Strategy versus Execution: The Problem of Making it Happen
By Al McClain
A new book, Making Strategy Work: Leading Effective Execution and Change by Wharton professor Lawrence Hrebiniak, focuses on the gap between developing business strategies
and their implementation.
He cites as one obstacle to execution the fact that in many large corporations too many people are involved in the process, along with multiple layers of management. Another
identified problem is that top execs often come up with strategy, but leave execution to underlings. He argues that key execs have to be more involved in execution, so that managers
take the process more seriously, and see that it’s not exclusively a lower level responsibility.
According to a survey in the book, the number one challenge managers face is managing change, or overcoming internal resistance to change. Hrebiniak says the key is planning
for change, not trying to do everything at once, and setting priorities. Another key is moving to sequential change – having more manageable pieces in the strategy. “Speed kills.
The biggest error is we do too many things at once.”
Moderator’s Comment: Why is there a wide gap between the ideas developed by businesses, and those that are actually well executed?
We all know it’s easier to come up with great ideas than it is to make them happen. How many brilliant ideas have we each thought of in our lifetimes that
never happened? The current orientation of society and business towards the short-term makes it easy to think only of what needs doing this day, week, or quarter. We might all
deliver better results if we agreed in our respective businesses that any idea accepted by the company must be accompanied by an integrated plan that must be executed in full
until the idea either succeeds or dies, with incentives and penalties for thinkers and implementers along the way, and checkpoints that call for involvement and commitment by
top execs at regular intervals. –
Al McClain – Moderator
This is the latest in a series of articles and books – most notably Larry Bossidy’s best seller titled “Execution” a couple of years ago – focusing on the critical role of execution in any company’s success.
Bossidy, as it sounds like this author did as well, argued passionately that execution was a critical job function of the CEO and other execs, while many execs, as suggested above – “leave that to underlings.”
A few quick comments.
One: these things go in cycles. Right now, “execution” is in. In a few years, you’ll see a wave of strategy books again.
Two: At its core, the number one issue with execution has to do with organizational alignment around the strategy, and a common or at least interlinked set of goals and strategies. We see problems with this all the time in retail, where the merchandising function and process is poorly aligned with sourcing, replenishment and supply chain functions, as just one of many examples. It’s hard to execute when everyone is rowing in different directions.
Three: There is an increasing and appropriate recognition of the challenges of “change management,” especially related to technology implementation, and it is these people and process issues that are the real factors as to why companies are often not getting the returns they expect from technology investment, not problems with the technology itself.
In the end, it takes leaders who understand this and set a culture focused on execution (and this can be at the departmental level as well as the corporation), organizational structure that supports cross functional execution and collaboration, and the right metrics and incentives to drive the desired behavior. But I suspect we’ll still be talking about the need for better execution 50 years from now!
I see Dan’s point two as most relevant, particularly as my firm conducts organizational interventions with suppliers/vendors. Something often “happens” on the way to executing meaningful change when company principals don’t make it their business to follow through on the promise of change within their organizations. We find that Sales, Product and order execution staff members crave change, challenge and structure yet company principals often rationalize that they are doing everyone a favor by keeping things “loose” and “flexible.” Beyond that, they often meet every retailer and licensor challenge with superficial “Band-Aids” that only add to the complication. And they wonder why their retailers find them taxing to work with…
Overall, the implementation of any strategy requires commitment and understanding. This is necessary at all levels of the organization involved. Understanding of both the work needed to make it happen (by management), and of the goals (by employees) is a prerequisite. This understanding needs to be supported by the commitment of everyone impacted.
This is the primary reason that most successful efforts have as their underpinning the involvement and approval of the entire organization. While it may no longer be fashionable to ascribe to the theories of Quality Management, they apply nonetheless. The successful efforts always have buy-in across the organization. And while it takes more work, more time, and more expense to do so; ultimately it also creates more impact and profit.
Great topic and the answers are pretty simple. Senior management is not involved enough, middle management often does not agree and say, “Oh just another one coming from the top, and we can wait it out,” competitive pressures changes the direction and there are just not enough good leaders in the organization to pull it off. To make it work is simple. Senior managements sets the course, stays the course and stays involved through implementation. The biggest issue or problem is – it takes time and no one has time anymore!
Coming up with the right strategy isn’t always straight-forward; witness the current state of affairs in grocery. Supermarkets share of food spending is dropping like a rock; supercenters’ share is poised to double in the next five years while new formats keep nibbling away. It doesn’t matter how hard you work or how smart your people are if you’re all pointed in the wrong direction. But once you do craft a sound strategy, you must be able to translate that into an organizational structure, what’s core and what’s periphery, your people/skills, processes and procedures, a consistent set of incentives and a realistic timeline in order to reinforce the necessary behavior and have a chance at success. Retail is all about execution, but the wrong strategy perfectly executed will still kill you. Part of your strategy should be a feedback mechanism to allow adaptation to changing market place or new opportunities. Strategy and execution are intertwined. To try and separate them is only useful as an analytical and planning exercise that disappears once you put them into action.
