#141 Execution Ahead of Strategy
This post discuss the role of execution and strategy in determining the trajectory of a company and the interdependence between the two.
Great Execution is Rarer than Great Strategy
In practice it is hard to separate strategy from execution. Strategy cannot be mastered until you know how to execute well. Execution is hard, and great execution is scarce - which makes it another great source of competitive advantage. That's why execution must be your first priority. You should worry about your organisation's strategy only after your team is good at executing.
Strategy gets discussed more often than execution. Strategy is seen more as a high-minded, intellectually stimulating subject while execution is seen as boring and pedestrian. Organisations need to overcome this bias/view and help teams to get better at execution.
Treat Execution like a Teachable Competency
The only way to teach execution is by having experienced managers. These managers must have had the chance to observe excellent execution or an opportunity to make useful, educational mistakes. If an organisation promotes inexperienced managers to senior roles, chaos ensues. Organisations cannot scale and mature around inexperienced management staff.
You Don't Need to Hire Consultants or Strategists
It is always better to have operators who are in charge of the business to be the strategists for their business. Strategies of operators are informed by real-life dynamics and they understand that they have to live with the consequences of their choices. Great operators live, breathe, and own their strategies.
In contrast, pure strategists (either outsourced or internal) will be quick to blame the execution when expected results do not materialise. Operators usually get better at strategy as execution improves.
Consultants and strategists can help you organise your data, generate visualisations, write up a detailed analysis, and deliver a more eloquent articulation of your strategy.
My Reflections
As a practitioner who is responsible for strategy and execution, I have found it most useful to use Kent Beck's 3x model to understand the relative importance of strategy and execution and the interdependence (or the tight coupling between the two) - based on the stage the product is in
Explore Stage
During the explore stage, strategic choices that we make - which problem to solve, what the shape of the solution should be (differentiation), how we can make the product easy to adopt, what the pricing should be - is critical. If any of these choices are wrong especially which problem to solve and the shape of the solution - even stellar execution cannot save the product (this is one of the key reasons products fail). If the strategic choices are at least average, then execution (pace and quality) will have a great impact on the product:
Great execution will help the product reach the expand stage much faster and provide the team an opportunity to tweak the strategy based on learnings from the market
Average (and poor) execution will result in delays in reaching the expand stage and cede ground to competition
Great strategy especially in terms of choices made related to differentiation (hard to copy kind) and distribution can have a lasting impact on the long term success of product. In such cases, execution controls the length and quality of success.
Intensity of competition also plays a major part - higher the intensity of competition - greater is the need to get both strategy and execution right.
Expand Stage
During the expand stage, it is mostly about the quality of the execution to ensure that the growth momentum continues and accelerates. Everyone across different functions is focused on ensuring that they are responding quickly to challenges, bottlenecks and scaling issues. Strategy typically plays second fiddle (choices made on various aspects of execution matters a great deal). Quality of execution will determine if the product will make it to the extract stage.
Extract Stage
During the extract stage, both strategy and execution are of equal importance. Quality of strategic choices made in terms of expansions (product scope, customer segments to go after), building barriers/differentiation plays a significant role in extending the life of the product. Quality of execution across different functions will play a critical role in retaining existing customers and attracting new customers. Choices made to improve efficiency can greatly impact profitability and further investments.
This post is a summary of a chapter from the book - Amp it Up, Leading for Hypergrowth by Raising Expectations, Increasing Urgency, and Elevating Intensity, Frank Slootman