Why Leadership Teams Can’t Tell If Their Strategy Is Working

The problem isn't data — it's evidence

Leadership teams review organizational performance and strategy regularly. They examine dashboards, debate KPIs, assess initiatives, and move resources and take decisions to move the strategy forward and deliver results.

And yet many are unable to answer two questions:

• Are we achieving the results we intended?

• Is our strategy working — or are we just busy executing it?

That is rarely caused by lack of intention or lack of effort.

It’s from a lack of evidence.

The Wrong Measures for the Right Questions

Every leadership decision is informed by, and based on, their understanding of the organization's performance. While that understanding comes from many sources and inputs, it should include actual evidence of performance and results achieved.

Dashboards, performance reports, and KPIs are intended to provide that evidence, yet too often they don’t. Instead, they aggregate operational measures of activities, milestones, and outputs delivered.

Operational measures and information are needed, but don't provide evidence that the investments work to execute strategy are translating into the improvements and results the strategy was designed to achieve.

Absent that evidence, discussions around strategy become informed by opinions, anecdotes, and whatever information is available. Decisions are made with more debate and less clarity which increases the risk of committing resources and effort that don't move the strategy forward.

It’s easy to think that “Our” strategy is clear enough to be measured and provide that evidence. But in a study of 50 strategic plans, 88% of organizations had strategic goals, but only 14% were written clearly enough to measure, and just 6% had KPIs that provided direct evidence of those goals.¹

General David Petraeus observed that in the absence of information, people make up their own. In the context of organizations and strategy, the same dynamic plays out: strategy reviews devolve from discussions of results to negotiations between opinions, narrow interests, hierarchy, and egos.

What Becomes Visible Is a Familiar Tension

The daily whirlwind and priorities of operations keep leadership focused on what’s in front of them - the problems to solve, the teams to support, the processes to fix, and customer issues to resolve. The organization keeps moving forward, and leadership continues to ask if the strategic investments and activities are achieving the intended results.

Individually and collectively, leadership knows the organization has greater potential, but they can't see where or how to unlock it.

Four things tend to follow:

• Operational demands crowd out strategic focus

• Tactical problem-solving takes over meetings that were meant to focus on strategy

• Leaders react to noise and variation in data instead of responding to real changes in performance

• Execution gradually drifts away from the results the strategy was designed to achieve

The organization becomes very good at managing today but struggles to manage where it is trying to go.

What KPIs Are Really For

The remedy isn't more data. It isn't better dashboards or more frequent reporting. It's recognizing that KPIs exist, and should be designed, to provide credible evidence and insight to:

• Know whether results from strategy are being achieved

• Test and validate the strategy's cause-effect relationships

• Make decisions based on evidence rather than assumption

• Reduce uncertainty to avoid the costs of wrong decisions

Designing KPIs as credible evidence of performance is an organizational capability in its own right — one most organizations have not deliberately developed. That is one major reason why the gap between strategy and execution remains one of the most persistent and frustrating challenges leadership teams face.

Strategy is a hypothesis, not a plan. And like any hypothesis, it requires constant testing and revision.

That demands two things:

1. situational awareness of how the external environment is changing, and

2. credible internal evidence of whether the organization is actually improving, developing needed capabilities, and achieving the results needed to succeed.

Without both, leaders are navigating strategy execution while blind.

Food for Thought:

What would change in your leadership discussions if your KPIs provided genuine evidence of results rather than a record of activity?

If your KPIs really showed whether your strategy was working, what decisions would you make differently?

What would change in your organization if credible evidence were built into the management process rather than bolted on after the fact?

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Brook Rolter, Managing Director and Founder of Rolter Associates, helps organizations integrate strategy, performance, and management practices to improve results and mission outcomes.

You can reach Brook at 703-628-0340 or by email.

¹ Stacey Barr, "How Many Organisations Have Meaningful KPIs?"

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