I read this with great interest because I’m currently working on a company initiative and have been thinking a lot about the strategy/execution process. This one began as a relatively minor, short-term idea, but we began to recognize greater promise in the concept. So we felt the need to push the scenario to its ultimate potential as an exercise to see if there was truly any “there” there. The basic choice before became: short term gratification vs. long-term investment (and honestly, sometimes getting a quick hit is the wisest choice.)
When trying to imagine the long-term process, you have to rely on all the successful and failed experiences you’ve had in testing and developing ideas. In other words, you have to “execute” the process in your mind to see if it will play out.
My point is: if you’re going to have top execs handling the strategy, better make sure they’ve been in the trenches and lived through the long, arduous development process, because you can’t separate the two and expect good results with any certainty.
Rick Moss comments – “My point is: if you’re going to have top execs handling the strategy, better make sure they’ve been in the trenches and lived through the long, arduous development process, because you can’t separate the two and expect good results with any certainty” – are exactly on target.
There is nothing else I could add from my perspective.
As they say in London “mind the gap.” People don’t think there should be a gap when it comes from taking strategy to execution. They believe things are frozen in time and that what was on paper should somehow simply unfold. There is always going to be a gap and that’s the art. Closing the gap. Living in the moment. Knowing that things will change and making the changes accordingly. The transition from strategy to execution is both a science and an art…and that means that discovery is inevitable. Discovery takes time, time that no one seems to have. It’s a vicious circle. Great topic.
All good points. I think keeping momentum going is hard. Something gets off to a great start, and then there’s some other initiative, and people lose touch with the plan and it withers. If “not enough middle management involvement” was an option to check in the survey, I would have said that. When scanners and automated registers were just getting started, IBM went to the retail CEOs to sell their equipment, and did a good job of it. But the heads of IT or MIS weren’t consulted at all, were unhappy at being overlooked and were not cooperative, in many cases, in helping the systems do well once installed. NCR came in, made the calls at lower levels, worked with these people and gave them respect, and the predictable shift in market share occurred, for reasons that weren’t at all obvious to the casual observer.
In their book “Execution,” Bossidy and Charan refer to the notion that companies must be able to translate big ideas into concrete steps for action. I agree with them, and with Al’s observation that it is easier to think great thoughts than to execute the action needed to implement the ideas that spring from them.
First of all, coming up with a great idea or strategy doesn’t cost anything. Implementation is where you have to start opening your pocketbook and that’s where people start pulling back on the purse strings before a strategy can be fully implemented. In the case of strategy/implementation, it doesn’t do any good to have the glass half full.
Second, and perhaps more importantly, no one ever lost their job talking about strategy. It’s not until the implementation phase that bodies start littering the landscape. Fear of failure is a very strong factor in weak implementation efforts.
I smile when I think of how many times in the past, going in to set a store department or area to be exactly as “it should have been” and having people wonder why it never seemed to stay that way. The time energy and patience (maybe the hardest) to teach train and reinforce a new direction is only for the strong at heart. Execution of a strategy is not tied up in the vision of what it would look like once it’s achieved, but in the great attention to detail to make sure it is fully understood. I have always had the greatest respect for a retailer like McDonald’s that can convey the worldwide message of “would you like fries with that?” with an entry level workforce. How many retailers wish they could get their deli staffs to suggest an additional sale at the counter?
I agree with scv93 in that, “It doesn’t matter how hard you work or how smart your people are if you’re all pointed in the wrong direction.” It doesn’t matter what you’re executing when you’re CTD (circling the drain).
In response to Charlie’s post… I went into Albertsons last night to get some steak to grill. I purchased two New York cuts from the counter. When I was handed the packaged beef, the young man asked me if I might want a few shrimp with the steak. After I picked my jaw up off the floor, I said yes, that sounds good, give me a pound. I should have a chat with that store director.
Successful execution requires discipline.
A football team may have 11 very talented players on the field. But for that team to average 4 yards per carry rushing the football, they may practice their ‘bread and butter’ running plays literally hundreds of times in practice – over and over again until all 11 players understand their roles.
All for a measly 4 yards per carry. But if a team does that, they control the ball, control the clock and put themselves in a position to win.
Too often in business, far more complex execution strategies are rolled out to middle management with a “make it happen” approach. Management too often wants the long bomb, the trick play, the reverse…too often they want instant scoring or think somehow the idea of blocking and tackling is old fashioned (and boring).
How wrong they are. Execution requires discipline from top to bottom. How many have you met who say, “I got started in the trenches” but somehow have forgotten the requirements to successfully survive down there?
Hats off to Charlie Moro for bringing to light the point that if you can’t get those directly involved with the strategy, front of the store, or customer front line, your strategy will never get off the ground. Businesses like McDonald’s and Albertsons drill this point to their employees daily to promote the business and to take a personal stake in it. Be proud of what you do and your customers will follow along willingly. I am challenged daily with independent business owners who just can’t seem to see this and don’t understand why they cannot enjoy the benefits of higher sales.