Mind The Strategic Execution Gap

In many organizations, there is a familiar gap between what should get done and what does get done. This gap is commonly referred to as the “execution gap” and it represents an organizational leadership issue that is difficult to overcome. Organizations that acknowledge a need for systemic innovation face a similar situation known as an “innovation gap.” The desire (or demand) for more breakthrough thinking and innovative new products espoused by senior leadership is disconnected from the safe, incremental innovations actually built and delivered by the front line.

The strategic execution gap typically results from a lack of clarity and action between the strategic direction of the organization and its frenetic attempt to balance keeping the lights on and the customer happy. In most organizations, the Chief Executive Officer (CEO) will typically work in conjunction with his or her leadership team to define and communicate the need for innovation and new product development. With the strategic vision established, he or she will direct operational teams to establish an organizational structure, or modify an existing structure, to produce the desired innovative outcomes of this new growth-focused approach or model.

“Companies typically realize only about 60% of their strategy’s potential value because of breakdowns in planning and execution

– Harvard Business Review

Unfortunately, once this mandate cascades down the management chain, it becomes diluted to minimize “change panic,” or is force fit into existing operational behavior rather than the establishment of new organization structures or operational processes. These adjustments, via “organizational change anti-body reflex,” result in incremental, rather than breakthrough, ideas and solutions and do not match the original mandate as directed by the executive leadership.

Busy executives and senior leaders, focused on their own priorities, also don’t take the time to verify that their strategic direction is being followed until far too late in the process. At the time the lack of adherence is discovered, the opinion that “some action” is better than “no action” typically prevails and the bold strategic vision is officially abandoned for something safe and completely ineffectual.

In order for execution to be successful, regardless of the business discipline in which it is applied, it must have a number of fundamental elements in place:

  1. Clear and consistent vision of the strategy
  2. Clear and consistent leadership commitment and attention from executive leadership ranks through middle / operational management
  3. Defined goals, tactics, milestones, deadlines and metrics to support execution of strategy
  4. Effective and efficient tracking mechanism to report against goals, tactics, milestones and deadlines
  5. Clear and consistent responsibility, authority and accountability
  6. Performance measurements tied to execution strategy

From an innovation standpoint, the aforementioned execution fundamentals align very closely to the Four Keys of Innovation Management Success[1]:

  1. Direct Executive / Senior Leadership engagement
  2. Allocation of appropriate amount of resources:
    1. Financial
    2. Human
    3. Space
    4. Time
  3. Consideration of innovation management as a business discipline rather than a singular event
  4. Disciplined processes, approaches, methodologies and techniques

If strategic innovation, and the execution of that strategy, is so important, why then does innovation fail to take hold in organizations? Actually, upon further examination, this failure results from two “gaps” that exist in every organization. Although the width of the gap may vary from firm to firm, these gaps prevent the free flow of ideas, an execution mindset or consistency of strategic focus throughout the organization.

The first of these gaps lies between the front-line employee and the middle/operational management layer. This gap is primarily an “Idea Gap,” as noted in the figure[2] below.

OrgTierGapDiagram-Obstacles

 

Research conducted by the American Institute for Innovation Excellence[3] in 2011 indicates that ideas conceived and developed at the front-line employee layer, where the vast majority of the customer-facing interaction occurs, are most frequently “lost” when moving up the chain of command through the middle/operational management layer due to a number of common causes:

  • Lack of idea submission process
  • Lack of problem solving and/or idea campaign focus
  • Failure to act on ideas
  • Outright obfuscation
  • Overcommitted / fractionalized resources
  • Lack of perceived “permission” to innovate or execute

The most common reason for idea execution failure at this layer, however, is the self-culling of ideas by idea generators themselves. Surveys, interviews and other individual-focused research repeatedly show that idea generators have a fear about sharing their ideas with others. These fears can include:

  • Fear of ridicule for a “crazy” idea
  • Fear of being punished for going outside of the normal process
  • Fear of failure and/or success based on the eventual disposition of the idea
  • Fear of rejection because if it really was a good idea, someone else would have thought of it already
  • Fear of theft or lack of credit for the idea once it leaves their “possession”

All of these fears, irrational or illogical as they may be, are real experiences and emotions expressed by real people. It is a large “gap” in the harvesting and processing of potentially great ideas that may lead to solving a strategic need.

