Good strategy or good execution – which is more important?
Is it the careful planning, analysis, and decision-making that go into crafting a solid strategy, or is it the effective implementation and flawless execution of that strategy?
They are intertwined and interdependent
Strategy is the process of formulating a plan to reach a desired goal. It involves assessing the current business environment, identifying opportunities and challenges, setting objectives, and designing a roadmap to achieve those objectives that is focused and aligned with the overarching vision.
Execution is about turning ideas into reality, ensuring that the right things are done at the right time efficiently and effectively on a day-to-day basis.
It is crucial to understand that they are intertwined and interdependent. A brilliant strategy without proper execution is merely an intellectual exercise, while flawless execution without a solid strategy can lead to aimless efforts and wasted resources.
Roger L. Martin argues in his book Playing to Win: How Strategy Really Works that strategy and execution are inseparable, with strategy providing the necessary guidance and execution ensuring that the strategy is successfully implemented.
Effective strategy sets the foundation for success
It provides clarity of purpose, helps prioritise initiatives, and enables organisations to adapt to changing circumstances. A well-crafted strategy allows leaders to anticipate challenges, identify opportunities, and allocate resources strategically. It enables organisations to differentiate themselves from competitors, capitalise on strengths, and mitigate weaknesses.
However, a strategy alone is not sufficient. Effective execution turns the strategy into action. It requires discipline, attention to detail, effective communication, and the ability to adapt to unforeseen circumstances. It requires competent leaders who can translate the strategic vision into tangible goals and objectives, assign responsibilities, and hold individuals accountable for their performance.
In evaluating the relative effectiveness of strategy and execution, it is important to consider the following factors:
Context and Flexibility: In rapidly changing environments, execution becomes more critical as plans need to be adapted quickly to stay relevant. On the other hand, in more stable environments, strategy plays a more significant role in setting the direction for long-term success.
Competitive Advantage: Strategy helps organisations identify unique selling propositions and differentiate themselves from competitors. Execution, however, determines how effectively an organisation can leverage its competitive advantage to deliver more value to customers.
Organisational Culture: A culture that values strategic thinking and fosters innovation can significantly enhance the effectiveness of strategy. Similarly, a culture that promotes operational excellence can greatly impact execution effectiveness.
Measurement and Feedback: Effective execution requires mechanisms for measurement and feedback. By regularly evaluating progress, organisations can make necessary adjustments, and ensure that execution is on track. Strategy, on the other hand, may require periodic review and refinement to adapt to changing market dynamics and internal capabilities.
Leadership and Talent: Effective leaders are skilled at developing and communicating a compelling vision, robust strategy, and motivating and aligning their teams for successful execution. Additionally, having the right talent and capabilities in place is essential for executing the strategy effectively.
Organisations that excel at both strategy and execution strike a delicate balance, continuously refining their plans and adapting their execution to achieve their goals. Rather than pitting strategy against execution, it is important to recognise their interdependence and focus on building capabilities in both areas to maximise effectiveness and achieve sustainable success.
A poor strategy that is executed well will provide poor outcomes, wrong targets, with the wrong resources and leave the organisation in a weaker position with no competitive advantage.
A great strategy, but poorly executed, will miss opportunities, weaken any competitive advantage, increase costs, and be deleterious to the morale within the organisation.
Therefore, the effectiveness of strategy and execution is not a matter of one being superior to the other, but rather a symbiotic relationship where both are necessary for success.
Author: Greg Bourke, Partner nem Australasia.
This article is based on research and opinion available in the public domain.