What is strategy execution?
The term strategy execution has been around for a long time, but what is it, and why are organizations (like Gtmhub) obsessed with it?
By description, strategy execution is pretty self-explanatory. In a bit more detail, it’s how decision-making and execution align with the strategic focus of an organization.
Strategy is a living, breathing entity, not an A-to-Z journey, meaning the process doesn’t end just because it’s been executed. Strategy must be optimized, which informs a refreshed cycle of definition, deployment, and execution.
Yes, the term “strategy execution” is both all-encompassing as a process, and a stage within the process itself, lending to its hard-to-understand nature.
So, where does strategy execution begin?
Strategy execution at 30,000 feet
To understand the concept of strategy execution, let’s explore what strategy execution is NOT.
Strategy execution is not one-directional
Certain models break down the process with visuals and charts to represent the flow of information in an organization. The problem is none of them can 100% accurately reflect the complexity of the process.
Strategy execution is best compared to a cycle or a web, where interdependencies inform various stages of ongoing, shifting processes. Yet even with these illustrations, there is no absolute source of truth for the strategy execution model.
Strategy execution is not turning on the lightbulb
If only strategy execution was as easy as flipping a switch and illuminating your teams with understanding. In reality, it’s like building a fire: it starts with kindling, the all-important spark, and a gradual buildup to a raging fire.
Strategy execution is a collaborative process, requiring focus and iteration to succeed. As Harvard Business Review notes, just because your organization is aligned from top to bottom doesn’t mean they operate well cross-functionally.
While top-level leaders can communicate strategy, your managers or teams may not understand it. Leaders can’t just define the strategy, but rather they need to ensure clarity on strategic priorities, oversee execution without micromanagement, and enable agility to create a successful strategy execution.
Strategy execution is not simple
There’s a reason we didn’t title this article, “4 Simple Stages to Strategy Execution.” Strategy execution is complicated by nature. Take Kaplan & Norton’s Strategy Execution Model, with its distinct stages, a multi-directional flow of information, and interdependencies:
With constantly moving processes, communication through hierarchies, and the overall subjective nature, strategy execution is a complex process for any sized organization. But mastering your strategy execution process begins with making the complicated simple.
When we talk about strategy execution, we break it down into four distinct stages:
- Strategy definition
- Strategy deployment
- Strategy execution
- Strategy optimization
Stage 1: Strategy definition
Defining strategy is the foundational step in the strategy execution process and without an agreed-upon definition, the vision is unclear. Basically, you can’t know where you’re going unless you decide on where you’re going.
When we look at strategy definition, it can be broken down into three areas — corporate strategy, business strategy, and functional strategy. Each of these areas is important to the strategy execution process and they must all be developed for your plan to be effective.
Corporate strategy is the “top-level” strategy that informs everything the organization is doing. This is where strategy mapping, visualization, and vision-mission development occurs. A lot is happening in this area, and it can become the business’s biggest strength or vulnerability — so please take your time!
To establish a thriving corporate strategy, a few simple, but important questions must be answered:
- What business should our company be in? (Niche)
- What distinguishes us as a company? (Vision)
- What are our company's comparative advantages? (Strength)
By answering these questions, corporate strategy begins taking shape, guiding the entire flow of the business through its niche, vision, and strengths. This helps your company understand things like:
- How the business is being run
- The goals and objectives of the business
- Which markets the business enters
- How success is defined
- Who is hired and why
- How the budget is being created/spent
Business strategy is the middle ground between corporate guidance and functional execution. Its purpose is to establish and coordinate the positioning of the organization by taking the mission and the vision and applying it to the external landscape.
Business strategy explores the questions of value, like:
- Where is our primary area of focus?
- Why will our customers benefit from this focus (over our competitors)?
- What about this focus ensures we are unique in our value proposition?
Factors from the business’s internal and external environment also shape how value creation is established, which impacts how business strategy is developed.
Improperly positioned firms encounter competitive difficulties and can fail to sustain competitive advantages. — Saylor.org
Once business strategy has been created, functional strategy has its foundation.
Functional strategy is broken down, you guessed it, by function, meaning the departments, teams, and initiatives in an organization where the work is done. Separate parts of the business need different strategies, informed by their unique goals and aspirations, as well as the set of values, needs, and desires of the unit and its members.
The key decisions in this strategy are determined by the function leaders who have the responsibility of bridging functional strategy to the business and corporate strategy. Without this alignment, organizations will operate in disarray and inefficiency. While the functional strategy should meet the department's unique needs, it must connect to and impact the corporate strategy and other departments’ strategies.
Let’s take this one step further and look at an example of how marketing and sales work together.
At the strategic level, they may share and depend on aligned information like:
- The organization’s value proposition
- The ideal customer profile (ICP)
- How the organization delivers value for the ICP
It makes sense for these individual departments to align their strategies, as they work with similar goals in mind. When functional units align their strategies, their impact is compounded. The collective functional strategy funnels up to the corporate strategy, creating a collaborative organizational strategy with multiple levels of alignment.
Gain more insight into why alignment is critical for adaptation in the modern world .
