The Crucial Link: Strategy to Execution

Great strategy, poor execution” is the excuse most frequently offered by the CEOs and boards of directors of unsuccessful companies. The last decade provides many examples. C. Michael Armstrong purchased cable companies to help the AT&T Corporation bypass local telephone companies to gain access to the home. Thomas Middelhoff committed to a digital future for Bertelsmann AG. Motorola, when it was led by Christopher Galvin, stood steadfastly behind the development of Iridium satellites to serve travelers’ needs for global cell phone coverage. Under Kenneth Lay, Enron spawned a series of knowledge-based businesses.

All of these concepts sounded good; many reflected accurate insights into industry dynamics and appreciation of customer needs. Yet all were unsuccessful. Is it fair to say that these companies had “great strategies” but simply failed to execute? The knee-jerk reaction to this question by many contemporary businesspeople would be “sure, it happens all the time.” But that’s just plain wrong. “Great strategy, poor execution” is, in fact, a pernicious oxymoron, rooted in ineffective concepts that sharply separate the formulation of strategy from its execution, and assume that there is a linear, sequential relationship between the two. These dangerous misconceptions come in four flavors:

1. The first views strategy purely as insight into industry dynamics and customer needs, evaluated on the basis of novelty, distinctiveness, analytical depth, or intellectual elegance — rather than on results achieved.
2. The second considers strategy as the long view, a step-by-step plan toward a comprehensive vision of a future 15 to 25 years distant — ignoring the reality that timing matters.
3. The third views strategy solely as the province of the CEO and the board of directors, which leaves others in the organization to address the grubby details of execution — and fails to mobilize the people who are best equipped to understand emerging opportunities.
4. The fourth misconception positions strategy as the first and most important driver of decisions about organization and operations — instead of basing strategy on the company’s core strengths and competencies.

Get more insight from BEST MANAGEMENT BOOK:Strategy recommended by Strategy+Business.