Strategy versus Execution
Posted by Felix Enescu on August 31st, 2006
As a final project to my MBA, a team of six young and enthusiastic people created a strategic plan for a Romanian company. It is a very good plan (excuse my lack of modesty 
)
We presented to the owner. And he told us:
“I did not ask for a strategy. I may not know all the nice words and theories, but you told me nothing new.
I knew my industry it is good, I know I have to produce custom structures and expand to halls. I know I should have financial reporting, I know I should have good people, I know I should have forecasts.
I am trying to get them since two years now. But nothing happened.
You show me a nice plan. Where is the rest? I need the execution!”
We still have to do the remaining 98% of the work!
“Never forget implementation, boys. In our work it’s what I call the ‘missing 98 percent’ of the client puzzle.”
Al McDonald, former McKinsey Managing Director
Ok, ok… We are young MBAs without a lot of experience; the owner is a self-made man without any formal business education.
No big problem, we learn some more, read some more books and go back to implementation to execution…
Tough luck. It looks like we are not alone.
Everybody is good at planning and everybody fails at implementation.
“82% of Fortune 500 CEO’s surveyed indicated that they feel their organization did an effective job of strategic planning. Only 14% of the same CEO’s indicated that their organization did an effective job of implementing the strategy.”
Forbes Magazine
Why?
Because we watch TV
Because we read business journals
Because we read management books
Because we took an MBA
And all this create preconceived ideas
“Strategy is for C-level. Let the ‘Grunts’ handle execution.”
Lawrence Hrebiniak
The great glamorous strategic planning is for larger-than-life figure heads. They do strategy, vision… all the sexy things.
And the dull manager do the boring execution.
If one can make a GOOD plan any half brain manager will be able to implement it.
Right?
Strategy… come on…
Great strategists, give me a name.. Jack Welch right?
Jack Welch had a strategy? #1, #2, fix or sell… This a strategy? Surely that isn’t a strategy, but a call to ACTION or else…
“We have a ‘strategic’ plan. It’s called doing things.”
Herb Kelleher, CEO of Southwestern Airlines
Let’s see another strategies. And a very successful one:
“The last thing IBM needs now is a vision.”
Lou Gerstner
“The only way to whip an army is to go out and fight it.”
General Grant
So, boys go out and do some REAL work. Start EXECUTION!
PS: This is heavily indebted to Tom Peters post.
November 17th, 2006 at 10:35 pm
I am relieved to see that other people face the same problem. I think I have an answer for myself on this topic and I share it with you.
Let me have a fairly distant shot first. I used to work for a fairly sizable company and I was in charge of Strategic Controlling. One day the Board of Directors requested a strategy document. Based on Senior Management interviews we built a comprehensive strategy document in 3 month. We worked our guts out to prepare it.
Was well received by the Board of Directors. If I remember correctly we even received some bonus:-)
The lightning strikes in however. I got promoted to C-level in the commercial area…
After the first shock and some wondering to find my new office I realized that I had a problem.
I had to execute the strategy.
I walked to my managers and explained them that we have to change the approach of the organization along the new strategy…
-’WTF?’ - they asked. I kept explaining what has to be done and the first attempts were disappointing. After a while I gave them two sentences and then gave an example: ‘Imagine Strategy as frame. This frame needs a picture and the picture must be painted by you…’ - ‘WOW’ - they said - ‘Now we know.’
Somehow we manage to TRANSLATE the idea and star speaking the COMMON LANGUAGE.
What is the conclusion? I would refer back to your post saying ‘The great glamorous strategic planning is for larger-than-life figure heads.’ yes it is true but still I would insist on the great importance of strategy/strategic document.
I think it is a question of how you perceive strategy.
Mission - Vision - Strategy….- Business Plan - …
I think these ‘Documents’ are the iteration steps of an idea. Different levels of the organization have different level of freedom - hopefully capability - to think.
A new recruit fresh graduate is not required to really understand vision but still has to understand the objective on what he can deliver. He gets direct and simple orders from the line manager. As it goes higher and higher on the scale the orders and less and less tangible…
So I think Strategy is one step of the TRANSLATION and the chain of ‘Documents’ help to build the library of the COMMON LANGUAGE.
I think that the COMMON LANGUAGE is a must for the success of the business. So Focusing on Strategic planning is a must to ENABLE execution. I dare to think that this is the real relationship. Strategy does not supersede execution or else considered as replacement but a strong enabler of execution by building the common library.
November 29th, 2006 at 2:38 am
Very good points. Thanks for the comment.
October 10th, 2007 at 7:52 pm
Can anyone cite the reference to the Forbes Magazine article that has the quote, “82% of Fortune 500 CEO’s surveyed indicated that they feel their organization did an effective job of strategic planning. Only 14% of the same CEO’s indicated that their organization did an effective job of implementing the strategy.” I’ve been trying to locate the original article but can’t seem to find it. James Holt