Over the years, various experts in fields ranging from Total Quality and Lean Thinking to Productivity and Self-Management have emphasized the importance of doing the right things right. The implication is that doing the wrong things right is no better than doing the right things wrong.
So it is with strategy and execution. A poor strategy well executed is no better than a good strategy poorly executed.
While the study of business strategy has been around for over 50 years, the focus on execution gained broad prominence after the publication of Larry Bossidy and Ram Charan’s landmark book, “Execution: The Discipline of Getting Things Done” in 2002. The high failure rates for strategic change initiatives had become a growing issue for those tasked with implementing such change. And while many articles and books on the topic have since been written, studies continue to peg failure rates for strategic change initiatives at 60-80%.
An unintended consequence of the focus on execution is that many have lost sight of what it is we should be trying to execute. The right strategy.
N. Anand and Jean-Louis Barsoux attempt to correct this imbalance in their article, “What Everyone Gets Wrong About Change Management”
They argue that before running off to implement some change initiative, we should first be crystal clear on the “Catalyst” – what it is that is driving us to change. So far, so good. Yet their explanation of what serves as a catalyst is disappointingly thin. Let me elaborate.
Pain and Vision
In my view, the catalyst for change almost always comes down to one of two things: pain or vision. A compelling pain that is simply too hard to ignore or a compelling vision that becomes an obsession. I have found the former to be more common and more reliable as a catalyst. Why? Complacency. The narcotic effect of a business doing well dulls the drive for change. It weakens the impetus for the vision. I come across many organizations that talk about vision but very few that pursue it with a messianic fervor (think Steve Jobs). In most cases – blustery talk aside – the vision is a nice-to-achieve not a must-achieve.
Fortunately, even without an obsessive vision, pain can be a very effective catalyst for change. Why? Because of its immediacy and severity. Fleeing customers. Dwindling cash. Your banker pointing at the gallows. It’s hard to rationalize away the immediacy of pain.
But what if you have neither? No compelling vision and no immediate pain? Now your task is to anticipate the pain. The impending pain that is almost certain to occur or the prospective pain that is likely to occur if you don’t change.
How do you find that pain? By assessing the Competitive Ecosystem. The ever-changing environment in which your business operates. Consider three landscapes: The Macro Landscape, the Industry Landscape, and the Internal Landscape.
The Macro Landscape
This is the landscape that many mid-market and smaller companies overlook. It includes the STEEP factors – the social, technological, economic, environmental and political factors that could kill your business if you’re oblivious to them. Are there technologies on the horizon that could lessen the need for your products or services? Are the political winds blowing towards regulations that could hurt your business? Do interest rate trends pose a serious threat given your debt structure?
Determine how each of the STEEP factors is trending, and then think through the implications for your business. Is there impending or prospective pain that you should take steps to mitigate?
The Industry Landscape
The mistake we often make when considering the Industry Landscape is that we focus exclusively on the customer. Obviously, the customer is critical, but you need to take a broader view and consider competitors, potential competitors, and suppliers, as well as customers and market segments you’re not serving. How viable is your business model given the changing landscape? Your customers could love you … and still leave. Don’t mistake customer satisfaction for customer loyalty. The moment someone else comes along with a more compelling value proposition, your days are numbered.
As with the Macro Landscape, determine the Industry Landscape trends and then the implications for your business. Is there impending or prospective pain that you should take steps to mitigate?
The Internal Landscape
This landscape is typically the hardest to be objective about because people are emotionally connected to what they do and how they do it. To overcome this, imagine that you are a competitor who is tasked with attacking your company. Which weaknesses would you go after, which vulnerabilities would you exploit? Products with dated technology? Inconsistent deliveries? Slow response times?
If you can imagine those weaknesses then what’s stopping your competitors from doing the same? And exploiting them?
What’s the best way to anticipate pain if you aren’t experiencing it? Assess the trends and implications of the changing Competitive Ecosystem.
Anand and Barsoux argue that once the catalyst for change has been identified and articulated, you must identify your “Quest” – the strategic direction that results from the Catalyst. They outline five prototypical quests: 1) Global presence (think “geographic expansion” if you’re a mid-market company), 2) Customer focus, 3) Nimbleness, 4) Innovation, and 5) Sustainability.
They’re not the first to suggest a set of quests from which to choose. In, “The Discipline of Market Leaders,” by Treacy & Wiersema, the authors identified customer intimacy, product leadership and operational excellence as the set of choices. Still others have argued that your choice should be driven by your capabilities and core competencies. Yet why should there be a fixed set of quests from which to choose? While these are all very good examples, couldn’t there be others? What’s to say your quest shouldn’t be supply chain optimization or price leadership?
The bigger issue – and I’m in complete agreement with Anand and Barsoux on this – isn’t identifying a quest but choosing too many quests. It’s a matter of focus. Every company I have ever consulted with wants to take on too much. Too many objectives, too many strategies, too many initiatives, too many everything. Without the right guidance they would become the victims of their unbridled ambition.
So how do you pare down the “too many”? By evaluating your quest options against relevant criteria. The better an option fits your predetermined criteria, the stronger case it makes for becoming your quest. Consider these criteria when evaluating your quest options:
- Strategic impact (given the Competitive Ecosystem)
- Projected financial impact
- Resource requirements
- Probability of success
- Time to fulfill
- Organizational resistance and trauma
This list isn’t exhaustive or even necessarily the best list. But criteria like these will help you select among potential quests.
“Why” and “What” … but Where’s the “How”
There’s a gap I see in Anand and Barsoux’s framework. While they speak to the “Why” (the Catalyst) and the “What” (the “Quest”), they don’t address the “How”. No, not the detailed nuts-and-bolts “how” of execution. But the choices about how the Quest will be fulfilled. It’s all well and good to say that your Quest is “customer focus”, but how will you operationalize that? Will you emphasize customer input when considering product enhancements? Will you pursue industry leading service standards? Will you develop training and development offerings for your employees? How will you pursue your Quest of becoming customer focused?
This is the level missing from Anand and Barsoux’s framework. It is only after you have decided on this “How” that you can move on to execution: how will we make it happen?
Yes, a poor strategy well executed is no better than a good strategy poorly executed. And, yes, with the growing emphasis on execution, the trap is that we lose rigor in selecting the right strategy.
A solid strategy requires a compelling “why”, a focused “what”, and a operational “how”. Do that with rigor. Then execute the hell out of it.
Make it happen.
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