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What is it that thwarts a rigorous process of sustainably executing an organization's strategy? As shown in Figure 1.1, some of the barriers include those capabilities that are the responsibility of managers and leaders in the organization.

In March 2010, Harvard Business Review (HBR) surveyed 1,075 HBR readers about strategy and execution in their organizations.³ Only 37% said their companies are “very good” or “excellent” at execution.

Figure 1.1 Barriers in the Strategy-Execution Gap

The HBR survey found that the top barriers to strategy-execution were:

 Making the strategy meaningful to frontline employees

 Poor communication of strategy

 Lack of accountability

 Lack of clear and decisive leadership

 Too much focus on short-term results

 Everyone too busy/not enough resources

 Resistance to change

 Strategy goals remain vague and pointless:Leadership actions inconsistent with strategyInability to measure impactBusiness units with competing agendasToo much uncertainty

In my consulting work, and being an employee for small, medium, and large organizations, I've seen some of the barriers to effective strategy execution, including:

 No vetting of the strategy to see if it's actually doable (do we have the right capital, right products, right markets, right people?), and little debate to refine the strategy.

 Low agreement on what the strategy actually is—even among the C-suite executives (it's always a surprise to see this).

 Low connection between the strategic financial and operational business models (made in the vetting debate) and budgets, plans, and forecasts.

 Low buy-in to the budgets, plans, and forecasts (usually due to management overrides after a bottoms-up exercise), resulting in low buy-in to the strategy from lower levels in the organization.

 Low agreement on what the right measures are to see how well we're doing, and no visible connection between those measures and strategic objectives.

 Low belief that the numbers seen are accurate (or at least the same version), as well as a lot of manual effort to get at the numbers.

 Low understanding of the root causes as to why the company achieves, underachieves, or overachieves results.

 Little connection between root-cause analysis and tweaking the strategy (“hey, we are losing money on product X, and it's not a loss-leader, should we be in that business?”).

 Low accountability for results. Some organizations don't have targets or owners for their key objectives.

When it does work, I've seen things like accounts receivable associates having a Business Intelligence (BI) dashboard that shows how they have a daily impact on days sales outstanding and cash collections, which directly impacts strategic objectives like profitable revenue growth.

According to Roger Martin, Dean of the Rotman School of Management at the University of Toronto, in his article “The Execution Trap,”⁴ as operational and frontline employees have to make decisions every day involving customers and operations, they become de facto strategists. Or, in my view, at least de facto strategy executioners, and I don't mean they have to kill the strategy!

Imagine if your number-one strategic objective is “profitable revenue growth,” and the target is 10% year-over-year improvement in both revenue and operating margin. Also imagine that every employee knows this—they even have it written on a laminated card they carry around in their wallets and purses. And then one of your customer service reps gets a phone call from an irate customer. Typically, the customer service rep is measured on customer satisfaction including low call time, low time-to-resolution, high marks on the net promoter score scale for each interaction, and so on. But what if the phone call from the irate customer was accompanied by a dashboard that automatically popped up on the customer service rep's screen that showed:

 Customer lifetime value (CLV) (how much the customer's company had spent on your products and services) was 50% lower than the average CLV.

 Cost to serve (the amount spent on support, maintenance, returns, etc.) was 50% higher than the average cost to serve.

 Overall customer profitability was ranked in the bottom 10% (this customer was very good at negotiating deep discounts on prices during the end-of-quarter sales cycle).

What would your customer service rep do? Would you want them to treat the irate customer as any other customer and invest the time and money to solve their problem or concern? Or would you want the customer service rep to forward the customer call on to a special help desk that, in line with your number one strategic objective, would “fire” this customer?

We need a better decision-making and resource-deployment process because business-as-usual is over. In its place we have a faster-paced, rapidly changing world, including:

 A need to be more agile, more responsive, and more tolerant of uncertainty

 Better-informed customers

 Changing market and business models

 Structural changes in the economics of business

 Regulatory revolution

 Growth through acquisition as the normal course of business

 Redefining asset values

 Changing delivery channels

 Vast new information sources

 Compressed cycle times

And those compressed cycle times impact the entire business:

 Time to market for new products and services (concept to realization)

 Time to deliver to the customer

 Time to close the books

 Time to hire new staff

 Time to deploy new staff (on-boarding)

 Time for new staff to reach full productivity

 Time to make key decisions

 Time to complete major business transactions

 Time to obsolescence for equipment and products

 Time to integrate acquisitions

 Time to respond to competitive actions

 Time to return on investment (ROI) (especially for new technology investments)

 Time to enter a new market⁵

Connected planning is one way to fill this strategy-to-execution gap. It helps everyone in the organization keep their eye on the prize and see how their performance is connected to the whole organization's performance.