Why Strategies Fail : Bridging the Gap Between Thinkers and Doers
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BY SCOTT GLATSTEIN


It doesn't take long for college graduates in their first job to learn that work in the corporate world is often divided into two major buckets: strategy and execution. This division seems to create, in turn, two categories of employees: thinkers and doers.

 

THE DIVISION OF THINKERS AND DOERS
The belief is: strategy is developed by the thinkers, typically senior executives with lots of experience and impressive track records. Execution is driven by the doers, basically everyone else in the organization charged with making things actually happen in the marketplace. Thinkers tend to talk about doing things. They debate strategic options with other senior leaders and, ultimately, set the overall direction for the organization as a whole or their particular division or function. They spend comparatively little time worrying about the implementation of their strategies in the marketplace. Execution is what they used to do when they were young up-and-comers but now they have people to do that for them--the doers. Doers are the ones who put the points on the board. While thinkers coach enthusiastically from the sidelines, doers are out on the court playing the game. Doers work directly with customers. Doers design, build, and deliver products and services. Doers resolve problems when things don't go as planned. Ultimately, it's the doers who drive the organization's success in the marketplace.


THE IMBALANCE
Regardless, many organizations seem more enamored with thinkers than doers. In these companies, the road to the top is often paved with successful strategic presentations. Their best and brightest quickly learn that talking about doing things will get them promoted faster than actually doing things. In these environments, successful doers may rise up but it's the thinkers who get the really big jobs, often by impressing senior managers with really cool business strategies that showcase their intellectual prowess. I first became aware of this dynamic when I was a young general manager at the old Pillsbury Company, now a part of General Mills. At the conclusion of a particularly successful year, it was time for my annual review. I was fairly confident that my accomplishments would yield an above-average rating. However, I soon realized that my supervisor did not share that view. Here's what I heard:

Supervisor: Scott, you're a really good corporate soldier. You know how to drive a team and put the points on the board. Increasing the profitability on your business by $30 million in a single year was truly extraordinary and went a long way to helping the division exceed plan. Nobody executes like you do.

Scott: OK, so why is my rating against my peers just average? Isn't driving profit for the shareholders the reason we're here?

Supervisor: Of course, profit is important...it's the ultimate scorecard. That's why much of our bonuses are tied directly to profit goals. But take Joe, for example. True, his product portfolio fell short of plan and actually lost money this past year, but Joe developed a really impressive strategy for turning that business around. Joe is a brilliant strategic thinker and that's what we need at the top of our organization...more guys like Joe. That's how you get above-average performance ratings around here.


That conversation led me to an epiphany. I realized that over time our corporate love affair with strategic thinking had created a massive chasm between executive-level strategy development and organization-wide execution in the marketplace. Our rewards systems encouraged leaders to think, not do. But this wasn't really new news was it? Hadn't it been this way since the evolution of the current corporate hierarchy?

"Recognizing what your organization can realistically deliver before crafting a new direction is essential to your business's success."

THE CONSEQUENCES


Unfortunately, the evidence suggests that this system doesn't work.
 David Norton, author and professor at Harvard Business School, tells us that 90% of all business strategies fail to live up to their potential in the marketplace. This is rarely due to a
strategy's inherent potential. Poor marketplace execution of the plan is often the culprit.
 A Fortune magazine study has shown that 7 out of 10 CEOs who fail do so not because of bad strategy but because of bad execution.
 In a Times of London study of 1,000 companies, 80% of directors said they had the right strategies but only 14% thought they were implementing those strategies well.

THE DISCONNECT BETWEEN VISION AND IMPLEMENTATION

Since my epiphany, I've had the opportunity to work with a lot of companies--large and small, successful and not so successful. In almost every instance, the challenges my clients struggled with were executional in nature, not strategic. Most often, these problems could be traced back to a disconnect between vision and implementation. Over the years, I've been able to segregate the primary issues driving this gap between strategic vision and marketplace reality into four major buckets:

  1. The strategy fails to recognize the limitations of the existing organization.Marketplace strategy makes huge demands on an organization's capabilities and resources. While your organization can certainly transform its capabilities over time, there is a limit to how far and how fast. Recognizing what your organization can realistically deliver before crafting a new direction is essential to your business success.

  2. Employees don't know how the strategy applies to their daily work. Many companies don't communicate strategy clearly or effectively enough to their employees. If, for example, your strategy is to offer world-class service, what does that really mean? What does it mean to your salesperson on the street, to your customer service representative in the call center, and to your marketing manager at headquarters? If your employees don't know how the "go-tomarket" strategy affects their everyday work, they aren't likely to implement it properly.

  3. The organization's business systems or processes can't support the strategy. It's difficult to implement a new strategy without changing the way the organization works on a daily basis. Does the way in which work flows across your various departments and divisions support your marketplace intent? Can your systems and tools meet the demands of the new strategic vision? Remember that pursuing a new strategy with old capabilities is a recipe for disaster.

  4. Performance metrics and rewards are not aligned with the strategy. If your organization strives to be a service leader but is instead rewarding its customer service reps for keeping calls short (as opposed to the resolution of a customer's problem), there may be a disconnect between performance metrics and the communicated strategy. Do reward systems and business strategies make sense in terms of the strategy and overall goal? Are you creating measurement tools that make employees feel good about their performance but don't really gauge the company's key success factors? Metrics and rewards must always be aimed at the specific employee behaviors sought--behaviors that support your company's strategic vision.

STRATEGY ACTIVATION

Certainly, the solution to this problem rests in Strategy Activation,® a business process designed to focus simultaneously on all the key factors necessary in creating successful corporate strategy execution programs: marketplace offerings, people, processes, and tools. Strategy Activation recognizes that your company's overarching strategy is a promise--a promise made to the marketplace and to the customers whose day-to-day experiences with the organization's products and services determines the ultimate success of the business. Strategy Activation is the new bridge that spans the chasm between strategic intent and organizationwide marketplace execution. It takes what an organization wants to do and defines how it is going to do it. It ensures that the promise made to the marketplace is driven by every employee across every customer touchpoint every day.

 

Scott Glatstein, president of IMPERATIVES, LLC, turns market opportunities into record-breaking profits with effective marketplace strategy execution. His new book is titled Strategy Activation: How to Turn Your Vision into Marketplace Success.

To help execute strategies, call us at 03.5786.3800