Strategy Failures Have Nothing To Do With Execution

Conventional wisdom says strategies fail because of poor execution, but conventional wisdom is wrong. Just because strategies fail in execution does not mean they fail because of execution. The top reasons for strategy failure have nothing to do with strategy execution, everything to do with strategy development.

Several years ago, I started out my career in the food industry leading a team of quality inspectors at Oscar Mayer. Our job was to make sure only the product that could pass rigorous quality standards reached the consumer. To make sure, teams of inspectors pulled samples of finished products off the end of the production lines and inspected for defects. If the inspection failed, product was “tagged” and had to be corrected.

But the defects weren’t created at the end of the production line. They were found at the end of the production line.

Similarly, strategy issues are found in execution, but the issues are created upstream in strategy development.

If you think about it, these top 5 problems with strategy (according to a global survey of CEOs conducted by McKinsey¹) are found in execution but they are created upstream in strategy development. Here are the top five problems cited by CEOs with an explanation of where the defect is created:

1. Lack of organizational alignment – this defect happens when a strategy is activated in the organization without securing adequate alignment first.
2. Inability to monitor progress – strategies and tactics should be cascaded through the organization with accountability and timing for each key action.
3. Inadequate focus on strategic issues – these are issues that will derail even the finest strategies so they should be identified and mitigated during the strategy development process.
4. Poor market intelligence – it’s not possible to select a good course of action if you don’t know the current situation.
5. Poor quality of strategy discussions – everyone knows strategy discussions must be thorough and robust during strategy development, not complaining afterwards when strategies go awry.

Stop thinking of execution as the problem. Focus on strategy development to avoid these defects downstream.

And yes, Oscar Mayer had the best quality…

1. McKinsey quarterly survey of executives.