Implementing Business Strategy – Why does Implementation Fail?

Many organizations are excellent at strategic formulation; setting visions, choosing competitive priorities, crafting plans. Yet time and again, they falter in bringing those strategies to life. Indeed, empirical and practitioner studies commonly cite failure rates in the range of 60 – 90 % for strategy implementations (or strategic initiatives). According to a study by the Economist Intelligence Unit, 90 percent of senior executives say they failed to reach all their strategic goals because of poor implementation.

Why is this failure in implementing business strategy so common? The short answer: strategic planning without disciplined execution is like designing an airplane and never building the wings. In academia, strategy implementation is often called a “black box” ; the messy domain where intentions, people, processes, conflicts, and adaptation collide.

A 5-Step Implementation Framework

Here is a 5-step strategic plan implementation framework which we have applied with many global resources, shipping and manufacturing companies around the world, which you can adapt to best fit the needs for your organization.

The steps include:

• Step 1: Communicate the Strategy across the Organization
• Step 2: Align Operations Planning with Corporate Goals and Objectives.
• Step 3: Link Budgeting to Planning
• Step 4: Link Performance Measurement to Planning
• Step 5: Regularly Report and Review Strategy Execution

Let’s briefly consider each of these Steps:

The Five Steps of a Robust Implementation Framework

Now, Let’s now walk through each of these Steps:

Step 1: Communicate the Vision, Mission, and Strategic Goals

Good strategy often fails at the first barrier: communication. Too often, strategy is framed in terms inaccessible to managers and employees, and oftentimes poorly communicated, and assigned to dusty shelves to be ignored.

The key elements  of corporate strategy you will (ideally) want to communicate to managers across the organization include:

• Corporate Vision and Mission – which together articulate the purpose and longer term aspirations of the organization.
• Strategic Goals and Objectives – which articulate the top level longer term goals and objectives of the organization.
• Strategic (transformation) Initiatives – which enable achievement of corporate goals and are typically enacted owned within and between business units).
• Key Result Areas and KPI’s – which frame the outcomes and how the organization will measure and report on performance and strategy execution.
• Strategic Progress Reporting and Review Program – which outlines a schedule of reporting and accountabilities.
• Recognition and Rewards – linked to the achievement of strategic objectives, implementation of improvement projects and associated tea and individual contributions.

Best Practices:

Best practices at this step include:

• Involve staff in strategy formation, where possible. Inclusion increases buy-in and helps uncover operational insights. Empirical reviews highlight “participation and involvement” as one success factor in overcoming resistance. (ResearchGate)
• Top leadership must lead, but cascade responsibility. The CEO, executive team, and heads should frequently communicate the mission, strategic themes, and how they translate to the business. But middle and front-line leaders should be empowered to interpret and translate into context-specific language.
• Use multiple communication vehicles. Formal (presentations, memos, intranet) and informal (town halls, team dialogues) methods work best.
• Reinforce continuously. Strategy should appear regularly in reporting, in meetings, in dashboards—not just at launch.

Where communication is neglected, strategy becomes a “top-down edict,” and resistance or confusion emerges. In empirical studies, “lack of communication or poor understanding” is one of the top obstacles. (ResearchGate)

Step 2: Align Business Unit and Team Goals & Operations

Once the strategy is communicated, business unit (BU) leaders and teams must collaboratively set objectives, KPIs, and BU scorecards / plans that support execution of the strategy.

Best Practices:

Best practices at this step include:

• Conduct collaborative planning workshops early in the planning period, shortly after strategic themes are finalized.
• Use Strategy Mapping – to visualize the causal chain, establish core drivers of performance, and provide a clear, visual narrative of the strategy, which is easier for employees to understand and relate to.
• Use a combination of strategic plan templates and scorecards to guide goal-setting and articulation of objectives, KPI’s and targets.
• Translate BU-level objectives into team-level, ideally with team level scorecards.
• Incorporate the planning into the performance management process where possible, and individual-level aligned objectives.

