The Strategy Execution Gap

I’ve never had to convince any team that executing on strategy is more challenging than crafting strategy.

Not that developing the strategy is easy. But executing the strategy is most definitely no easier.

What do most companies do to craft their strategy? Executives at an organisation work tirelessly to understand and articulate market conditions, competitor actions, strengths, opportunities, market trends, etc. With these elements on the table, they face a complex and challenging set of choices. Choices that will determine where to allocate scarce resources, based on their belief or hypothesis about the future. After much deliberation, sweat and tears, they decide on a direction to take.

And with much relief, they return to the organisation and communicate that decision. One decision.

The organisation is lacking the hundreds of hours spent on researching and deliberating. As a result, they have minimal context into that one decision.

And so, without context, how seriously will they take that strategic direction and act on it?

And hence the cavity between strategy and execution is born.

reasons for the gap:

This misalignment and lack of context is not the only reason for the gap. Here are six reasons we’ve witnessed:

1. Lack of alignment

Teams struggle to take action if they don’t understand the purpose of their actions. They become disengaged and lose interest quickly.

2. Lack of capacity

It could be that goals are too far out of reach of the team and organisation; they don’t have the capacity to execute on it.

3. Lack of capabilities

Teams need not only capacity but also the capabilities and skills to execute. Unfortunately, existing teams don’t always have the capabilities to take the lead on future growth areas.

4. Unfavourable market conditions

It could be the market that didn’t act or react as anticipated. Maybe the market wasn’t ready for the product, or a downturn significantly impacted the business.

5. Unclear expectations

The team isn’t clear on what they need to do next; strategy is long-term, but in reality, most of the organisation is concerned with the short-term.

6. Debilitated teams

Sometimes, micromanagement is the problem. Teams aren’t empowered to operate autonomously, so every action and idea needs to be signed off, significantly reducing the speed of execution.

how do we close the gap?

So we know what the gap is – it was there last year and will be there next year. We know the reasons for it. So assuming we want to close the gap, what do we do about it?

Each of the reasons has a different approach to solving it. Doing more market research; getting the right team; training that team; articulating goals better; discussing the purpose more often; distributing leadership.

OKRs, when done well, will contribute towards closing the gap. But, even more, I’d say they exist to close the gap.

Here are a few ways in which they do that.

Publishing OKRs creates transparency and vulnerability, increasing trust, buy-in, commitment and engagement.
Checking in on OKRs regularly ensures the important strategic components remain front and centre.
Setting short-term commitments will ensure each team understands what they need to do in the next 3-6 months to contribute to progressing the strategy.
Aligning OKRs throughout the organisation will put a purpose to actions.
Communicating and celebrating short-term gains further increases engagement.
Tracking, measuring and reflecting often leads to clarity about our progress (tracking), how much time is available to spend on strategic elements in the business (measuring), and what inputs we need to change to affect the outcomes (reflecting).

To be clear: We don’t want to eliminate the gap. If there’s no gap, there’s probably very little growth. But we want to ensure that we can perform in line with expectations or very close to them. Next year, we will stretch again, and the gap will stretch. And every year, we’re becoming more and more effective, continuously improving in our pursuit of continuous progress.