A recent article and posting on Harvard Business Review has again promoted debate around the distinction between strategy and execution, with two highly credentialed business professors arguing the toss. Professor Roger Martin (Dean: Rotman School of Management) argued ‘execution is strategy’. Professor Don Sull (MIT) pushed back suggesting this was really just a definitional issue, and what really matters is “why do some organisations translate their strategies into results while others do not?”
This strategy versus execution debate reminds me a little of Fiedler’s commentary on leadership in response to some writers asking if there is such a thing as leadership: viz.
“This may be a good attention getter, but more sober reflection tells us that leadership does make a difference”
On sober reflection I believe that there is a distinction between the activities and accountabilities in creating strategy – which gives us our ‘planned strategy’ or, more simply, our ‘strategy’ – and executing strategy.
So how do I differentiate ‘strategy’ and ‘execution’.
Let’s use the ‘case study’ of a major strategy at a global ($>100B mkt cap) company over the last decade. I was lucky enough to have a seat in many of the discussions that drove the transformation. A high level summary of the process is shown below.
There were a series of ExCo workshops over months, with inputs from the various teams working on the strategy, building a shared understanding of the strategic context, and surfacing and exploring of potential options. In parallel, there was also a series of GM workshops, which allowed the strategy team to share the data, and the ExCo conversations, and engaged the GM’s in testing the various options. There were other engagement conversations with a broader leadership group not shown here.
One of the options that emerged and won support was the need for a ‘technology platform’ that would allow a modified operating model to meet the disruptive China growth. However, although there was agreement among the ExCo members, the translation of that ‘agreement’ into ‘commitment’ would have been variable if the business pushed forward at that time.
A critical tipping point was a carefully orchestrated ‘global tour’ of various technology rich companies, including one visit which saw that US farmers with more sophisticated in use of GPS technologies than our global business.
A tipping point like this as critical in shifting commitment from the ‘intellectual’ to the ‘visceral’: ExCo ‘got it’.
Shortly after returning from that tour, the ExCo signed off on a substantial funding commitment to move forward with the implementation of their ‘technology platform’. This led to the creation of their ‘FutureWorld’ project team, which in turn began to pursue a series of ‘proof of concept’ studies into various specific opportunities. The best of these was then implemented via a prototype and ultimately was rolled out as a very successful technology initiative.
So, what is strategy and what is execution?
The period of building shared understanding, surfacing and exploring options, through to the emerging consensus around the technology platform, and ultimately the decision to commit material resources post the tour is ‘creating strategy’.
But then we transition into execution. This is the point at which the real work transfers to the GM’s and their teams as they clarify options within the broad strategic framing of the ExCo. Do these teams make strategic choices? Yes they do. And so this reflects in part what I believe Martin was arguing: in execution you are always making specific choices which are ‘strategic’, but it is within a conceptual framework which has been signed off by the ExCo with input from the GM’s.
This is the equivalent of Rumelt’s ‘guiding policy’: guiding in the sense that it channels action in certain directions without defining exactly what shall be done[1].
The transition to execution is consistent with Mintzberg’s ‘strategic programming’: codification (clarifying and expressing the strategy in sufficient operational detail); elaboration (breaking strategies down into programs, sub-programs and action plans; and conversion (integrate into the formal control systems)[2].
There are definitional issues here for academic researchers. For executives the definitional issue is less problematic: delivering on the execution is the goal.
[1] Rumelt, Richard. (2011). Good strategy, bad strategy.
[2] Mintzberg, Henry. (1994). The fall and rise of straetgic planning. Harvard Business Review, Jan-Feb, 107-114.
