13. October 2022
Close The Gap Between Strategy and Execution
In a business transformation, it is important that the strategy is successfully implemented. However, there are pitfalls that regularly cause this to fail. In this context, I really enjoyed the HBR article by Prof. Freek Vermeulen of Londen Business School, “Many Strategies Fail Because They’re Not Actually Strategies”. He not only points out several of these identifiable pitfalls, but also actionable solutions. The following insights particularly stood out to me:
- Don’t confuse goals with strategy
Becoming number one, for example, is not a strategy. It’s a goal. A strategy is a clear and coherent set of decisions about what a company will and will not do.
- Communicate not only the strategic choices but also its logic
Too often, communication focuses on the strategic decisions made rather than taking the time to explain the logic behind them. When people understand the logic, it’s easier to support them.
- It’s not just a top-down process
A strategy implementation process is rarely effective if decisions are made in only one direction, top-down. The most effective way is a combination of clear top-down strategic direction while enabling bottom-up initiatives that fall within the scope of the strategic intent. In this context, top managers should resist the temptation to use bottom-up initiatives to decide which initiatives to select. Top management should develop internal systems/processes to make the selection.
- Make change your default
Finally, many implementation attempts fail because they typically ask people to change their habits. Organizational behaviors are infamous for being sticky and tenacious. There are several ways to break old, rigid habits. Of course, depending on the context approaches such as taking on difficult customers/projects that fit the new strategy can trigger a learning process. Transferring employees to other departments can also change habitual beliefs and ways of working.
Finally, I liked a quote from him: “We often resist change unless it is crystal clear that the alternative is substantially better. For a successful strategy implementation process, however, it is useful to put the default the other way around: Change it unless it is crystal clear that the old way is substantially better.”