#180 | Strategy Doesn’t Fail. Execution Does - Capability Unboxed Mini Series (powered by CIAB+) Part 4

Capability Unboxed Mini Series (powered by CIAB+) #4

Strategy isn’t usually the problem. Execution is. And more often than not, the real issue isn’t poor intent — it’s fragmented capability.

In this third episode of our Capability Unboxed mini-series, Fatimah Abbouchi explores why well-written strategies still falter once they hit operational reality. From digital transformation to customer-first initiatives, organisations often slice work into functions — leaving projects to stitch together what should already exist as stable, cross-cutting capabilities.

She reframes the conversation through a capability lens:

Core and enabling capabilities must cut across departments
 Fragmented people, process, and tools quietly drain value
 Projects shouldn’t just deliver outputs — they should strengthen the operating system

From green dashboards masking red adoption to rushed year-end spending and repeated rework, this episode dives into the structural reasons benefits leak long after strategy decks are approved.

You’ll learn:

Why capability fragmentation creates integration tax and hidden rework
 How to baseline maturity and map cross-functional value streams
 What funding and governance look like when tied to capability health — not just project milestones

Whether you're leading transformation, running a PMO, or trying to make strategy stick, this episode challenges you to stop treating delivery as temporary effort — and start treating capability as infrastructure.

🎧 Tune in, take notes, and join us in May for our live webinar event where we take a deeper dive into all things capability (powered by the AMO Way). If you can’t make it live, register anyway and we’ll send you the recording.

In this episode, I cover: 

0:42 Strategy Sounds Great On Paper

3:02 When Execution Unravels

5:33 Capabilities As The Missing Link

8:20 Customer First Needs Real Capabilities

11:08 How Strategy Gets Distorted in Delivery

14:50 Budgets, Functions, And Fragmentation

18:18 A Funding Model That Drives Outcomes

And more...

