Which One Has Priority: Strategy or Execution? How About Both?

An article I read in strategy+business prompted me to write on a topic I have been sitting on for some time. The article I am referring to is titled “Strategy or Execution: Which One is More Important? (http://www.strategy-business.com/article/cs00005?gko=733e9&cid=20121009enews&utm_campaign=20121009enews).

In a nutshell, the authors heard from business leaders that “execution is more important than strategy.” The authors’ response to this input is that “you cannot have good execution without good strategy.” First, let me state that I fully agree with the arguments of the authors. I guess I fall into the category of “seasoned strategists” they refer to.

Having said this, the authors’ observation and, possibly, frustration are no different from what I feel when I discuss innovation with business leaders. A critical component of designing an innovation program for an organization is to understand and articulate its business strategy. And, articulating a strategy goes beyond slogans and animated speeches. Enough has been said about what strategy is and how to build one. Just like everything else, building a solid strategy is lots of hard work. But, I am not going to dwell on strategy-building in this posting. Instead, I want to discuss the fact that business leaders think that they have to make a choice between strategy and execution. In fact, they have no choice. If they take their fiduciary responsibility seriously, that is.

Business leaders have two distinct responsibilities:
1) Successfully compete today (i.e., make money today)
2) Position the organization for future success (i.e., make money tomorrow)

Focus on execution means business leaders clearly understand the importance of (1) but leaving strategy behind means they do not get the importance of (2). The typical defence is “if the business does not survive today, there is no tomorrow.” I think this thinking is the kiss of death for businesses. Unfortunately, businesses build their organizations around execution and they keep perfecting it. It is tangible, gives immediate results and makes the leaders look good. The problem arises when the concept of strategic innovation comes to picture.

First, unclear or poorly articulated strategies result in disjointed innovation attempts. These initiatives are typically misguided and produce very poor results. In some cases, they may even hurt the business.

Second, trying to perform strategic innovation in an execution-minded environment and organization is doomed for failure. And, these are not the learn-from-your-failures type of failures one would expect to have in innovation initiatives. These are “I told you to not mess with my department” type of failures, which only create frustration and animosity. In my experience so far, execution and strategic innovation do not mix. Until a level of market success delivered by the innovation initiative, it should be kept outside the execution engine of an organization. Unfortunately, my experience is in line with the authors of the article I mentioned above. Organizations know how to build execution excellence but they do a very poor job in building strategic innovation excellence. In fact, it is not a choice between the two. Great organizations have to do both equally well.

I welcome your comments on my blog. Please feel free to contact me at ferhan@ferhanbulca.com with relevant comments, ideas and thoughts.

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