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From Strategy to Execution: Closing the Gap on Material Weaknesses

From Strategy to Execution: Closing the Gap on Material Weaknesses

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In our earlier articles, we explored the rising tide of material weaknesses and how organizations should respond—not just react. Article 1 examined early signals: a convergence of pressures from economic volatility, regulatory shifts and internal control failures. We predicted that material weaknesses would likely rise and since then, the environment has only grown more complex. Tarriff threats, potential changes to the regulatory oversights like the PCAOB and mounting investor scrutiny, have deepened the uncertainty.

In Article 2, we emphasized the critical role of leadership—not just setting the tone at the top, but in actively stepping into the details. Remediation is not theoretical; it’s messy, iterative and time intensive. We outlined six tactical actions teams should take, but those steps require one thing many organizations lack: capacity. Addressing material weaknesses means not just knowing what to do but being willing to stop doing what no longer serves the mission.

Now, in Article 3, we explore the tension between strategy and tactics—and how material weaknesses often emerge from a disconnect across that spectrum.  On one end: executive vision and strategic intent; on the other: the day-to-day operational execution that brings those plans to life. Most failures don’t stem from a lack of vision or lack of effort—they stem from the breakdown in translation between the two. 

This is where the root causes live. 

Strategy vs. Tactics: A Breakdown in the Spectrum

In smaller organizations, leaders often have the capacity to stretch across the entire strategy-to-execution spectrum. A controller or CFO may personally understand both the high-level vision and granular details of day-to-day operations. But as organizations grow—through headcount, acquisitions or change through turnover—responsibilities narrow, silos form and it becomes harder for any one person to span that full spectrum.

At scale, success hinges on communication and feedback loops. Strategic intent must cascade downward in a clear and actionable way—and just as critically, feedback from the front lines must travel upward to inform and refine the original vision.  When this loop breaks, material weaknesses often follow.

The diagram below illustrates this flow:

Strategic alignment depends on this cycle staying intact; yet in many cases, organizations over-index on top-down communication and underinvest in bottom-up feedback. The result? Gaps between intent and execution—sometimes subtle, sometimes systematic.

Strategy-setters must prioritize listening. Feedback from those executing the work not only identifies operational friction but also highlights when the original vision has been diluted, misunderstood or misapplied.  If what comes back doesn’t align with what went out, the breakdown must be traced—where did the message skew? Where did alignment falter?

Some breakdowns stem from a failure to translate strategic goals into clear, repeatable actions. Others stem from a culture that discourages upward feedback—where ego, defensiveness or lack of psychological safety prevent teams from raising issues that leadership needs to hear.

At its core, the purpose of internal controls is to confirm that tactical actions reflect strategic intent. Controls are not about perfection—they’re about alignment. To that end, some organizations are leveraging process stewards to bridge this gap.  These individuals, often middle managers or business process owners, are responsible for overseeing end-to end workflows (such as procure-to-pay or order-to-cash) and ensuring that execution remains aligned with vision. These individuals span that strategy-to-execution spectrum for their specific area to know the context and objective.  They are best-positioned to mitigate risks from a top-down, holistic view of the end-to-end cycle.

However, the growing trend of thinning middle management is putting strain on this model. Fewer translators mean greater risk of misalignment. It becomes even more important to equip frontline teams with education, context and clarity—not just on what to do but why it matters. A workforce that understands purpose is a workforce that can deliver on it.

The IIA’s Three Lines Model, a common framework that clarifies roles in risk management, is shown below. The first line owns risk, the second line (our process stewards) supports and monitors and the third provides assurance. Much of the push-pull between proactive and reactive efforts happens between the first and second lines, making clear roles and collaboration key.

When Process Stewards and Documentation Don’t Exist

What happens when process stewards aren’t in place—and documentation is sparse, inconsistent or missing altogether?

In all these cases, organizations need to take a deliberate, people-centered approach. The first step is to identify key individuals who possess both enterprise-level visibility and operational insight—those are team members who can stretch across the strategy -to- execution spectrum and connect the dots. These individuals are not in formal roles that span the organization, but their institutional knowledge and context make them invaluable.

Importantly, this is not an internal audit function.

While internal auditors may understand controls and risks holistically, their role is to assess not to execute or realign strategy. What’s needed here is different: a focus on creating closed-loop feedback between tactical execution and strategic vision.

This goal is twofold:

  1. Understand the strategy and the intent behind it
  2. Gather actionable feedback from those closest to the work—and feed that insight back into leadership discussions.

This is where the process begins. When organizations pause to gather real feedback from the frontlines—those who are living the process daily—they uncover friction, workarounds, communication gaps and missed opportunities that would otherwise go unnoticed.

Our experience has shown that the people closest to the details often hold the clearest insight into where alignment is breaking down. The faster that insight is surfaced, the faster the organization can rebalance—closing the gap between strategy and execution before a small misalignment becomes a material risk.

Technology Comes Last, By Design

At FD, we believe technology should always be the final piece in a four-part framework: strategy, people, process then technology. Too often organizations look to tech as a shortcut or quick fix, but without the proper foundation automation only accelerates dysfunction.

Before implementing new tools, organizations must first:

  • Establish a clear strategic vision.
  • Develop and empower the right people.
  • Define and refine sustainable end to end processes.

Only then should leadership assess what technology can enhance, accelerate or scale–not solve.

Technology amplifies the system it enters if controls are weak, communication is fragmented or feedback loops are broken. Technology simply codifies those issues and buries them deeper. But when added to a healthy foundation it becomes a powerful enabler—helping teams execute compliance faster, more consistently and with greater transparency.

This is especially important in the context of material weaknesses. Remediation often includes temporary fixes and manual controls— “band aids” to mitigate immediate risk. That’s expected. But those solutions must evolve into a sustainable technology-supported process that reduces reliance on workarounds and increases long term resilience.

This is where process stewards again play a pivotal role position at the intersection of strategy execution and systems they are best equipped to identify:

  • Where strategy can streamline
  • Where it may overcomplicate
  • How to ensure any solution is scalable and understood across the organization

As management considers transformation, the focus should remain on building sustainable solutions—with technology as the last, not first, lever to pull.

Conclusion: No Two Material Weaknesses are Alike—But the Response Should Be Intentional

While every material weakness has its own fact pattern, one thing remains consistent: the organizations that recover most effectively are the ones that respond with clarity, structure and purpose.

This article marks the culmination of our material weakness series—a roadmap to help leadership teams move from reactive fixes to sustainable transformation.  By balancing strategic vision with tactical execution, empowering process stewards and leveraging technology only after people and processes are in place, organizations can close the gaps that often lead to material weaknesses in the first place.

In future articles, we’ll share real-world case studies that show how this approach has helped clients navigate high-stakes remediation timeliness with confidence.

If your organization is currently addressing control issues or simply wants to strengthen internal alignment before problems arise, our team is here to help. We work with management to turn uncertainty into action and complexity into clarity.

Contact us to get started.

Contributors

Adam Mark, Partner, Frazier & Deeter Advisory, LLC

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