When systems trump strategy

When I started off as a strategy consultant about 20 years ago, clients would often request that their strategy retreat be structured around departmental presentations. Each functional head would prepare a “strategy” and present it after the other in what I privately called a beauty parade. Marketing would present, then HR, then finance, then operations – each showcasing well-crafted plans, KPIs, and initiatives. It took some convincing to get leadership teams to see the fundamental flaw in this approach and adopt an approach that developed a strategy that was “transfunctional”. While this agitation has significantly reduced over time, the underlying mindset that produced it – the belief that an organisation is simply the sum of its departments – still quietly haunts and trumps strategy execution today.

This is precisely where systems thinking becomes critical. Decades ago, Russell Ackoff argued that organisations are systems, not collections of independent parts. His core insight was that improving individual components does not automatically improve the performance of the whole. In fact, optimising parts in isolation can reduce overall effectiveness if the interactions between them are misaligned. This explains why many organisations struggle with execution even when each department appears competent and aligned within its own space.

“From a practical standpoint, systems thinking requires leaders to shift from functional optimisation to systemic alignment.”

Contemporary management thinking reinforces this system’s view in practical terms. Eric Garton, writing in Harvard Business Review, emphasises that the operating model that includes structure, decision rights, governance, talent deployment, and workflows is the true bridge between strategy and results. Organisations often invest heavily in crafting a strategy but fail to align the system responsible for delivering it. The result is a predictable and persistent gap between intention and performance.

The departmental beauty parade is a classic example of non-systemic thinking. When functions develop strategies independently, what emerges is not a unified organisational direction but a collection of functional priorities. Marketing may push growth, finance may enforce cost discipline, HR may focus on capability building, and operations may prioritise efficiency. Each objective makes sense in isolation, yet collectively they may conflict. The system then produces internal friction, slow decision-making, and diluted execution.

Ackoff warned against this kind of disciplinary fragmentation, noting that real organisational challenges are rarely functional problems but systemic ones. Strategy execution cannot be solved by fixing one department at a time. It requires alignment across interdependent elements such as leadership behavior, incentives, governance, communication flows, and culture. When these elements are misaligned, the organisation naturally resists strategic change, regardless of how compelling the strategy appears on paper.

Garton’s perspective brings this into a modern execution context. Many organisations announce bold strategies or restructure their org charts without clarifying decision rights, aligning accountability, or redesigning workflows. Employees are told to be agile, yet approval processes remain slow. Leaders emphasise collaboration, yet performance systems reward silo achievements. Over time, the system overrides the strategy.

This challenge cuts across industries, not just specific sectors. Large corporations, public institutions, non-profits and fast-growing organisations alike often formulate strategy centrally but execute it through fragmented systems designed for different priorities. Leaders then attribute weak execution to resistance or capability gaps when the deeper issue lies in organisational design.

From a practical standpoint, systems thinking requires leaders to shift from functional optimisation to systemic alignment. The key question is not whether each department has a clear plan, but whether the organisation’s structure, incentives, and governance collectively support the strategic direction. A strategy that calls for innovation, for example, will struggle if budgeting systems punish experimentation or if decision-making remains overly centralised.

Talent deployment is another critical systemic lever. Many organisations assign talent based on functional boundaries rather than strategic importance. Strong performers become trapped within silos instead of being deployed where they can create enterprise-wide impact. This weakens execution and slows capability building. A systems-oriented leader, by contrast, treats talent mobility, leadership alignment, and cross-functional collaboration as interconnected drivers of results.

Communication is often misunderstood in execution discussions. When strategy stalls, leaders typically increase communication, assuming the problem is clarity. However, systems thinking shows that communication must be supported by aligned incentives, governance, and leadership behaviour. If leaders communicate collaboration but reward individual unit success, silos will persist regardless of messaging.

Measurement and accountability further illustrate the systems gap. Many organisations rigorously track departmental performance while neglecting enterprise-wide outcomes. This encourages local optimisation rather than collective success. Integrated metrics that reflect shared strategic priorities help align behaviour across functions and reduce fragmentation.

Ultimately, the enduring lesson from both systems theory and modern management research is straightforward: organisations are perfectly designed to produce the results they currently achieve. If strategy is not translating into results, the issue is rarely effort or intelligence. It is systemic misalignment.

The decline of the departmental beauty parade in strategy retreats is encouraging, but it does not automatically mean organisations have embraced systems thinking. Many still operate with siloed decision-making, fragmented governance, and misaligned incentives. Until leaders consciously design their organisations as coherent systems, the strategy-to-results gap will persist. Closing that gap requires more than better plans; it requires aligning governance, talent, culture, incentives, and operating processes so they collectively reinforce the same strategic intent.

Omagbitse Barrow is the chief executive of Efiko Management Consulting and supports organisations to translate their strategy into results.

Join BusinessDay whatsapp Channel, to stay up to date