominant reason for poor strategy implementation is

uncertainty: unsure leadership, undefined strategy and unclear responsibilities.

These important uncertainties allow strategy execution to be overcome by the inertial forces of legacy priorities, skills,

structure, rewards, and culture. No respondents chose to fault the strategy itself for as the primary reason.

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Leadership is unsure of how to execute: 28%

o “Strategy is to do with Leadership. Bad execution is to do with what the leader has not done to guide, train

or mentor the subordinates”

o “The strategy does not get translated effectively and/or efficiently from leadership through the ranks to those

who implement/execute the activities”

o “The days when a leader (like Napoleon Bonaparte) developed a strategy and an organization executed it

are over ... I hope”

The strategy is not well-defined: 19%

o “As much time need be spent on timelines and clear accountability assignments as was spent on developing

the strategy in the first place “

o “We tend to separate the conception of a strategy from its execution. This is, in my view, a mistake”

o “PowerPoint”

Not sure who is responsible for results: 6%

o “People try to move ahead but are unsure exactly what they should do, who all should be involved “

o “Lack of clearly defined actions, owners and accountability/monitoring”

The strategy is wrong for the company: 0%

Although there were no votes for this reason, there were a few comments that any definition of strategy that does not

consider the execution capability gaps of the organization is an incomplete strategy and by implication – wrong for the

company

o “… when we separate Strategy from Execution we have a problem.”

o “Top down directed, bottom up silence, and a lack of complete understanding in the capabilities of the

people, processes, policies, practices and plant.”

o “In our good industrial tradition of division of labor, we tend to separate the conception of a strategy from its

execution. This is, in my view, a mistake.”

7


Figure 1

28%

0%19%

46%

6%

What is the Primary Reason forPoor Strategy Implementation?

Leadership is unsure of how to

execute 28%

The strategy is wrong for the

company 0%

The strategy is not well -defined

19%

Priority is lost in daily problems

46%

Not sure who is responsible for

results 6%

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Top Level Conclusions

Returning to the opening statement that the most common reason for poor strategy implementation is that the priority is

“lost in daily problems." I will draw on my consulting and leadership experience; primarily in B2B financial services

companies to suggest a real life interpretation.

No doubt, there should always something useful to accomplish in one‟s job and almost every task competes with a long

list of tasks that are beneficial.

But if, at any point in time you are tasked with working on

a poorly defined strategic goal

to deliver future results

for which you may or may not be responsible and

that your leadership is unsure how to execute

-prioritizing daily problems is probably a welcome alternative.

So, the company continues to move in the legacy direction and 90% of strategy implementations are incomplete

Below these top line numbers

There are many interesting indications of where and why strategy implementation fails. These relate to management level,

company size and job function as shown in the tables and charts that follow below.

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Hierarchy Title Differences

Interestingly, even 44% of the executive respondents, those most likely to have participated in developing the business

strategy, also faulted their uncertainty of “how, who and what” as a primary reason for poor strategy implementation. This

manifested itself as 65% in the management level that takes direction from executives.

Even 24% of those closest to top leadership (C-level & VP), with the best view of how strategy was developed, indicate

they and their own top leaders are unsure of how to execute. So it is not surprising at all that an even greater 45% of

Management identified Leadership‟s uncertainty of how to execute as the #1 reason for poor execution.

Comments on this senior level uncertainty suggest it is a product of

o high risk inherent to new strategies

o failure to operationalize the strategy

Primary reason by position and title

Leadership is unsure of how to execute

The strategy is not well –defined


Not sure who is responsible for results

Response distribution

Uncertainty (how, not defined, who)

It is worth mentioning by way of interpretation that although none of the Manager respondents chose “Not sure who is

responsible for results” that doesn‟t mean they believe that there were no problems in accountability but that compared to

the other choices, it was the least of reasons for poor execution. If 45% hadn‟t „spent‟ their vote on the perception or fact

that “leadership is unsure how to execute”, theoretically at least, some of them may have selected uncertainty about

responsibility

C-level VP Mgmt Other

24% 45% 19%

10% 20% 19%

56% 35% 56%

10% 0% 6%

100% 100% 100%

14% 29% 57%

44% 65% 44%

Table 1

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Company Size

Those who answered the poll self-identified the size of their companies and may not be consistent as to which category

they measurably belong; however, the stand out fact is that small companies have the highest uncertainty level at 62%

and this is driven almost entirely by “leadership unsure of how to execute” at 44% - twice that of enterprises and three

times of large companies.

