A couple of years ago, I was contacted by a large business looking for a business strategy consultant to help them with strategic planning. One of the first things out of the CEO’s mouth was, “I don’t want to create yet another task list. We have to be developing a strategy.”
When I asked him what he meant by that, it turned out he was convinced that having a simple task list would do nothing to move the business forward. Instead, they needed a strategy that would help them surpass their competitors to become the dominant players in the marketplace.
On the one hand, he was right. But as we got to know his business, we realized he was also so very wrong. You can have the best strategy in the world, but if you can’t execute on it, it’s useless. So, which matters more, strategy or execution? First, let’s back up a bit and review the difference between strategy and execution.
What is Strategy?
For many people, strategy is all about one simple question: “how will we win?”. Strategy is all about developing a unique and valuable position in the marketplace that your customers love and will make them buy from you instead of someone else. We’ve talked about strategy before, including how to create a business strategy and what mistakes to avoid when creating goals for your strategic plan.
What is Execution?
Most people would define execution as the ability to get stuff done and achieve your goals. But in reality, when we say execution, we are talking about a cultural shift inside of an organization; a shift that creates a culture of accountability and the disciplines necessary to be able to execute time and time again.
In his book Great by Choice, Jim Collins refers to the need to maintain a steady pace whether conditions are in your favour or not as the 20 Mile March. This means getting up in the morning, putting on your boots, and marching 20 miles, rain or shine, pain or sickness, and so on. Teams that can do this 20-mile march and maintain it week after week, month after month, and year after year, are the ones that are exceptional at execution.
There are many elements to execution that people don’t think about. Execution is about more than just getting the work done. It is also about disciplines:
- getting systems in place around data and dashboards so that you have the information you need to make decisions
- ensuring you’ve got the right people in the right positions
- having well-organized financials and cash flow management
As Jim Collins says, to be truly good at execution you need disciplined people, disciplined thought, and disciplined action.
Which is More Important: Strategy or Execution?
This is a debate amongst business leaders, strategic planners, and just about anyone with an armchair MBA. The answer is a bit more complicated than you’d think, and as with many questions, it depends.
If you consider 95% of businesses out there under $10 million in revenue, they’re doing okay or perhaps even struggling. For these businesses, developing an outstanding strategy isn’t necessarily going to save them or take them from okay to the next level.
Learning to be very disciplined around execution (while being aligned with a vision) means they can move forward, and they can get better and stronger and build a very solid foundation. Then, when they do have a strategy, this means they will be able to rocket forward.
On the other hand, developing a strategy too early on when they have no idea how to have the discipline to execute is like putting the chicken before the egg…or teaching quantum physics to a 7-year-old who doesn’t yet understand the math. You get the idea.
Should We Throw Business Strategy Out the Window?
So, does all this mean we don’t focus on strategy? Heck no! We absolutely want to help our clients develop their competitive differentiation. But for most of our small- and medium-sized business clients, it’s secondary to getting them working well as a team and driving forward.
For these companies, there’s so much to fix inside the business and so many disciplines to learn that there are a thousand things they could do to have a huge impact on their business. That’s why sometimes it may make sense to focus on these disciplines and getting things working well rather than coming up with a fancy strategy that you can’t execute.
That brings us back to the story about the CEO introduced earlier, who wanted a strategy rather than a task list. When asked whether they had ever been through a strategic planning process before, the CEO revealed that yes, they had three years earlier.
When probed further about how successful they were at their implementation plan, the CEO’s body language changed and the response was a tepid, “Oh, we did fine”. It was clear that they hadn’t in fact done very well on execution.
We didn’t end up working with this business, but we did check back in with them about a year later to see how they were doing. What we found was not surprising – history was repeating itself. They ended up developing a 3-year strategic plan, but they were making no progress on it, once again. They simply did not have the necessary accountability or disciplines in place.
Remember, all the strategy work in the world is useless if the team can’t execute. Getting good at execution means that when your strategy comes, you can make better progress on it.
So, you tell me…strategy first? Or execution first? I’ll leave that to you to decide. If you need help thinking this through for your business, get in touch with me and let’s talk about it.