Why does execution take the back seat?
You have probably noticed the abundance of books and articles focused on business strategy. In each, the author professes how to make you and your business more successful. Have you ever wondered why there aren’t as many materials focused on business execution? Isn’t it just as important to quickly and reliably implement your business strategy as it is to develop it?
When it comes to coverage by educational institutions, books and the media, business execution takes a backseat to business strategy. In a recent survey of Amazon, a search on the phrase “business strategy” returned 43,291 books. A search on the phrase “business execution” produced 696 titles. That is a 63-to-1 ration in favor of business strategy.
Simply googling “business strategy” generates greater than 123 million hits, while “business execution” only generates about 7 million – an 18-to-1 ratio biased toward business strategy. While these surveys aren’t the pinnacle of business research, they illustrate the persistent emphasis on business strategy over business execution.
While this comparison is interesting, the more critical issue is that many businesses and executives are failing due to poor execution. Several surveys revealed significant statistics about execution:
• 90 percent of well formulated strategies fail due to poor execution (Harvard Business School Press)
• 70 percent of CEO failures come not as a result of poor strategy, but of poor execution (Fortune Magazine)
• 66 percent of corporate strategy is never executed (Ernst & Young)
So why do businesses fail at executing their strategy? Many businesses fail because “execution is extremely hard”. One Wharton Business School study reasoned that:
• Managers are trained to plan, and not to execute.
• Planning and execution are not treated as interdependent which can lead to major disconnects between strategy and what is, or can be, executed.
• Managers don’t stay engaged in execution. Top managers typically leave execution to the ranks of the organization and review progress periodically at best.
• Execution requires more people and time than strategy formulation. Unlike strategy formulation which is performed as an action-step by a few people, execution is a business-wide continuous process.
Many companies today are running flat out in all directions taking very little time for introspection. To get a benchmark in your organization, ask employees throughout your business the following questions:
• Are you familiar with the company’s strategy?
• Do you know what you need to be doing in your role on a daily basis to move the company towards its goals?
Execution of a business’s strategy requires communicating strategic intent and aligning all individuals (and systems) in the organization to act accordingly. In many companies, few people can accurately articulate the company’s strategy. People either do not know the strategy, or think they know but have it wrong. Will these people move the company towards its goals? Only by chance.
If your business is suffering from these symptoms, the situation isn’t hopeless. However, it will require energy, discipline and perhaps a change in attitude to establish the proper emphasis on execution.
While the emphasis here is on execution, the key principle at play is aligning strategy and execution. To address short-falls in execution, consider utilizing a methodology (process) that fully aligns strategy formulation, operational planning, execution management and business review. Some or all of these elements may be employed by businesses today, but they frequently lack the discipline, consistency and alignment necessary to succeed in executing the strategy.
Aligning strategy and execution in your business can help you achieve your business goals more reliably and more quickly, increase operating margins and increase employee job satisfaction. The net result is a higher overall business value.
So the next time you reach for a business strategy book, ask yourself if your biggest challenge is with your strategy or in executing it. Chances are your time would be better spent leading the execution of your existing strategy.