Transcript

Welcome And Series Context

Fatimah Abbouchi 0:00

You're listening to Agile Ideas the podcast, hosted by Fatimah Abbouchi. For anyone listening out there not having a good day, please know there is help out there. Hi everyone and welcome back to another episode of Agile Ideas. I'm Fatimah, CEO at AMO, Mental Health Ambassador, and your host. Today's episode is a continuation of our Capability Unbox series. So we've already spoken in the previous episode about why people and organizations typically treat capabilities and people as the same thing and why that breaks execution. So in today's episode, we're going to talk about how strategies not failing, but execution does. And so let's start by talking about some of the common strategic themes that you hear from time to time across organizations. And I also want to point out the fact that I find that every organization is undertaking transformation at any point in time. It seems to be run like BAU, to be honest. But nonetheless, let's talk about some of those strategic themes. So one of the big ones at the moment is around AI transformation and/or under the guise of digital transformation, which is also something that has been really prominent in the last however many years. Customer first, uh, operational excellence programs, organizations we've worked with have been establishing almost like a continuous improvement initiatives, but running them as an ongoing program and then determining initiatives that feed into that to help them, you know, cost cut or create efficiencies in their warehouse or identify additional dispatch options or just a range of different initiatives, but that they make up operational excellence. There's cost reduction strategies we talked about. There's organizations that are acquiring businesses, there's organizations that are scaling internationally, and there is just so many different strategic themes within the organizations, and they all sound great. Well, not all of them, but many sound good. They always sound good on paper because so much time and energy and effort is spent defining strategy papers and packs and you know reviews and all the sorts of things. And that's great. Strategy isn't typically the problem. It usually gets the most airtime, it usually gets the most recognition, it usually drives the funding envelopes that teams and organizations achieve to grow their business and to do their mergers and to transform. But even though the strategies themselves can seem very coherent, well thought through, and developed well, it's what happens after that becomes the problem. Now, depending on the strategy, it could be 12 to 24 months later, where fragmented delivery means that something was unachieved. It may mean that programs are drawn out well and truly beyond what is estimated in the strategy paper. It's very, very common by the way. Benefits are leaking, there's fatigue, people are exhausted, there's turnover in the leadership team, and the problems continue. I was reading just this morning actually about an organization that I can't remember the name, but they decided to pull the pin on a seven-year program. So the strategy probably was great, but execution probably wasn't. And so this is why strategy is not the problem, it's execution. So strategy itself is not what is not what's failing because the intent is there, but ultimately when it comes to execution, it's probably failing when it comes to capability and the abilities to actually deliver on what it is that you've defined in your strategy. So the capability layer of an organization is the what an organization is going to do. Now, regardless of what your strategy is and what you're trying to achieve, the big picture, you oft all ultimately have core capabilities within your organization and the supporting capabilities that enable you to deliver on whatever it is that you've promised to the executive team and to the board and to your stakeholders. The problem is when your organization's capabilities and operating system around those capabilities isn't fit for purpose or isn't operating well or doesn't deliver consistently or is fragmented or is tired and fatigued, then it ultimately can make it really difficult to produce reliable outcomes. And so you find that you know your um customer attention uh projects and initiatives are impacted because the capability that supports that is not there or it's not well managed. Or maybe you've got product development um capacity and capability happening and the capability components of that, everybody is doing something completely different. So it's not a cohesive capability that the organization can look to and say, this is how we do new product development. Or maybe, like another organization we work with recently that had data governance challenges, that's because they hadn't established the data governance capability and they were um effectively implementing a program of work to do that and were um finding that they had gaps around embedding and change in comps. There's so many different capability layers that underpin the operating model of an organization: vendor management, risk management, innovation, um, project delivery. There's so many different capability areas within an organization. And if those capabilities are not well structured and not well managed, then execution will stall. Ultimately, when I think about um the customer side of things, so customer first, one of the most common, and so it should be uh items on a strategic agenda for organizations is around their customer first, customer first. And so if you don't have consistency in how that capability comes together when it comes to people, process, and tools, how can you meet your strategic objectives around customer first? Uh, if you don't have the right tools in place to support inputting and input and output of data, um, cross-channel journey design, life cycle phases of how initiatives get managed to deliver for that customer first strategy, all of those things are problematic. And so this is why capability fragmentation is something that penetrates across multiple areas of an organization. And as I mentioned in the previous episode, capabilities are cross-cutting, unlike functions and divisions, which are typically more siloed. And the capabilities is what enables an organization itself to um, I guess, survive and scale and grow and deliver and execution and not stall. So now that we've spoken a little bit about what capability layers mean and the strategies versus execution, let's talk about how strategy itself actually gets impacted and effectively distorted. So most organizations go through the process of developing out their strategy. Their strategy then becomes a portfolio of projects, and then budgets get attached to the functions to deliver. So your marketing will get a certain budget and sales and so forth and so forth. Then the accountability of delivering to that strategy is usually attached to those with certain job titles. Your project managers, your delivery leads, your head of this, and your general manager that. So if I think about a digital transformation as a good example because it's so common, IT might run platform upgrades and operations runs process changes, marketing might do the CX design, but there isn't an end-to-end digital service capability. And so what ends up happening is integrating across all of that is usually left up to the program and projects. What that ends up meaning is projects and programs that are doing that are often spending more time and more money because they're adding more capacity to actually do that every single time, as opposed to having a system and a structure around capabilities that has the people, processes, and tool elements defined up front, so that you can lift and shift and reuse that, as opposed to reinventing the wheel and recreating that every time you've got a new project or a program. So activity tends to be increasing, but coherence and cohesiveness around the system doesn't. And so this is where some of those gaps come about. This is why I find a lot of organizations get to the end of the year and either they've got lots of functions that have underspent and they're rushing drastically to figure out how they're going to spend their funds before they lose it, or organizations that are so over budget in some