Business Excellence Comes from Balancing Strategy and Execution

There has been endless discussion over the years as to which is more important – strategy development or strategy execution? Indeed, if anecdotal evidence is anything to go by, it stands to reason that business schools think that strategy development is the answer. And whilst many companies have resources to help them develop their strategies, very few feel the need to have dedicated resources and capability for execution, relegating it to the realms of yet another management task. In my experience, most organisations, be they large or small, suffer a major disconnect between strategy formulation and its execution because they fail to place the same importance on execution.

In my view, strategy development and execution should be equal partners. This is supported by research published by the Harvard Business Review, which suggests that not paying enough attention to strategy execution is a critical, consistently overlooked mistake. Consider the following:

  • 90% of well-formulated strategies fail due to poor execution.
  • 85% of leadership teams spend less than one hour per month discussing strategy.
  • Only 27% of a typical company’s employees have access to its strategic plan.
  • 70% of middle managers’ and more than 90% of front-line employees’ compensation is not linked to the strategy.
  • 95% of employees do not understand their organisation’s strategy.

It seems fairly obvious from the evidence that both are critical for an organisation’s success. I would argue that knowing how to develop strategy, and how to execute it consistently are two of the most important skills a business can have because they bring control. Without disciplined, consistent execution, businesses are condemned to a firefighting, reactive existence. Businesses that realise that they have the opportunity to gain a substantial competitive advantage leapfrog those who do not. According to research by the Harvard Business School, 70% of organisations that use a formal process to execute their strategy consistently outperform their peers.

Excellence comes to organisations who habitually pursue a balance between strategy development and strategy execution. Strategy development involves gaining absolute clarity and focus on what the business’s priorities should be, and what needs to be done to achieve these. Execution involves how to effect what needs to achieved with consistent laser-like focus, whilst dealing with endless surprises that arise from day-to-day operations. Of the two, execution is far more difficult to achieve, but fruitless without a solid strategy. Learning how to balance these two is the key to business excellence and a true sustainable advantage.


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