Stage 2: Strategy deployment
In an ideal world, top leaders know exactly what the strategy is, it’s perfectly understood by managers and team members, and execution falls into place. In the real world, sometimes top leaders don’t even know the strategy, creating an impossible dynamic for alignment.
Luckily, the strategy deployment phase helps test strategic alignment before the entire organization executes. Deployment, also known as implementation, encompasses all decisions and activities required to drive corporate and business level strategies to the execution phase.
During deployment, corporate strategic goals are broken down at the business level. Teams and individuals receive direction from the leaders who create business strategy (usually mid-level VPs or managers). These leaders set goals aligned with the corporate strategy and progress the goals of the business strategy.
The strategy definition-deployment parallel
Although strategy definition and strategy deployment are different stages, it helps to conceptualize them not in a sequence, but in parallel. As we said in the strategy definition phase (and we’ll say again), strategy doesn’t operate in silos.
Creating a clear set of values, advantages, customer demographics, etc. in the strategy definition phase is a great accomplishment. However, if this strategy can’t be deployed, it’s useless for the business.
The space between ambitiously defining a strategy and practically deploying the strategy is where all businesses struggle. We’ve all seen enterprises with a well-defined strategy struggle to deploy at scale or start-ups and scale-ups with flexibility in their identity as a business, struggle to define (and stick to) a strategy.
When strategy definition and strategy deployment inform one another in parallel, the gap between them shrinks, and as a result, different strategic initiatives can be tested and deployed with a smaller lag.
Resource dedication in strategy deployment
You can have a winning strategy that will shake the foundation of your industry, but it means nothing without the resources required to deploy and execute it.
A focus on planning is critical in the strategy deployment stage because it handles the responsibility of resources.
Your budget, time allocation, and hiring establish the possibilities and constraints of the strategy. All this to say, resource dedication is pivotal for your deployment approach and determining what goes where to execute a strategy.
Sometimes a quick, good strategy beats a slow, great strategy, and vice versa.
Building strategic timelines
Timing is a crucial, underrated resource element in strategy deployment. Many businesses focus on the “what” and the “why” of their strategy, but not “when.” For instance, we can all agree that a worldwide pandemic shifted the dynamic of how all businesses consider timing.
Creating timelines around decision-making is a crucial step in transitioning from strategy deployment to execution. Important questions to consider for building strategic timelines:
- What do we do now ? Why?
- What can wait for later? What should wait for later?
- How much time should X element of strategy take? Y element?
Knowing the business’s distinct value and comparative advantages — defined in corporate strategy — helps answer these questions. As Executing Organizational Strategy explains, well-informed timing helps the business leverage its strengths and understand market opportunities.
Timing is the underutilized strategic advantage.
A note on targets and goals in strategy
Targets and goals demonstrate the effectiveness of your strategy, but they are not the strategy itself. Knowing the difference between operational effectiveness and operational efficiency is crucial to maintaining focus on strategy deployment.
Seven Steps to Strategy Execution notes that targets and goals such as speed, quality, and efficiency are not to be confused with strategies. These outcomes are the result of a well-executed strategy and may provide feedback for different stages of the strategy execution process.
Performance management indicators, such as OKRs and KPIs , should be incorporated as part of the strategy planning process. Having a data-driven approach to tracking and monitoring these indicators primes your strategy execution for success.
Learn more about OKRs and KPIs in our article.
Stage 3: Strategy execution
If strategy definition and deployment are the map, strategy execution is where the adventure begins. Strategy execution is the culmination of the hundreds (if not thousands) of decisions made in the definition and deployment phases.
Effective strategy execution is when everyone at each level of the business — c-suite leader, VP, mid-level manager, or functional contributor — understands and aligns with the corporate strategy. Information about the strategy flows freely from unit to unit, top-to-bottom, bottom-to-top, with little friction.
But how does strategy become execution?
Communication and autonomy
As we’ve mentioned before, it’s not enough for strategy to exist in a silo or in c-suite leaders’ minds: team members need a two-way connection with strategy. They must feel the strategy is connected to their work, so they can create work that connects to the strategy.
When this alignment happens between people and process, strategy becomes the lifeblood of the organization’s culture. Strategy is no longer a vague concept or idealistic aspiration: it’s a practical conductor for how the organization operates.
Successful strategy execution depends on two factors: a focus on the right strategic goals and the freedom granted to all parts of the organization. — Successful Strategy Execution
However, strategy execution doesn’t always equal alignment. While most leaders focus on top-to-bottom alignment, one of the biggest struggles for organizations is cross-functional alignment.
The problem stems from goal cascading and a narrow focus on vertical alignment. When support for cross-functional commitments is poor because of strategic tunnel vision, teams can’t align efforts horizontally where the real work is done. So what’s the solution?
According to Harvard Business Review, there are four fundamental building blocks to effective strategy execution — information flow, decision rights, motivators, and structures:
- Information flow: the catalyst of strategy execution, supported by autonomous communication. Leadership clearly communicates the corporate strategy, and team members communicate the plan for its execution.
- Decision rights: clarity on delegation and authority. Managers know who is responsible for which decisions, reducing ambiguity and second-guessing on execution.
