Why transformation fails despite a strong strategy.

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Reading time: 3 minutes

Why transformation fails despite a strong strategy often becomes visible only when people have to act on it. Priorities shift. Established routines lose relevance. Decisions must be made differently. Problems need to surface earlier. Teams have to learn while continuing to perform. When this proves difficult, the problem is usually described as a failure of execution. But that diagnosis may be too narrow. Execution is not simply what happens after strategy. It is an organizational capability in its own right. The more useful question is: Have we created the conditions in which execution can happen?

Why transformation fails between strategy and execution.

Organizations often treat strategy and execution as consecutive activities: leaders define the direction, communicate it, and the organization acts. Strategic intent does not translate into coordinated behaviour automatically. De Oliveira, Carneiro, and Esteves (2019) studied strategy execution across 276 firms. Their findings suggest that strategy and execution are connected — but remain distinct organizational capabilities.

That distinction changes the diagnosis. People still have to determine what the strategy means for their work:

What should stop?

Which trade-offs now matter?

Where can people act independently?

Decision rights may remain unclear. Incentives may reinforce old priorities. Leaders may send competing signals. In these conditions, demanding greater discipline will not address the underlying issue. What appears to be an execution problem may be an organizational design problem.

Transformation removes familiar answers.

Organizations normally rely on established routines and assumptions to guide action. Transformation makes some of those reference points less reliable. Weick’s work explains how people interpret uncertain situations before deciding how to act (Weick, 1995). Execution during transformation is therefore not a direct movement from strategy to implementation. It is closer to:

Strategy → Interpretation → Action → Learning → Adaptation

Communication can explain the destination. It cannot resolve every decision people will encounter along the way. People need enough clarity to apply strategic intent when established rules no longer provide an answer.

Leaders shape the conditions.

Leadership behaviour affects how change is implemented. Higgs and Rowland (2011) interviewed leaders from 33 organizations. Leader-centric behaviour was associated with less successful change. Facilitating and engaging behaviour was linked to better outcomes. This does not reduce leadership accountability. It changes what accountability requires. Leaders must do more than demand progress. They must create the clarity, involvement, and support that allow others to act. The leadership question therefore becomes:

What are we doing that makes execution easier — or harder?

Execution requires learning and coordination.

Transformation rarely develops exactly as planned. New initiatives expose dependencies. Customer responses challenge assumptions. Operating-model changes create unanticipated consequences. Execution must therefore include the ability to recognize when reality differs from the plan.

Edmondson (1999) studied 51 teams in one manufacturing company. Psychological safety was associated with learning behaviour. Learning behaviour, in turn, was linked to independently assessed team performance. It highlights a relevant mechanism: An organization cannot learn from problems that people are unable to discuss.

Execution also requires coordinated action. A 2026 McKinsey perspective identifies two barriers to transformation: information hoarding and the prioritization of local interests (Strovink et al., 2026). A function may optimize its KPI. A business unit may protect its budget. Each decision may appear rational in isolation while moving the organization away from its shared direction. Execution is not only about individual action. It is about enabling the organization to act as a system.

The executive test.

To understand why transformation fails, look beneath the programme dashboard. The executive question is: What currently enables or constrains execution?

Look beneath the programme dashboard:

Do people understand what the strategy changes for their decisions?

Are decision rights clear enough for them to act?

Do incentives reinforce the new priorities?

Can teams surface problems and challenge assumptions?

Are functions rewarded for enterprise outcomes or primarily for local performance?

If the answers point in different directions, the organization may be facing a design issue. Not simply a lack of execution discipline.

Closing reflection.

A project plan can organize the work. It cannot ensure that people interpret priorities, make trade-offs, and coordinate differently. This is why transformation fails even when the strategy defines a clear destination: it cannot, by itself, create the organizational conditions required to reach it. Execution is where transformation becomes visible. But its conditions are designed long before.

by Anastasia Rettig | FLŌ

References

de Oliveira, C. A., Carneiro, J., & Esteves, F. (2019). Conceptualizing and measuring the “strategy execution” construct. Journal of Business Research, 105, 333–344. https://doi.org/10.1016/j.jbusres.2018.03.012

Edmondson, A. C. (1999). Psychological safety and learning behavior in work teams. Administrative Science Quarterly, 44(2), 350–383. https://doi.org/10.2307/2666999

Higgs, M., & Rowland, D. (2011). What does it take to implement change successfully? A study of the behaviors of successful change leaders. The Journal of Applied Behavioral Science, 47(3), 309–335. https://doi.org/10.1177/0021886311404556

Strovink, K., Lee, M., Hill, M., & Bucy, M. (2026, June 15). Collective action, collective success: A CEO’s role in transformations. McKinsey & Company. https://www.mckinsey.com/capabilities/transformation/our-insights/collective-action-collective-success-a-ceos-role-in-transformations

Weick, K. E. (1995). Sensemaking in organizations. Sage Publications.

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November 22, 2021

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