For every organisation there is the continuing dilemma of pursuing the ‘right’ strategy.
Orthodoxy suggests that strategy can be reduced to ‘standard’ components which any student, of organisational leader, simply has to understand and, depending on the circumstances, apply.
If there is any advice on what implementing strategy actually means for leaders it is frequently pretty facile.
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Whereas in the past, for instance, there was guidance to be directive and use ‘no-nonsense’ leadership, more recently it is more that writers on strategy will advocate the need to be consultative.
The reality for any managers given the task of developing strategy is that whilst you plan for certain outcomes, you remain sufficiently flexible to adapt should circumstances require.
In the contemporary lexicon you have to be prepared to be both ‘adaptive’ and ‘agile’ in execution.
In all my reading of management books and articles the one thing that tends to be notable by its absence is telling you how to do it; and books on strategy are undoubtedly the worst offenders.
Application of principles, it seems, is left to the individual to sort out for themselves.
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Interesting in the March 2015 edition of The Harvard Business Review (HBR) there is an article in which research that has been carried out into strategy execution and, more particularly, the reasons why failure occurs and how to avoid them is explained.
In ‘Why Strategy Execution Unravels – and what to do about it’ authors Donald Sull, who lectures at the MIT Sloan School of Management, Rebecca Homkes, a fellow at London Business School’s Centre for Management Development and fellow at the London School of Economics Centre for Economic Performance and Charles Sull, cofounder of and a partner at Charles Thames Strategy Partners, describe research based on 40 empirical experiments carried out in companies as well as a survey involving 7.600 managers in 262 companies.
Using the results of a survey of over 400 CEOs, Sull, Homkes and Sull show that ‘executional excellence’ of strategy is the number one issue that concerns them.
Crucially, they demonstrate using the results of other studies, between “two-thirds to three-quarters of large organizations struggle to implement their strategies.”
Though their research is not complete, Sull, Homkes and Sull believe they have discovered ‘valuable’ insights the most important of which is that a number of “widely held beliefs” concerning how to implement strategy are “plain wrong.”
In the HBR article Sull, Homkes and Sull present five “most pernicious myths”.
The first of these myths is that execution equals alignment and they suggest that their data shows that this occurs because leaders they ignore the importance of “powerful drivers of effectiveness”; decision rights and information flow.
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Strategists, it seems, are too optimistic in believing that managers will cooperate in doing what is required.
The reality is somewhat different.
When it came to commitment “across functions and business units” research carried out showed that only 9% of managers believe they can rely on others.
Sull, Homkes and Sull’s advice is that more effort is needed to achieve coordination across the organisation.
The second myth is that execution means sticking to the plan; “real-time adjustments require firms to be agile.”
This may seem obvious – that organisations must continually adapt the plan.
However, Sull, Homkes and Sull caution that there is a balance to be struck between being sufficiently agile but adequately discerning not to waste time and effort of initiatives that may be “peripheral”.
Though agility is essential it must “fit within strategic boundaries [and..] be balanced with alignment.”
The third myth is that communication equals understanding.
Fascinatingly Sull, Homkes and Sull cite research within the companies they have researched, only 55% of the change managers who will explain it to “the troops” could name even one of their company’s five key strategic priorities.
Others finding are even more shocking.
For example, their research shows that less than a third of those who report to a senior executive can “clearly understand the connections between corporate priorities”.
When this question was put to frontline supervisors and team leaders the figure falls to only 16%.
Sull, Homkes and Sull offer advice that what is important in communication is simplicity and avoiding too many objectives that simply confuse.
Additionally, any inconsistency in what is being communicated will cause confusion.
The fourth myth is especially interesting; that a “performance culture drives execution.”
The desire to develop a performance culture through measuring the impact on a range of key indicators of success is widely accepted as the way to know what works (and what doesn’t!)
The trouble is, it seems, over-obsession with measurement can blind organisation to opportunities that exist.
Being agile, it is explained, is about inculcating willingness to experiment and, as a corollary, accepting that things may not turn out as anticipated.
Though it’s something of a cliché, there is learning in failure though in the increasingly results-obsessed world there is less room for failure than ever.
Finally the last of the five myths is that execution should be “driven” from the top.
It is perhaps the ultimate irony strategy fails in execution because those who formulated it, senior executives, feel that they must be involved in every aspect of its implementation.
Instead, Sull, Homkes and Sull recommend, leadership of strategy to be seen to be authentic must be achieved by distribution of effort.
After all, they argue, for the majority of those employees whose commitment to the espoused in strategy is essential to success, these “distributed leaders” represent management; not the executives with whom employees rarely, if ever, interact.
Additionally, it power is too concentrated at the top of the organisation there is a very high likelihood of undermining middle managers both in terms of their influence and their skills as demonstrated by decision-making and initiative.
One other danger that Sull, Homkes and Sull identify in their research, is what they term the “alignment trap”
The alignment trap, they explain, occurs when execution of the strategy is not felt to be succeeding as fast as anticipated and senior managers believe that it is their duty to interfere to achieve expected results.
The result of such interference, they contend, simply makes things worse as a consequence of “micromanagement” undermining experimentation that is a crucial component of agility and the “peer-to-peer interactions that drive coordination.”
Further deterioration is inevitable they believe as senior managers engage in more interference which, as they explain, leads to a “downward spiral” in terms of execution of strategy from which there is no escape unless senior managers learn to step away.
In an increasingly complex and uncertain world developing and, more importantly, effectively implementing appropriate strategy is increasingly difficult.
As the results of the research carried out by Sull, Homkes and Sull in HBR show, there are good lessons to be learned; providing you appreciate the pitfalls.