Figure 2

55%

50%

45%

62%

22%

13%

18%

44%

33%

25%

18%

6%

0%

10%

20%

30%

40%

50%

60%

70%

Enterprise Large Medium Small

Uncertainty (how, not well defined,

who)

Leadership is unsure of how to

execute


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Business Building Job Functions

Only two thirds of the respondents identified their primary job function, and at this point, the numbers become too small to

be meaningful. However, there are some interesting indications for further research. For example, all of the “not sure who

is responsible for results” in this poll came from Finance positions. Combining the business development, marketing and

sales function results show that 45% chose uncertainty answers – a real problem if the company strategy depends on

these metrics targeted groups to make important contributions to execution. Either strategy implementation is not built into

their measureable targets or they don‟t see the link between them and company strategy. Either way, this is an important

group that feels disconnected from company strategies.

Figure 3

31%

14%

55%

Primary reason for Business Development, Marketing and Sales

Combined

Leadership is unsure of how to execute



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Conclusions:

As stated in the high level conclusion, if, at any point in time you are tasked with working on a poorly defined strategic

goal to deliver future results for which you may or may not be responsible and that your leadership is unsure how to

execute -prioritizing daily problems is probably a welcome diversion from strategy execution.

Strategy execution could be more difficult than daily distractions because daily problems are clear, urgent, sometimes

emotional, incented, familiar, and success leads to a tangible sense of accomplishment and influence on company

success

If only strategy could be clear, urgent, sometimes emotional, incented, familiar, and its success lead to a tangible sense of

accomplishment and influence on company success. Unfortunately, according to the respondents to this poll, the primary

reason for poor strategy implementation is the lack of clarity about the strategy, its leadership and accountability.

Low percentages in the execution issues by company size do not indicate better success but rather, more pressing

reasons. For instance it‟s not reasonable to believe that Enterprise size businesses with zero votes for “Not sure who is

responsible for results” indicate an enterprise strength. How can an employee be sure who is responsible when

“Leadership is unsure of how to execute” and “The strategy is not well-defined”?

More importantly, in enterprise, large and medium businesses, the greatest source of uncertainty is “The strategy is not

well –defined” The comments by respondents and other interested group members lead me to at least one actionable

conclusion and that is that the strategy is not complete until it is operationalized in a plan that is executable.

The comments suggest that a good method of accomplishing this stage is to engage the implementers in operationalizing

the strategy. Even 60% of the executive/vice-president respondents voted the main reason as “The strategy is not well –

defined”. And the managers get that because 44% of them get that “Leadership is unsure of how to execute”. However,

more than any other layers in the business hierarchy, executives and vice-presidents say the main reason for failure is

“Priority is lost in daily problems”.

My view is that the executives‟ uncertainty and lack of clarity about strategy leave employees to do what they know best –

the inertial momentum of legacy goals and tasks.

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Additional Quotes from Contributors on the Primary Reason for Poor Strategy Implementation

Comments were entered on-line to communicate, not to publish so I have corrected spelling, grammar and some syntax

for clarity.

I have identified commentators by their initials and deleted their company names to anonymize them. They know who they

are and I thank them for their thoughtful ideas, suggestions on strategy execution. I also appreciate the encouragement of

Group owners who allowed me to pose these questions in their forums.

Daily Problems

These and other comments highlight the lack of clarity, communication and even when these are successful - the

challenge of motivation or buy-in that remains to be achieved.

******

It is the lack of a systematic, consistent, and repeatable approach.

Face it; the toughest thing is to consistently attack/handle something on a repeated basis. There are too many outside

forces pulling in too many directions.

