Why Good Strategies Fail at Execution

Ask a leadership team why last year's strategy underdelivered and you will usually hear about the market, the competition, or a team that "did not execute." Rarely will you hear that the strategy itself was flawed. That gap between what leaders assume and what actually breaks is worth taking seriously, because it is measurable, and the measurement points somewhere specific.

Research by Michael Mankins and Richard Steele, first published in Harvard Business Review in 2005 and still cited by Bain & Company today, found that most companies' strategies deliver only 63% of their promised financial value (Bain & Company). Not zero, not half: roughly two-thirds. That number matters because it rules out the easy explanation. A strategy that captures 63% of its potential was reasonable, sometimes good, and still lost more than a third of its value somewhere between the plan and the P&L.

Where the strategy execution gap actually opens

The instinctive response to underperformance is to blame the plan: wrong market read, wrong bet, wrong priorities. Sometimes that is true. But Bain's framing is useful precisely because it separates two different failure modes that get treated as one: a sound strategy poorly executed, and a genuinely flawed strategy. Leaders reach for a new strategy process when the real fix is a better execution system, and reach for a reorganization when the real fix is a sharper strategic choice. Diagnosing which one you actually have is the first, most skipped step.

Most of the time, for most organizations, the honest answer is execution. The strategy was directionally right. The organization could not translate it into the thousands of daily decisions that would have made it real.

What the research says actually moves the needle

The most rigorous answer to "what closes the gap" comes from a multi-year study by Gary Neilson, Karla Martin, and Elizabeth Powers, published through Strategy& and Harvard Business Review, drawing on roughly 125,000 employees across more than 1,000 companies, government agencies, and not-for-profits in more than 50 countries (Strategy& / HBR research). They tested four levers organizations pull to try to execute better: decision rights, information flow, motivators, and structure, the last one being what most reorganizations actually change.

The finding that should change how you sequence a fix:

• Decision rights and information flow. had roughly twice the impact on successful execution as changes to structure or motivators. Who is allowed to decide what, and who has the information to decide well, mattered more than anything else measured.
• Structure. the org chart, reporting lines, team boundaries, is the lever leaders reach for first because it is the most visible and the easiest to announce. It is also the weakest of the four on its own.
• Motivators. incentives and recognition matter, but they cannot compensate for people who lack the authority or the information to act. An incentive to hit a target you cannot actually influence just breeds cynicism.

The sequencing problem is what makes this research more than an academic curiosity. The researchers found that once a company redraws the org chart and puts names in the boxes, the appetite and the political capital to fix decision rights and information flow largely disappears. The reorg becomes the answer, whether or not it fixes anything, because nobody wants to reorganize twice in one year.

Why restructuring first backfires

Reorganizing feels like action. It is visible, it is announced in a town hall, and it gives leadership something concrete to point to. That is exactly why it is dangerous as a first move: it consumes the organization's appetite for change on the lever with the weakest measured effect, before the higher-impact fixes, clarifying who decides and who knows what, have even been diagnosed.

A team can have a perfectly sensible reporting structure and still fail to execute, because a regional manager cannot approve a discount without three sign-offs, or because the sales team does not see the churn data the product team already has. Neither of those is a structure problem. Both will survive a reorg untouched.

A practical sequence for closing the gap

Treat execution as a design problem with a deliberate order, not a single reorganization event.

1. Map the ten decisions that matter most. for the strategy to work, list the recurring decisions that determine whether it succeeds (pricing, discounting, hiring, prioritization calls) and write down who actually has the authority to make each one today. Gaps here are usually the real bottleneck, not the org chart.
2. Fix the information flow around those decisions. the person with decision rights needs the data at the moment they need it, not in a monthly deck. Close the loop between the team that has the information and the person who needs it to decide.
3. Translate the strategy into metrics people see weekly. a plan that never touches a frontline scorecard has not actually reached the people executing it. Pick a handful of measures a manager can act on directly, not a dashboard reserved for quarterly reviews.
4. Align incentives to the decisions you just clarified. only once decision rights and information are fixed does an incentive change have something real to reinforce. An incentive layered onto unclear authority just rewards noise.
5. Touch structure last, and only if it is still needed. after the first three steps, many teams find the existing structure works fine. If a structural change is still required, it should follow the diagnosis, not substitute for it.

The tool for step three: a scorecard, not a dashboard

The mechanism most organizations reach for to connect strategy to daily decisions is a structured scorecard: a small set of measures spanning financial, customer, internal process, and organizational capacity, built specifically to make an abstract strategy concrete and trackable (Kaplan & Norton, Harvard Business Review). The tool matters less than the discipline behind it.

A metric that only leadership sees is a reporting artifact. A metric the team that owns the decision sees every week is a management tool. The difference is whether it changes what someone does on a Tuesday, and that difference is what separates a scorecard from a dashboard nobody opens between quarterly reviews.

Signs your organization has an execution gap

• Decisions escalate that should not. if routine calls keep landing on a VP's desk, decision rights are unclear, not your people.
• Two teams learn the same fact at different times. a persistent information lag between teams that depend on each other is a design flaw, not a communication reminder away from being fixed.
• The strategy has not changed anyone's weekly metrics. if the scorecard a manager checks every Monday looks the same as it did before the new strategy, the strategy has not actually landed yet.
• The last fix was a reorg. if the default response to underperformance is redrawing the chart, check whether decision rights and information were diagnosed first.
• Incentives reward things people cannot control. a target tied to an outcome the team has no real authority over signals a decision-rights problem wearing an incentive-plan disguise.

None of this makes strategy formulation unimportant. A genuinely flawed strategy will not survive good execution, and Bain's own number, 63% captured on average, still means real value gets left on the table even by strategies worth having. But for most leadership teams staring at a strategy that has not landed the way it should, the fix is not a new offsite. It is closing the specific, measurable gap between the plan and the decisions people make every day.

That is the part of the work we focus on at Gaveau Strategy: not another strategy deck, but the operating detail, decision rights, metrics, and sequencing, that determines whether the strategy you already have actually ships.