Strategy #17: Everyone agrees, but the system continues to function the same way.

McKinsey A recently released survey of over 10,000 senior executives in 15 countries across 16 industries for the year 2026 reveals a statement that most accurately summarizes the findings:

“Most organizations in 2026 have approved the strategy. The roadmaps have been built. The AI ​​investments have been funded. The leadership teams have aligned.”

And then there's the next line, which is very interesting.

“And 72% of senior executives say their organizations cannot execute on any of it.”

In the same year that every organization was talking about transformation, AI, and strategy—everyone agreed, everyone nodded—three-quarters said it was impossible to make it happen.

This isn't just a problem for some organizations; it's a problem for the majority.

Harvard Business Review Similar figures show that 67% of good strategies fail because of execution issues, not because the plan itself is flawed. Even more incredibly, Kaplan and Norton, the creators of the Balanced Scorecard, estimate that as many as 90% of strategies are never truly executed.

If these numbers are correct, it means the problem isn't with the strategy, and it's not with the intention.

It lies somewhere deeper than that.

As we've discussed before, strategy doesn't fail at the planning stage, but at the prioritization stage. Steve Jobs of Apple cut its product line from 350 down to 10; that was the first step.

But there's a second step that 72% of organizations haven't yet taken: integrating the choice into the organization's systems, not just in the boardroom.

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The system tells people in the organization what is truly important without anyone having to say it, and it is divided into four layers:

Level 1 — Things to measure

If you measure transaction volume, people will work for volume. If you measure customer satisfaction, people will work for satisfaction. The system recognizes this through metrics because people in the organization aren't necessarily doing the right things; they are doing what is being measured.

Level 2 — What gets paid and the people involved.

The budget is the most honest vote within an organization. Projects that are listed as priority but don't receive funding are prioritized on paper, not as true priority.

Level 3 — What is praised and what is punished.

If an organization says, "Take a risk," but those who run failed pilot projects are overlooked, people will stop taking risks immediately. Systems remember behavior that is rewarded, not that is met with applause.

Level 4 — What leaders do when no one is watching.

Toyota made it very clear about the Andon Cord. When an employee pulls the cord, the first thing the manager says is "Thank you," not "Who's at fault?" The leader's behavior in a world without slides is the most accurate reflection of a leader's character within the organization.

Why are these four layers so important?... Because when all four layers...Pointing in the same direction. This is what is called a memory system.

But if there's even just one layer of contradiction, such as measuring one thing but saying another, or awarding one prize but announcing something else, people in the organization will believe tangible signals, not auditory signals.

And this is the best explanation of why 72% of McKinsey members agree with the strategy, but haven't been able to make it a reality.

On a Toyota production line, every employee has the right to stop the entire production line immediately, simply by pulling a rope called an Andon Cord. No permission is needed, no waiting is required. When a quality problem is detected, pull it, everything stops. The supervisor runs over and asks... "How can I help?" and the problem was solved immediately.

Toyota didn't just say, "Quality is more important than speed," but they created a system that allows everyone in the organization to actually enforce that priority every day.

But when several American car companies saw this and implemented the same rope in their own factories, the results were completely different. No one dared to pull it because in those factories, the managers were still asking, "Who's at fault?" not "How do we fix it?" KPIs were still measured by production volume, and production line stoppages indicated a problem, not responsibility.

The same tools, but different systems and cultures, therefore different results.

This is the best explanation I've found for McKinsey's 72% figure.

From my conversations with various organizations, what I consistently observe is that the meeting room makes a good decision, everyone agrees, but three months later, everything is still the same. This isn't because people are unintentionally lacking in commitment, but because the surrounding systems are still measuring, rewarding, and unconsciously punishing new behaviors using the same methods.

We've already talked about "organizational gravity," where the existing system doesn't need to resist anything; it simply functions as it was designed, and then gradually pulls everything back to its original state.

McKinsey calls this phenomenon “strategic drift” and estimates that it costs organizations worldwide a cumulative loss of approximately $1.4 trillion per year.

The numbers are very high, but what's more interesting is that it didn't result from a wrong strategy. But it stems from a system that doesn't yet know what the organization has chosen.

What really needs to change isn't just announcing new priorities, but rather the metrics that tell people what's important, the budget that shows what resources are actually being allocated, and projects that are willing to be paused to allow more important issues to take center stage.

In the article discussing who truly carries the organization's identity, we talked about how middle managers act as the bridge connecting strategy and execution. Because when the CEO isn't involved in every decision, it's the middle managers who fill that role. And if the surrounding systems continue to send the same signals, they will choose the path that's safer for themselves, not the one that's more important for the organization.

Toyota designed Andon Cord for all employees, not just executives, and a good system makes making the right decisions easy. It's not something that requires extraordinary bravery every time.

Finally, here's another interesting figure from the PwC Global CEO Survey 2026: only 12% of CEOs say AI is delivering real results in both cost and revenue, even though almost every organization has already invested in AI.

88% of investments yielded only 12% real results.

This isn't an AI problem; it's the same problem we've been discussing throughout this series. New technology is being implemented on top of existing systems, and the old systems continue to function as before.

things What Toyota taught us today wasn't just about car manufacturing plants.

It affirms that a sustainable strategy is not one that everyone remembers, but one that the system remembers—where the indicators, budget, reward system, and response methods all point in the same direction.

The American company that failed with the same thread as Toyota didn't fail because of the tool itself, but because the systems surrounding that tool were sending the opposite signal.

And on days when no one is watching, people in the organization will listen to signals from the system, not from slides.

In the next episode, we'll discuss how to start reading signals from your organization's systems and how to tell if those systems are supporting or hindering your chosen strategies.