Strategy-Execution Gap: Is your CEO driving a Clown-car?

If you read this post on Linkedin and its associated comments, you’d be forgiven for thinking that the CEO drives a clown-car to work and that the rest of the exec team spend all day throwing custard pies at each other!

In summary, the post mentions research that looked at 117 projects. Of those projects, 80% of the projects suggested by senior managers failed while 80% of those suggested by mid-managers succeeded.

80% of executive projects fail. 80% of middle-manager projects succeed.

The comments in response to the post were really interesting; the general consensus was “Executive = Vanity Project”...

Ouch!

But I wasn’t convinced that this was fair, so I went and read the original paper published by Quy Huy in the Harvard Business Review.

What did the research actually say?

The research was really about “the importance of middle managers during times of significant change.”

Quy Huy had spent several years doing primary research, looking at organizations and discovered that the key to implementing a successful transformation is getting the middle-managers on board.

These mid-level managers are key to the implementation of transformation programs because they;

• Have good “entrepreneurial ideas” for initiatives that would have an impact,
• They are much better at leveraging the informal networks that all organizations have, the networks that allow you to cut through the noise and get stuff done,
• They are better attuned to employee sentiment and can adapt messages to engage their teams, and
• They are better at managing the tension between progress and continuity.

It is the first point, the entrepreneurial ideas, that made the “great 80% / 80% headline”... but I don’t think this means that the executives are clowns.

Who does strategy? Who does execution?

The role of the executive team, at the end of the day, is to provide strategic direction and to ensure the organization is set up to achieve its goals.

In his book, Align, Oxford University researcher Dr. Jonathan Trevor describes how the leadership of an organization is responsible for creating a clear picture of the “purpose” of the company and for coming up with a strategy to achieve that purpose.

For example, if your "purpose” is to be the most valuable car-maker, you could do-a-Toyota and chase volume or you could do-a-Tesla and achieve valuation through technology. These are both valid strategies that can fulfil the purpose of being the most valuable car company.

Most executive teams are not in a position to really know, at a detailed level, what resources, barriers or constraints the company has to work with to deliver its strategy. They are not the experts in “how the company really works” and “where the opportunities lie”.

They don’t DO any of the actual work so their direct experience is limited.

That is where the mid-level managers come in. They are plugged in, they see the day-to-day problems and opportunities, they understand the constraints and the people.

But this is also where the clown-car comes in.

The Clown-car cannot steer!

When speaking with Jonathan Trevor a few weeks ago, he confirmed my own observations: the executives might have a clear idea of what their strategy is, but there is usually very little connection between the strategy and what actually gets done.

On the Clown-car, the steering wheel is not connected to wheels on the road. It doesn’t matter how you twirl the steering wheel, nothing happens.... and that’s not funny!

Why is this? Well, in my experience, the mid-level managers usually don’t understand the strategic vision, or at least, they don’t have a clear picture of how it affects them in their daily life... so they do the “projects” that seem to make sense on the ground.

These projects might be completed 80% of the time (that would be highly unusual, in my experience), but are they pointing in the right “strategic direction”?

They might deliver a positive return on investment, “profit,” or other financial benefit, but how many of the 117 projects in the study take you in the wrong direction strategically?

In my experience, and helping organizations select projects is our business here at TransparentChoice so I feel like my experience is highly relevant here, projects are usually not well aligned with strategy.

I put this video together to illustrate the idea that positive ROI projects do not necessarily “move you forward”. Each match represents the positive ROI of a project, but each one points in a different direction strategically. Your portfolio of projects, therefore, delivers no overall strategic value.

And so the exec team gets frustrated. There’s lots of activity, but their strategic goals are not being met.

So they weigh in and suggest some projects of their own, but they lack the detailed context to identify and land good quality projects consistently.

Of course, some execs propose pet projects or vanity projects, but many of the projects being suggested by executives are born of a deep frustration at the lack of strategic progress.

Creating the link between strategy and execution

How do we fix this? How do we create a direct connection between the steering wheel and the road. In concept it’s simple – again I refer you to Align by Jonathan Trevor – but in practice it can be difficult and slow.

But there are things you can do very quickly that will make a huge difference.

First, make sure you have clear alignment within your leadership team.

Alignment doesn’t just mean that they all sign off on the same Vision and Mission statement. It also means that they agree on the key goals and drivers of success (and how to define them) and that there is a clear map of which of these goals and drivers are most important.

AHP (the Analytic Hierarchy Process – sounds scary, but isn’t) is a really good tool to do this. It helps get people on the same page with clear definitions. Moreover, the output is a clear “map” of which goals and drivers are most important.

This can then be used by business units and departments to guide their own planning, helping keep everyone aligned.

What’s even better, the goals and drivers coming out of the leadership team can be used to supercharge your portfolio.

• Communicate strategy - the “goal and driver map” can be used to clearly orient the whole organization on what issues they should be thinking about.
• Project ideation challenges - You can then use this map to define project ideation challenges. This means that now you are orienting the creativity of those talented and plugged-in mid-level managers in the same direction – your strategic direction!
• Measurement of alignment – You can now use the AHP process again to measure the contribution of projects to your organization’s goals. This means you can potentially even forecast the impact that your overall portfolio should have on your strategic goals.
• Selection and governance - Now you know which projects are likely to add the most value, you need to select the right portfolio. The most common “mistake” at this level is to just try and do everything – a recipe for project failure and burn-out - so balancing projects with available resources is key. Having the right tools to support decision-making can really make a difference here.

If you follow this process, your steering wheel will now work, turning the road-wheels in the desired direction. Of course, true alignment of the whole organization (in the Jonathan Trevor sense) involves people, organizational structures, geographic structure, product mix, etc.... but they all take time to change.

Connecting your strategy process (steering wheel) directly to your road-wheels (projects) is a quick win, and will quickly get you heading in the right direction.

Why you cannot separate strategic goals and project prioritization

So far, I’ve talked about how strategic planning should “guide” the action on the ground, but I constantly see examples where the two are not directly linked. I’ve used the Clown-car's steering wheel as the analogy, but now let’s look at real cars...

Car companies don’t design a steering wheel, then design driving wheels and then think, “Gee, how do we connect these two?”

When you design a car, you design one system for steering. It includes the steering wheel, the connection mechanism, the axles, suspension and wheels. Car companies spend time testing different tyres, suspension bushes and spring rates. They work on steering “feel”, the speed that the steering wheel turns the driving wheels... and so on.

I have four points I want you to take away from this analogy;

• It’s one integrated system that allows you to get your car to its destination.
• There’s no point having a steering wheel if it’s not connected to the road.
• There’s no point having a car if you can’t steer it.
• The steering mechanism is what connects the two, completing the system.

Strategy and projects are just the same.

• There’s no point creating a beautiful, elegant strategy if you don’t then execute the right projects to implement it
• There is no point doing projects if they don’t take you where you want to go
• Project prioritization is how you connect the two
• And this is one whole system

It’s one system and it turns out that the best mechanism to join the pieces together is AHP. I won’t go into why in this blog, but if you’re interested, this prioritization guide will help.

So, if you don’t want to be seen as the clown, if you want your steering wheel to actually change your direction, then make sure that your strategic planning process and your project delivery process are joined both joined together using an AHP-based project prioritization and selection process.