The Strategy-to-Execution Gap: How Portfolio Management Bridges the Divide

In our previous articles, we explored transforming risk assessment into strategic advantage and using foresight techniques to prevent decision blindspots. Today, we address perhaps the most persistent challenge organizations face: bridging the gap between strategic intent and operational execution.

The Execution Crisis

The statistics are sobering:

• 67% of well-formulated strategies fail due to poor execution according to research by the Economist Intelligence Unit[^1]

• Only 14% of employees understand their organization's strategy, as reported in a Harvard Business Review study[^2]

• Less than 10% of organizations consistently achieve their strategic objectives according to Project Management Institute research[^3]

• On average, organizations deliver just 50-60% of the financial performance their strategies promise based on findings from McKinsey & Company[^4]

These failures don't typically stem from poor strategies or insufficient resources, but from the disconnection between strategic direction and day-to-day operational activities. This is what we call the strategy-to-execution gap.

The Portfolio Management Solution

Strategic portfolio management (SPM) offers a proven approach to bridging this gap by creating a structured framework for translating strategic objectives into coordinated initiatives, resource allocations, and measurable outcomes. Unlike traditional project portfolio management that focuses primarily on operational efficiency, strategic portfolio management explicitly connects execution activities to strategic intent.

The Four Dimensions of the Gap

To understand how portfolio management bridges the strategy-to-execution gap, we must first understand the gap's four dimensions:

1. The Translation Gap

Many strategies fail at the first hurdle: translating broad strategic objectives into specific, actionable initiatives. Without this translation, strategies remain aspirational statements disconnected from operational reality.

2. The Resource Gap

Even well-translated strategies fail when resources aren't aligned with strategic priorities. Most organizations spread resources too thinly across too many initiatives, creating the illusion of strategic action while delivering minimal strategic impact.

3. The Coordination Gap

Strategic initiatives often require cross-functional coordination, but organizational silos and competing priorities undermine this collaboration, causing execution to fragment and lose coherence.

4. The Feedback Gap

Without timely feedback on initiative performance against strategic objectives, organizations can't adapt their execution approach when circumstances change or assumptions prove incorrect.

Portfolio Management as the Bridge

Strategic portfolio management addresses each dimension of the gap through a structured approach to connecting strategy and execution:

Bridging the Translation Gap

Effective portfolio management begins by translating strategic objectives into a balanced portfolio of initiatives, each with clear connections to strategic goals. This translation process:

• Breaks down broad objectives into specific outcomes

• Establishes initiative evaluation criteria linked to strategic priorities

• Creates visibility into how each initiative contributes to strategic goals

• Ensures comprehensive coverage of strategic objectives

For example, a healthcare organization pursuing a "patient-centered care" strategy might translate this into a portfolio of initiatives addressing digital patient engagement, staff training, facility redesign, and process improvement - each with explicit connections to the overarching strategy.

Bridging the Resource Gap

Portfolio management provides mechanisms for aligning resources with strategic priorities through:

• Capacity-based planning that acknowledges resource constraints

• Strategic resource allocation across the initiative portfolio

• Investment balancing across strategic themes and time horizons

• Dynamic reallocation as priorities shift or performance feedback emerges

Unlike traditional budgeting processes that allocate resources based on historical patterns or political power, portfolio management directs resources based on strategic contribution, creating a direct link between strategic priorities and resource investment.

Bridging the Coordination Gap

By establishing portfolio governance structures that transcend functional boundaries, portfolio management enables:

• Cross-functional visibility into interdependent initiatives

• Coordinated planning and execution across organizational silos

• Shared accountability for portfolio outcomes

• Integrated management of dependencies and constraints

These governance structures create forums where traditional organizational barriers can be overcome in service of strategic execution.

Bridging the Feedback Gap

Portfolio management establishes feedback mechanisms that close the loop between execution activities and strategic intent:

• Portfolio-level performance metrics tied to strategic objectives

• Regular review cadences that assess strategic alignment

• Early warning systems for initiative performance issues

• Mechanisms for strategic course correction

These feedback loops enable organizations to adapt their execution approach as they learn what works and what doesn't in pursuit of strategic objectives.

The Facilitated Portfolio Approach

While the principles of strategic portfolio management are straightforward, implementation often proves challenging due to entrenched organizational behaviors, competing priorities, and political dynamics. Facilitated portfolio workshops provide a structured environment where organizations can:

• Objectively evaluate initiative alignment with strategy

• Make transparent resource allocation decisions

• Address cross-functional dependencies and conflicts

• Build shared understanding of strategic priorities

• Develop portfolio management capabilities

These workshops combine rigorous methodology with skilled facilitation to overcome organizational barriers and establish sustainable portfolio management practices.

Beyond Tools to Mindset

Truly effective portfolio management requires more than just processes and tools - it requires a fundamental shift in organizational mindset from:

• Project thinking to portfolio thinking

• Activity metrics to outcome metrics

• Functional optimization to enterprise optimization

• Fixed planning to adaptive execution

This mindset shift begins at the executive level but must permeate throughout the organization to create lasting change.

Starting the Journey

Organizations looking to bridge their strategy-to-execution gap should consider these initial steps:

1. Assess the current state of your strategy-to-execution connection

2. Map your existing initiative portfolio against strategic objectives

3. Evaluate your resource allocation process for strategic alignment

4. Review governance structures for cross-functional effectiveness

5. Examine feedback mechanisms for strategic learning

6. Develop portfolio management capabilities through training and facilitation

By taking these steps, organizations can begin transforming strategy from an annual planning exercise to a continuous cycle of strategic execution and adaptation.

The Connected Enterprise

When risk optimization, strategic foresight, and portfolio management work in concert, organizations develop what we call "execution intelligence" - the ability to consistently translate strategic intent into operational reality while adapting to changing conditions. This capability becomes increasingly valuable as business environments grow more complex and uncertain.

[^1]: Economist Intelligence Unit. (2017). "Why Good Strategies Fail: Lessons for the C-Suite." The Economist.

[^2]: Kaplan, R.S., & Norton, D.P. (2005). "The Office of Strategy Management." Harvard Business Review, 83(10), 72-80.

[^3]: Project Management Institute. (2018). "Success in Disruptive Times: Expanding the Value Delivery Landscape to Address the High Cost of Low Performance." PMI's Pulse of the Profession.

[^4]: Sull, D., Homkes, R., & Sull, C. (2015). "Why Strategy Execution Unravels—and What to Do About It." Harvard Business Review, 93(3), 57-66.

In our upcoming posts, we'll explore specific techniques for enhancing each dimension of portfolio management and dive deeper into how facilitated workshops can accelerate portfolio maturity.

Contact us to learn about our Strategy-to-Execution workshops and how portfolio management can help your organization close the gap between strategic intent and operational reality.