Execution Foundations – Introduction

Corporate - Foundations of Strategy Execution

Foundations for Strategy Execution

For strategy execution to be effective and successful, an organisation should have the following foundational elements or conditions in place, given its internal and external circumstances:

  • Communicate and feedback regularly and openly.
  • Great execution requires great executable strategy.
  • What gets measured, gets executed.
  • Know your business, your people, and yourself.
  • Adapt and change or perish.
  • Strategies and plans are built to be executed.
  • Execution requires vertical alignment and horizontal integration.
  • Strategy execution is everyone’s job.
  • Understand what you are accountable for.
  • Dynamic governance drives strategy execution.
  • Make human capital the creative core of strategy execution.
  • Simplicity and brevity are keys to effective execution.

Management mandate, commitment, and leadership

Strategy execution requires strong and sustained governance, leadership, commitment, and mandate by the board and management. This includes prioritisation and allocation of adequate financial and non-financial resources and embracing a culture of performance, discipline, and accountability.

Successful organisational performance

Organisational performance is dependent on the successful cascading of unambiguous corporate strategy to every individual in the organisation where there is:

  • Strong employee involvement, buy-in, and commitment.
  • A disciplined focus on only a hand-full of executable objectives. 
  • Close alignment of employees’ economic interests with those of the organisation.

What is the failure rate for strategy implementation?

Based on papers and publications, the rate of failure for strategy execution or implementation has ranged from 28 percent to 90 percent.

Several factors can help explain why there is such variation in the estimates produced including possible overestimation, exposure of organisations to different contextual and environmental factors and differences in the concepts used to define success/failure and in the samples and methodologies adopted. It is not surprising to note that most of the higher estimates presented in the literature come from consulting firms.

The results seem to suggest a downward trend on the estimates of failure, indicating that the percentage of strategic initiatives that fail has decreased over time, as shown in the figure below.

Independently of the ‘real’ success/failure rate, and despite success rates that seem to have improved over time, it is reasonable to conclude that the number of strategic initiatives that fail is still considerably higher than would be desirable. This suggests that organisations either need better implementation guidelines or need to make better use of the existing ones.

Source – Cândido, C.J.F. and S.P. Santos (2015) Strategy implementation: What is the failure rate? Journal of Management & Organization, 21(2), 237-262. DOI: http://dx.doi.org/10.1017/jmo.2014.77