The art of execution: from vision to action

Strategy in Greek ( strategia ) means the “art of the general” and, since antiquity, has implied the ability to achieve a complex battle objective. In the modern business world, common “battles” might include executing a digital transformation strategy, winning the war for talent, or changing course before others do. Whatever the choice, the only valid strategy is one that can be executed. As Thomas Edison famously noted, “Vision without implementation is just a hallucination.” 

When execution becomes the Achilles’ heel

While it’s sometimes difficult to distinguish between poorly formulated ambition and poor execution, we know that most companies fail at the latter. A study by Booz & Company revealed that employees in three out of five organizations consider their company’s execution weak.  

Many leaders believe their strategy is “correct” but lament that implementation is the problem. We have yet to meet a single leader who admits their strategy is flawed but excels at execution. When exploring the obstacles to successful implementation, vague explanations emerge: “poor leadership,” “inadequate talent,” “lack of process excellence,” or the still-popular “culture eats strategy for breakfast.” 

As organizational designers, we know that many leaders want to address these challenges. Here are three key steps to building a robust execution system : 

1. Achieve strategic clarity

A good strategy is one that can and should be executed. What “good” means will depend on the competitive and industry context. While assessing the suitability of your strategy is beyond the scope of this article, a strategy that can be executed well will meet your aspirations and capabilities. Therefore, there are two key questions you should ask yourself: 

Is their strategy set at the right level of ambition?

We can argue that there are two major errors related to strategic ambition: 

• A type 1 error, basically inaccurate optimism, refers to an unrealistic or overly ambitious strategy, prompting the question: “How can this possibly work?” 

• A type 2 error, irrational pessimism, is an unambitious or overly pedestrian strategy that provokes a “meh” reaction. 

Type I errors are currently more prevalent in the world of unicorns and activist hedge funds, but that may simply be a matter of current trends and risk appetite, not to mention the fact that such grandiose aspirations are more likely to be rewarded with large investments. Both errors should be avoided. 

Do you know which capabilities are essential to your strategy?

Strategic clarity requires a further step: understanding what will be needed to execute the strategy. The first step is to clearly identify the essential organizational capabilities that the new strategy will require; that is, to develop capabilities that others cannot easily emulate. 

The second step is to determine whether you can be expected to develop these capabilities. Established companies will be more conservative in this regard than entrepreneurs (there’s a reason Professor Howard Stevenson defined entrepreneurship as “the search for opportunities beyond controlled resources”). 

One way to achieve this clarity is through a pre-mortem exercise, which allows executives to identify the dark side of their strategy and, therefore, their main execution risks. 

2. Achieve organizational clarity

Once the ambition is defined and the necessary capabilities understood, you must guide your organization toward the key execution challenges. A high-level operating model serves as a roadmap for delegating implementation . Three questions are helpful in building your operating model: 

Have you specified which unit owns which part of your strategy?

Every strategy must have clear owners of its objectives. To achieve this, two key questions must be answered:

• What is the subset of key strategic objectives ? How can they be grouped (by product, customer, or geography)?

• What shared strategic capabilities should be applied to all groups?

A good organizational design allows goals and capabilities to be mutually exclusive and collectively exhaustive .

Have you built the correct interactions between these key units?

Once key organizational decisions have been made, it is necessary to recognize and actively manage key interdependencies. The company’s various sub-objectives will generate different trade-offs that must be addressed. Clear governance regarding how scarce resources will be divided, support allocated, and capabilities shared is crucial for aligning the entire organization. 

It is very important to manage these trade-offs proactively and explicitly; the art of strategy lies in balancing the different sub-objectives well to achieve a distant goal. 

Have you assigned the right talent to the right roles?

Your executive team will drive your operating model: your key leaders own the key sub-objectives of your strategy and must rise to the task. 

The first task is to create the right roles. Roles are simply broad groupings of objectives, decision-making rights, and incentives. The second task is to assign executive talent to those key roles. It’s best to create the operating model you need and then check if your current talent fits your requirements. You can probably take some risks and manage with some gaps, but if the gap is too large, you’ll need new talent or a new strategy. 

3. Build a management system

Once the strategy and operating model have been established , they need to be implemented in countless daily decisions. This requires a management system . In this process, the key custodians of execution become the managers , with hierarchy being a fundamental tool for implementing a complex strategy across a large number of individuals. 

Hierarchy is not very fashionable these days, partly because there have been stories of top-down strategies gone wrong and leaders with inappropriate behavior, which has led to a decline in trust in institutions of all kinds . 

The role of hierarchy in times of agility

We believe that new management approaches (e.g., agile , customer-focused , with empowered employees ) are an understandable reaction to a top-down, command-and-control style of management. The logical expression of such an antiquated system is bureaucracy , which can best be described as a proud obsession with form over function and process over effectiveness. In this respect, the Third Law of Politics by British historian Robert Conquest still holds true: “The simplest way to explain the behavior of any bureaucratic organization is to assume that it is controlled by a cabal of its enemies.” 

However, we also believe that the idea of ​​the disappearance of hierarchy and management goes too far: any complex strategy will require organization and structure to achieve collective coordination. The concepts of self-organized communities and markets , and the resulting collective intelligence they create, are suitable models for many of the outcomes that concern us in the world, but they are not good for executing complex strategies. In other words, as a general, a Normandy landing is not achieved through a bottom-up process. 

Our approach combines the management hierarchy with two key conditions that allow for successful adaptation of the strategy to local conditions and avoid bureaucracy: 

How have you empowered your staff?

Their strategy and operating model aim to provide sufficient clarity throughout the organization regarding expectations for each employee and how they can be supported in achieving their goals. Beyond that, employees will require considerable flexibility to adapt these objectives and approaches to suit local circumstances. 

Good management systems explicitly ensure sufficient accountability and flexibility in their design to avoid the “bureaucracy trap” and allow for adequate levels of empowerment. One example is the famous Ritz-Carlton $2,000 rule , which specifies that employees can spend up to that amount to make a customer happy without seeking management approval. 

How have you incorporated self-correcting feedback into your system?

The importance of local context and the value of collective intelligence , customer feedback , and employee input necessitate the creation of a feedback loop that enables executives to understand and react quickly to local events. Simply put, executives must understand what works and what doesn’t, as quickly and clearly as possible, and be able to rapidly share best practices. 

Take the example of Ford, where a new CEO faced a culture in which problems were not typically reported to the executive board and certainly not openly explored or addressed in depth. By instituting a business review process, the leadership team was able to collectively focus on the aspects of the strategy that weren’t working and address them quickly and effectively, thus creating a key link to successful execution . 

In short, collective action (i.e., large-scale cooperation) is a major competitive advantage for humanity: creating a fiction and turning it into reality. To achieve this, three factors must converge: 1) a sound strategy, 2) appropriate organization, and 3) effective management . 

With these three ingredients in place, human ingenuity can be unleashed and, collectively, we can achieve what we do best: make our dreams come true. 

Sources

GL Neilson, KL Martin, and E. Powers, “The Secrets to Successful Strategy Execution,” Harvard Business Review , June 2008