Irish storytellers have a saying that goes like this: “Dreamers are happy building castles in the sky; realists are happy collecting the rent.” Personally, I haven’t seen company Leaders spending a significant portion of their time on developing creative visions and strategies for their company, they are all about the rent. So, should your priority be day-to-day execution? What is the relationship between strategy and execution? Is it a on again-off again love affair or just a one-night stand?
I always recall a Fortune magazine cover story: Why CEO’s Fail? The primary reason, poor execution of day-to-day tactics, not for a lack of smarts or a vision. As a CEO lamented to me once, “I need help: half my company is on a rocket ride to the moon and the other half is exhausting itself driving a wagon train to Kansas. Does a ‘good’ strategy assure successful execution? Likewise, can you grow with a ‘bad’ or flawed strategy but good execution? Good Leaders and especially business consultants will tell you that to be successful you need both.
Leaders usually have a ‘vision’ and strategy for their company. Successful well-known national examples include Jack Welch’s strategy to turnaround and increase the value of GE by demanding that each business unit be either No. 1 or No. 2 in its market or be fixed, sold or closed. Southwest Airlines, the only airline to be never file bankruptcy and show consistent profitability strategy is to be a low-cost, short-run carrier. Michael Dell created the largest direct-sales personal computer company by executing on his strategy to cut out the middleman and sell directly. Intel under Andy Grove grew and continually succeeds through a strategy of innovative chip technology that cannibalizes its product line every 18 months.
The only real test whether your business model has a sound strategy is how effectively you can execute it. And therein is the problem for most companies. If you aren’t achieving intended results where does the problem, lie? Where do you start? Your financial statement, sales figures, or whatever other tracking tools you use. These typically only ‘tell you what they tell you’ and it’s not where the problem is.
Here’s a challenge I often give to leaders in discussions about strategy and execution. I ask them to talk to employees at all levels in their company and ask them the following: “can you explain to me how we make money”, “how do we get things done or how do we operate and why”? Even amongst leadership team I have seen them struggle to articulate how day-to-day execution is linked to the company’s strategy. “I just show up every day and try to get done the work that is in front of me” is a common refrain.
The demand for consistent results is only going to increase. ” Like those Irish dreamers happily building their castles in the sky, Americans love to be dazzled by leaders with vision, or a heart-driven goal, or even a “customer-driven strategy.” But, like those Irish realists, over the long haul, the market will reward only those companies that have figured out how to execute on “collecting the rent.”
In part 2 on strategy vs. execution I will look at how make sure strategy and execution are ‘aligned’, conflicts that occur and how to simplify the message of ‘why we do things the way we do them’.