Which is more important? It’s a bit of a chicken vs. egg argument, but it’s fair to say that both are critical to driving positive financial results. Put it this way, if defining strategy explains 15% of a company’s financial performance then 85% must be explained by the execution of the strategy. You can’t separate the two, but given those percentages it’s also fair to say that execution is a much harder task. The more you study this the clearer the evidence becomes.
What do the greatest companies all have in common? You got it — the ability to focus their organization on strategy execution by ensuring that each individual is working (i.e., executing) on goals that matter to the organization. What type of goals “matter?” Put simply, only the ones that have a direct line back to the Strategy sitting in a binder on the CEO’s bookshelf.
We’re just researching what impact we have on our customer’s ability to communicate strategy and execute new directions faster. The early results are very intriguing and positive – and we promise to share them when we finalize our research. The timing is also significant as the economy has forced companies to be agile and demands that companies be able to shift their strategy (and subsequent execution) at a much more rapid pace than in a bull market.
The thing that struck me when doing some desktop research was that even though we know that 85% of performance is due to execution, the amount of content available is unbelievably skewed towards strategy — a simple web search on “Business Strategy” returns 3X more hits than “Business Execution” (80M hits vs. 24M hits). The term strategy execution returns only 3.5M hits.
The good news is that the “worm is turning.” Execution is the topic du jour – maybe it’s the economy, maybe it’s just the natural evolution of business. Regardless, you can put us squarely on the “Business Execution” team, and we’re looking forward to sharing our results soon.
After all, Execution is the name of the game to drive financial results
So, “Business Strategy” provides 3X more hits than “Business Execution?” Yet execution is far more demanding of time and resources than coming up with a strategy.
Good execution means we have to spend time implementing, monitoring, and probably most important –following-up.
Perhaps it is because we are overwhelmed with day-to-day demands that the plan gets left tucked away in some file, to be dealt with when we have the time. Getting the “plan” into action is critical. Tracking progress and making tactical changes without changing the plan keeps you cutting-edge.
Strategic planning technology can help get everyone on the same page, with daily tasks as well as ongoing projects.
T. Welch
ManagePro.com
Earlier this year the Wall St Journal in the United States published an article “CEOs Debate: Execution vs. Strategy”, January 29, 2009. The article asked CEOs to choose between the two and stated arguments for both being more important than the other and that, “many CEOs rejected the question as a false choice.”
The significant observations from the Wall St article is that execution or implementation (the two words are synonymous) has arrived and is becoming part of the way we do business.
It is now 10 years since Fortune magazine published the oft-quoted cover story, “Why CEOs Fail,” that explained, “Organizations fail to successfully implement strategy not because of bad strategy but because of bad execution.” It’s seven years since, Ram Charan followed up this article by teaming up with Larry Bossidy to write Execution: The Discipline of Getting Things Done. The book introduced the field of execution to business leader and why execution is important. Six years ago, I wrote the best selling book Bricks to Bridges: Make Your Strategy Come Alive and published our research that 9 out of 10 times strategy fails and a framework for success. Implementation has arrived.
I agree currently the pendulum has swung towards execution as leaders grasp to understand this new field of business. According to recent Monitor research, strategy execution is the most important issue to the executive suite. In 2007 The Conference Board survey reported that executives’ number one concern was “excellence in action” and their number three concern was “consistent execution of strategy by top management.” Most leaders do not need to be convinced on the importance of execution. Subconsciously they knew past approaches were flawed.
The current literature has provided the numerical arguments to support the emotional ones. Execution is a business differentiator.