The secrets to successful strategy execution

Harv Bus Rev. 2008 Jun;86(6):60-70, 138.

Abstract

When a company finds itself unable to execute strategy, all too often the first reaction is to redraw the organization chart or tinker with incentives. Far more effective would be to clarify decision rights and improve the flow of information both up the line of command and across the organization. Then, the right structures and motivators tend to fall into place. That conclusion is borne out by the authors' decades of experience as Booz & Company consultants and by the survey data that they have been collecting for almost five years from more than 125,000 employees of some 1,000 organizations in more than 50 countries. From this data they have distilled--and ranked in order of importance--the top 17 traits exhibited by the organizations that are most effective at executing strategy. The single most common attribute of such companies is that their employees are clear about which decisions and actions they are responsible for. As a result, decisions are rarely second-guessed, and accurate competitive information quickly finds its way up the hierarchy and across organizational boundaries. Managers communicate the key drivers of success, so frontline employees have the information they need to understand the impact of their day-to-day actions. Motivators--like performance appraisals that distinguish high, adequate, and low performers and rewards for fulfilling particular commitments--are also important but are most effective when applied after decision rights and information flows have been addressed. That holds true for structural moves as well. Surprisingly, the most effective structural moves turn out to be promoting people laterally--and more slowly. How can you make the most educated and cost-efficient decisions about which change initiatives to implement? The authors have developed a powerful online diagnostic and simulation tool that can help you test the effectiveness of various approaches virtually, without risking significant amounts of time and money.

MeSH terms

  • Decision Making, Organizational*
  • Efficiency, Organizational
  • Industry / organization & administration*
  • Organizational Innovation
  • Planning Techniques