Human flourishing means people perform at their best by willingly and fully expressing their competence, realizing autonomy, and experiencing relatedness in doing their daily jobs, i.e., ‘implementing organizational strategy.’ Organizational strategy aims to create and deliver innovative customer-sought value and is the means to organizational performance^1,2,3. Research shows that realized organizational performance falls short of planning, suggesting strategy breaks down. This breakdown jeopardizes the organization’s economic viability to the detriment of employees, customers, and society. Despite years of study and numerous proposed solutions, the failure persists⁴.

Problems persist because of a narrow and symptomatic diagnosis, contrary to a broad and systemic diagnosis⁵. As such, attention focuses on presenting problems rather than underlying causes⁵. This blog proposes a holistic diagnostic framework to identify underlying causes to overcome the breakdown in organizational strategy. Hopefully, it provides an impetus for practitioners and researchers to rethink strategy to craft an effective, implementable strategy that nurtures human flourishing, ensures customer satisfaction, supports the organization’s economic viability, and enhances society’s well-being.

Schools of Thought
There are several Schools of Thought on Organizational Strategy⁹. Few consider strategy’s original roots dating back to management pioneers such as Fayol (1916[2013]) and Taylor (1911[2022]). Furthermore, authors rarely adequately attend to the organization’s purpose. This is odd, as attaining the organizational purpose amounts to organizational performance. Regardless, most authors address enacting strategy to attain organizational performance. Enacting strategy focuses mainly on either (a) strategy-as-process or (b) strategy-as-practice¹⁰.

It is uncommon for strategy authors to attend to the work of human resource or psychology authors such as Hogan and Sherman (2020), Kahn (1990), Nadler and Tushman (1980), Tichy (1983), and Weisbord (1976) on organizational strategy implementation. This omission is peculiar because people implement strategy by doing their daily jobs^5,11,12. Predictably, one of the main and persistent reasons for the strategy breakdown is the physical or psychological unavailability of suitably competent people to implement strategy^13,14.

Unsurprisingly, research shows that organizational leadership does not know how people link to strategy implementation¹⁵. This deficit originates in the strategy formulation stage, which separates formulation from implementation and neglects inclusiveness and transparency^5,6,16,17. This fissure sets strategy implementation up for failure. To overcome this failure, it may be useful to think of organizational strategy in terms of ‘purpose,’ which is enacted through ‘process’ to attain ‘performance.’

Proposed Strategy Framework to Overcome the Organizational Strategy Breakdown
Figure 1 illustrates strategy as ‘purpose,’ ‘process,’ and ‘performance,’ along with employee competence (knowledge, skills, experience, attitude, behavior)^18,19 required for success. Figure 1 is consistent with standard strategic management texts³. Furthermore, it incorporates the ideas of Fayol (1916[2013]) and Taylor (1911[2022]), while making visible the role of people in implementing strategy, similar to Hogan and Sherman (2020), Kahn (1990), Nadler and Tushman (1980), Tichy (1983), and Weisbord (1976). Figure 1 is a simplified illustration of an organization as a total, integrated, open system demonstrating its interacting parts. It reveals how employee competence creates value through activities that convert inputs through processes into outputs that support culminating outcomes, representing organizational performance^{18, 20,21}.

Figure 1: Strategy as purpose, process, and performance

Source: Adapted from McNeill and Nienaber, 2025

Strategy-as-purpose
Figure 1 shows that strategy-as-purpose coincides with strategy formulation, at the organizational strategic level and spearheaded by top management. Strategy formulation corresponds to Fayol’s (1916[2013]) organizational function of management. Specifically, the management function of planning, namely, to foresee the future and make action plans to attain it. Strategy-as-purpose coincides with the strategy dimensions ‘content’ and ‘context,’ consisting of the elements (a) direction setting, (b) environmental analysis, and (c) strategic analysis and choice based on competitive advantage³.

Direction setting
Direction setting consists of the organizational purpose, vision, mission, goals, and values. Organizations exist with the purpose to (a) offer innovative customer-sought value (economic, functional, psychological, or a combination), (b) employ societal members, enhancing their dignity and self-respect, and (c) create wealth, which incorporates profit optimization². The organizational purpose is reflected in the organizational vision, mission, and goals, and is guided by organizational values³.

