The high cost of failing to execute strategy

Failure to execute strategy has serious consequences for organisations, from bankruptcy in the business world to violent service delivery protests in the public sector. The problem is that plans are about intentions, while execution is about talent. Whether in civil society or the corporate world, there is irrefutable evidence of a leadership blind spot when it comes to executing strategy.

Shareholder value in two JSE-listed companies, for example, dropped by 60% and 92% respectively between 2010 and 2013. Add to that the cost of opportunities missed while executives are distracted by trying to rectify the consequences of failed strategy, and the numbers become even more frightening.

Research conducted by the Social Change Research Unit of the University of Johannesburg showed that there were 287 service delivery protects lasts year, with grievances including slow to no service delivery in general, housing, water and sanitation, political representation and electricity. To suppress protests, the South African Police Service (SAPS) had to request additional funding from parliament.

Organisational disasters such as these are the result of failure to execute, yet it’s a phenomenon seldom mentioned in the published surveys of management challenges.

As Bossidy and Charan stated in “Execution: The discipline of getting things done”, execution is the great unaddressed issue in the business world today. It is the single biggest obstacle to success and the cause of most disappointments that are mistakenly attributed to other causes.

This leadership blind spot is all the more disconcerting when you take into account that Kaplan and Norton noted way back in 2001, that less than 10 percent of well formulated strategies are actually executed. The problem, they noted, is not formulation, but execution.

There is a pervasive belief that while executives strategize, it is the responsibility of managers to execute. In fact, the first responsibility of the executive is to ensure delivery. Strategy cannot be delegated – those who formulate must manage the execution of the plan. Another false perception is that a well formulated plan will necessarily be executed.
Organisational leaders have to accept that the measurable outputs required to make a strategy implementable and successful depend on the talent to deliver. No matter how well the plan is formulated, strategy is about intention, while delivery is about talent. People – or talent – are thus critical to execution. And because we are not all equally talented to perform the same tasks, it follows that different outputs require different talents.

When developing a strategy, therefore, leaders need to take into account – above all else – the organisation’s ability to execute, based on its people. That is why hiring, managing, assessing, developing and rewarding people must be geared toward the execution of strategy at all times.

One Comment

  1. Roslyn Cassidy-Reply
    23/01/2015 at 8:44 AM

    Dear Chantal

    I read your letter in Business Day 22 Jan while lying in bed in the Kruger. So I googled your firm and read the longer article. Excellent.

    Keep pushing your message that execution of strategy is about people. Say it everywhere and use every platform.

    I’m a recently returned South African and have just registered to do a masters in public policy. I see a huge unfilled layer of managerial positions in government. Bringing the NDP to fruition is going to require filling those positions with capable people. Anything you can do to bring that about will be terrific.

    Kind regards

    Thanks again.

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