At a recent networking gathering, I was asked, “Which is more important: strategy or execution?” I didn’t want to be rude, but it’s a nonsensical question. It’s like asking, “Which is more important, your car’s engine or its wheels?”
In both cases, you won’t get far with just one.
BlackBerry, Nokia, and Motorola excelled at continually improving efficiency (execution) while missing what was going on in the broader competitive marketplace (strategy).
Conversely, JC Penney failed miserably a few years ago when new CEO Ron Johnson implemented a strategy — no more discounting or couponing — that failed on execution (it turns out their customers perceived their chain-wide move towards “everyday low pricing” as everyday HIGH pricing).
So you need them both, and there’s little to be gained by pondering which matters more. That said, the quality of each matters a great deal and it should always begin with the development of a clear and well-considered strategy.
How do you do that? Three recommendations…
#1. Involve others in the assessment.
I have long been an advocate for using an external resource to assess the landscape and competitive environment. Outsiders are objective, able to take a fresh look at the situation, and less likely to be influenced by confirmation bias (i.e., giving greater weight to factors that support your operations and underplaying factors that represent threats).
During the assessment phase, and in addition to outsiders, you should also involve people throughout your organization. Before you start developing options, they need to understand the context of what is happening in the market and any signs of change that may require adjustments.
#2. Engage the organization in developing options.
Change is always uncomfortable, and you are right to expect that at least some people in the organization will be resistant to it. However, successful execution of any strategy requires the involvement of your people in its creation. If you bring them along by engaging them in the process, you can minimize resistance while benefiting from their perspective (front line people are often much closer to what is happening in the market than are senior executives).
For example, when I was leading strategy development for a discount department store chain facing market entry from Walmart, we knew we’d have to significantly change how our stores looked, what merchandise we carried, and which product categories we emphasized.
So we engaged representatives from every merchandise category in a three-day offsite. We shared all the market research and industry landscape information so that everyone involved had a common understanding of the situation, its risks, and its opportunities. Participants then worked together to translate the new positioning concept into very specific execution plans.
In the end, even those whose areas of responsibility were being reduced were on board with the changes being made. They were involved from the start, understood the rationale behind the changes, and were active participants in creating the plan they would need to execute.
#3. Share the plan widely.
Jim Koch, founder of Boston Beer, was once asked if he was concerned that sharing the company’s strategy with employees might result in people who leave the organization having knowledge of its strategy. He said his bigger concern was with those who didn’t understand the strategy and stayed.
Indeed, some research suggests that only a small portion of employees truly understand their company’s strategy. That’s a problem. Absent that understanding, they are not in a position to intelligently allocate resources or make decisions about what to do or not do.
The more you make your strategy known and its underlying logic understood — in meetings, internal publications, one-on-one discussions — the more able your people will be to internalize it and act in ways that are consistent with your overall goals.
It Comes Down to Trust
Involving outsiders and people across the organization in the development of your strategy and then making sure it is shared and understood by all is fundamentally about trust.
Trust that senior management doesn’t have all the answers; trust that other people, regardless of where they sit, have something to contribute; and trust that the best way to develop a winning strategy and execute it competently is to involve and inform your team as much as possible.
