Most of us have heard some variation of the old axiom, “Don’t worry about strategy, it’s all in the execution.” Strategy vs execution is an ancient argument. I often say that I prefer an average strategy and great execution, rather than the opposite.
However, the reality is that in most cases, a tech business’s success requires a solid job at both strategy and execution. There are exceptions, of course. A hot brand or huge company may be able to get away with an uninspiring strategy or clumsy execution on occasion. But even at large software or hardware companies, if this happens often, the results will suffer. At startups and small companies, even one instance of bad strategy or poor execution can be the death knell for the company.
So how do you ensure that both your strategies and execution don’t let you down? Below, I toss out a few things you might want to consider:
Not just good ideas but realistic ones
It usually does–and should–start with strategy. In most cases, it’s best not to be too “Blue Sky” in your strategic approach. Maybe you start off by allowing blue sky ideas, just to make sure that the innovation juices are allowed to flow. This way, you won’t miss promising strategies. But I recommend that during your strategy process, you include an explicit step or filter by asking the following question. “This is a promising strategy – but is this realistic?” And what’s the definition of realistic? My definition of realistic is a strategy that can be EXECUTED by YOUR company. Not by some undefined company, not by a huge company with unlimited reach and resources. One that can work at YOUR company. That’s the essence of a realistic strategy.
Strategy vs Execution: matching capabilities and markets
One area that should be considered early on is the fit between the company’s capabilities and the target market requirements. Because of this, it’s almost always less risky to stay within the three “closest” quadrants to your current business by using the common Ansoff matrix(see above) as the strategy construct. That fourth, riskier quadrant is the one at the upper right. This “diversification” quadrant is where you’re heading toward a new market segment with a new product or technology. This is where the greatest execution risk lies. That’s because you may not have the right technology or the marketing skills to serve this new target segment. Because of this, companies often use M&A to lower diversification risks, buying an existing company with the desired technology and/or market access. M&A comes with its own execution risks, of course!
While it’s not impossible to have success with this “riskier” diversification strategy, it becomes all the more important to take a careful inventory of the company’s capabilities. Then map that against the requirements of the new target segment.
Aligning strategy with execution capabilities
So, how do you ensure the chosen strategy will be well-executed? Be self-reflective as an organization and not just chase what might appear to be the hottest or most lucrative opportunity available. Ask yourself at least a few key questions about potential alignment, such as the samples below:
Is your organizational structure properly set up?
For example, do you have a highly centralized or matrixed organization? But you are trying to implement a strategy that relies on data collection and fast decisions, which can only occur lower in the organization? If so, you’re likely doomed to fail.
Do you have the right skills/competence?
For example, the organization is heavy on technology expertise, but you are light in marketing skills or cost-competitiveness. In this case, it’s going to be tough to compete in a mature market segment where margins are thin if you’re entering with little product differentiation. Better to pick an earlier stage or a smaller tech market segment in this case. Or it may be best to wait to enter this segment until you can create a large technological advantage.
Are your incentives appropriate?
Say your sales force’s compensation is primarily based upon volume, and existing products are relatively easy to sell. In this case, the sales folks are heavily incentivized to “mine” existing accounts and sell the current products. Yet you’re pursuing a new strategy that bets the company on penetrating a completely new customer base, with a new product that has a long sales cycle. In this situation, you’re way out of alignment on the sales side with the new strategy–and likely screwed.
Do you have buy-in throughout the organization?
It may not matter how elegant the strategy or how well you’ve matched your capabilities with market requirements. If the folks who are to implement the strategy aren’t on board, you’re almost certainly headed for failure. Don’t formulate a strategy and throw it over the wall, no matter how good it is. You need to involve the people who will be required to implement it. Solicit their input at the earliest possible stage. In the real world, it’s better to have an average strategy that everyone is dedicated to implementing, over a great one that the rank & file ends up sabotaging.
Do you have an execution mentality?
I’ve seen many “strategy-oriented” technology organizations and executives fail at their chosen strategy because of an organizational imbalance between strategy and execution. Because the strategic component is where their interest lies, not enough effort and resources are expended on the execution piece of the equation. This mentality often leads to prematurely discarding a strategy and moving on to the next one. But execution is rarely perfect with any new strategy. The best executing companies are patient and systematic in improving their execution. They are giving the strategy every opportunity to succeed before throwing in the towel and changing course.
Strategy vs Execution: In the end, both matter
Both strategy and execution are important to success in most circumstances. And both are always important to maximize that success. The most important thing in a software or hardware company is to make sure that your organization is not biased or imbalanced toward one of these key components or the other.
That means not only doing your best to stay balanced in your thinking, but also bringing in folks who are stronger at execution to balance a strategy-oriented team. Or vice versa, if your company is better at execution than strategy. This will not only balance the discussion in the room when key decisions are being made, but will also give you the best chance of both formulating the best strategy and gaining buy-in to execute it optimally.
The message in the previous paragraph may seem obvious. However, I find that executives have a strong tendency to “hire in their own image.” This greatly increases the chances of an “imbalanced” team. It’s critical to guard against this in your hiring.
That’s my take on balancing strategy vs execution in the technology business. What’s your viewpoint? Chime in on the discussion with your own comments below.
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