How conventional business practice creates a strategy-to-execution gap

Strategy That WorksIn Strategy That Works: How Winning Companies Close the Strategy-to-Execution Gap, Paul Leinwand and Cesare R. Mainardi (with Art Kleiner) point out that two-thirds of executives say their organizations don’t have the capabilities to support their strategy. Leinwand and Mainardi explain why.

They identify conventional business practices that unintentionally create a gap between strategy and execution. And they show how some of the best companies in the world consistently leap ahead of their competitors.

Based on new research, the authors reveal five practices for connecting strategy and execution used by highly successful enterprises such as IKEA, Natura, Danaher, Haier, and Lego.

Here are conventional business practices that create a strategy-to-execution gap and their unintended consequences

1. Focus on growth. Getting trapped on a growth treadmill: chasing multiple market opportunities where you have no right to win

2. Pursue functional excellence. Striving to be world-class at everything but mastering nothing: treating external benchmarking as the path to success

3. Reorganize to drive change. Falling into a habit of organizing and reorganizing: trying in vain to change behaviors and create success by restructuring alone

4. Go lean. Cutting costs across the board: starving key capabilities while over investing in none critical businesses and functions

5. Become agile and resilient. Constantly reacting to market changes: shifting direction in the misguided conviction that if you listen hard and act fast, you will survive

“The problem with conventional management practices is that they have mostly developed through trial and error, without a fundamental theory for value creation…They foster incoherence by focusing attention on narrow, fragmented, expedient measures, aimed at getting things done rapidly and in line with the rest of the industry. This naturally divides global decision from local action, and strategy from execution”

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Paul Leinwand is Global Managing Director, Capabilities-Driven Strategy and Growth, with Strategy&, PwC’s strategy consulting business, and a principal with PwC U.S. To learn more about Paul, please click here.

Cesare R. Mainardi is a business strategy author, professor, and the former Chief Executive Officer of global management consultancy Booz & Company 9now Strategy&). To learn more about Cesare, please click here.

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