When an important target is missed, most organizations know what happens next. Attention moves quickly toward execution. Did the team do what it said it would do? Was the right person accountable? Did we move fast enough? Were problems escalated soon enough? Those are fair questions, and I have asked them plenty of times myself. But they also begin with an assumption that is not always correct: that the strategy itself was sound and the problem occurred somewhere between the plan and the result.
Sometimes the team may have executed the plan reasonably well and the plan itself was wrong. A strategy is built on assumptions about customers, markets, technology, cost, organizational capability, and how certain actions are expected to influence an outcome. Some of those assumptions will prove correct. Others will not. Conditions can also change after the plan is put in place. So when a result misses, leadership needs to understand whether the organization failed to execute the strategy or whether it successfully executed something that was never going to produce the expected result. Those are two very different problems, and they require very different responses.
Teams Need Room to Be Wrong
I believe strong teams need to become comfortable with failure, but that does not mean becoming comfortable with poor performance. There is a meaningful difference between tolerating repeated underperformance and creating enough organizational security for people to take intelligent risks. If every unsuccessful idea becomes a discussion about who is at fault, people learn quickly to become more cautious. Targets get safer. Problems get softened before they move up the organization. Teams begin repeating what worked before rather than testing what might work better next.
That can become particularly damaging when a company says it wants innovation. You cannot ask people to challenge the status quo, experiment with AI, rethink the customer journey, or redesign an operating model while creating an environment where being wrong feels professionally dangerous. Over time, people will do exactly what the system teaches them to do: protect themselves. I would rather know early that an idea is not working than spend another six months defending it because nobody feels comfortable saying so.
The leadership responsibility is to distinguish between a thoughtful attempt that did not produce the expected outcome and poor execution of something the organization already knows how to do. The first should create learning. The second may require a very different conversation.
What Actually Failed?
This is where the diagnosis becomes more important than the reaction. Suppose a team has a clear objective, defined execution drivers, and agreed actions. The people responsible for those actions actually complete them. The operating reviews happen. Problems are surfaced. The measures underneath the strategy begin moving largely as expected. Yet the strategic output does not.
At some point, continuing to tell the team to execute harder stops making sense.
Consider a customer service organization that believes increasing digital self-service will lower cost while also improving customer experience. The team does the work. Digital adoption increases. The technology functions properly. Customers use the new channels. The original driver targets are achieved. But customer satisfaction remains flat and repeat contacts stay high. That is useful information. It may mean digital adoption was never as strongly connected to the desired customer outcome as everyone originally believed. Perhaps customers are using self-service but still contacting an agent afterward. Maybe the wrong transactions were automated. Maybe the experience created less effort for the company but not less effort for the customer.
The answer should not automatically be another round of pressure on the operating team. Leadership may need to revisit the assumption that drove the strategy. The same thing can happen in sales, field operations, cost reduction, or large transformation programs. Sometimes people execute exactly what we asked them to execute. The uncomfortable realization is that we asked them to do the wrong thing.
Use Rankings to Raise the Team, Not Create Fear
I think the same principle applies when leaders compare teams or individuals. There is nothing inherently wrong with rankings. I have used them, and they can reveal differences that deserve attention. If one team is consistently outperforming others, we should understand what it is doing differently. Good performance should be recognized.
But somebody is always going to finish last.
If twelve operating teams are ranked from one through twelve, the fact that someone is number twelve does not automatically tell me that the team is failing. I want to know how that team is performing relative to expectations, how it compares with where the organization was previously, and whether the entire distribution is improving. My objective as a leader would be to raise the whole group, not simply celebrate number one and put pressure on number twelve.
I think about sports in much the same way. I would rather be the twelfth player on the bench of a championship basketball team than the leading scorer on a team that cannot win. Being the twelfth player does not mean there is no expectation to improve. There absolutely is. But the broader context matters. The leader's job is to understand what separates the strongest performers from the weaker ones and determine what can actually be transferred. Is one team better staffed? Does it have a stronger supervisor? Are the customer conditions different? Is one group using technology more effectively? Or is part of the gap outside either team's control?
A ranking should start a conversation, not end one. And people need enough confidence in the environment to participate honestly in that conversation. If the team at the bottom believes that admitting a problem puts jobs in jeopardy, leadership is much less likely to hear what is actually going wrong.
Know Which Problem You Are Solving
There are usually clues that help distinguish an execution problem from a strategy problem. If commitments are repeatedly missed, ownership remains unclear, problems sit unresolved, decisions are delayed, and known execution drivers are deteriorating without intervention, I am probably looking at an execution problem. The organization may know what to do but is struggling to do it consistently.
The strategy question becomes more important when the opposite is happening. The agreed actions are being completed. The team is operating with discipline. The execution measures look reasonably healthy, yet the expected business result is not following. That is when leadership needs to be willing to challenge the original thinking. Maybe the driver was wrong. Maybe the customer changed. Maybe the market changed. Maybe an assumption that looked reasonable nine months ago no longer holds. Or maybe the strategy was simply too optimistic from the beginning.
What concerns me most is when an organization has a strategy problem but continues treating it as an execution problem. More meetings get scheduled. More reporting is requested. Leaders ask for additional action plans. People work harder trying to close a gap that the existing strategy may not be capable of closing. Eventually, you can damage a good team by repeatedly asking it to compensate for a bad assumption.
There are times when senior leadership has to be willing to say, the team did what we asked. We now need to reconsider what we asked them to do. That is not lowering the standard. It is part of the standard.
Learn Faster Than the Problem Grows
I do not think strong organizations are defined by never missing a target. That is unrealistic, particularly for organizations trying to grow, transform, or innovate. What separates stronger organizations is what happens after the miss.
Do they immediately look for someone to blame? Do they explain away the variance and move on? Or do they spend enough time understanding whether execution failed, the strategy failed, or some combination of the two?
Sometimes the answer will be uncomfortable. An owner may need to improve. A process may need more discipline. A team may need additional support. Other times, the uncomfortable answer belongs further up the organization because the original strategy or assumption needs to change. Either way, people need enough confidence in the environment to tell the truth.
When performance falls short, asking whether people executed well is necessary. It just should not be the only question. Sometimes the more important question is whether we gave them the right thing to execute.