Strategy execution research – common problems identified

Nowadays companies struggle to improve their strategy execution. How do we know what are the main problems in this field? Let’s take a look at some sources: large-scale surveys with corporate executives and managers.

EIU Research 2014
The greatest challenges for companies accorging to EIU

First The Economist Intelligence Unit study from 2004. The EIU conducts periodic research on the subject. In 2004 they surveyed 276 executives in the US and Canada. Only 43% rated their companies as successful at executing strategic initiatives. The most important issue to improve: communication from senior management.

Booz Hamilton HBR 2008
What Matters Most to Strategy Execution – HBR 2008

In „Secrets to successful strategy execution” published by HBR in 2008 consultants from Booz & Company share results from their 5 years long research (1000 organizations). Three out of five companies when asked if “Important strategic and operational decisions are quickly translated into action” the answer was no. Again similar results:  information and decision rights are crucial to successful execution.

Hrebeniak 2006 research
Five obstacles to strategy execution – Hrebeniak 2006

Wharton–Gartner Survey described by Professor Lawrence G. Hrebiniak in „Obstacles to Effective Strategy Implementation” paper (2006). He wrote: „I undertook an empirical study of implementation issues in which data were collected from 443 managers involved in strategy execution”. Key obstacles: poor change management, vague strategy and poor information sharing.

OKRs are not an „HR thing”

Companies see them as a silver bullet for both performance management AND strategy execution. When HR is in charge of OKRs, the strategy alignment component is missing and people regard OKRs as yet another method of evaluating them.

The idea in short: OKR for strategic priorities – yes, performance management – no. No silver bullet. To develop people and invest in teams, discipline and regular conversations about work and progress are required.

OKRs should be used to clarify what is important, maintain focus, and improve execution. They should steer the conversation toward the most important issues. We create them for businesses and teams. Some say that they are „just goals,” but this is a trap.

Years of management education and practice have resulted in a strong link: goals => SMART => performance management. As a result, for many managers goals are for individuals only. Breaking this is difficult. To begin, it may be helpful to label OKRs as „team priorities.”

A team is the most important unit in the organisation. This is where value gets created. People don’t work in companies, they work in teams (read Buckingham). There is no team without a shared goal. It really is that simple.

HR plays a significant role in the implementation of OKRs. It needs to help with training, support middle managers and work with feedback from people. Switching from any old system to OKR is a significant change. The HR department may have its own objectives, such as improving recruitment processes.

HR departments face a challenge when it comes to performance management. The evidence shows that the traditional approach does not work. These systems are pricey but „only 14 percent of employees strongly agree that the performance reviews inspire them to improve,” according to Gallup.

So HR people look for new things. OKR gives some hope, which is an illusion. To improve things it is not enough to change the method of goal writing. You must train managers to do their jobs which is developing people and having conversations with them about work and results.

Managers need to have regular 1n1s and two other types of conversations with employees: about results and about development. Those are separate meetings with distinct goals. And BTW, feedback should be given on a regular basis, ideally when the reason for it occurs.

Achievement of goals, especially individual, should not be the sole reason for a raise or promotion. The reason is, again, teams. What matters is also what kind of player someone is, whether his expertise matters and what his contribution is.

[oryginaly published as a post on LinkedIn]

Crystal clear mission

“Patagonia is in business to save our home planet.”
Jeff Beer, 13 grudzień 2018

Its mission has long been “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” …has changed to something more direct, urgent, and crystal clear:

“Patagonia is in business to save our home planet.”