One of the great weaknesses of strategic management is a failure to pay attention to the implementation of the strategy. In fact, recently over 400 global CEOs reported that effective execution of strategy was their number one challenge out of a list of 80 issues.

The reasons for inadequate execution of strategy have been identified by a large‐scale research project that included over 40 experiments to explore the effects of changes on strategy execution. The project also explored responses to a survey administered to almost 8000 managers in over 250 companies. The research discovered five common myths that some managers believe regarding strategy execution. The five myths are summarised below.

Myth 1: Execution equals alignment

The research discovered that although managers can rely on their bosses and direct reports, they couldn’t rely on colleagues in other functions and other units. This leads to managers duplicating organisation efforts, letting promises to customers slip, passing up attractive opportunities and delaying deliverables. A failure to coordinate, therefore, is a common reason for failure in executing strategy.

Myth 2: Execution means sticking to the plan

Developing budgets, assigning responsibilities and setting realistic goals is usually performed well in organisations. However, plans are made on the basis of assessments of circumstances and situations that inevitably will turn out to be different in reality. Thus, managers who craft creative solutions to unforeseen problems are mastering execution rather than failing by following the plan. Agility is key to strategy execution and fluid reallocation of funds, people and attention is more important than sticking to an out‐dated budget. Agility also means that companies should disinvest from declining businesses sooner rather than later. Managers must also be careful not to get carried away with the common mistake of pursuing attractive opportunities outside of their strategic objectives.

Myth 3: Communication equals understanding

The project found that although top managers were relentlessly communicating the strategy within the organisation, the recall of organisational priorities by middle managers was found to be poor. In fact, only 55 per cent of middle managers could name even one of their company’s top five priorities. The research also found that middle managers could not see how the priorities fit together. Executives need to move from measuring effectiveness by how many meetings and emails they send regarding strategy (inputs) to how well their leaders understand what is communicated.

Myth 4: A performance culture drives execution

The mantra of hiring, rewarding and promoting high performers and firing low performers is widely appreciated in strategy execution. However, such an approach usually fails to appreciate that individual performance is not the only game in town and that other things such as agility, teamwork and ambition should also be recognised and rewarded. Agility means trying new things and, inevitably, some new initiatives will fail. Emphasising performance can also cause workers to be conservative in setting goals and so lack of ambition may ultimately be rewarded. Once again, coordination between work units is important to success, but rarely will a worker be corrected if they meet their targets yet fail to collaborate with colleagues across units.

Myth 5: Execution should be driven from the top

If the organisation relies too heavily on top‐driven execution, it remains vulnerable to poor performance after the personnel at the top move on (as they inevitably do). Although concentrating decision‐making at the top can boost performance in the short term, such a process degrades organisational capacity in the long term. Distributing leadership and decision‐making is a process to help broaden the organisation’s capacity to execute strategy.

The research suggests that effective strategy execution is more about seizing strategically aligned opportunities and developing organisation wide coordination in achieving goals. Emphasising these organisational aspects is regarded as key to effective strategy execution.

QUESTION

Emphasising performance in developing strategy is considered essential by many managers. Explain why this may be a mistake.