“82% of Fortune 500 CEOs feel their organization did an effective job of strategic planning. However, only 14% of those same CEOs indicated that their organization did an effective job of implementing the strategy”

Forbes Magazine

The second of the two “gaps,” seen in all organizations struggling with the execution of an innovation strategy, exists at the intersection of the Executive or Senior Leadership layer and the Middle / Operational layer. This gap, known as the “Execution Gap,” typically exists as result of weak leadership, ineffective performance / reward mechanisms or poor communication. Specifically, additional research on this topic discovered the most commonly cited causes for the existence of the gap were:

  • Failure to link strategy and operations
  • Failure to link performance goals to strategy / innovation
  • Lack of common language and understanding of innovation for the organization
  • Lack of accountability
  • Lack of metrics or system of measurement
  • Lack of executive leadership engagement
  • Failure to create time/space away from operations

Causes of this behavior may be the result of a lack of foundational training in execution and/or strategic planning. Another cause may be the way middle managers are rewarded via their performance and bonus structures. Lawrence G. Hrebiniak[4], Professor of Management at the Wharton School of the University of Pennsylvania and author of “Making Strategy Work,” summed it up rather succinctly, “Managers are trained to plan, not execute.[5]

In other words, “A failure to innovate is a failure to execute…and a failure to execute is a failure of leadership.”

Paul R. Williams

Fortunately, the obstacles and blocks caused at the middle management layer can be quickly and effectively resolved using a number of strategies:

  1. Provide innovation leadership training and a hands-on practice lab where they can both identify and eliminate unsupportive behaviors as well as build supportive skill sets
  2. “Incentivize” or otherwise structure their pay, bonus and other performance based goals to align with the desired outcome
  3. Establish an idea and/or innovation management process that allows ideas and information from both directions to by-pass the middle management layer entirely
  4. Hold middle / operational management accountable, including punishment for non-conformance, to executive directive

Although much “blame” centers on the middle / operational management layer as one of the major causes of the innovation strategy execution gap, it should equally be noted that they are not the sole cause. In fact, the single common thread throughout all of the research in this area identified the number one contributor of the failure to connect innovation strategy with execution: day-to-day operations.

Even when front-line employees and/or middle managers understand the organization’s strategy, and fully intend to integrate and execute upon the new strategy, they often admit that their failure to actually follow through resulted from “day-to-day operations” disrupting their plans. In essence, firefighting ruled the workday rather than planned tasks or strategic focus.

It seems that day-to-day operations always seem to get in the way or supersede, not just strategic innovation execution, but practically any initiative-driven, project-based activities beyond standard operating procedures. Due to cost pressures, resources are overscheduled and fractionalized across daily work, project work and administrative tasks. The perceived reality is that there simply isn’t enough time in the day to drive strategic execution to the top of the stack.

This obstacle too can be overcome with the appropriate leadership awareness and via leveraging the following tactics to re-balance work effort:

  • Reduce day-to-day operational responsibilities
  • Increase resources
  • Design performance incentives / disincentives
  • Remove work flow and/or process-based obstacles
  • Establish frequent and focused communication on work balance
  • Design a roadmap, plan or other structure and make it visible
  • Be honest about changes and share both the benefits and the risks of the strategy
  • Establish a specialized team to work outside of the day-to-day operations

So what does it take to bridge the gap between innovation strategy and innovation execution? The simple fact remains, innovation cannot happen without some kind of execution.  Ideas are not real and do not exist until they are “executed.”  That’s why every definition of innovation contains an action of some sort.  Most organizations do not suffer from a shortage of ideas.  Employees, management, vendors, partners and customers all have ideas on how to make products and/or services better, faster and cheaper.  But again, ideas are the easy part, they mostly just happen.  Step two takes action or execution.

  • Figuring out what problems you want to solve…takes execution
  • Collecting ideas from employees, management, vendors, partners and customers…takes execution
  • Filtering ideas and deciding which ideas you want to commercialize…takes execution
  • Committing resources, both financial and human, toward commercialization…takes execution
  • Developing a solid project plan to move the idea to reality…takes execution
  • Marketing the product/service and making the idea known to the world…takes execution
  • Making a profit on an idea…takes execution

Remember…to be a good innovator, you need to excel at execution!

 

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[1] “Four Keys of Innovation Management Success” – © Copyright, American Institute for Innovation Excellence, 2010

[2] http://www.thinkforachange.com/wp-content/uploads/2015/11/OrgTierGapDiagram-Obstacles.jpg

[3] Exploring The Innovation Execution Gap – Fall 2011 Research Report – American Institute for Innovation Excellence, http://www.thinkforachange.com/wp-content/uploads/2015/01/White-Paper-Bridging-The-Innovation-Execution-Gap.pdf

[4] Lawrence G. Hrebiniak bio at Wharton School Website: http://mgmt.wharton.upenn.edu/people/faculty.cfm?id=1329

[5] Making Strategy Work: Leading Effective Execution and Change, Lawrence G. Hrebiniak, Wharton School Publishing, January 2005

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