Conventional wisdom says strategies fail because of poor execution, but conventional wisdom is wrong. Just because strategies fail in execution does not mean they fail because of execution. The top reasons for strategy failure have nothing to do with strategy execution, everything to do with strategy development.
Several years ago, I started out my career in the food industry leading a team of quality inspectors at Oscar Mayer. Our job was to make sure only the product that could pass rigorous quality standards reached the consumer. To make sure, teams of inspectors pulled samples of finished products off the end of the production lines and inspected for defects. If the inspection failed, product was “tagged” and had to be corrected.
But the defects weren’t created at the end of the production line. They were found at the end of the production line.
Similarly, strategy issues are found in execution, but the issues are created upstream in strategy development.
If you think about it, these top 5 problems with strategy (according to a global survey of CEOs conducted by McKinsey1) are found in execution but they are created upstream in strategy development. Here are the top five problems cited by CEOs with an explanation of where the defect is created:
Stop thinking of execution as the problem. Focus on strategy development to avoid these defects downstream.
And yes, Oscar Mayer had the best quality…
1. McKinsey quarterly survey of executives.