Strategy execution is commonly fraught with failure. Having worked with hundreds of organizations, we’ve observed one consistent misstep when leaders attempt to translate strategy into results: the failure to align strategy with the organization’s design.
Research suggests that only 10% of organizations are successful at aligning their strategy with their organization design. Some of the problem is a gross misunderstanding of what the word “alignment” actually means in this context. Most leaders naively assume that it means rigid processes that cascade goals from top to bottom, launching intense communication campaigns that promote top priorities, and shaping budgets to support those priorities. For example, one large manufacturing company we’ve observed invests countless hours every January having employees input goals that correspond to their boss’s goals into their HR system. But employees noted, “It’s all cosmetic. We write goals we have no idea if we can achieve, but as long as they appear linked to our boss’s goals, they get approved.”
The problem is that such processes leave alignment to individuals and ignore the systemic organizational factors needed to make strategy work.