Let me ask this - Why do so many diets, work out plans, money saving attempts, etc. go by the wayside? Because it is

just too tough to do it consistently over a long period of time. Right now, for instance, I am helping an organization learn

some new software. We've defined the goals, had leadership back the decision 100%, communicated the need/desire to

change, motivated employees, provided on-site training, and the list goes on from there.

The problem is that when left to make individual decisions … related to the mundane tasks of learning the new system

they revert to something more enjoyable! I would rather … „send email forwards' than watch a 30-minute tutorial … I

would rather 'eat that slice of pizza' than the diet food shown in my diet plan, I would rather 'sit on the couch and watch my

sitcom' than go for a run.

A great book I recently read describes this in terms of rational vs. emotional decision making and likens it to a concept of

an elephant (emotional) and its rider (rational). The elephant can be directed for a period of time with constant attention

and focus from his rider; however, when the elephant truly wants to get off course there is nothing the rider can do to take

back control! T.C. - Business Development

******

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Hi Brian,

I'm a strategist and know very well that all of your answers are more or less contributing to failure of some strategies. I will

select on upper category: communication.

Normally, the people that define strategies don‟t involve all levels in the company. The consequences are when you try to

deploy the strategy or cascade it down, the language used in different levels play a very important role. If you say for blue

collar that the stakeholders are looking forward to improve the KPI regarding ROI in 3 years, they will not understand a

single word and will see the strategy as power points and folders distributed in the organization. However, if you find a

wise way to communicate throughout the organization you get their attention. Then it's all about a culture change.

As a human being, it is quite normal that you come back to your fire fighting when a problem happens. That was my vote:

priority is lost. You need to define key persons in all levels that will be pulled out from daily activities and concentrate only

on middle or long term results. So, you can succeed at implementing a Strategy. G.S. - Quality Specialist

******

Good strategies are not necessarily easy to execute. On the contrary, execution is the stage where many good strategies

and companies fail. Otherwise, everybody would do it. Good strategies however are on the spot and sustainable rather

than being short-lived.

Take the first iPod in the market as an example. Apple changed the music industry although there were many mp3

players in the market already. In Apple's case, consumer-focused strategy went hand-in-hand with excellent execution.

Flawless executions require professional expertise in all aspects of a business, relentless focus and desire to be excellent

and connections for amazing collaboration with top industry players. Let me also add tenacity; I've met many companies

that gave up right in the middle of creating "the next big thing." They didn't need an easily executable strategy, they

needed the right mind-set. C.C - Executive Director of Product Development

Assuming the strategy is good … the most significant reason why it fails is because of lack of buy-in. When the team

below cannot identify with the tasks because they do not have an understanding of the whole picture - then the execution

is likely to fail. A clear ongoing communication plan is critical. S.M. – Partner & CRM Champion

******

… I learned early on from one who I consider my marketing mentor that you must sell the salesman before the salesman

will sell. I believe that this is an important piece of the implementation puzzle, and maybe a lost art. I have talked with

many customer facing folks who were questioning the marketing strategy or product strategy while commenting that they

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did not see it having a chance to succeed or understand what the company was doing. So, it appears that another bit that

can be a challenge, is collecting feedback from the customer facing (sales, applications, or customer services) parts of the

organization to complete the data gathering aspect of formulating a strategy. I therefore, agree with an earlier comment

about too much segregation of these functional parts … where strategy sometimes appears to come out of the clear blue

with frontline folks left asking, “where did THIS come from?".

My second comment is that some organizations dump their strategy too quickly and declare it unsuccessful due to early

set backs or poor early results. In my experience, if the right controllers and monitoring channels are used and watched,

an organization should be able to make adjustments on the fly. Not dump the effort due to poor early results. Strategy is

not static but dynamic. So, some amount of flexibility in the strategy either to changes in market forces or other

developments in the marketplace is also the hallmark of a well conceived plan. R.S. – Vice President, Bus. Dev.

Strategy Is Not Well-Defined

Comments on this answer take three viewpoints.

