More than half of senior executives surveyed think their company doesn’t have a winning strategy and two-thirds think their organization doesn’t have the right capabilities to execute its strategy. That’s the sobering news from a global survey of senior executives and the basis for an illuminating article, “5 Ways to Close the Strategy-to-Execution Gap,” (Paul Leinwant, Cesare Mainardi and Art Kleiner).
Intrigued by the gap that persists between strategy and execution, the researchers set out to find and study examples of extraordinary companies that successfully close that gap. Their findings are both surprising and predictable when viewed through the proper lens. Indeed, the companies who are great at both strategy and execution excel at five unconventional acts — management practices that contradict conventional wisdom.
- First, these companies commit to an identity. They avoid getting trapped on a growth treadmill, chasing multiple market opportunities where they have no right to win. Instead, they are clear-minded about what they do best, developing a solid value proposition and building distinctive capabilities that will last for the long term.
- Second, many managers assume they should adopt the best practices of their industry and treat external benchmarking as the established path to success. But the companies they studied believe otherwise. They translate the strategic into the everyday. They design and build their own bespoke capabilities that set them apart from other companies. Then they bring those capabilities to scale in their own distinctive ways.
- Third, the companies they studied resist disruptive reorganizations and instead put their culture to work. They tap the power of the ingrained thinking and behavior that already exists below the surface in their company, using culture, not structure, to drive change.
- Fourth, a conventional company might try to reduce costs across the board by going lean everywhere. But the companies they studied cut costs to grow stronger. They marshal their resources strategically, doubling down on the few capabilities that matter most and pruning back everything else.
- Finally, these companies are not trying to simply become agile. They don’t respond to external change as rapidly as possible. Instead, they shape their future by creating the change they want to see.
Companies that are capable of integrating strategy and execution in every decision create long-term sustainable success. The quality and caliber of leadership, company culture, and understanding how to build and scale the capabilities required, are key to the ability to engage in a chosen market and consistently outmatch competitors.