- Motivators: enabled by alignment of strategy to execution, motivators revolve around performance rewarding and collaborative initiatives.
- Structures: building accessibility into company operations, enabling the ability to expand responsibilities, move laterally, and guarantee influence.
But how do you improve the odds of having successful strategy execution from “good” to “guaranteed”? One word: scalability.
Building strategy execution that scales
While communication is a key component, incorporating process is the gateway to scalability. However, process for the sake of process is the best way to create inefficiencies and organizational rigidness. Process needs strategy as much as strategy needs process.
Strategy must be monitored and linked through the organizational hierarchy — corporate to business, business to team level, and so on — to ensure the right people are executing the right strategy at the right pace. Properly investing in the building and oversight of process through governance requires resource dedication on every front — time, budget, and labor.
Having advocates in process management is the best way to ensure your strategy is effective and scalable. Remember: a scalable strategy is a successful one.
Strategy management and governance
Strategy execution becomes complicated when we begin exploring all its parts. (We’re not going to overwhelm you with that here, but make sure to check out our Tips for Successful Strategy Execution). Regardless of the number of steps in strategy, teams need help staying in line with it. That’s where governance comes into play.
It won’t do your organization any good if you say, “Here’s the strategy, please follow it, but we’re not checking in or managing it." If people followed every direction given to perfection... we wouldn’t be writing this article.
Strategy execution governance is derived from strategy management. Management is an ongoing part of the entire strategy execution framework but is emphasized in the execution phase. Strategy management involves:
- Developing time-bound goals and objectives
- Incorporating initiatives into goals
- Ensuring these initiatives align with the corporate/business/functional strategy
Whether it’s one person or an entire team, businesses must connect strategy with performance to ensure strategic guidance is being followed.
Stage 4: Strategy optimization
Optimization is the never-ending last stage of strategy execution. It’s where good strategy becomes great strategy.
Companies that create tight links between their strategies, their plans, and their performance often experience a cultural multiplier effect. — Harvard Business Review
To thrive in strategy optimization requires critical thinking, the right questions, and data analysis involving multiple levels of the organization. When looking at this stage, ask yourself:
- How does our information flow through the organization?
- Where are the white areas in our strategy implementation and execution?
- How can we minimize the waste of our resources by shifting/changing/dropping/adding initiatives?
To answer the questions of optimization, we must look at the full scale of strategic processes in the organization, also known as SPM (Strategic Performance Management). The chart below from Seven Steps to Strategy Execution illustrates different components of SPM:
While this image is a bit busy, let’s break down the SPM process and what each pillar means.
Strategy management is the management parallel of strategy execution, involving definition, deployment (formulation), execution, and optimization. It is the governance system that connects planning and performance.
Portfolio management covers the inventory, analysis, execution, and monitoring of the organization’s resources. Determining the business’s strategic emphasis depends on resources, so portfolio optimization and strategy optimization share a symbiotic relationship.
Program management involves the overall collection of projects that feeds into the strategic objective of the organization. The projects are functional initiatives that move the needle, while programs organize and align these projects.
is more granular by comparison. Tied directly to the execution phase, performance improvement creates a unique strategic cycle that overlaps with overall strategy optimization.
Why does SPM matter for strategy optimization?
In principle, strategy optimization is plugging the data and insights from the very “end” of the strategy cycle — the actual execution — into the “top” half of the strategy funnel: definition and deployment. In reality, it’s much more complicated.
Although models like SPM appear complex, they help solidify the vague ideas of strategy into concrete processes. Understanding where that data comes from — through a framework like the SPM model — informs which parts of the strategy should be optimized.
As the SPM process chart above demonstrates, certain highlighted processes are critical to the strategy execution process. Prioritizing the review of processes that are equally different and important allows for a balanced approach to strategy optimization.
Leaders use the data to reflect on the effectiveness of the defined strategy, identify weaknesses and opportunities in deployment, and endless other possibilities to close the gap between strategy and execution.
Take the next step in mastering strategy execution
Strategy execution isn’t simple, but it doesn’t have to be intimidating. Understanding the phases of strategy execution and how they relate to one another is a great first step.
In this article, you’ve learned about the four distinct phases of strategy execution and their interdependencies:
- Defining the strategy is an honest conversation about the organization’s direction
- Deploying the strategy is the tactical setup that takes strategy to execution
- Executing the strategy is decision-making aligned with each level of the hierarchy
- Optimizing the strategy is improving process at scale
You know how these phases overlap, the importance of each, and learned how to connect the concept of strategy to practical execution. By reading this overview, you’ve got the necessary foundation for understanding strategy execution. Now it's time to take this understanding to the next level.
At Gtmhub, we’re committed to helping you bridge the gap between strategy and execution. Inspired by the Objectives and Key Results (OKR) methodology, our platform is designed to help you align your teams, improve focus and foster transparency.
Quick-start your OKR journey with ready-to-go OKR templates from our Marketplace or connect with 160+ Integrations to update your OKRs and KPIs automatically to easily make data-driven decisions with our customizable Insights and Dashboards.