1. The strategy is not well-defined

2. The strategy is not operationalized for execution

3. The strategy that fails to consider the organization‟s strategy/execution capabilities gap – does not meet the test of

“well-defined”

******

We find that of these choices “The strategy is not well defined” and “Leadership is not sure how to execute” are the two

primary reasons that implementation fails to meet expectations. From 30,000 feet the reason for this is that you don‟t

know what you don‟t know going in. Before you can develop a strategy you need a quantitative baseline of organizational

performance, descriptions of relevant and real organizational behaviors, gaps in performance and analysis tools. In

addition, you need a way for management to channel resources for success. In other words, you need to discover the

“Current Reality” of the organization. Without it your strategy / initiative will have a high probability for failure. M.S. –

President & CEO

******

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My experience has been that a sound strategy is an implemented strategy. Anything less and you need to question if the

strategy was sound. Buy-in, “executibility” (if that is such a word), business coordination - all of it - are clear indicators of

a sound strategy. When I think of firms that have implemented a sound strategy I think of WalMart, Apple, Best Buy, and

Cisco to start.

Their strategies encompass the entire business and permeate through the business. They aren't complex, multi-paged

PowerPoint‟s drawn up by their CEOs or their senior managers in a rah-rah off-site. They definitely aren't works of outside

consulting firms handed to the senior team. The strategy itself should be wonderfully simplistic and clear statements that

employees from C-suite to line worker are able to understand what it means for them - and importantly act to implement

the strategy. RI - Head, Americas Alliances

There are a host of reasons why strategies fail when it comes time to implement. One I would mention is that strategic

plans are often not exposed to enough cross-functional perspective. D.F. - Marketing Leader & Consultant

******

Many times early implementation failures can be mitigated by input from key sales reps (provides customer and

competitive perspective), geographic representatives (helps uncover regional differences), and trusted key customers

(understands the context in which your product exists). J.S. - Chief Strategy and Growth Officer

******

PowerPoint. H.P. - Director of Marketing

******

A good idea poorly executed is not a good idea anymore.

In fact, I have seen very good ideas being lost in translation by poor 'craft' as much as pretty standard ideas being

elevated to worthy results simply by excellent 'craft'. Look at Avatar. C.C. - Executive Director of Product Development

******

Good strategies are easy to execute, bad strategies are not.

A sure symptom of failure to come is when concerns over execution in the real world are swept away with "yes you can"

slogans. In our good industrial tradition of division of labor, we tend to separate the conception of a strategy from its

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execution. This is, in my view, a mistake.

I contend that it is the job of the strategist (and a part of the strategy) to factor in who will execute and with which means.

A strategy that does not account for limits on the ground is poor and doomed to fail.

A strategist that walks away saying "I had a good idea, my job is done" does not deserve to get paid. A good idea is not a

strategy, is only a starting point to build a strategy.

In my mind "poor execution" is an excuse used by those who propose a poor strategy - and is used, alas, in over 90% of

the strategy projects.

And it is here where I come back to the point that if the strategy is really well conceived, its execution will be "easy". S.H. -

Telecommunications Advisor & Executive

******

Top down directed, bottom up silence, and a lack of complete understanding in the capabilities of the people, processes,

policies, practices and plant. Then there is the absence of linking the new strategy to the budget and the correct metrics.

M.J. - Principal Consultant

Let‟s assume the strategy is sound. Its successful implementation is directly proportionate to its complexity and thus, the

need to involve a few, or many constituents. Regardless, before everyone goes running off with their piece of the puzzle,

nearly as much time need be spent on timelines and clear accountability assignments as was spent on developing the

strategy in the first place. An individual weak link (ownership lapse) in the process can derail the timing and even

compromise the original strategic vision. W.S. - Sales Development & Marketing

******

Leadership Is Unsure Of How to Execute

The full responsibility for successful strategy execution is with the leader. Leaders must lead and inspire their

teams with passion. Leaders with broader experience are more likely to have success translating the strategy

into execution

Hi Brian, I think all contribute to some extent but at the end of the day, it is the leadership (or not) defining top

management to execute and forward actions or guidelines to the lower levels; I think in many cases severe disasters

occurred due to inconsistent management (leadership) (A.A. - EU Director)

******

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Leadership, Leadership, Leadership takes full responsibility. Leadership is always the one to take credit if things work out

and to be accountable if things don't go well. (H.A. - International Business Management)

******

Strategy is to do with Leadership. Bad execution is to do with what the leader has not done to guide, train or mentor the

subordinates. (V.V. – Director)

******

… when we separate Strategy from Execution we have a problem.

