Defining strategy, setting goals, establishing policies, and designing programs are vitally important management functions. But in order for these to become reality, plans must be converted into action; how well that conversion process happens ultimately determines success. That conversion process is the very nature of execution.
Given the critical role played by execution, you’d think that improving execution would be found at the top of every leader’s wish list. That’s seldom the case: Ram Charam described execution as “the last great unaddressed issue in the business world.” Ironically, the inability to execute strategy – i.e., achieve the goals set for the business – has cost companies billions of dollars in lost revenue, profits, and, on more than one occasion, human life.
One measure of the cost of poor execution can be found in a survey of 197 CEO’s reported in the Harvard Business Review, who were asked how well their business strategies were converted into business results. By their own estimates, 37% of the value to be gained from the business strategy was lost in execution; worse yet, one third of those CEO’s estimated their loss at over 50%.
Viewed in the positive, that means there is huge upside potential to be found in execution. Picture the level of performance that could be attained if strategies, programs, procedures and standards were fully and faithfully executed. So, if you’re a leader interested in improving the execution in your organization, what do you do, and how do you do it?
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