areas and not in others. Um, and ultimately these gaps, you can kind of see where the gaps are based on uh pattern of behavior across those areas. In one organization I worked with in banking, they started a process where they gave full trust and accountability to the functions, and in a way that was very different to how they'd normally do it. And what they did is they would give them funding envelopes released quarterly. So that meant they would request a certain amount of funds up front, they would have that validated, they'd have the funds then distributed quarterly. And so what it meant was it kept those areas on their toes, and they had to keep demonstrating delivery incrementally to keep securing that funds, as opposed to knowing that they've got you know $10 million for the year or whatever it might be. Um, that's a really good example of in that organization there, they factored in capabilities in that sort of operating system as a um a horizontal layer um across their functions, divisions, and organization. And that kind of worked really well and was really suitable for them. So let's talk about the elephant in the room for a sec. And this is why leadership thinks the strategy is working until it's not. And this might be because you know, we tick some boxes and say some milestones are achieved or our artifacts are being delivered, you might have some fancy dashboards, um, steering committees might not be seeing any red or any problems. But ultimately, just because you might in your strategy decide to bring in a tool and deliver a pilot and identify some use cases, ultimately, if there's no changes to the underlying people, process, and tools more broadly, there's no changes to the decision making, the accountability, data governance, the workflow integration, all of those things, then adoption of said tool or pilot or whatever it is that you're delivering can actually stall. And then what ends up happening is strategy gets blamed. And people will say the strategy wasn't good enough, or it wasn't coherent enough, or wasn't articulated well enough, or it was, you know, blame it on the consultancy who put the strategy together. Where really, if they look inwards, they'll realize that it was actually because the strategy itself wasn't anchored in the capabilities of an organization. So I think it's important to shift to structural thinking about it from a structural clarity perspective. And remember that execution itself is ultimately anchored in capabilities. Remember, if you don't have clarity on the capabilities your organization has, then you ultimately will find significant challenges in scaling and growing and running your business effectively because you're going to constantly come up against all of these execution gaps I articulated earlier. In our business, for example, small business at AMO, we do a range of different things. We support organizations in their transformation, PMO, project implementation, um, regulatory compliance, AFSL, all sorts of things. But ultimately, our number one priority is helping take an executive's strategy or a signed-off strategy for an organization, help them to translate that into delivery, and then not only into delivery execution, but actually then handing that over into BAU or operations in a way that is sustainable and long-lasting. Because that's only when you get the delivery. But whenever we spend any time with customers, we always factor in what we always do for ourselves, and that is focusing on the capabilities, where they are, what they are, who runs them, what are the processes and tools and people that underpin it, and how do they help you to continuously meet your strategy. So when we think about anchoring your capability, your execution into your capability, what I'm referring to here is making sure you have really clear, identified capabilities, critical capabilities or core capabilities. Think of core capabilities as the things that without them your business just wouldn't exist. So there are capabilities that underpin that that are supporting or shared that include things like finance and IT, but as a core capability is critical to your business. These are the things that your business just wouldn't exist without them. You need to make sure you have a clear maturity baseline so that you understand what your starting position is, as you would in any instance, whether it's a project or your baselining at the beginning of where you're kicking off with introduction of a new tool and the adoption of that tool. Your baseline helps to provide that level of maturity, a sense of where it is, and then shows you how you're progressing to uplift as you move forward. Cross-functional mapping capabilities typically are always going to be cross-functional. And so mapping those is really important. It also really helps us to see where there is blind spots, duplication, and also rework across the path of that capability mapping exercise. Defining accountability. So this isn't about what department or function is responsible for a capability as such, but more about who is actually accountable for delivering the capability and then the people, the process, and the tools that sit within it. Also thinking about funding. So again, how how costs are estimated and factored in to uplift, continuously uplift and improve the overarching system, not just factored in to the department's effort, so not just capacity. And then also governance associated with tracking capability maturity over time, just like you would in projects and using milestones as well. So these sorts of things are examples of things that would really help provide structural clarity. Um, working with some clients recently, and they have articulated in different instances that they think they have a PMO problem, or they think that they have an IT problem. But when we dig deeper beneath the surface, it's actually a capability problem. And this is where people don't know what the people over here are doing, or another good example is when one team doesn't realize where their work stops and starts, or even how many projects are being run in an organization at any point in time. The capability associated with that is often uh misunderstood. So if we think about um all of those things, projects will help serve capability uplift, and it's important that we use them in a way to continuously factor in the changes, whether it's people, processes, tools that underpin those capabilities. And so ultimately in your business, you're either changing your business or you are running your business. Either way, both are anchored in and around the capabilities. So, as I mentioned earlier, when strategy fails, it's often an execution gap. Um, it's something that is not evident all the time and not easy to spot because executives are very busy. As a CEO of my business myself, I do find that it is really challenging sometimes to see the forest from the trees. And I need to spend time digging deeper to understand: is it a resource constraint? Is it poor program management? Is there a cultural issue? Is there an adoption issue? Is there resistance to change? There are often a lot of those things that people will blame, but when you dig deep, it's often none of those, or maybe a little bit of all of those, but rather the actual underpinning structure of an organization that is based on fundamental capabilities, both core and strategic and enabling capabilities that help you to deliver the required strategy. So, on that note, um, hopefully that has given you a bit of an insight into why I think it's not the strategy that's failing, but execution. And stay tuned for our upcoming episodes where we'll talk a little bit more about capability. And I wonder how many times I'm going to use that word in this little mini-series. Please let me know your feedback. Remember, we do have a webinar coming up in May, so please feel free to join. And if you want any more information on anything I've discussed, please do reach out. Thank you so much for listening to this podcast. Please share this with someone or rate it if you enjoyed it. Don't forget to follow us on social media and to stay up to date with all things Agile Ideas. Go to our website www.agilemanagementoffice.com. I hope you've been able to learn, feel, or be inspired today. Until next time, what's your Agile Idea?