Ideally a Strategist should be someone who has come up through the ranks and understands the nuances of Corporate

Vs Markets; engineering, marketing, production, finance, and sales. Too many Companies do not take the time to groom

potential leaders with a broad understanding of the business and thus get a myopic strategy or worse yet pull in someone

from the outside with no understanding of the business to deliver the magic bullet strategy. C.K. – Director

******

… My experience is that more-often-than-not the original strategy planned out looks quite different to that eventually

implemented. This lends credence to the fact that the implementation of a strategic plan is a "journey", where flexibility

and compromise are mandatory skills in order to deal with unplanned & unexpected obstacles that inevitably arise along

the way.

As we know, the Leader must have the passion and ability to have a clear vision and understanding of the goal, as well as

the leadership skills to clearly "sell" this to the organization.

After all, it is the Leader's attitude and his/her ability to mentor & coach those selected leaders embedded within the

organization that make the difference between success & failure. No matter how good the Leader or the strategy is, it will

all become derailed if you can't obtain buy-in from these folks. For in reality, it is they who must carry and demonstrate the

same level of passion and leadership to inspire their staff & colleagues to reach the goal.

If this doesn't happen, no matter how well thought-out a strategy is, it risks failure during the implementation process. It

must be a team effort. D.M. - Managing Director

******

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The strategy does not get translated effectively and/or efficiently from leadership through the ranks to those who

implement/execute the activities. T.P. – Business & Technical Leader

******

From my experience (CEO and, at other times, Consultant) Change management requires the following elements:

Stakeholders in the change from every department, management and staff. The risks & benefits of (not/) implementing the

Plan must be communicated to & from all stakeholders, A Change Management Plan developed by all stake holders. The

Plan must be visual. The Plan must surface Critical Success Factors. The Plan must address individual task and activities.

The Plan must address timelines. The Plan must address failure modes and contingencies. The Plan must address KPI's

expected after the change is implemented and those KPI's must be reported and followed up upon.

Utilizing these steps is a serious investment of leadership and time. The old saying is true -- Measure twice, cut once. Yet,

when done this way, I have seen pretty complex change get implemented successfully. It also brings people and

departments together, creating allies. Change is ultimately about people, more than equipment. Thus, the emphasis

needs to be with the people. G.R. – CEO

******

The days when a leader (like Napoleon Bonaparte) developed a strategy and an organization executed it are over ... I

hope.

Strategy development and execution are the responsibility of all of the organization ... only they don't know it. F.L. –

Professor & Consultant

******

Not Sure Who Is Responsible For Results

Lack of clearly defined actions, owners and accountability/monitoring. SL - Vice President

******

Strategies fail because there are no clear execution parameters. People try to move ahead but are unsure exactly what

they should do, who all should be involved ... G.S – Regional Manager

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Bibliography

Lantsiti, (2010). One Strategy: Aligning Planning & Execution. Boston: Harvard Business Press. The chief impediment to

successful strategy execution is inertia. He identifies Dell‟s direct sale model as one example– “Execution continued along

the old inertial path, and the organization failed to adapt”. (Comments at http://www.accountcaffeine.com/blog/)

Robert S Kaplan, D. P. (2008). The Execution Premium. Boston, Mass, USA: Harvard Business Publishing Corporation.

Kaplan and Norton concluded in a 2006 on-line survey of 143 performance management professionals “that having a

formal strategy execution system made success two to three times as likely as did not having such a program” (Robert S

Kaplan, 2008) page 5

“Our problem is not about the strategy itself, but about our execution of it” Tony Hayward, CEO of BP in 2007 (Robert

Kaplan, 2008) page

http://www.accountcaffeine.com/blog/

21


END

Brian Shepherd Shepherd Consulting LLC

http://www.accountcaffeine.com linkedin.com/in/briansshepherd

San Francisco 415-516-8433

Documents

Poll: Causes of Poor Strategy ImplementationStrategy Execution Poll And Comments