Making Strategy Work: Execution Is the Key
In 2013, eight years after the publication of Making Strategy Work, the strategic implementation problems organizations face are remarkably similar to those reported by managers in 2005. The obstacles to effective strategy execution are still real and formidable. While strategic planning or strategy making is difficult and challenging, as always, it’s still obvious that managers feel more than ever that the successful implementation of strategy is more problematic than the formulation of a chosen strategy and even more important for organizational performance. It is still clear and notable that making strategy work is more difficult and challenging than making or creating strategy.
If, indeed, there is a notable change in 2013, it’s that the execution of strategy is receiving more attention than it did a decade or so ago. Managers realize more than ever that execution is a key to strategic success and that the obstacles to implementation are real and demand managerial time and attention. Despite this insight, however, the road to successful execution is still bumpy and full of potholes, suggesting that managers haven’t come fully to grasp with what contributes to making strategy work. Let’s note what these challenging issues were in 2005 and why they still set the tone for this book and underlie the present treatment of what’s needed to make strategy work. Looking at the past and present clearly shows that the challenges to execution were and still are real, salient, and worthy of attention.
More than two decades ago, I was working with the Organizational Effectiveness Group in AT&T’s new Consumer Products division, a business created after the court-mandated breakup and reorganization of the company. I remember one particular day that made an impression on me that would last for years.
I was talking to Randy Tobias, the head of the division. I had met Randy while doing some work for Illinois Bell, and here we were talking about his division’s strategic issues and challenges. Randy later moved into the chairman’s office at AT&T and then became a successful CEO of Eli Lilly, but his comments that day years ago were the ones that affected me most.i
Here was a new business thrust headlong into the competitive arena. Competition was new to AT&T at the time. Competitive strategy for the business was nonexistent, and Tobias was laboring to create that elusive original plan. He focused on products, competitors, industry forces, and how to position the new division in the marketplace. He handled expectations and demands from corporate as he forged a plan for the business and helped position it in the AT&T portfolio. He created a strategic plan where previously there had been none, a Herculean task and one well done at the time.
On that day, I recall asking Randy what was the biggest strategic challenge confronting the business. I expected that his answer would deal with the problem of strategy formulation or some competitive threat facing the division. His answer surprised me.
He said that strategy formulation, while extremely challenging and difficult, was not what concerned him the most. It was not the planning that worried him. It was something even bigger and more problematic.
It was the execution of strategy that concerned him above all else. Making the plan work would be an even bigger challenge than creating the plan. Execution was the key to competitive success, but it would take some doing.
I, of course, sought further clarification and elaboration. I can’t remember all of his points in response to my many questions, but here are some of the execution challenges he raised that day, referring to his own organization. He mentioned the following:
- The culture of the organization and how it was not appropriate for the challenges ahead
- Incentives and how people have been rewarded for seniority or “getting older,” not for performance or competitive achievement
- The need to overcome problems with traditional functional “silos” in the organization’s structure
- The challenges inherent in managing change as the division adapted to new competitive conditions
This was the first elaboration of execution-related problems I had ever heard, and the message has stayed with me over the years. This early experience has been repeated countless times in many other organizations. A number of critical insights have stayed with me as I’ve dealt with execution- or implementation-related programs in many different organizations. It became clear to me that day and over the years that: Execution is a key to success.