Vision states the aspirational, intended long-term future direction of the organization in terms of (a) innovative customer-sought value offered, (b) in the chosen competitive market(s) served, and (c) is constrained by environmental variables. Mission uniquely identifies the organization in terms of who it is, what it offers, and how it delivers customer value. Goals translate the vision and mission into measurable, achievable performance targets to enable progress monitoring. Organizational values call for the moral, proper, just, and reasonable treatment of all stakeholders at all times.

Environmental analysis
Environmental analysis continuously examines the ever-changing variables in the macro-, market-, and micro-environments that impact organizational performance. These include variables from the economic, technological, social, and political-legal sub-environments. These variables constrain what is desirable relative to what is possible²². Environmental variables shape an emergent strategy that deviates from the intended strategy that is deliberately enacted, and culminates in realized strategy^6,10. Successful organizations are agile and resilient²³. Agile organizations identify and capitalize on opportunities faster than rivals. Resilient organizations foresee major events, swiftly adapt to these changes, and recover from setbacks.

Competitive advantage
Environmental analysis is the basis for crafting a competitive advantage and foundation of a sound strategy at the corporate (growth, maintenance, divest), business/competitive (focus, differentiation, low-cost), functional (marketing/exchange, financial, HR, etc.), and tactical (e.g., price discounts) levels, and regardless of the organizational lifecycle (growth, mature, decline). Competitive advantage means an organization creates and delivers superior customer-sought value compared to its rivals. Achieving this advantage depends on suitably competent employees who are appropriately deployed and able to freely and fully apply their competence, realize autonomy, and experience meaningful workplace relationships. Competitive advantage is also contingent on the characteristics of the market served and access to the resources required to create and deliver value^20,24,25.

Competitive advantage mirrors the organizational purpose. Fayol’s (1916[2013]) management functions of coordination (the harmonized running of the entire organization) and command (voluntary, unified cooperation of all organizational members in pursuing the organizational purpose) are central to competitive advantage²⁰. Fulfilled competitive advantage facilitates strategy implementation and ensures positive organizational performance²⁴.

Competence required to accomplish strategy-as-purpose
Because people ‘do strategy’ in performing their daily jobs, this exposition will be incomplete without attending to the employee competence required to set and attain organizational performance, namely, its purpose. Figure 1 illustrates examples of the competence required to successfully discharge the management function of strategy-as-purpose, process, and performance in pursuit of organizational performance^15,20,21.

As illustrated, strategy- as-purpose is set at the organizational strategic level. Strategy-as-purpose requires competence at the strategic (output and outcome) and tactical (input) levels of measurement. Competence at the tactical level of measurement may be unexpected, as it is not necessarily associated with the organizational strategic level. Therefore, it is overlooked and derails strategy implementation.

Competence measures include (a) leadership capability which gauges top management’s ability to set the organizational direction, recruit and retain talented organizational and team members, influence and align organizational members towards the common organizational goal, motivate organizational members to act and take charge of their performance in alignment with the organizational strategy, and to persevere, (b) workforce composition which assesses available vs. required people competence to perform their roles proficiently to attain organizational performance, (c) regulatory compliance which weighs the organization’s adherence to applicable laws, regulations, guidelines, and specifications, including relevant to human resources such as health and safety legislation, (d) agility which gauges the organization’s capacity to recognize and take advantage of opportunities faster than competitors, (e) resilience which assesses the organization’s capacity to constantly foresee emerging key events, adapt to these changes, and quickly bounce back from setbacks, (f) innovation which gauges the organization’s capacity for invention which encompasses initiating, synthesizing, and implementing new ideas that solve problems. Innovation involves risk-taking that (1) requires agility and resilience and (2) stimulates employee engagement by nurturing flourishing people – to be fully functioning, and be their best, by willingly and fully utilizing their competence, realizing autonomy, and experiencing relatedness in creating and delivering innovative customer-sought value through performing their jobs, and (g) customer satisfaction which evaluates customers’ perception of value offered, including the interaction experience in acquiring the value offer. Satisfied customers are return customers who support the organization’s economic viability^18,21,23.

Various organizational units typically administer these competence measures. Hence, competence measurement can easily result in a siloed effort that dilutes measurement effectiveness. Regardless, competence measures gauging strategy-as-purpose reflect competence in the business and leadership domains¹⁸. Business competence comprises technical knowledge and skills as described by Fayol (1916[2013]), Taylor (1911[2022]), and Stewart (1997). Leadership competence comprises influencing and team-building skills and draws on business, interpersonal, and intrapersonal competence¹⁸. Interpersonal competence comprises knowledge and skills in initiating, building, and maintaining positive relationships with many diverse people¹⁸. Intrapersonal competence comprises self-awareness (internal identity and external reputation), skillful expression of personal qualities, self-regulation, and self-management¹⁸. Research shows that strategy implementation failures can be categorized according to these four competence domains, i.e., business, leadership, interpersonal, and intrapersonal. Specifically, leadership’s failure to identify innovative customer-sought value has a domino effect on competitive advantage, resulting in low levels of employee engagement and poor organizational performance^8,20,30.

