The secrets to successful strategy execution - sort of, perhaps!

I was delighted to read the words of Harvard Business Review’s editor, Thomas A. Stewart, in his editorial introduction to the June 2008 edition.  In his piece headed “Tools for Change,” he briefly previews the journal’s lead article, “The Secrets to Successful Strategy Execution”.

In re-stating the authors’ claim that clarifying decision rights and designing information flows are the most important aspects of execution, he points out that “… those [areas] are the least subject to corner-office diktats. They involve dirty hands and messy conversations [my emphasis].” 

Reading this, I eagerly thumbed through the pages of the journal to see what the authors had to say about the messy conversations at the heart of strategy development and delivery …

… only to be disappointed.   The mess and informality are nowhere to be seen.  Instead, readers are presented with a well ordered list of factors, which the authors label “the 17 fundamental traits of organizational effectiveness”.  These are intended to provide managers with the basis for diagnosing organizational ills and planning formal actions to deal with any perceived deficiencies.

The article has been written by three senior members of global strategy consultancy firm Booz and Co. It is based on the results of a questionnaire that they have designed around what they describe as “the four building blocks we knew could enable effective execution.”  These they list as:

changing structure, clarifying decision rights, designing information flows, and aligning motivators.

The outcome is a ranked list of 17 organizational traits relating to these four factors, which the authors claim distinguish those organizations that manage execution effectively from those that are less successful.

The factors are hard to argue against, in a common sense sort of way.  For example, few would dispute the suggestion that strategy is more likely to be executed effectively if “everyone has a good idea of the decisions for which he or she is responsible” (ranked #1 on their list).  But collective outcomes emerge from the complex interplay of a vast array of people’s moment-by-moment actions and interactions.  And these are only governed in part by

their formal roles and responsibilities.   Or by the 16 other formal interventions that are put forward in the article.

Frustratingly, the authors get tantalisingly close to recognising this. As they acknowledge early on in the article, “Execution is the result of thousands of decisions made every day by employees acting according to the information they have and their own self-interest.”   Unfortunately, instead of unpicking this statement and revealing the important insights it contains, they move on quickly to describe their formal, structured prescription for strategy implementation.  This potentially pivotal sentence therefore remains unexplored. And so do two critically important points on the dynamics of strategic management that are buried within it:

First, the worth of information that employees have available to them at any one time depends heavily on how, individually and collectively, they perceive, interpret and evaluate it.

Secondly, self-interest plays a crucial role in the process through which people - alone and in conversation with others - make sense of what’s going on and decide how they are going to act. 

This local sense-making happens in the moment-by-moment exchanges of everyday, self-organized interaction. And, most importantly, this process is not within the gift of individual managers or ‘management’ as a whole to control.  This also means that any formal information flows that may have been studiously designed in, to provide people with the ‘right’ information at the ‘right’  time, have little or no impact on the mass of informal information that contributes significantly to everyday sense making and action taking.

These dynamics of self-organization will not go away, however well structured and commonsensical the formal actions taken by management might be.   Nor can the powerful impact of self-interest be neutralised - less still controlled – simply through the introduction of formal reward mechanisms.  If managers wish to influence the way that strategy is executed in their organizations, they need to take the informal dynamics of everyday interaction as seriously as they do the formal aspects of their roles.  This means engaging directly with the dynamic networks of self-organizing conversations that make up their organizations, with the intention (though not the guarantee) of helping to shift the patterns and content of those interactions in organizationally beneficial ways. This is the essence of strategic management, as Ralph Stacey argues inStrategic Management and Organisational Dynamics 5Ed (2007: 415):

“Strategic management is the process of actively participating in the conversations around important emerging issues.” 

In contrast, the HBR article remains firmly within the “strategic choice” school of strategy development and execution.  This privileges the formal, rational and structured elements of organization and management ahead of its hidden, messy and informal dynamics.  From this perspective, it is often

assumed that the messy stuff will disappear, if managers do the formal aspects better and ‘get it right’.  On other occasions, as here, these underlying dynamics are ignored altogether. So, although the editor of the journal appears to have recognised their powerful impact on organizational outcomes, the article itself has failed to unearth these particular "secrets to successful strategy execution".