The 5 Pillars of Strategy Execution - Gartner

To get execution right, clarify and test relevant assumptions. This includes using mechanisms to both identify and challenge strategic assumptions so your ... Insights / AllLeadership / Article The5PillarsofStrategyExecution ShareonTwitter ShareonLinkedIn ShareonFacebook SharebyEmail April26,2021 Contributor:JackieWiles Closingthegapbetweenstrategyandexecutionremainsachallenge.Fivepillarsofstrategyexecutionensureamoreeffectiveandalignedimplementation. About40%ofexecutiveleaderssaytheirenterpriseaccountabilityandleadershiparenotalignedonstrategyexecution,accordingtothe2020GartnerExecutionGapSurvey.Thisisn'tanewconcern. Gartnerpollsofstrategyleadersinprioryearshaveshownslowstrategyexecutiontobeatopchallenge,oftenbecauseofinsufficientvisibilityandcontrol,ashort-term‘firefighting’mentalityandemployeechangefatigue. Sometimestheproblemstartswithstrategysetting.Manyexecutiveleadersdon'thaveadocumentedthree-tofive-yearbusinessstrategybecauseCEOshaven'tproduced,updatedorsharedthelatestiteration.Sometimes,theenterpriseexists,butithasn’tbeensharedeffectivelywithbusinessandfunctionalleaders.Inyetothercases,thestrategyhaschangedwithoutmanybusinessleadersrealizingit. Theriskthatstrategywon'tbeeffectivelyexecutedonlyincreasesinvolatileanddisruptedconditionslikethoseexperiencedduringandsincetheCOVID-19pandemic. DownloadNow:YourGuidetoStrategicPlanning 5keypillarsforeffectivestrategyexecution   Corporatestrategistscanbridgethestrategy-to-executiongapanddrivealignedexecutioninfiveways. PillarNo.1:Strategyformulation 83%ofstrategiescanfailduetofaultyassumptions.Testassumptionsabouttheexecutabilityofstrategyduringformulation.  Historyislitteredwithexamplesoforganizationsthathitseveregrowthstallsbecauseofstrategiesbasedonflawedassumptionsaboutcustomers,competitorsorinternalcapabilities.Alackofclarityleadstounwantedsurprisesduringexecutionandreducesmanagers’abilitytomonitoruncertaintiesandrespondaccordingly.Togetexecutionright,clarifyandtestrelevantassumptions.Thisincludesusingmechanismstobothidentifyandchallengestrategicassumptionssoyourorganizationcanavoidunanticipatedissuesthatderailimplementation. PillarNo.2:Planning 67%ofkeyfunctionsarenotalignedwithbusinessunitandcorporatestrategies.Alignobjectivestostrategybyclarifyingtheobjectivesforthosetaskedwithexecution.  It'snotunusualforlargeorganizationstoconductstrategicplanningsessionsthatcostmillionsofdollarsandhundredsofemployeehourseachyear.Despitetheseefforts,strategicgoalsareoftenunclearormisaligned,whichthencreatesresourcingchallengesthatlimitexecutionsuccess. Focustheplanningprocessonverticalalignmentbetweenthecorporatecenterandthebusinessunits(BUs),andhorizontalalignmentacrossBUsandfunctions.Toavoidconfusion,beginbyclarifyingobjectivesandrolesforthoseinthebusinesstaskedwithexecution. PillarNo.3:Performancemanagement 58%oforganizationsbelievetheirperformancemanagementsystemsareinsufficientformonitoringtheperformanceofstrategy.Ensureaccountabilityforactionscriticaltostrategyexecutionandmonitorperformance.  Marketscanshiftbetweenafirm’sstrategicplanningcycles,thusinvalidatingassumptionsandthestrategicplan.Withoutaneffectivesystemtomonitortheperformanceofthestrategy,organizationsmayexecutethewrongplanformonths—orevenyears—beforecorrection. Fortimelycourse-correction,useperformancemanagementsystemstoholdemployeesaccountableforkeymetricgoals.Frequentreviewsoftheplancandetermineifunderperformancewastheresultofabadmarketassessment,wrongstrategyorpoorexecution. Alsoconsideramoreadaptiveapproachtostrategicplanning. PillarNo.4:Strategycommunication 67%ofemployeesdonotunderstandtheirrolewhennewgrowthinitiativesarelaunched.Fosteratwo-waydialogueaboutthestrategytoensureorganizationalbuy-in. Toeffectivelyimplementanewstrategy,employeesmustunderstandandsupportit—bothbeforeandduringexecution.Lackofbuy-inonlyreducesemployeecommitmentandmotivationforactionandmessagesthatlackcredibilityincreaseorganizationalresistancetochange. What’sneededisacohesivecommunicationstrategy.Withoutit,employeemotivationgoesdownandresistancegoesup,increasingthecostofexecution.  Engagecriticalemployeeswithtargetedcommunicationstowinsupportforthestrategy.Startatwo-waydialogueortakeapagefromyourorganization’sPRplaybooktokeepemployeesonboardandactivelyengagedinachievingthecompany’sobjectives. ▶ ▶ Close|✕ PillarNo.5:Organizationalcapacity Organizationsthatareabletosuccessfullyunlockcapacitytoexecutenewgrowthstrategiesincreaseprofitabilityby77%.Strategistsmustfocusonunlockingcapacitytoensurestrategyexecutionsuccess.  Watchnow: TheGartnerTopStrategicPredictionsfor2022 Manyorganizationsfailtoallocateresources(assets,time,people,etc.)fortheactualimplementationofnewgrowthstrategies.Theyrelytooheavilyonstrategycreation,planning,performancemetricsandcommunication.  Strategistsmustlocateareaswheretheorganizationlosestheabilitytoexecuteduetopoorcoordination.Thenetresultofpoorcoordinationisareductioninthetotalcapacityoftheenterprise.  Practicesforunlockingorganizationalcapacity: Deploydiagnosticstotestorganizationalcapacitybeforelaunchinggrowthefforts. Usenewtoolsforclarifyingmid-managertrade-offsaboutresourcinggrowthbets. Constructnewframeworksforfreeingtrappedresources. Createsupportstructuresforintegratinggrowthprojectsintoexistingbusinesses.  Thisarticlehasbeenupdatedfromtheoriginal,publishedonNovember2019,toreflectnewevents,conditionsorresearch. ExperienceGartnerConferences JoinyourpeersfortheunveilingofthelatestinsightsatGartnerconferences. ViewConferences RecommendedresourcesforGartnerclients*:TheFivePillarsofStrategyExecution ClosingtheStrategy-to-ExecutionGap StrategyExecutionCapabilitiesAssessment Strategy'sNewExecutionMandate*NotethatsomedocumentsmaynotbeavailabletoallGartnerclients. BuildaGreatStrategicPlanforYourFunction StrategicPlanningforyourfunction?Herearefourcriticalthingstoknowanddo,andacustomizableone-pagetemplatetocaptureyourstrategicplan. 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