Strategy-as-process
Figure 1 shows that strategy-as-process occurs at the organizational operational level, where strategy is translated into action (implemented). Thus, strategy-as-process aligns key actions (implementation) with strategic intent (formulation). Strategy-as-process enacts strategy-as-purpose through employees performing organizational activities, stipulated in the action plans formulated in strategy-as-purpose. These activities constitute employees’ daily jobs as specified in job design.

These activities are categorized according to Fayol’s (1916[2013]) six interdependent functional groups, namely, (a) production, (b) exchange/marketing, (c) finance, (d) security, (e) accounting, and (f) managerial, i.e., planning, organizing, coordinating, commanding (analogous to cooperating), and controlling. Furthermore, these activities are congruent with Porter’s (1985) value-chain activities. These interdependent functions require corresponding and proportionate competence to be executed in congruence with the employees’ hierarchical position²⁹. Higher hierarchical levels require more management activities and lower hierarchical levels more technical activities. Strategy-as-process emphasizes the managerial functions of organizing, coordinating, and commanding.

These organizational activities govern the creation and delivery of innovative customer-sought value and are captured in the mechanism structural dimensions of organization for implementing strategy. This mechanism (a) arranges division of labor and integration of effort, (b) permits employees to express their competence (getting ahead), realize autonomy (finding meaning), and experience relatedness (getting along) through the interacting dimensions, framework and processes, and (c) nurtures employee flourishing^{5,7,14,16,17,20,29,30}. The framework dimension is relatively stable and arranges coordination that galvanizes cooperation. The processes dimension is fleeting and arranges command/cooperation.

Framework dimension of organization for implementing strategy

The framework structural dimension of organization for implementing strategy comprises structure and systems. Structure encompasses (a) the formal organization of roles and responsibilities reflected in job design, subsuming decision-authority accompanying the job, (b) policies and procedures that support effective job performance, (c) leadership, explicitly creating an environment conducive to nurturing flourishing employees, and (d) culture, expressly enabling appropriate risk-taking behavior that delivers innovation, which in turn fosters flourishing employees and businesses^20,30.

Systems allocate resources that enable employees to do their jobs productively through (a) budgets, (b) management information, (c) training and development, and (d) operational controls, in striving to attain planned performance. To be effective, the constituent parts of the framework structural dimension of organization for implementing strategy should be congruent. Moreover, the framework and processes dimensions of organization for implementing strategy should also be congruent, as these dimensions interact.

Processes dimension of organization for implementing strategy
The processes structural dimension of organization for implementing strategy consists of interaction and sanctions. Interaction involves communication, while sanctions involve rewards (punishments) for implementing (not implementing) strategy. Communication includes appropriate consultation with relevant stakeholders, particularly organizational members, about the strategy (a) content/purpose, (b) process, and (c) outcome/performance.

Strategy content involves what/strategy option, e.g., growth, maintenance, divestment, focus, low-cost, differentiation. As illustrated in Figure 1, the strategy option is addressed in strategy-as-purpose. Strategy process involves the who (internal and external stakeholders), how (sophistication, formality, deliberate/emergent/combination), where (context, e.g., stable/volatile, national, regional, global, and variables from the economic, technological, social, and legal environments impacting strategy), and when (frequency) of strategy formulation, implementation, and control. Strategy process is partly addressed in strategy-as-purpose.

Strategy outcome (organizational performance) refers to whether, and to what degree, planned goals were achieved and reinforced by sanctions. Sanctions involve power and rewards or punishments that rely on, and simultaneously impact, employees’ competence (getting ahead), autonomy (finding meaning), and relatedness (getting along), which are the motivational levers of human behavior. The use of the motivational levers allows (or obstructs) people to implement strategy by being engaged (or alienated)^7,14. Individual behaviors that reflect relationships among organizational members are at play. To be effective, the constituent parts of the processes dimension of organization for executing strategy should be congruent.

