The Gap Between Strategy and Execution

Why Strategies Are Not Implemented

According to Harvard Business Review, only 10% of developed strategies are implemented. The problem is not in the quality of the strategies—the problem lies in execution.

Main reasons for the gap: Communication failure: middle managers do not understand the strategy. Survey: only 40% of managers can name the company's top three priorities.

Lack of resources: strategy requires investment, but the budget is allocated inertially, supporting existing activities.

Metrics not linked to strategy: KPIs measure operational efficiency, but not strategic goals.

Organizational barriers: different divisions work in "silos"; strategic initiatives require cross-functional coordination—which does not exist.

Cultural immunity: “That's not how we do things here.” Culture is stronger than strategy.

Balanced Scorecard (BSC)

BSC (Kaplan and Norton) is a tool for translating strategy into measurable objectives across four perspectives:

Finance: How do shareholders see us? Revenue growth, ROIC, EVA.

Customers: How do customers see us? Market share, NPS, satisfaction.

Internal processes: In which processes must we excel? Cycle time, quality, cost.

Learning and growth: Can we continue to develop? Employee satisfaction, skills, IT infrastructure.

BSC creates a "strategy map"—a chain of cause-and-effect relationships from learning to finance.

Cascading the Strategy

Company strategy → business unit strategies → functional department objectives → employee KPIs. Each level understands how their work is connected to the overall strategy.

Practical Assignment

The company has announced a strategy: “Become the leader in the ESG investment segment by 2027.” Develop a BSC: for each of the four perspectives, define 2-3 strategic objectives and 1-2 metrics. Propose three initiatives to ensure implementation.