Sunday, November 25, 2012

Strategy or Execution? Both!

Booz & Co. asks the question Strategy or Execution: Which Is More Important? Its conclusion: You can't have good execution without good strategy. Strategy is a broad road map for driving decisions about which customers to serve and how. Apple's strategy is distinctly different than Samsung's strategy and from Microsoft's strategy. Amazon's strategy isn't the same as Macy's strategy, or Walgreen's strategy.

Still, as a practical matter, the best strategy in the world is useless if it can't be implemented or if it can't be implemented effectively (two different things). A Harvard Business Review article points out that companies need to look at how their managers and employees make decisions and are held accountable, not just at symptoms of poor execution such as out of control costs. Fix the underlying problems, and you'll be better able to transform strategy into reality.

In a recent interview with Fortune, Bank of America CEO John Stumpf tells Geoff Colvin: "We always say we could leave our strategic plan on an airplane, somebody could pick it up, and it wouldn't matter. It's all about execution." Well, in an industry like banking, his statement may have a lot of validity, but Bank of America also works hard at crafting its strategy and updating it as circumstances change. It's not just execution, clearly, that helps B of A compete.

In general, highly-trained managers may be excellent at strategy but unable to execute because the company resists changes needed to make the strategy work . . . or because they focus on the wrong things . . . or because the corporate culture is in conflict with the strategy. In the past, another reason for ineffective execution was that execs didn't properly track implementation of their plans. Those days are gone, thanks to key performance indicators and metrics.

When Adobe introduced tools for digital marketing, it started a campaign to dispel the mistaken idea that marketing lacks hard facts and figures for performance analysis. Now marketers can back up their projections and plans with solid data to connect the dots between good strategy and good execution. One without the other? Like a car without wheels--not going anywhere.

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