“Ideas are a commodity. Execution of them is not” Michael Dell. Michael Dell created the largest direct-sales company by executing on his strategy to cut out the middleman and sell direct. In this series we are asking the question, what is the relationship between strategy and execution? Is it a on again-off again love affair or just a one-night stand? How do you know that your strategy is aligned with how you operate?
In part 2 I looked at In-Fisherman as an example of a company that aligned their Corporate strategy of ‘teach the world how to fish’ with their operational/ execution strategy (Customer Focus) ‘being the best solution to their customers problems’ of how to catch more fish. Dell Computers Corporate strategy ‘going direct’ wasn’t necessarily anything new or innovative outside of their marketspace however their success relied on executing a strategy of Operational Excellence where Dell Computer would be known in the marketplace as the ’best total cost deal’ for a purchaser of a personal computer.
People convolute this strategy by thinking in terms of being the cheapest. If you are trying to be the cheapest that is a very difficult world to compete in. Too often I hear the whisper amongst salespeople of, “if only manufacturing would cut their costs, we could sell more product at a cheaper price”! The other refrain is “why don’t we come out with some new products”? Companies spend huge sums of time and money on marketing and sales without asking the question ‘are we aligning our sales and marketing message with our strategy of ‘being the best total cost deal’ or whatever your strategy is?
Executing an Operational Excellence strategy requires an all-out emphasis on efficiency. All processes are geared for flawless transactional flow. There is a constant focus and training on standard operating procedures. Highly centralized management reinforces standard procedures through rewards based on cost and quality throughout.
Customers look at the product/service for its low price (not as cheapest) and how quick and convenient their interactions with the company and product/service are. They value purchase cost over the life of the product/service.
Let’s look at a third option for a Corporate Strategy. Intel under Andy Gove grew and continually succeeds through a Corporate Strategy of constant Innovation. Their Business strategy is to come out with new products on an 18-month cycle even if it cannibalized their existing products. Execution requires clear, ambitious targets, rewards based on innovation and decisiveness, cross functional teams, technically competent, creative people that work well in teams and leadership with a high tolerance for risk taking. A high tolerance for risk taking is a point not to be overlooked. As a Leader if you want to compete on innovation you have to ask yourself what your tolerance for risk taking is.
In this series we are asking the question, what is the relationship between strategy and execution? Here are a few thoughts from others that integrate my thoughts. “Without strategy, execution is aimless. Without execution, strategy is useless.” Morris Chang. “To me, ideas are worth nothing unless executed. They are just a multiplier. Execution is worth millions.” Steve Jobs.
“Leaders have three fundamental responsibilities: They craft a vision, they build alignment, and they champion execution.” Anonymous. In my experience what gets companies into difficulty is when they forgot the alignment question in their strategic planning, operational execution and problem solving.
Try this exercise on a white board. At the top of the board on a horizontal plane write (in one sentence for each one) your Corporate strategy then follow that with your Business strategy and then Operational strategy on the same horizontal plane. Below that on a horizontal plane list the operational functions within your company as your customer experiences you: i.e., Marketing, Sales, Operations, Fulfilment, Service. Step back and ask the question, is each operational function aligned with the performance and execution characteristics of the strategy above? The lesson I have learned over the years when it comes to strategy and execution: LEARN TO ALIGN STRATEGY WITH EXECUTION OR LEARN TO BEG FOR FORGIVENESS.