Derek's Blog on everything and everything else...

During the past two decades in working with more than 100 companies in the field of strategic leadership and strategy development, I found the number one complaint from EXCO teams to be “that strategy fails at the execution phase”.

 Harvard Business Review calls this the execution gap (Martin: 2010). According to Fortune Magazine (Fortune 27 December 1982, p38) as well as renowned author, Eric Kurjan (2011), 90% (nine out of ten) strategies fail due to poor execution… In fact if you google “statistics on why strategy fails” you will get 83 000 000 results of which more than 80% tells you that strategy fails due to poor or no execution… Why, Why Why???

A myriad of authors have attempted to explain this ongoing phenomena; thus my attempt here joins a list of many. Nevertheless, I have paid my dues in this field and am confident that I can add to unravelling this predictable misery. I believe, in heart and mind, that this execution gap has three primary sources…

1.       Incompetent EXCO Team…

Amazing how much blame senior management often bestows on the entire organisation for failure to execute strategy. Maybe I’m missing the boat here, but when did life start working this way? For as far as I can remember, where the team loses we fire the coach; where the General loses battle after battle we get rid of him; and yes, where the EXCO team fails to execute strategy, we need to appoint new ones. One of the main reasons for executive failure is the classic case of a Chef who became the CEO, but refuses to get out of the kitchen. Employees are paid to do work and executives are paid to keep the organisation relevant. Keeping relevant carries higher risk than executing work, thus we pay executives higher wages. Now, to keep relevant requires effective strategy. This is all that executives must do, they have no other work. Yet, according to Kurjan (2011), 85% percent of executive teams spend less than one-hour a month on strategy issues. How can this be???

2.       Strategy is only 20-30% of what we do in organisations…

Yes, strategy is 80%+ of EXCO’s work, but this does not mean its 80% of the organisations work. Most of what we do in organisations are process-based. The accountant does the books as she has done them last year and the year before, and she will do so next year and the year after that. Reality is that most employees do what they have done yesterday, and there is absolutely nothing wrong with this. In fact, process-based work holds much less risk than project-based work (strategy & change). The one is based on a predictable past and the other on a very unpredictable future. And YES, we must work with the future, but whilst a few well paid people do this, the rest of us must keep bread on the table. In psychology this is called countertransference. EXCO has targets and so they push everyone else to follow suit, which is immensely confusing to the receptionist – what must she do now, answer the phone 3.5 times faster than yesterday???

3.       Lack of Quantification…

If you cannot measure it, you cannot manage it. Yet, from all the strategy documents I have ever seen, and I have seen many, only about 5% are measurable. Over the past four years I have spent much of my time with other professional colleagues to develop a master scorecard system, which aims to translate strategy to action through quantifying both strategic and tactical work into one scorecard. It is my view that work only starts making sense if we can accurately measure its sum total. In other words we need to create one master scorecard that measures all work within the organisation. Such quantification should be translated to other systems such as performance management, budgeting, etc. But this is a whole new story for another editorial…

      I believe that this ‘disconnect’ between strategy and action starts with a strong realisation by executive teams that strategy is their only work. To become a senior executive, you first need to be fired from your previous job. You are no longer the engineer, the accountant, the lawyer, or the whatever. Your job now is to keep this organisation relevant. Once this awareness has dawned, ask a few simple questions…

·         What must we change to achieve our vision?

·         What must we perfect to stay accountable to our mission?

·         How will we quantify the above into one scorecard?

·         Who needs to take responsibility for what?

·         How will we all behave in executing our task (our values)?

© 10 April 2014