Execution Gap 2.0 – Why even the most expensive strategies stall halfway?
Author: Krzysztof Szatkowski, Managing Consultant
The facts are stark: organizations have never invested in transformation as intensively as they do today. AI, digitalization, new operating models, regulation, automation. The list of priorities is growing faster than companies’ ability to deliver them.
The Execution Gap, the gap between strategic ambition and an organization’s actual capacity to deliver on it, is no longer merely an operational issue. It has become a business and systemic challenge: it consumes budgets, extends transformation timelines, overstretches critical resources and, over time, undermines management boards’ confidence in the very idea of change.
The latest data from the Project Management Institute (PMI) illustrates the scale of the issue. Only around half of all projects meet the modern definition of success. 13% fail, while another 37% deliver only part of the expected outcomes. Moreover, 35% of surveyed leaders identify the disconnect between planning and execution as a significant barrier to organizational reinvention.
In this article we explore:
- why is the Execution Gap widening despite massive investment in transformation,
- which organizational mechanisms deepen the gap between strategy and execution,
- how to distinguish strategic ambition from actual execution capacity,
- which three actions can help reduce the Execution Gap,
- why is the speed of strategy execution becoming one of the key sources of competitive advantage.
Strategy sets the direction. Execution determines the outcome.
For years, consultants, including ourselves, focused primarily on diagnosis: Is the strategy sound? Is the mission inspiring? Is the portfolio of initiatives aligned with the organization’s ambition? Increasingly, however, the evidence suggests that the real problem lies elsewhere: not in the quality of thinking, but in the ability to act.
McKinsey’s State of Organizations report shows that around 70% of transformation programs fail to deliver the expected business value. PMI’s Pulse of the Profession, in turn, indicates that a considerable proportion of project budgets do not translate into expected outcomes because of weak execution rather than flawed strategy. Both sources point to a similar conclusion: execution remains one of the weakest links in transformation.
Three mechanisms that deepen the Execution Gap:
1. An overloaded portfolio of initiatives
Competitive, regulatory and technological pressure is driving management boards to launch transformations across multiple areas at the same time: AI implementation, ESG reporting in line with the CSRD (Corporate Sustainability Reporting Directive), compliance with the EU AI Act and the digitalization of operational processes.
Each of these initiatives may have a valid business case. The problem begins when they are all launched simultaneously, drawing on the same people and the same organizational decision-making capacity.
Research into project portfolio management, including academic studies published in the International Journal of Project Management, points to a clear pattern: organizations achieve the highest project success rates when they concentrate resources on a limited number of priorities. Once a certain level of parallel activity is exceeded, every additional initiative reduces the likelihood of success for the others.
2. Distributed ownership
In many organizations, a project has a sponsor, a steering committee, workstream leaders, external advisers and an internal PMO. Everyone is involved, yet no one carries full responsibility for the whole.
When a project stalls, accountability begins to disperse across dozens of stakeholders and successive layers of governance. This phenomenon, often described as ownership dilution, is particularly visible in cross-functional transformations. Examples include AI implementations requiring simultaneous collaboration between IT, business and compliance, or ESG programs involving finance, supply chain and corporate communications.
The more parties involved in the process, the more diluted the responsibility becomes, making it harder to reach clear decisions and harder still to ensure consistent execution.
3. Overloaded decision-making structures
Large organizations often respond to increasing complexity by adding another layer of control: more committees, more approvals and more reporting. The response is understandable, but often counterproductive. In practice, decisions that should be made within days may wait weeks for the next meeting of the relevant decision-making body. In the meantime, the market window begins to close, the team loses momentum and the initiative gradually loses internal support.
The issue is not that responsibility for a decision disappears. It moves between successive forums and levels of approval. Each of them mitigates risk within its own remit, but collectively they extend the response time of the entire organization.
The Execution Gap is not the result of a poor strategy. It emerges when strategy collides with the day-to-day reality of an organization: its structures, operating culture and limited capacity to focus attention on the decisions that matter most.
