What is Strategy Execution?

The importance of strategy implementation

Strategy execution is really important. It’s a key source of sustainable competitive advantage for businesses and high performance for all organisations. 

However, it is a challenge, especially in large and complex organisations. Strategy implementation failure is remarkably common. Andrew MacLennan conducts the Strategy Execution Capability Survey at London Business School, which reveals that around 60 percent of strategy execution efforts fail to achieve all their objectives.

So what is strategy execution?

Strategy execution is fundamentally about translating strategies into critical activities that will achieve organisation objectives. It is the glue between conceptual goals and concrete actions. If you prefer a more formal definition:

Strategy execution is the process of indirectly manipulating the pattern of resource and market interactions an organisation has with its environment in order to achieve its overall objective.

Strategy execution & change management

Crucially, strategy execution is not simply change management. Although it’s a very important challenge, managing change can destroy value if it is misaligned with valid strategic intent. Many organisations have both sound strategies and efficient operations, but suffer from a disconnect between the two. This can mean that capable, passionate people end up working hard to deliver the wrong things – something that Dr MacLennan’s research shows happens a great deal. Effective strategy implementation reduced that disconnect by focusing effort on delivering the right change.

You can't execute strategy without managing change.
But you can manage change without executing strategy.

A strategy execution framework

The point that strategy is implemented through indirect manipulations of activities is important. Patterns of activity emerge over the relatively long term and and as leaders cannot attend to all activities themselves, they must create the right environment for them to occur in the right way.

Below is a simplified version of the Inverted Pyramid, a strategy execution framework developed through empirical research undertaken by Andrew MacLennan. It illustrates the challenges that leaders face in executing strategy:

  • translating strategic objectives into concrete activities
  • ensuring these critical activities are actually delivered
  • designing organisations to support this
  • managing the performance of individuals, teams and the whole organisation
Andrew MacLennan's 'Inverted Pyramid' strategy execution framework.
Andrew MacLennan's 'Inverted Pyramid' strategy execution framework (simplified)

Top-down & bottom-up strategy: A powerful combination

Leaders can think develop strategy and manage its execution in two ways:
  • translating strategic objectives into concrete activities in a deterministic, ‘top-down’ fashion
  • aligning emergent activities with strategic intent and experimenting to discover what works, in an emergent, ‘bottom-up’ fashion
It makes a lot of sense to develop capabilities to do both these things: analysing, planning and positioning; but also exploring, testing and adapting. Fusing these approaches ensures that organisations neither drift with focus, nor become rigid bureaucracies.