In the world of corporate strategy, ideas are not enough. It's true to say that leaders get to where they are on the back of good ideas, but underpinning this is the ability to make their vision a reality.
The rapidly changing nature of the digital world has not really rendered any strategy obsolete, rather it has increased the need for company culture to rule. The best strategists are those that develop strategies that are closely entwined with company values, and then get staff on side to execute as a team.
Paul Leinwand said at a recent book launch that ‘the biggest threat to your strategy is your leadership’, and it is the job of executives to close the gulf that often exists between strategic planning and implementation. PwC Strategy& surveyed 2,800 executives from a vast range of companies of different sizes, industries and business models about their faith in their own corporate strategy. The results reflected not just a frustration with the difficulty of effectively executing strategy, but a more general distrust of their own plans. Despite all of the writing around the creation of a successful strategy, execution remains a largely misunderstood task.
Over half of the respondents did not think their company had a strategy that would lead to success, while exactly half of the respondents believed it to be a considerable challenge serving a clear and differentiating strategy. One positive would be that nearly half believed they had a workable strategy, however it is clear that strategy is facing a period of low confidence. An overwhelming majority (82%) believe that growth initiatives ‘lead to waste, at least some of the time.’ This is misleading to an extent. Strategy itself can indeed be wasteful, yes, but only if the company’s strategic implementation is some way off of the intent.
PwC summarises that many companies’ strategies ‘are not differentiating and are not focused on what the companies are truly good at.’ And this is one of the key reasons for the gap between strategy and execution - a strategy should both serve and be served by the company’s strengths. To focus too much time and energy on areas outside of these strengths is to create a strategy that doesn’t fit, and implementation will naturally suffer as a result. These alignment gaps can be damaging. Only 54% of those polled believe their strategy has been ‘sufficiently translated into clear actions that will achieve their objectives.’ And, perhaps more importantly, only 37% ‘believe there are clear consequences for anyone who failed to ‘live’ the identified critical behaviors’ of the strategy day by day.
The report drew some interesting conclusions; the characteristics shared by companies that deploy working strategies. The recurrent theme is one of identity. ‘Your culture has to support your strategy’, Leinwand says, and staying ‘true to your value proposition’ is essential. Where strategies fail is in focusing on growth over objectives that actually fit the company; a business should not only accept its limitations, but focus on what it does well and fit these things into its strategic goals. Be selective. Take Apple, for example, who managed to overcome Microsoft in an all-out battle for supremacy by applying their culture and identity to everything they did. Leinwand adds that: ‘Strategy is deciding who we want to be and then doing it’ - execution of strategy is smoothest when the company has a clear image of who and what they are, and knows not only what they want to achieve, but how.
Cutbacks should reflect this, too. Wholesale reductions ignore the fact that, like it or not, some areas of your company are more vital than others. Invest intelligently, i.e. doubling down on a few areas that matter most, and delicately reducing everything else. When building a strategy, consider not just what you want to be but what you already are - what can you do that no one else can? What other capabilities would aid us to do those things? Execution and strategy should be closely integrated in every decision. Stick to your identity, recognize your strengths and weaknesses, and have faith in your culture. The gap between strategy and execution exists primarily thanks to weak leadership - close it.