A large technology service firm with a history of strong execution has come up short for years on its growth and profitability targets relative to many competitors. While the senior executive team agrees on the strategy, they have not taken the actions needed to orient employees to that strategy. They deploy the organization’s strong marketing, program management and financial capabilities against a constantly changing set of operational objectives and metrics. The whiplash this management team creates leaves many employees exhausted and confused. This senior team spends more time praising their execution against near-term deliverables than discussing how to align the organization against the long-term priorities.
An industrial supplier struggles at the other end of the spectrum. Despite having a solid strategy that the organization already orients around, senior executives insist on constantly having multiday strategy offsites and avoid more pressing concerns about weak execution against customer expectations. The senior team spends a lot of time discussing which acquisitions to make and which new technologies to invest in, and relatively little time on how to better deliver products on time and under budget.
Halting or misguided attempts to improve performance are not uncommon. For companies that feel stuck despite having sound strategies, it is often unclear whether the problem lies in how the organization orients around the strategy, executes against the strategy or both. So companies flounder as they throw more energy and resources at remedies for the wrong problem. Instead of addressing what ails them, they focus on what they know and do best. This predicament can become even more pronounced when companies try to migrate their business model, or market conditions shift dramatically or upstart competitors begin taking share.
Dealing with an organizational dysfunction starts with a diagnostic that uncovers the root causes of the symptoms. Once you uncover root causes, proven remedies usually exist. To oversimplify, if a company has an orientation problem, the solution may reside in getting senior leadership better aligned, clarifying roles and accountabilities, or reducing organization priorities down to the two to three priorities most critical to the stated strategy. An execution problem may require addressing major talent gaps, poorly performing systems, a lack of focus on cost and performance or all of the above.