As businesses we are deluged with information overload through various technologically based systems, processes, regulations and the likes. How we assimilate this information and use it to run our business is where the rubber meets the road.
The biggest challenge we face is either too much or too little information. Many of the questions that we ask and are asked revolve around these very aspects – strategy and results:
- What to do with this information and/or lack thereof
- How do we understand results, that are not purely financial, and
- Are lagging indicators as they are 30 or 60 days in arrears
As we were reviewing this topic further, there was a perfect article written through Harvard Business Review, July 2010, by Roger L. Martin, that absolutely portrays this concept the best. We have credited and excerpted most of the article here and provided commentary at the end for summation. HBR and Martin did a great job on highlighting the concept of what we don’t know as it associates to strategy execution, failure and/or wins:
The Execution Trap
Roger L. Martin
Artwork: Rune Guneriussen, Twentyfourseven #21, 2006, c-print/aluminum, 125 x 218 cm
The idea that execution is distinct from strategy has become firmly ensconced in management thinking over the past decade. So much so, in fact, that if you run a Google search for “A mediocre strategy well executed is better than a great strategy poorly executed,” you will get more than 42,600 references. Where the idea comes from is not certain, but in 2002, in the aftermath of the dot-com bubble, Jamie Dimon, now CEO of JPMorgan Chase, opined, “I’d rather have a first-rate execution and second-rate strategy any time than a brilliant idea and mediocre management.” In the same year, Larry Bossidy, former AlliedSignal CEO, coauthored the best-selling book Execution: The Discipline of Getting Things Done, in which the authors declared, “Strategies most often fail because they aren’t well executed.”
The trouble is, Dimon and Bossidy’s doctrine—that execution is the key to a strategy’s success—is as flawed as it is popular. That popularity discourages us from questioning the principle’s validity. Let’s suppose you had a theory that heavenly objects revolve around the Earth. Increasingly, you find that this theory doesn’t predict the movement of the stars and planets very well. Is it more rational to respond by questioning the theory that the universe revolves around the Earth or to keep positing ever more complicated, convoluted, and improbable explanations for the discrepancy? Applying Dimon and Bossidy’s doctrine rather than Occam’s razor would have you going in a lot of unnecessary and useless circles.
Unfortunately, this is exactly what often happens when people are trying to understand why their strategy is failing, especially when consulting firms are involved. In fact, Dimon and Bossidy’s approach can be a godsend for these firms because it allows them to blame their clients for any mistakes they might make. Firms can in effect say, “It won’t be our strategy advice that will let you down but your implementation of that strategy. (To help you get around that problem, we suggest that we do some change management work for you as well.)”
Of course, lining the pockets of consulting firms does nothing to further most companies’ performance. I suggest a superior way to proceed. Rather than doubling down on the prevailing theory to try to get it to work, consider the simple possibility that the theory is wrong.
So let’s evaluate the idea of the brilliant strategy poorly executed. If a strategy produces poor results, how can we argue that it is brilliant? It certainly is an odd definition of brilliance. A strategy’s purpose is to generate positive results, and the strategy in question doesn’t do that, yet it was brilliant? In what other field do we proclaim something to be brilliant that has failed miserably in its only attempt? A “brilliant” Broadway play that closes after one week? A “brilliant” political campaign that results in the other candidate winning? If we think about it, we must accept that the only strategy that can legitimately be called brilliant is one whose results are exemplary. A strategy that fails to produce a great outcome is simply a failure.
So the bottom line here is, when we go back to the Harvard stat of 90% of strategies fail due to poor execution, then the above truly ensconces this messaging and those results.
I often ask CEO’s a follow up question to their “…yet we are profitable…”, and the question is “At what expense? And I do not mean financial solely.” At this time they usually start twisting in their seat, looking for the CFO or other Executive Team members, etc. Yet, I have not to date been able to receive a concise answer, because the bottom line is they do not know if everyone knows the Vision and Strategies and are tying their activities to them. Therefore they cannot answer what they are measuring and managing against, consistently, and thus do not know whether the results they have obtained are clearly successes to strategy or merely strategies that have failed.
If this has conjured any thoughts at all about where you are, should be, can be, then you should minimally ask yourself and your leadership team to recite the Vision and Strategies of the company. Guaranteed you will have “X” different responses, not necessarily completely off from one another, yet not the same. This is the group that is leading your different departments, divisions, et al, and at best they might be creating vertical alignment in their groups, yet most likely they are creating multiple silos.
Your homework: Ask and Act!
