Why strategy fails

Muibat Ijaiya at Strategy Management Partners explains why execution is the key to turning strategy into success

 

Strategy is the foundation of business success, yet 60-67% of strategies fail.

 

The difficulty of executing strategy is something most businesses know only too well. Extensive studies by companies, consultants, and experts over several decades have all shown that executing strategy often proves challenging — and it’s not getting any easier. One such study by the Economist Intelligence Unit (EIU), sponsored by PMI, found 61% of executives acknowledged that their firms struggle to bridge the gap between strategy formulation and execution.

 

The issue is often not the strategy itself, but the ability to execute it. Execution is inherently more complex than strategy formulation. It is a dynamic, people-intensive process that must deliver measurable outcomes and manage risk, all whilst continually adapting to competing demands for limited resources. It demands high attention for leaders; yet various studies suggest executives devote only 10-20% of their time to it. 

 

Understanding why execution falters requires a closer look at the leadership and organisational factors that enable or hinder effective implementation.

 

 

Leadership pitfalls that undermine execution

At the heart of any successful execution lies strong leadership. Without visible commitment and alignment from the top, strategy implementation risks being undermined by the pressures of day-to-day operations. Execution failure typically stems from four leadership pitfalls:

 

Insufficient leadership commitment

A lack of commitment from senior leadership is one of the most significant obstacles to successful execution. When boards are disconnected from the strategy, and leaders don’t fully take ownership of strategic goals, execution will suffer. Effective execution requires visible and sustained leadership sponsorship, with leaders actively supporting and following through on strategic initiatives and actions.

 

Lack of a formal execution framework

A strategy can’t be effectively executed without a formal framework that translates broad strategic goals into actionable measurable terms. A well-defined execution framework is essential to cascade strategic objectives throughout the organisation and align all levels of the business. This framework should incorporate a robust performance management system, which sets clear targets and has a built-in feedback loop to track and report on progress, as well as provide insights that facilitates forward looking discussions.  

 

Unclear priorities

Organisations often struggle with execution when there is a lack of clarity around which strategic initiatives to prioritise. This makes it difficult to allocate resources effectively. Leaders should define key strategic initiatives, establish expected outcomes, align the budget and ensure timely deployment of resources.  

 

Limited emphasis on strategic thinking

Effective execution requires ensuring collective focus on the long-term goals. However, many leaders fall into the trap of focusing too heavily on short-term operational issues. Limited focus on surfacing and addressing cross-organisational strategic issues; and allowing short term operational issues to dominate the leaders’ time sends the wrong signal and weakens execution discipline.

 

Businesses that identify these leadership pitfalls and take proactive steps to address them are much better positioned to execute their strategies successfully. However, leadership alone is not enough.

 

 

Barriers to organisational readiness

Execution is not only about leadership decisions; it’s also about whether the organisation is prepared to act on those decisions. Many strategies fail because of poor planning and weak readiness. Common organisational barriers to execution include:

 

Limited awareness and engagement

For execution to succeed, the entire organisation must understand the strategy and be fully engaged in its implementation. A lack of awareness or buy-in can lead to resistance to change, resulting in low levels of motivation and commitment. Businesses need to ensure that employees at all levels are informed and motivated to support the strategy. Effective communication and clear role definitions can help rally all employees around the strategic vision.

 

Lack of preparation

When strategic initiatives are not well-defined or when there is no clear plan for how to achieve the desired outcomes, businesses risk failing to deliver. Thorough planning, clear goals, and consensus on milestones and timelines are critical for smooth implementation.

 

Disjointed initiative management

Uncoordinated and poor management of strategic initiatives as a portfolio weakens results. It fosters weak collaboration and inconsistency in decision making. It also affects the opportunity to capitalise on synergies. For successful execution, organisations must embed a governance model that oversees implementation, track benefits and ensure value creation.

 

Weak links between operations and strategy

Execution fails when operational plans are disconnected from strategic goals. Success requires a collective effort. Aligning operational activities is essential to win with the strategy. 

 

People disconnect

Successful execution depends on having the right people in place and ensuring that their goals are aligned with the organisation’s strategy. Organisations often face execution barriers when there are gaps in capability, manpower, or capacity. Aligning incentives and rewards with strategic objectives is also important. Businesses must ensure that employees are adequately equipped, supported, and incentivised to drive the strategy forward.

 

Misaligned culture

Resistance to change, disengaged employees, or a lack of accountability can all undermine execution efforts. Leaders should foster a culture of ownership, responsibility, and accountability, ensuring that employees at all levels are committed to the organisation’s long-term vision. A culture that prioritises short-term results over long-term objectives is particularly detrimental to execution.

 

A strategy is only as effective as the organisation’s ability to execute it. Businesses that invest in breaking down these barriers significantly enhance their chances of success.

 

 

What sets winners apart?

Winning businesses recognise that execution is not an afterthought — it is the heart of success.

 

The companies that successfully bridge the gap between strategy and execution ensure organisation and human capital readiness. And they are set apart by strong board oversight and leadership commitment, which drive focus, discipline and accountability for execution. 

 

---

 

Muibat Ijaiya is a Partner at Strategy Management Partners

 

Main image courtesy of iStockPhoto.com domin_domin