To ensure successful strategy implementation, people at the operational level should be appropriately involved in strategy formulation. One reason for the physical and psychological unavailability of people to implement strategy is that they are overlooked during the formulation stage^5,16,17, despite competence measures assessing people’s availability to implement strategy. Excluding employees from strategy formulation contributes to employee frustration. This frustration may prevent them from applying their competence, realizing autonomy, and developing meaningful workplace relationships, and result in alienation from their work and colleagues, strategy implementation failures, and poor organizational performance.

Competence required to accomplish strategy-as-process
It stands to reason that the activities performed in strategy-as-process require employees to possess and express relevant competence to pursue organizational performance. As can be expected, competence required to enact strategy through process relies on technical/business and interpersonal competence¹⁸. Figure 1 illustrates the competence required to enact strategy, with activity measurement dominating. The presence of strategic (output and outcome) level measurement may be unexpected, because it is not associated with the organizational operational level and is, thus, often overlooked^15,20. However, strategic-level measurement matters most in strategy implementation and underscores the interconnected nature of strategy formulation and implementation^15,20,30. Hence, competence to accomplish strategy-as-process and strategy-as-purpose overlap to some degree and are illustrated in Figure 1.

Competence measures cover a wide range of people- and financial practices that support effective strategy implementation. These measures value and activate flourishing employees, and form the basis for managing human resources. Measures include workforce attraction and recruitment, which ensure suitable competence enters the organization to fulfill their role in strategy implementation. Performance management measures how well individual employees and teams achieve their objectives that are derived from organizational goals. Learning & Development identifies and enhances the competence required to secure sustainable, successful job performance to realize organizational performance.

Reward and recognition measure employee compensation, financial or otherwise, to ensure employees’ economic security, which influences their retention and positive employee relations. Employee relations gauge communication between the organization and its employees, particularly if employees have opportunities to be appropriately included in decision-making, specifically in terms of strategy implementation. Employee welfare gauges support available to employees aimed at nurturing flourishing employees.

Organizational development enables lasting organizational performance through employees, deployed in appropriate positions and, when warranted, includes organizational redesign, restructuring, strategic alignment, and job (re-)design. Workforce planning, i.e., continually aligning the needs and priorities of the organization with the workforce competence to meet obligations in pursuit of organizational performance.

Culture identifies the organization’s shared values that influence members’ behavior, including stimulating innovation based on appropriate risk-taking that ignites employee engagement. Employee engagement and well-being assess the level of employee functioning and the conditions that prompt flourishing employees that are necessary for organizational performance.

Employee performance and productivity measure the quality of employee performance against role-based targets, necessary to produce outputs and outcomes. Finally, leadership capability, discussed under strategy-as-purpose, provides the direction, alignment, and support needed to connect these measures and ensure their effective contribution to strategy implementation.

These measures reflect competence in the business, leadership, and interpersonal domains and are underpinned by intrapersonal competence.¹⁸ Furthermore, these measures demonstrate that competence measurement is intertwined and does not follow the organizational hierarchical levels²⁰, as illustrated in Figure 1. These competence measures also underscore the interrelatedness of strategy formulation and implementation. Therefore, strategy formulation and implementation should not be separated, as is often the case^6,30.

Research shows that the strategy breakdown can be categorized as either coordination or command/cooperation failures²⁰, the essence of structural dimensions of organization for implementing strategy. For example, the physical or psychological unavailability of suitably competent people to implement strategy results from organizational leadership not knowing how people link to strategy implementation, and the separation of strategy formulation and implementation. By implication, strategy breaks down owing to failures in division of labor and integration of effort, originating from failures in strategy-as-purpose. Following this exposition, as illustrated in Figure 1, can ensure that realized and planned organizational performance match.

Strategy-as-performance
Strategy-as-performance relates to the strategy-dimension outcome and reflects the degree to which the organization realized its purpose, i.e., the intent to create and deliver innovative customer-sought value. Figure 1 shows that strategy-as-performance occurs at the organizational strategic level and comprises workforce and organizational performance. As mentioned, realized strategy falls short of planned performance, thereby jeopardizing the economic viability of organizations and undermining employee flourishing, customer satisfaction, and society’s well-being. Essentially, realized strategy fails to yield the planned results owing to inappropriate performance management²⁶. Inappropriate performance management undermines its aim to maximize employee value aligned with organizational goals²⁶.

