- We discovered that almost half of the leaders surveyed—49%—do perceive a gap between their organizations' ability to develop and communicate sound strategies and their ability to implement those strategies.
- 64% don't have full confidence that their companies will be able to close the gap.
- "Vision" isn't the problem. The majority of respondents - 75% believe their companies have clear and inspiring visions.
So what is contributing to the strategy-execution gap?
Eight central factors set apart those companies whose employees have confidence in their company's ability to effectively execute from those with reported strategy-execution gaps:
- Change is well managed by top management
- Decisions and actions are well coordinated across different levels of management
- The actions and decisions of top management are consistent with their espoused objectives, values, and priorities
- Decisions and actions are well coordinated across different work units
- Effective human resource management systems and practices are in place for selecting, training, and compensating employees
- The current organizational structure supports the implementation of the business strategy
- There is a proper balance of centralized and decentralized responsibility required to achieve the strategy
- Top management appropriately involves people in decisions
What are the implications? Their survey yields several critical lessons for business leaders:
- Successfully achieving execution takes more than clarifying and communicating the organization's strategic direction. You've got to come up with a common picture, clarify the focus and scope, before you can get to the actual behaviors. For many companies, this step—clarifying assumptions—is missing. (See Discipline I - Decide What's Important)
- Few organizations appear to ask whether or not they have the proper management systems in place to support the achievement of the strategy. (See Discipline III - Align Systems)
- It is also important to go beyond gaining understanding and acceptance of the strategy throughout the organization. Monitoring may be the most critical aspect of the process. (See Discipline III. Align Systems)
- Leaders must behave in a way that is consistent with organizational values and priorities. (See Discipline I - Decide What's Important)
BOTTOMLINE: "Gaps between strategy and execution that are neglected tend to grow into chasms. Closing the gap between strategy and execution may be the most important thing you can do for the future of your company."