Why Your Strategy Execution Is Failing

The CEO of one London-based professional service firm my colleague and I worked with met with her extended management team the first week of every month. She began each meeting by repeating the firm’s strategy and key priorities for the year. She was delighted when their employee engagement survey revealed that 84 percent of the staff were clear on their organization’s top priorities. She felt her effort to communicate the strategy seemed to be working.

Then her management team took my execution survey, which asked them to describe the strategy in their own words and list the top three to five priorities over the next few years. The CEO was disappointed to learn that their descriptions of the strategy were all over the place, with little overlap. Fewer than one-third of her direct reports could name even two of the company’s five strategic priorities—the same objectives she discussed in every management meeting.

This CEO was not the exception, but the rule. Most leaders believe that relentless communication is critical to leading execution, and most think they’re doing a great job. The data tends to say otherwise. Across over 500 companies, on average only 56 percent of distributed leaders could name even one of their company’s top priorities. Put simply, the most trusted leaders in the organization charged with strategy execution were given five chances to list the company’s must-win battles and half failed to list even one. The situation deteriorates as you move lower down into the organization. Only 44 percent of top team members could list the company’s top three priorities, a number that slipped to just over one-third among their direct reports. Further, only half of distributed leaders say they could easily explain the company’s strategy, and another 17 percent say they mostly understand the strategy but question whether it is the right way forward.

Most CEOs and senior leaders I work with tell me they communicate all the time and are surprised when data shows how poorly strategy is understood throughout the organization. But frequency of communication is not the problem: 90 percent of middle managers agree that top leaders communicate the strategy frequently enough. So how can so much communication yield so little?

Because communication does not equal understanding; shared context does. Successful companies create shared context, which is the common understanding of what matters, why it matters, how the pieces fit together, and what is and is not working.

Shared context cannot be measured by the input—volume of material communicated. Only the outcome matters, which is how well key leaders understand it. It comes from constant effort to build a shared understanding and reinforce this with your most critical leaders.

Here are four ways to build shared context:

1. Choose a simple tune that everyone can hum. Strategy communication should be clear and to be clear it must be simple. Remind everyone about the Reset questions, which are the six questions a team asks when they are resetting the strategy: What is the situation, and how will this change? What is success? Where will we play? How will we win? What will stop us? And, what should we do? The senior team members need to be aligned on what success looks like and what the must-win battles (MWBs) are and why they matter. If your entire leadership and management team cannot express the strategy in short sentences that reference the same points, you have not built shared context. Your outgoing communication is the starting point. Every company-wide announcement should go through a filter—does this reinforce our strategy and MWBs? If it does, describe how, and if it does not, ask why you are communicating it.

2. Show what it looks like to win. Success at the finish line matters. Consistent tying back to the definition of success, for both the strategy cycle and the year reinforce context. Everyone wants to win. If they know the finish line they are aiming towards, they can better align effort and make the daily trade-offs to get there. The London-based CEO was able to boost shared context after the survey results by consistently linking the top priorities to where they wanted to be at the end of the three years.

3. Discussions, not lectures. Shared context is built in discussion, which can be virtual and via shared platforms, but not just email or Slack. Review the agenda of your last meeting and the time allocation between telling and talking; if it wasn’t majority talking, you are not building shared context. Building shared context comes from frequent, formal and informal, conversations with distributed leaders about what’s working, what’s not, and what they are seeing. Resist the urge to tell and ensure you are listening and discussing. 

4. Talk about what’s not working. It is just as important to discuss what is not working as what is. Even companies that score well on initial communication often fail to go back to the organization with updates on progress. It is these follow-up conversations on MWB progress and why things are working, or not, that build shared context. Having clear regularly updated scoreboard metrics for each MWB is another effective way to reinforce this shared understanding.

Offices are a great way to facilitate shared context. Steve Jobs knew the power of discussions and conversations in creating shared context. While designing the Pixar building, he moved away from a multi-building design to a single large building. In the center was an atrium designed to encourage employee mingling and unplanned collaboration. John Lasseter, Pixar’s former chief creative officer, remarked he has “never seen a building that promoted collaboration and creativity as well as this one.” Chris Kane, former head of corporate real estate at BBC, similarly prioritized the strategic asset of real estate to further strategy, and context when they launched White City in London and re-developed Broadcasting House. You can create context for collaboration and creativity around a virtual water cooler as well, but it takes explicit focus rather than leaving it to chance.

Excerpted with permission from Survive, Reset, Thrive: Leading Breakthrough Growth Strategy in Volatile Times (Kogan Page; February 27, 2024).

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