Let’s take an example of how team objectives are linked to organizational strategy:

• ORGANIZATIONAL VISION: To be known as the leading ship repair services company in the Middle East Region.
• ORGANIZATIONAL OBJECTIVE: To grow our market shares in Middle East region by 20% in 2024.
• SALES DEPARTMENT OBJECTIVES: To increase sales to existing customers by 25% in 2024.
• SALES DEPARTMENT KPI: % of total sales to existing customers / % growth in sales per customer (existing)

Ideally, you will develop a BU/ team scorecard something like the example here:

By making these links explicit (as with scorecards), staff can see how their daily actions contribute to strategic outcomes.

Step 3: Budget for Strategic Implementation

All too often, strategic initiatives are underfunded or treated as add-ons rather than core priorities. That disconnect is fatal.

How to integrate budgeting and strategy:

• The Budget cycle must follow the strategy cycle. Rather than treating budgeting as an accounting ritual, position it as the resource-allocation mechanism to deliver strategy.
• Strategic initiatives should receive ring-fenced funding. Avoid forcing them to compete with operational budgets.
• Managers should be accountable for budget-performance relative to strategic objectives.
• Include scenario planning and flexibility. Some initiatives may require adaptive funding as conditions evolve.

When budgets are unaligned with strategic priorities, staff may focus on short-term firefighting and neglect the strategic agenda. Harvard’s Robert Kaplan argued that 90 % of organizations struggle with executing strategy when resources aren’t aligned. Harvard Business School Online

Step 4: Link Performance Measurement to Strategy

 “What gets measured, gets done” is a longstanding adage—one that holds critical truth in strategic execution. In implementing business strategy, you will want to capture performance data from legacy systems which enables measurement of key result areas in your strategy (your objectives), and additionally, track the progress of your strategic initiatives (your action projects). Ideally, you will be able to capture data dynamically at each of the levels in this diagram.

Steps to Effective Measurement:

1. Develop meaningful KPIs – Align performance measures with strategic themes, critical success factors, and cascading objectives.
2. Develop scorecards or dashboards at viable levels across the organization – consider applying a Balanced Scorecard architecture with concise numbers of high value KPI’s at each level.
3. Connect individual performance goals to KPIs – Each employee should have at least one performance goal tied to a strategic KPI.
4. Align rewards, recognition, and incentives – Incentive systems should reinforce, not undermine, the strategic priorities. For example, avoid rewarding volume while penalizing quality, if your strategy emphasizes customer satisfaction.

Empirical reviews find that poorly designed measurement and reward systems are among the most frequent impediments to strategy execution.

See our course on: DEVELOPING A BALANCED SCORECARD

Step 5: Conduct Regular Review, Reporting & Adaptation

Strategy is not a “set-and-forget” exercise. Without governance, inertia, drift, or surprises will derail progress.

For strategy execution to be successful, a formal process of review and reporting needs to be introduced and formally embedded in the organizations reporting and review processes. Ideally, the reviews should be quarterly, but ideally supported by more dynamic reporting and review processes using best practice technologies.

Review Scheduling

• Quarterly strategy reviews at senior leadership level
• Monthly or bi-monthly operational reviews at BU and team levels
• Ongoing dashboards or digital scorecards enabling real-time visibility

Types of review:

Your strategic review will need to report and review on:

• Implementation Activity Review — what strategic initiatives have been completed, what is delayed, what are the resource issues?
• Performance Outcome Review — KPI trends, variance analysis, emerging risks

In these reviews, senior leaders must review the scorecards and the strategic project progress reports; they must also identify obstacles, adjust course, and remove impediments. Over time, this adaptive feedback loop helps the organization refine its execution capability.

Share lessons learned

Sharing lessons learned across BU’s is highly beneficial: recounting successes, failures, and innovations.

Ongoing communication is crucial for success. It is extremely important for the senior leadership team and managers of each BU to share lessons learned, to share successes, and to show that work is being accomplished. The fact that senior leaders are paying attention to goal accomplishment will focus everyone’s attention on the plan.

