When it comes to carrying out nearly any business function — whether you’re leading a website overhaul, reworking your product and service offerings, or doing something completely different — a robust, carefully considered strategy is key to your success.
However, the road to strategy implementation is rife with failures and setbacks. According to reporting by Harvard Business Review, 67% of strategies fail due to unsatisfactory execution. This is true even when the strategy is laid out carefully.
Another study reported that across industries, just 28% of executives and middle managers tasked with executing strategy were able to list three of their organization’s strategic priorities. (At one company, in particular, 33% of leaders tasked with strategy implementation failed to list one at all). Besides this, roughly 70% of company leaders — from C-suite executives to first-level managers — are unable to define “free cash flow.”
In short, many of your managers likely can’t communicate your organization’s strategy to their direct reports. At the same time, 70% of them can’t define the economic goal of nearly any strategy — also known as free cash flow. With all of this in mind, it’s no wonder why the majority of company strategies fail.
So how can we alleviate this issue and create strategies that not only look effective on paper, but also achieve business goals when put into effect?
The Most Neglected Side of Strategy
There are a wide variety of reasons as to why a business strategy might fail. A lack of technological chops could hold you back, processes might be ill-defined, or timing and resources could be lacking within your organization, to name a few common examples.
When strategy implementations fail, it’s often due to problems with the people side of strategy. This includes the capabilities, behaviors, and mindsets held by the people in your organization — and especially your leaders.
4 Traits to Encourage in Leaders for Seamless Strategy Execution
A successful strategy clearly starts with your organization’s leaders. Luckily, there are a few ways to address the often neglected capability areas cited above and improve your management team’s understanding of your business’s strategy, goals, and values.
There are four key areas within business acumen that will make your employees better business decision makers and accelerate your strategy:
1. Ensuring financial literacy
2. Having a functional business-savvy perspective
3. Adopting general manager (or GM) thinking
4. Keeping an enterprise value mindset close
This business acumen framework is mapped out as a continuum — with individual contributors and first-level managers focusing on financial literacy, middle managers focusing on a functional business-savvy perspective and GM thinking, and your most senior leaders focusing on an enterprise value mindset.
I’ve put the above business acumen framework together to help you identify gaps in mindsets, capability, and alignment to lead a business, execute strategies effectively, and drive business results. To learn how to put it into practice within your own organization and ensure successful strategy implementation, download “Accelerating execution at every management level.”