Monday, March 16, 2009

Barriers to Strategy Execution

I read a nice piece on the blog Did somebody say strategy?, entitled Barriers to Strategy Execution, written by Ron Dimon, where he listed some of the barriers to effective strategy execution:

1. No vetting of the strategy to see if it's actually do-able (do we have the right capital, right products, right markets, right people) debate to refine the strategy,

2. Low/No agreement on what the strategy actually is - even among the C-suite executives (it’s always a surprise to see this),

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

4. No buy-in to the budgets, plans, and forecasts (usually due to management overrides after a bottoms-up exercise),

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

6. Low/No 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,

7. Low/No understanding of the root causes as to why the company achieve, underachieve, or overachieve results,

8. No 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?"),

9. Low accountability for results.

This is a good list about the barriers to effective strategy execution. In my opinion, the mainly barrier is the #2, the executives of the company don't understand exactly what the strategy actually is, because when this happens, all the others barriers tend to happen too. In this case, you need to work together with the company to define and brighten up their strategy before start the execution.

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