Avoid Derailment — Tips for Successful Strategy Execution

Given the tumultuous business environment in which we are all struggling today, being able to execute on an organization’s overall business strategy creates strong competitive advantage.

But a good strategy is not enough, and based on prior Leadership Pulse executive comments, we devoted a recent study to the factors that may derail strategy. The reason we focused on this topic was to provide leaders with some advice on what they can do, while time remains in 2005, to help spur their strategies on to success.

The Data

In this University of Michigan/Leadership Pulse study, we collected leadership data every two months from a sample of over 4,000 via short surveys. Our goal was to learn from a large sample of leaders, create a dialogue around the subjects we study, and help managers continually learn and bring value to their organizations.

In the April study, a total of 308 executives participated in the research and were asked to rate 15 items in terms of the degree to which each might get in the way of executing the strategy.

Responses indicated the following (percent of people who agreed this particular issue was a problem in executing strategy for 2005):

  • 35% Company’s Past and Habits
  • 29% Economic Climate or Budget
  • 23% Company Culture
  • 20% Way We Work Together
  • 18% Senior Management Team
  • 14% Customers
  • 13% CEO/President or Lack of Confidence
  • 11% Technology
  • 9% Middle Management
  • 7% Reputation, Human Resource Management or Employees
  • The Role of Technology

    The good news for CIOs and others in the technology field is that technology did not score high as a “derailer.” The bad news for any CIO is that the company’s past, culture, and management team are in the top factors that get in the way of strategy.

    This means, along with the other leaders in the firm, the CIO office has a part to play in making sure their teams do not get in the way of execution. The habits of any technology group are not excluded from the list.

    In order to further understand the impact of technology, we analyzed the data by strategy types.

    The results show that technology presents the biggest problem for firms with a new strategy but using the same tactics. This may because technology is part of the process used in many firms to execute on their new strategy, and without clear alignment of technology with the process (or tactics) it starts to derail execution.

    What this means to the CIO or technology group is that early involvement in strategy development and execution are key for success.

    Technology can be particularly helpful in the development of a company strategy that, overall, can execute well. Getting the strategy “right” is less about pure alignment of people and strategy and more a function of knowing how to realign strategy.

    This means that clearly listening to the business’ stakeholders, understanding the environment, and moving all the pieces in the company through agile leadership are the real keys to long-term success.

    Technology can be a key factor in building agility because information can be obtained and circulated faster. However, key to success is making sure leaders not only have the data they need to lead but that they know how to use that information.

    Theresa Welbourne, is the founder, president and CEO of eePulse and an adjunct professor of Executive Education at the University of Michigan Business School. If you wish to participate her ongoing leadership study, which is available to you at no cost, please register at: www.umbs.leadership.eepulse.com.