The senior leadership of each BU needs to choose formal communication methods that will reach the widest audience on a continual basis. These may include for example:

• Bulletin boards.
• Newsletters
• Organizations’ Intranet
• Toolbox Meetings

Celebrate Achievements

Celebrating successes when implementing business strategy involves acknowledging progress and wins to build momentum, foster engagement, and reinforce positive behaviors by recognizing milestones, providing recognition, and ensuring a positive and inclusive culture where employees feel valued. This helps keep the team motivated and focused, making the strategy implementation process more engaging and leading to better overall results. 

How to Celebrate Successes Effectively

Here are some suggestions about how to celebrate successes in strategy execution:

• Define Milestones and Wins: Break the strategy down into specific, measurable milestones. Celebrate achievements at each milestone to keep momentum high.
• Acknowledge and Recognize: Provide clear, direct recognition for the efforts that led to the success. This can be through verbal praise, public acknowledgment, or written recognition.
• Foster a Supportive Culture: Create a business culture where employees feel valued and supported. This encourages open communication and problem-solving when facing challenges.
• Communicate Achievements: Clearly communicate the successes to the entire organization. This helps everyone understand the impact of their work and the strategy’s overall progress.
• Provide Context: Explain how the success connects to the larger strategic goals and how the team’s efforts are vital to the overall success of the organization.
• Encourage Two-Way Communication: Use these moments as opportunities to invite dialogue, encouraging team members to share their thoughts and concerns, which promotes ownership. 

Potential Pitfalls & Mitigation Tactics

Even with a framework, execution can stumble. Below are some common traps and how to sidestep them:

Many of these pitfalls are echoed in the empirical literature on strategy implementation obstacles.

Ensuring a Successful Roll-out – Final Tips

Here’s a practical way to roll this out in your organization:

1. Pilot on a key strategic theme or business unit. Don’t try to do everything at once; demonstrate success in one domain.
2. Design a strategy-to-execution playbook. This will include planning and scorecard templates, reporting protocols, roles and accountabilities, process steps, communication, and governance cadence.
3. Engage stakeholders early. Secure buy-in from BU heads, HR, finance, IT, and team leaders.
4. Train middle managers. They are the critical translation layer between strategy and operations.
5. Implement digital dashboards / scorecards. Use tools for visibility, tracking, and transparency.
6. Hold the first review within 90 days. Early course corrections are vital.
7. Scale gradually, embed in organizational rhythms. Connect this framework into annual planning, budgeting, reporting, and culture.

To learn more about implementing Business Strategy, see our course on: IMPLEMENTING BUSINESS STRATEGY – GLOBAL MANAGEMENT ACADEMY

Conclusion

The steps above in implementing business strategy are not just “common sense”—they reflect robust insights from academic and consulting research. A few key theoretical and empirical underpinnings:

• A recent systematic review of 160 papers identifies managerial and organizational levers (communication, participation, structural alignment, performance systems) as vital to strategy implementation. (SpringerLink)
• Another review catalogs 16 obstacles and 18 success factors, mapped to categories such as process, people, culture, leadership, performance systems, and governance. (ResearchGate)
• Strategy implementation literature consistently describes it as a “complex, multilevel, iterative process” that demands adaptation, cross-functional coordination, and managerial agility. (ScienceDirect)
• Empirical studies often emphasize resistance to change, lack of leadership commitment, poor communication, misaligned reward systems, and resource constraints as recurring failure modes.
• Implementation science, commonly used in health and policy, emphasizes the value of explicit frameworks, the identification of determinants (barriers and facilitators), and the use of continuous evaluation and adaptation.

In short: success in strategy execution isn’t about clever tactics; it is about embedding disciplined process, strong governance, and a capability for continuous learning

Formulating a strategy is only half the battle. Execution is where the real value and risk lies. That’s why leaders, not planners, carry the burden of success.

By systematically applying the five steps above, communication, goal alignment, budgeting, measuring, review and recognition, and governance, your organization can transform strategy from aspiration into action. And by learning from research and experience, you can increase the chances that your next strategic planning program becomes a success.

This is an extract from one of the courses on the: GLOBAL PROFESSIONAL CERTIFICATE IN STRATEGIC PLANNING: