The ‘Execution Gap’ CEOs Must Fill

Where strategy implementation breaks down and what senior executives can do about it.



Where strategy implementation breaks down and what senior executives can do about it


For most companies, the end of the fiscal year is approaching. With it will probably come a critical assessment. Is the enterprise on track with its strategic plan? And is that painstakingly developed roadmap returning the value that was expected?


Sorry to disappoint you, but there is a strong likelihood that if you’re a member of the C suite, the answer you soon find to these questions will be ‘no.’


How can I make such a dire prediction without any knowledge of your organization? A wide range of research conducted by consulting and analytics firms alike has repeatedly found the same thing. About 70% of company strategies fail. And value achievement fares even worse.


A line comes to mind from T.S. Eliot’s famous poem, The Hollow Men. ‘Between the idea and the reality falls the Shadow.’ Adapt this to business and we can locate a similar abyss somewhere between strategy and its execution.


Execution Happens in the (Rapidly Changing) Middle

Why is there such a disconnect between the strategy conceived during executive retreats and meetings and the implementation happening on the front lines? Business commentators have a variety of explanations.


There are those, such as Wharton’s Lawrence G. Hrebiniak and global leadership expert Maya Hu-Chan, who look to MBA programs, which are, they say, long on strategic planning and short on implementation-related training. Others site executive insularity, lack of team involvement in strategy formulation, exclusively top-down management styles, or limited of communication and alignment. Still others say that many companies’ strategies aren’t really strategies at all, but more like a list of disparate action items.


These are all helpful insights but if a CEO or business owner were looking down the barrel at 2022 and needed to deliver, where should this executive focus? Let me suggest middle management.


I can hear the protests already. Middle management?!? Aren’t we streamlining such intermediaries out of existence as we become lean, agile organizations? Wasn’t the lesson of COVID-19 that we could get things done with only a handful of decision-makers, freed from bureaucracy? Didn’t employees working from home mostly manage themselves, and if so, what is there left for a manager to do?


There is a real risk that the pandemic experience will be misinterpreted in precisely these ways. For months, many companies went into survival mode and narrowed their vision to the most immediate threats. Executives concentrated power to speed action, and teams mostly went along. As disaster response, this approach was often enough to beat more ponderous competition, but it’s unlikely to stem the Great Resignation or succeed over the long run. The mid-tier isn’t going away.


That’s not to say that middle management will remain the same. The fact is, technology is taking over many of the tasks previously associated with the middle of a company. Passing information down, tracking project status, monitoring workloads and assigning tasks to frontline employees—this type of work now takes less time and requires fewer managers than it did in the past.


But companies today are also more complex than ever. Strategic execution frequently requires cross-silo collaboration. Businesses need people who can forge connections and build employee belonging in increasingly diverse environments. Senior executives alone cannot perform these functions for every business unit, department, and project.


What’s more, businesses thrive on their talent. Selecting, training, coaching, and mentoring that talent cannot be left only to HR. Employees look to their direct supervisors to guide them in learning their role and expanding their skills. Similarly, creativity cannot be offloaded to the product development department or a Skunkworks group. The best organizations innovate everywhere and are open to ideas from anywhere.


These are the types of rising executives at various levels are now filling. Where strategy becomes reality, there are managers, supervisors, directors, vice presidents, and other early- and mid-career executives. We can no longer leave them in the shadows.


Shining a Light on Management Readiness

Anecdotal reports indicate that the success of middle management during the COVID-19 crisis was somewhat hit or miss. Bain, for example, reports that “CEOs found that most managers lacked business-building skills” critical at this time. On the other hand, two McKinsey senior partners observed in Fortune that “some young middle managers are defying the problems and frustrations of this difficult period to demonstrate calm, champion diverse talent, and achieve far more than peer leaders do.”


Given the challenges companies are facing—among them high levels of employee burnout, extreme change fatigue, and the need to execute new strategies for a new era—nearly any CEO would gladly take as many of those calm, high-achieving managers as they could get. Sadly, such individuals are in short supply.

That’s not because the talent doesn’t exist—it’s because great managers aren’t born, they’re trained.


A Gallup study, for instance, suggested that only 10% of people naturally possess all core management traits. Ironically, early- and mid-career managers are, however, the least likely to benefit from coaching and other professional development assistance designed to instill those traits.


Companies tend to promote strong individual contributors to management, only to do one of three things:

  1. Provide no training at all. The unstated assumption is that if someone was able to do a job well as an individual contributor, they can easily select, train, motivate, and oversee others doing the same job.

  2. Expect that managers should be starting an M.B.A. or other training program on their own initiative. The thought is that HR can simply predicate further promotions on externally earned credentials in which the company needn’t play a substantive role.

  3. Limit company-provided training to hard skills and organization-specific requirements. Managers might learn how to operate a certain IT system or create a particular report, but the soft skills they’ll need to mentor and motivate their teams and succeed within the larger organization are given little, if any, attention.

Hopefully the discussion so far has demonstrated the error in these three ways of doing business.


Supporting Your Emerging and Advancing Leaders

There is a fourth option—investing in rising stars. And not just in a recognition program or a short seminar. Companies should really invest as soon as a high-potential individual is promoted to management and keep investing as they develop their careers, because it pays off in both retention and results.


There are many ways to do it but I routinely recommend an easy-to-implement option. Vistage offers leadership development programs aimed at early- and mid-career managers, known as Emerging Leaders and Advancing Leaders respectively. Both programs incorporate mentorship, resources, and the all-important peer meetings where rising leaders work with a small, multi-industry peer group to explore key topics and apply what they are learning. Companies can sponsor key management personnel for these two-year opportunities.


Emerging and Advancing Leaders programs help managers, directors, vice presidents, and other leaders hone their business understanding, so all the strategy communication and alignment work the senior executive team is doing makes more sense. The programs also build implementation skills, so managers take targeted, effective, strategy-advancing action on the front lines.


In other words, Emerging and Advancing Leaders programs can help C-suite teams leap the ‘execution gap’ and realize their vision and the full business value of their strategies, at long last.


Need more information? Contact us.


Resources:

  1. https://knowledge.wharton.upenn.edu/article/three-reasons-why-good-strategies-fail-execution-execution/

  2. https://www.inc.com/maya-hu-chan/90-percent-of-companies-fail-to-do-this.html