Aligning employee value with organizational goals
Organizational performance shortfalls mean performance management did not maximize the employees’ value in alignment with the organizational goals and purpose. This implies employees are not flourishing because they are not allowed to willingly and fully express their competence (getting ahead), realize autonomy (finding meaning), and experience relatedness (getting along) in performing their jobs, i.e., executing organizational strategy. Performance management, thus, squanders employee value. This waste is reflected in low levels of employee engagement³¹, indicating alienation rather than flourishing, and manifests in poor organizational performance.

Squandering the value of employees is unsurprising given leadership failures. Specifically, (a) overlooking the purpose of the organization in terms of offering innovative customer-sought value, (b) not knowing how people link to strategy implementation, i.e., creating and delivering customer-sought value, and (c) resulting in people being deployed in positions that frustrate the satisfaction of their inborn needs for competence, autonomy, and relatedness, yielding poor performance.

In effect, leadership frustrates people’s motivation to cooperate willingly and fully in strategy implementation. It is aggravated by a lack of: (a) resources supporting employee performance, (b) feedback, recognition, and development opportunities, (c) communication transparency and inclusiveness, and (d) conditions that foster meaningful connections. These leadership failures result in performance management tools and practices that are detached from organizational strategy and fortify the cycle of poor employee performance spilling over into organizational performance^26,27,28.

Maximizing employee value aligned with organizational purpose

The performance deficit can be corrected by following Figure 1. Effectual performance management (a) begins with clear expectations from employees aligned with organizational goals, anchored in the organizational purpose, which constitute organizational performance, (b) follows with providing employees with the required motivation, (competence, autonomy, relatedness), resources, support, and the opportunity to succeed in achieving organizational goals/performance, and ends with (c) holding employees accountable for their work performance with commensurate sanctions (either rewards or punishments)²⁶.

As shown in Figure 1, the mechanism to achieve effectual performance management is structural dimensions of organization for implementing strategy, linking ‘purpose,’ ‘process,’ and ‘performance.’ Thus, strategy-as-performance is a continuous management function that ensures realized and planned organizational performance match. Performance management is proactive (agile) in detecting and responding (resilient) to environmental changes by mobilizing proper contingency plans. Furthermore, strategy-as-performance hinges on employees taking ownership of their performance, as agreed upon during the strategy formulation stage (strategy-as-purpose), calibrated and confirmed during implementation (strategy-as-process), and control (strategy-as-performance) stages. Ownership ensures employees’ flourishing, i.e., full and free-willed participation in strategy implementation by expressing their competence, realizing autonomy, and experiencing relatedness through appropriate transparency and inclusion throughout the strategy formulation, implementation, and control stages, as discussed.

Competence required to accomplish strategy-as-performance
Figure 1 demonstrates that (a) strategy-as-purpose, -process, and -performance is an intertwined, iterative cycle and (b) a few competence measures repeat throughout this cycle to ensure organizational performance²⁰. For example, non-financial competence measures gauging strategy-as-performance include innovation, agility, resilience, customer satisfaction, culture, employee engagement and wellbeing, and employee performance and productivity. These measures also gauge strategy-as-purpose and strategy-as-process, as discussed. Furthermore, these competence measures feed into financial performance measures. For example, satisfied customers are return customers warranting a steady income flow. At the same time, it is less costly to retain existing customers than to acquire new customers. Engaged employees boost productivity, which enhances profitability.

Carefully selecting a few relevant and comprehensive competence measures comprises a holistic, integrative measurement system that bolsters measurement effectiveness. If these measures are properly and jointly administered by relevant organizational members, it would be possible to steer the organization towards successful performance. As illustrated in Figure 1, the integrated measurement system accounts for competence at the strategic (output and outcome), activity (process-operational), and tactical (input) levels of measurement. These points are prosaic and, thus, somewhat redundant to mention; nonetheless, they are often missed^18,23,26,27.

Parting Thoughts
This blog aims to enable a broad, systemic, and systematic diagnosis to identify underlying causes of the organizational strategy breakdown to ensure organizational performance. In short, the organizational strategy breakdown stems from leadership failures arising from (a) neglecting innovative customer-sought value, resulting in (b) the unavailability of suitably competent employees to implement strategy, (c) yielding performance shortfalls, and (d) destroying rather than creating wealth. Figure 1 is a sound roadmap to rethink and to craft an effective, implementable strategy that nurtures human flourishing, ensures customer satisfaction, supports the organization’s economic viability, and enhances society’s well-being. I hope you find this information useful in your endeavors.

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