The Meaning of “The Gap Between Strategy and Execution”

One of the best ways to serve my clients is for both of us to be on the same page right from the start.

Today I’m thinking of terms and phrases that two people can interpret or understand very differently. When such a disconnect between the advisor/coach and a client happens, it doesn’t usually end well.

The phrase that often can have different meanings is . . . “The gap between strategy and execution.” This GAP is most often associated with ‘a failed implementation’ or that ‘the wrong resources were allocated.’

I’m again brought to think about this because of the overwhelming evidence in the statistics from the Harvard Business Review, Fortune Magazine, and Project Management Institute (PMI), among others. The troubling data state that “70 – 90% of strategies fail to be successfully executed” [i] by small businesses as well as large multi-national conglomerates. 

It seems that most organizations may be in denial of this fact.

If ever there is an opportunity to better realize priorities, profits, and performance, it is in fulfilling the execution of strategy.

Why focus on this now?

Consider this simple bit of math: for every $1Billion spent on projects, $97 Million is wasted. Nearly 10%.

Globally, companies spend roughly $8 Trillion on projects each year – roughly 30% of the entire US economy. To create waste of $800 Billion seems inconceivable. But that, too, is a fact.

The most common reason for the waste is a lack of understanding of what the end user wants or expects or how long it will take to deliver.

The good news!!

In another report, the “Fortune Knowledge Group found that 7% of organizations are consistently successful in executing their strategies”. [ii]

It is time to consciously raise the bar on strategy and execution. How to do that?

A live example

Allow me to provide an example of how it was achieved in a live client situation.

The client is a large services organization operating in multiple countries. We were working with the Canadian business. Over the course of several months and a series of workshops, we developed an executable strategy that was based on their ‘capabilities system’. They selected 5 unique capabilities that are most difficult to copy by their competition.

In the first phase, leaders and managers, TOGETHER, designed an executable strategy based on their decisions on what TO DO and what NOT TO DO. They call it their ‘Way to Play’. This was developed within our Four Boxes™ Tool At each step, they assess if their capabilities system is aligned with the strategy, products, and services that create value for customers and the company.

To be clear – the capabilities system consists of their skills, tools, processes, capacity and will to take action. Their unique capabilities would be difficult and expensive to replicate in similar organizations or by competitors.

Throughout the process, they are focused internally and not beholden to any industry benchmarks or measures. The team is more intent on being effective in execution, not in being efficient or following industry trends. Collectively, the team feels that being effective provides a competitive edge. It does!

The second phase of the strategy was to determine where investments would have to be made. Here they see an opportunity to trim out what does not matter and boost the capabilities that create impact.

The importance of this step is to manage change. By effectively managing the change it allows the company to be leaner and grow stronger versus the traditional method of across-the-board budget and personnel cuts.

In the third and final phase, their culture was put to work in identifying where risks could emerge. The risks were identified by carefully curating internal and external indicators, patterns, barriers and vulnerabilities.

To manage risk means they must manage the conditions to enable effective and efficient execution with the least number of detrimental events (if any).  As conditions shift, they apply the tools for monitoring and reporting through established communications methods.

Throughout each of the phases, the leaders and managers are coached to ensure they remain consistent with the main purpose and strategic intents of the business.

The combination of the workshops and coaching on new strategy tools allowed them to achieve the clarity that supports effective execution.

What this means for strategy execution

At the end of the day, what this means is that strategy and execution co-exist. Both are reviewed on a regular basis against the established terms of performance. It places execution top-of-mind. The strategy is translated into everyday operations; it is connected to cross-functional capabilities that deliver the necessary outcomes.

Ultimately, it means that the gap is eliminated. Strategy execution with this approach on the first try will result in at least a 50 – 70% success rate until the process is sufficiently refined. It will grow over time. It is equally applicable enterprise-wide, as it is at a program and project level. The process will create a cascading effect, with each level having ownership of the capabilities system for the strategy.

Let’s understand – this level of strategy execution will not happen in a matter of weeks. It is designed and implemented over months and results are measured accordingly and progressively.

The objective is to turn the statistics on their head.  The goal is to reach execution success at 70-90%For Now

Now those would be results truly worth praising.

[i] Harvard Business Review – July/August 2021

[ii] Fortune Magazine

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