The market is sending a signal management board should not ignore
Rising transformation spending combined with persistently low project success rates is a warning signal that should change the way organizations think about resource allocation. Instead of focusing solely on the question, “How much will we invest in AI?”, management boards should first ask another: “Do we have the organizational capacity to deliver this investment successfully?”
The distinction between strategic ambition and execution capacity is becoming one of the key dimensions of organizational maturity.
Companies that understand this do not treat the launch of another transformation as a success in itself. They first assess whether they have the people, resources and decision-making capacity required to complete the changes already under way.
Three levers that reduce the Execution Gap:
Organizations that consistently achieve high rates of strategy execution differ from others not on the scale of their ambition, but in the discipline of their execution.
In practice, three mechanisms stand out as particularly important in reducing the Execution Gap.
Lever 1: Rigorous portfolio selection
Organizations with high execution maturity manage their portfolio in both directions. They not only launch new initiatives but are equally disciplined in closing those that no longer show sufficient potential.
A value-versus-feasibility matrix helps distinguish strategically critical projects from those that continue through inertia or political considerations. The result is straightforward: a smaller portfolio of initiatives, sharper focus and better outcomes.
Practical tip: if your organization is running more than seven or eight transformation initiatives in parallel, it is likely that none of them is being delivered to its full potential. A portfolio audit is not a sign of weakness. It is an expression of strategic discipline.
Lever 2: Simplifying decision-making structures
A single decision-maker model, with a clear mandate, decision rights and personal accountability for the outcome, can significantly shorten decision cycles. The key is to clearly separate the right to contribute from the right to decide. The first can be distributed broadly. The second must belong to a specific person.
In Polish organizations, where corporate culture often rewards consensus at the expense of speed, such a change is particularly difficult and particularly necessary. The pursuit of full agreement can easily prolong the decision-making process. The number of consultations grows, additional stakeholders acquire an effective right of veto, and responsibility for the choice shifts from an individual decision-maker to the group. The result may be a compromise that everyone can accept, but which is not necessarily the best decision from the perspective of the project objective.
Lever 3: Clear ownership
Projects are delivered by people, not governing bodies.
Assigning responsibility for delivery to a specific person, with a clear mandate, personal accountability and transparent visibility of progress, changes the dynamics of the entire implementation.
OKRs (Objectives and Key Results), combined with weekly progress reviews, can complement quarterly steering committee reporting with a much more current view of execution.
An organization must recognize accountability as an element of mature management, not as a mechanism for assigning blame. Simply allocating responsibility within a process is not enough if it does not become part of the organization’s everyday way of working. Process change must therefore evolve into a new organizational culture in which accountability for results becomes a natural standard for collaboration and decision-making.
Competitive advantage lies in the speed of execution
The most important mindset shift required by Execution Gap 2.0 is easy to articulate, but far more difficult to implement.
A good strategy alone no longer creates competitive advantage. Advantage comes from the ability to execute strategy faster and more effectively than competitors. That is why the companies that win will be those that are first to scale AI in customer service, turn ESG requirements from a compliance cost into business value, and complete the transformations they have started instead of keeping them in a permanent state of “continuous change”.
These are the organizations that unlock value from investment faster and set the pace in their industries. The question is therefore no longer whether the strategy is good enough. A far more important question is: Does the organization have the people, decision-making capacity, resources and execution capability required to actually deliver it?
And if the answer is “only partially” that is precisely where work on the Execution Gap should begin.
At Carrywater, we support organizations in delivering complex business and technology transformations. We help structure project portfolios, strengthen PMO and governance, manage projects and programs, and complement teams with experienced Project Managers, Program Managers and interim experts.
Our support can cover an entire program or focus on a specific area where the organization currently lacks the required capabilities, capacity or clear ownership.
If your strategy is already in place but execution is beginning to slow, let us talk about where the gap is actually emerging and how to reduce it.
Sources
- McKinsey & Company, State of Organizations – recurring report, available at: mckinsey.com
- Project Management Institute, Pulse of the Profession – recurring report, available at: pmi.org
- International Journal of Project Management – peer-reviewed academic journal
- CSRD (Corporate Sustainability Reporting Directive) – European Commission, 2022
- EU AI Act – European Parliament, 2024
