Why organizations fail at strategy Execution

Strategy Execution and Management Decision-Making
Strategy execution is a disciplined and systematic approach to managing - directing, controlling and facilitating - the day-to-day decisions and activities undertaken at all levels in the organization involving top management through middle management, and front-line managers and workers that carryout the ongoing pursuit of a strategy and complete it. Strategy execution makes the implemented strategy work as intended, and turn implemented strategy into organizational success. 

Managing strategy implementation and execution is a function of strategic management. Strategic management is one of the most vital activities since it encompasses the business organization's entire scope of strategic decision-making. Strategy execution management is a process of managing people, strategy and operations; Execution involves doing things (such as making decisions and directing activities) to create "fits" between the way things are done and what it takes to make the strategy work as intended. (how things should be done) within the context of the strategy implementation. 

Successful strategy execution involves decisions about managing changes to appropriate elements of the Operating Model which is concerned with how resources are organized and operated to get critical work done. Changes to elements of the organization's Operating Model may include: governance, accountability, or culture, and in some cases overhauling the whole structure, when a company's strategy changes. These decisions about change take place within an organizational context of power, culture, leadership, and ability to manage change. This makes it more difficult for managers to control execution. 

Challenges to Successful Execution
Strategy execution can fail - not accomplishing the desired outcomes - for myriad reasons including the inability of the organization to manage its strategy very well when faced with the following challenging situations:

• Economy - Economic upheavals that simply do not provide any room for new businesses to survive, grow and thrive.
• Competitors - Actions of competitors.
• Market - Business challenges inherent in the market.
• Resource Availability - Lack of availability of adequate resources.

These challenges are not the reasons at fault, since other businesses are able to survive, grow and thrive. The real (causal) reason can be attributed to mismanagement - inability of the business organization to manage its strategy very well.


Factors Influencing Effective Strategy Execution
In addition to poor management decision-making, other factors that can influence successful strategy execution; may include:

1. Bad Strategy - A bad strategy is a strategy that does not define an approach/means to respond to a challenge (opportunity/threat), or solve a known problem. Bad strategy is reflected in an organization's failure to face the problems that pose threat to its survival and profitable growth. A good strategy, for example, aligns with well diagnosed strategic issue and basic problem; and is an approach to overcoming an obstacle; or a response to a challenge.  A good strategy is a mixture of policy and action designed to surmount a challenge/problem. 
2. Bad Strategic Decisions - Strategic decisions are among the main means through which management choices are actually realized. Bad strategic decisions are strategic decisions whose outcomes are the wrong expected outcomes, and result in business failure/decline. 
3. Poor Implementation - This is failure of strategic initiatives that define major efforts/actions required to close identified strategic gaps to achieve intended objectives, so the organization can make progress towards its strategic goals. The gaps may be (1) between strategy and organization capabilities, (2) between strategy and the reward structure, (3) between strategy and internal support systems, and (4) between strategy and the organization's culture. Poor implementation may result in weak strategic assets that do not close the strategic gap, and make successful execution is unlikely. 
4. Inadequate Structure - The organization structure defines appropriate boundaries for lines of business, shared services and functions, centers of expertise and other integrative and coordinating methods and mechanisms that allow the company to leverage scale and expertise. The structure in addition specifies the size and shape of the organization with indicative resource levels and locations. Inadequate structure is a structure that is not aligned with the strategy and supportive of it. 
5. Culture - Organizational culture is the overall atmosphere within the company, particularly with respect to its members and their involvement in how work gets done.  The company should foster a culture of being responsible and accountable for one's actions with corresponding incentives and sanctions for good and bad behavior.
6. ​Accountability - This specifies and clarifies the Roles, Responsibilities of the main organizational entities, including ownership of P&Ls and a clear value-adding role for the corporate center. There should be clear guidelines for the roles each organizational unit will play in critical decisions. A rewards system linked to these accountability reinforces strong execution.  
7. Poor Coordination - Implementation and Execution Takes time, Execution Involves Many People, Execution involves managers across all levels in the organization this requires leadership in coordinating management and staff in properly performing their tasks to accomplish work.
8. Not Managing Change - This relates to the difficulty of managing employee resistance to change. People become comfortable with the way the business is run; they know the expectations and their role within the company. When a major change disrupts their familiarity, some employees become upset; they don't want to relearn their jobs or change the way they have done things. The leadership in the organization need to support the employees and provide training for any new responsibilities to ease the transition.
9. Poor Leadership - Effective strategy execution requires leadership and management effectively communicate the vision and mission of the organization to employees and ensure they are aligned with the vision and mission goals and objectives.  Leadership must also understand the the current climate (influenced by culture) and ensure the organization climate is appropriate to support successful strategy execution or make the appropriate and necessary changes to culture.  Clarifying Decision Rights and Norms.
10. Poor Communication - Failing to communicate effectively creates uncertainty and makes employees feel as if they are not part of the team and decisions. This invites fear and rumors into the work environment, disrupting work and progress towards change implementation. Keeping employees updated regularly about the progress of strategy performance improves employee involvement.
11. Poor Planning - This results in inefficient utilization of resources such as time and labor as well as lack of capacity to managing change. Without adequate planning, change in the organization is likely to fall apart or cause more problems than benefits Poor planning may lead to strategy execution failure resulting from: bad or unrealistic schedules for project team members resulting in waste of time and poor time management; lack of clear definition of strategy and project objectives; lack of budgetary controls leading to misuse of funds, etc. 

All these factors are interdependent and their influences are non-deterministic; this typically, makes it very difficult for managers to comprehend the contribution of each of the factors to successful outcomes of strategy execution. Each of the factors influences execution success/failure in a different way; if an organization fails to pay proper attention to one of these factors, it can result in execution failure, therefore an organization needs a system and approach to support management of these factors and their influence on successful execution. ​

Effective Strategy Execution Management
Effective strategy execution management involves closing the "execution" gap - the gap between actual/current strategy performance and intended desired performance. The actual strategy realized from execution is the combination of the executed part of the intended (deliberate) strategy - what managers have set out in advance and intend to do - as part of some important strategic plan, and emergent strategy - the executed as-needed reactions to unanticipated developments and fresh competitive pressures. 

Strategy execution involves change in people that typically takes over a long period of time, this makes it more likely that the conditions under which the strategy formulation took place will change and unforeseen circumstances may arise to derail the execution. Managing organizational change requires a system of controls - a tool designed by managers to help them monitor and evaluate the progress of activities directed towards executing the organization's implemented strategy.

Strategic Control
​Management needs to also understand the interactions among key execution decisions and actions, and contextual forces that create significant and persistent execution gap as measured by the Operating Model. An important task of managers is to design strategic control systems for successfully implementing and executing a strategy.

Strategic control systems provide managers with the tools to regulate and govern their activities. In strategic control, managers first select strategy and organization structure, and then create control systems to evaluate and monitor the progress of activities directed towards implementing and executing strategies. Finally, they adopt corrective actions through adjustments in the strategy if variations are detected. Strategic control systems provide managers the tools to regulate and govern their activities through both proactive (feed forward) and reactive (feedback) mechanisms. Proactive control systems help in keeping an organization on track, anticipating future events and responding to opportunities and threats. Reactive control systems help detect deviations after events have occurred and then take corrective actions. 

​Strategic managers create control systems to monitor the quality of products. Strategic control systems further help managers achieve superior efficiency, quality, innovation and responsiveness to customers. Strategic managers can measure efficiency by comparing the total inputs with the total outputs (how many units of inputs are used to produce a unit of output). Strategic control systems can also help in encouraging employees to think about innovation. Strategic control systems make employees more responsive to customers through monitoring and evaluating employees' behavior and contact with customers.