Why businesses need to focus more energy on the execution of strategy
Strategic change is the norm rather than the exception in today’s turbulent world. Whether disruption opens windows of opportunity or poses serious threats to competitiveness of businesses, either scenario requires one response: the willingness and ability to make a strategic shift. Even the most robust strategies, however, can stumble at the point of execution.
For over a couple of decades, research has reiterated that the biggest impediment to business success is poor execution of strategy – two-thirds to three-quarters of large organisations struggle to execute strategy well. There continues to be a big gap between the ‘knowing’ and the ‘doing’.
In order for organisations to implement a new strategy or enhance the effectiveness of a current one, they must make radical changes – rather than taking piecemeal incremental steps – and all the different areas of the business need to be aligned with the plan to harness its full potential.
Crucially, the most brilliant strategies will not deliver if you don’t invest time and energy into bringing people on board. It is imperative to win the hearts and minds of your team to build solid commitment behind the firm’s strategy and its execution. It is this softer stuff that businesses find most overwhelming and towards which they pay insufficient attention or dedicate inadequate resources.
Even the most robust strategies can stumble at the point of execution
The challenge of execution is only becoming more daunting as external pressures are pushing businesses to think in unprecedented ways about their strategies. For example, increasingly companies are expected to play a more active role in tackling complex social problems. Social responsibility is certainly not a novel thing but the challenge is to make it an integral part of running a business day to day rather than an isolated activity. That calls for a radical change in shared values in these companies to embrace the notion of ‘compassionate capitalism’.
Similarly, the expectation that businesses play their part in reducing the carbon footprint is now non-negotiable and it requires going beyond superficial changes to weaving it into their strategy and aligning organisational structures, systems and culture around it.
Given the importance of nurturing and harnessing the full potential of people, businesses are up against another challenge: understanding and managing the millennial generation.
There is increasing evidence to suggest millennials are more sensitive, have little tolerance for hierarchy and formality, desire more inclusiveness and participation, as well as more work-life balance. Businesses therefore need to make deep cultural changes to motivate this new workforce to support and deliver their strategy.
The expectation that businesses play their part in reducing the carbon footprint is now non-negotiable
That means being change-ready, and a healthy, internally well-aligned company is more likely to be able to view these social problems or the sustainability challenges as opportunities for innovation and competitiveness.
At Imperial College Business School, I tailor the content of what I teach to these big challenges and use innovative pedagogical approaches to reduce the gap between the knowing and the doing. In other words, to make the difficult and abstract issues that are so pivotal to executing strategy effectively more tangible.
For example, what needs aligning with a strategy: what is the compatible internal architecture required? How do you do the ‘values-work’ to change culture to align with strategy? How do you build change-readiness into the DNA of a company? How do you navigate strategic change to get buy-in from people to a new business strategy? How do you maintain a proactive rather than reactive stance in a fast changing environment? How do you use people at different levels of an organisation, especially middle managers and those at the coalface, as a resource during times of change?
I use hands-on simulations, role-plays and exercises in class. It is a safe space for young executives to experience, observe and reflect upon their own patterns of responses to handling change situations, decision-making and team-working.