Leadership deficits or lukewarm commitment
In this HBR article, Ron Carucci from consulting firm Navalent reports that 61% of executives in a 10-year longitudinal study felt they were not prepared for the strategic challenges they faced upon being appointed to senior leadership roles. Lack of commitment to the plan is also a contributing factor. In addition, leaders attending to quarterly targets, crisis-management, and reconciling budgets often consider execution a low priority.
Lack of metrics
Companies fail to apply metrics to track progress, which leads to ambiguous goals. Without metrics, it is easy to go off-track or to not recognize when conditions have changed and the plan should be revised.
Lack of systemic alignment
When strategies aren’t linked to budgets, strategic “priorities” don’t get resources. Local budgeting often reflects the conflicting objectives or goals for a group or business unit that are not consistent with strategic priorities.
Insufficient communication
Lack of down-the-line communication leads to confusion and lack of information enterprise-wide. This engenders distrust and negatively impacts commitment. The people closest to the customer are often in the dark. Kaplan and Norton report that on average, 95% of employees are unaware of the strategy.
Insufficient management capabilities
A study by the Economist found that “only 41% of respondents say their companies have a sufficient number of skilled personnel to implement high-priority strategic initiatives.” In the same study, only 18% reported prioritizing hiring of people with the skills to drive strategy implementation.
Lack of robust employee performance and development plans.
Kaplan and Norton report 70% of middle managers and over 90% of frontline employees have no link to the success or failure of execution. W. James McNerney, Jr. Chairman of 3M argued that by improving the average performance of every employee by 15%, irrespective of what his or her role is, a company can achieve and sustain consistently superior performance. Joseph Hrebiniak, Emeritus management professor at Wharton warns that the strategic plan has to be reconciled with the organization’s talent. “If you don’t have what it takes, you’re going to have to get it, or modify the strategy to be more realistic.” Develop leaders, managers, and employees to meet the strategy.
Resistance to Change
Change is threatening. In an organization, change often corresponds with budget and resource allocations representing shifts in power and influence for the leaders involved. For employees, fear and anxiety about their own competence, status, and job security also contribute to resistance.