Most executives can readily agree: Organizational success hinges on effective execution, and effective execution is a matter of ability and agility. Can an organization quickly convert strategy into action, and can it deal effectively with discontinuous change in its competitive environment?
Organizations are collections of individuals, each of whom makes multiple trade-offs every day. To drive superior execution, organizations need to align the choices of these individuals with the overall strategic goals of the enterprise. In our experience working with companies and government agencies, we’ve identified four fundamental tools that organizations can wield to achieve that alignment: decision rights, information, motivators, and structure. These tools, in combination, determine — even predict — how an organization behaves internally and performs externally; they are the organization’s genetic code, so to speak.
To enhance execution and boost performance, most managers have traditionally focused most of their attention on the structure gene. They literally “restructure.” According to our research, however, decision rights and information flows provide the greater leverage in driving execution. These two are the “dominant genes”: Decision rights and information correlate most strongly with execution ability and agility, which, in turn, correlate strongly with superior profitability and growth.
Decision rights and information are dominant for a reason; they each have a pervasive effect on the organization and its other building blocks. Unclear decision rights not only paralyze decision making, they impede information flow and precipitate work-arounds that subvert formal reporting lines. Blocked information flows result in poor decisions, limited career development, and a reinforcement of structural silos.
Although each organization is unique, the insights captured in this report can help all companies chart a straighter course to performance improvement. Getting there is all about assembling the right program of actions that draw on the highest-leverage tools or genes — and then executing it.
© 2019 - Thu Jan 28 03:52:53 UTC 2021 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.