Intelligent Work Can Help CEOs Close the Strategy Execution Gap (White Paper Summary)

Cindy Praeger

A fairly significant body of research now clearly shows that the reason why a number of mid-to-large companies face is not because their strategies were not sound, but because they were unable to create a culture of strategy execution to perform well on those otherwise sound strategies.

Here is a quick summary of some of the research findings:

• A recent survey of more than 400 Global CEOs found that executional excellence was the #1 challenge they faced, coming at the top of some 80 other issues.
• In a study of 8,000 managers in more than 250 companies, respondents said they were three times as likely to miss performance commitments due to insufficient support from other units.
• Another study of 144 C-level executives found that only 10% said they implemented two-thirds or more of their core strategic initiatives in the year.

Clearly, there is a significant gap between the strategies that the leadership develops, and execution of those CEO growth strategies as evidenced by the results achieved.  Companies that successful close the strategy execution gap far outperform those that don’t, therefore it is essential to get this right.  It isn’t just about having an excellent strategic plan, it is about building a culture that has A players that come into work everyday wanting to see that strategy come to life.

And yet, strategy continues to receive far more attention than execution. In fact, a quick search shows that books and articles on strategy outnumber those on execution by nearly ten to one.  The execution gap is where the real problem lies, not in creating a winning 3 year strategic plan.  Good companies have a 3-5 year strategic business plan, great companies also have execution ready quarterly plans to execute their growth initiatives.

It has always been assumed that strategy is what the executives do, and execution is what the rest of the company does.  However, in today’s environment of continuous disruptions, CEOs cannot afford to assume anything. Everybody needs to be involved in the strategy execution and know why they are working on the projects that they are.

To close the strategy-execution gap, CEO must make both strategy AND execution what everyone in the company does. The rest of this article explores both the problem and the solution in some detail.

What Is The Strategy-Execution Gap?

If a company does not achieve at least 90% of its strategic targets as defined in its annual plans, then the CEO has a strategy-execution gap problem.  The problem isn’t coming up with good ideas, it is coming up with an execution plan to achieve them that breaks down the project into easily digestible parts that can be executed by the team.

How Is Strategy-Execution Gap Created?

The Departmental Silo Problem

Ironically, the strategy-execution gap is created primarily as a result of a company’s success and growth. In its early years when the company only had a handful of people, everyone knew the strategy (“survive and thrive”) and everyone knew their role in it.

As the company moves out of survival mode and thrives—and hires more people—the new hires are placed under “managers” in a “department”, and the extent to which they know and understand the strategy depends on how well that manager communicates with them.

As more people are hired, and more layers of supervision are added, the strategy gets boiled down to, “here is what I want you to do…”. Any questions are likely to generate, “Let me worry about that. What I want you to worry about is…”

The more this happens, the more fragmented the resources of the company becomes, the more silos are formed and calcify.  The organizational culture starts to slowly fragment based on departments and teams unconsciously.

The company has now reached a stage where it is far more concerned with efficiency than effectiveness—everyone does their job perfectly. They are doing things right, but they are not doing the right things.  This is a common occurrence for companies, you are not alone – but you will be in rare company if you devote the resources needed to close the strategy execution gap.

At this point, the company has begun losing the shared sense of mission that united everyone in the early days. Whatever organic growth the company continues to show comes from a small minority of highly effective people who still focus their energies on doing the right things that matter.  Creating a culture of strategy execution is a process that is well worth the investment.

Which is when CEOs typically turn to mergers and acquisitions (M&As) to generate more growth, as their organic growth has stalled. However, as surveys have shown, the vast majority of CEOs (over 70%) go through the complex transactions of M&As with no prior experience. Which only increases the difficulty of integrating two different companies with two different cultures. In the end, the very reason that slowed a company’s growth leads to a strategy that tends to practically guarantee more silos and execution gaps.

This is a much bigger problem than CEOs typically understand it to be. Unless fixed quickly, the company can run into serious trouble and fall back into the survival mode.

How Do CEOs Close The Strategy-Execution Gap?

The challenge CEO’s have is two-fold:

1. The vast majority of employees in mid-to-large companies don’t know the vision or strategy.
2. The CEO, and Senior Management in general, don’t know what the vast majority of employees are working on in any given day.

The key to closing the strategy-execution gap is to ensure that every employee is focused on effectiveness—doing the right things that make matter and make the most difference. In other words, they understand the strategy, they believe in it, and their efforts are focused on implementing the strategy.

We call this Intelligent Work.

Therefore, what is needed is a system or platform that ensures Intelligent Work is done throughout the organization. We call this system an Intelligent Work Platform.

Components Of An Intelligent Work Platform

An Intelligent Work Platform seamlessly blends the latest cloud-based digital technologies with 21st century management thinking to close the strategy-execution gap by eliminating silos and fostering better execution of cross-functional growth priorities.

It has three main components that work together to bridge the strategy execution-gap and drive successful growth:

1. Create a clear execution plan for your growth strategy
2. Establish the right execution habits
3. An execution software that ensures employees are focused on Intelligent Work

Rhythm software is the only Intelligent Work Platform built specifically for mid-market CEOs to confidently execute their growth strategies by ensuring that all employees in every department are working synchronously as a single team.  CEO growth strategies are much easier to implement with an Intelligent Work Platform and a culture of accountability.

With Rhythm, CEOs, departmental leaders and their teams have full visibility at the execution level and can focus on what is failing so they can mobilize the necessary resources to fix the problem quickly and what is working exceptionally well so it can be replicated.

This strategy execution gap blog post originally appeared on www.rhythmsystems.com/blog and has been updated.

Cindy Praeger, Co Founder – Rhythm Systems