1: The bad news?
“Once a CEO sets a direction for the company’s future, the probability that the plan will become reality is low,” Carolyn Dewar, Scott Keller, and Vikram Malhotra write in CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest.
“Many studies, including our own research,” the authors note, “conclude that only one in three strategies is successfully implemented.”
2: What’s going on here? Why are the numbers so low?
Making change is not an intellectual challenge. It is an emotional one.
“The ‘soft stuff’—issues related to people and culture—account for the vast majority (72 percent) of the barriers to success,” they write.
This insight isn’t new news. It’s exactly what management guru Peter Drucker was referring to over fifty years ago when he said, “Culture eats strategy for breakfast.'”
So, what do the best CEOs do? Those who are successful in implementing the strategies they have laid out?
They treat the soft stuff as the hard stuff.
“You have to fix both sides as the CEO: The easy part is technical; the difficult part is people,” says KBC’s Johan Thijs.
“You might fix the technical issues: finding capital, liquidity, profitability, and so forth,” he observes. “But over time if you can’t solve the mindset issues, you’ll go back on the same route because the mindset is going to drive you again over a cliff.”
3: There are three specific areas the best CEOs consistently focus on: Culture, organizational design, and talent.
It begins with culture.
“They make sure that every senior leader, not just the Chief Human Resource Officer, owns the people-related implications of the strategy,” Carolyn, Scott, and Vik write.
Taking this approach dramatically improves their ability to be successful: “The odds of a strategy being successfully executed more than double from 30 to 79 percent, and the impact of that execution is 1.8 times greater,” the authors note.
More tomorrow.
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Reflection: Where am I most comfortable as a leader—addressing the hard stuff (the technical) or the soft stuff (people and culture)?
Action: Discuss with a family member, a colleague, or my team.
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