Understanding Strategy Execution

Introduction
Strategy execution is a disciplined and systematic process of directing and controlling actionable decisions and activities that make an implemented strategy work. Execution usually takes a long time - longer than the formulation of strategy; 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 by making it more difficult for managers to control execution. Execution also involves more people at all levels in the organization than strategy formulation, this creates a challenge in communicating down the organization and/or across different functions relevant to the effective implementation of the strategy. .

Successful execution involves decisions about strategy, structure, coordination, information sharing, incentives and controls. These decisions take place within an organizational context of power, culture, leadership and capacity to manage change; and the capacity to understand and manage the interactions among those decisions and contextual forces. The execution flow involves both top down flows of decisions and actions from corporate strategy decisions through business strategy decisions to strategy implementation decision and actions (participation and communication down and across operating units), and bottom up flows of participation and communication information up the organization.  Execution leads to organizational learning so the flows include feedback loops, and the controls portion comprises feedback and change. 

Obstacles to Effective Strategy Execution
Strategies may fail at execution for a myriad of reasons including the following obstacles:

1. Poor Strategy
2. Planning and Execution are Interdependent
3. Implementation and Execution Takes time
4. Execution Involves Many People
5. Execution involves managers across all levels in the organization
6. Managing Change is Difficult
7. Clarifying Decision Rights and Norms
8. Clarifying Roles, Responsibilities and Accountability for execution activities
9. Poor Knowledge Sharing among functions and divisions
10. Dis-functional Incentives
11. Inadequate Coordination
12. No Guidelines and model to shape execution decisions and activities.

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 in successful execution. ​

Poor Leadership Style
Poor leadership is manifested in a variety of ways, including:

1. Failure of leadership to clearly communicate the reasons for the new strategy and garner the appropriate support to create consensus
2. Failure to generate enthusiasm and motivation in order to overcome any pockets of doubt and resistance to change resulting from successful strategy execution  
3. Failure of leadership to orchestrate the processes and major initiatives
4. Failure to coordinate management and staff in properly performing their tasks to accomplish work.
5. Failure to clearly articulate and communicate the vision and mission as well as the organization's values.

Good Strategy
Good execution begins with good strategy. A good strategy aligns with well diagnosed strategic issue and basic problem. A strategy may be defined variously as an approach to overcoming an obstacle; or a response to a challenge. 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. It reflects an organization's failure to face the problem. A good strategy is a mixture of policy and action designed to surmount a challenge/problem.

Organization Structure
Corporate structure - the organizational arrangement created in response to the demands of corporate strategy. The result of the decisions about structure is that different units focus on different tasks and specialties. To  achieve unity of effort and to combine the activities of these units, companies must pay formal attention to integrative methods and mechanisms through structural integration. Thus, structural integration refers to business processes that coordinate corporate functions with business unit operations..  Structure affects real costs and benefits. Different ways of organizing affect outcomes, but creating the right organizational structure is a real challenge.

Poor Implementation
This results in failure of strategic initiatives that define major efforts required to close identified strategic gaps so the organization can make progress towards its strategic goals. Poor implementation may result in weak strategic assets that do not close the strategic gap, and since execution takes place within the context of the implemented strategy, successful execution is unlikely.

Bad Strategic Decisions
Bad decisions result in the wrong outcomes. Bad strategic decisions are strategic decisions whose outcomes result in business failure/decline. Bad decisions may result from incomplete or short-circuited decision processes.

Strategic decisions are among the main means through which management choices are actually realized. They are difficult or expensive to reverse because they substantially alter (and irrevocably so in the short run) the relationships between the decision makers' organization and customers, competitors, etc. The decision's outcomes are usually contingent on effects - the behavior of other actors affected by the decisions and outcomes. These recursive relationships between decisions, decision outcomes, and effects on other actors' behavior make strategic decisions messier and more complex than operations decisions.

Poor Planning
This results in inefficient utilization of resources such as time and labor as well as lack of capacity to managing change. 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. 

Strategy Execution System
The actual strategy of an organization is realized through combined execution of the intended strategy - what managers have set out in advance and intend to do - as part of some important strategic plan, and as-needed reactions to unanticipated developments and fresh competitive pressures to realize the actual strategy New circumstances always emerge, whether important technological developments, rivals successful new products introductions, newly enacted government regulations and policies, etc., that create enough uncertainty about the future that makes it impossible for managers to plan every strategic action in advance and pursue their intended strategy without alteration.

​
Organizations need a system to support managers in influencing the effectiveness of planned actions (top-down) and as-needed adaptive reactions to unforeseen conditions ("unplanned" bottom-up strategy responses) in order to improve the likelihood of successful execution: