Strategy vs. Execution: Why Leaders Must Win on Both Fronts

I could feel that something was wrong.

For a long time, I wasn't connecting the dots...

I wanted to understand why most organizations fail to execute operations effectively.  Why do doors fly off planes in flight when we know that Boeing has existing quality processes?  Why does CrowdStrike ship destructive code that paralyzes a large portion of the planet when they have existing systems test processes that would likely have caught the issue if followed?  Why do organizations not hold their leaders accountable for driving and continually improving operational rigor & discipline?

My doctoral research focused on the factors that motivate individuals to adopt appropriate processes for tech project initiatives. We surfaced the factors that help to drive process adoption.  In our study, we found that the critical driver was management engagement.  (Williams, 2009)

That answer led me to the next logical question: If managers and leaders know that they must drive the creation and adoption of appropriate operational processes and tools, why are they not held accountable for failing to do so?

The truth was out there.

Everyone has an opinion on why this issue is recurring, but I prefer my information to be fact/data-based.  I searched around a bit and stumbled on an answer that made sense. In a 2017 HBR article titled "Why Do We Undervalue Competent Management?" the authors present the results of a study that directly challenges the current school of thought around competitive strategy.  They performed a decade-long research project that involved 12,000 individual firms, and their results tell a compelling story.  The bottom line is that business leaders are taught that while operational effectiveness is essential, it does not provide a sustainable competitive advantage because the competition can imitate it.  (Porter, 1996). 

The Competitive Strategy guru Michael Porter espoused this worldview in his 1996 article "What is Strategy."  The authors of the 2017 article present evidence that Porter may have been wrong with his position on the ease with which operational effectiveness can be replicated.   (Sadun et al., 2017)

Michael Porter is a world-renowned thought leader in competitive strategy and is often considered the father of the modern strategy field. His book Competitive Strategy is on my shelf right now. His views on competitive strategy have guided many global business leaders. Many business schools teach MBA students Porter's view of the competitive strategy space and preach that operational effectiveness can be easily replicated and is not a sustainable competitive advantage.  Therefore, many managers and executives minimize the role of structured operational execution because it cannot differentiate one company from another and instead focus on building shinier products.

Where are we now?

The result is a generation of leaders who equate operational rigor and appropriate processes to speed bumps and useless overhead.  They are enamored by catchy phrases like "move fast and break things."  Some leaders have a well-thought-out strategy and cannot understand why they can't get traction within the organization to get it done.  The rank-and-file team members trying to complete their jobs are consistently mired in organizational malaise, operational confusion, and non-existent cross-functional collaboration.  Everything they do feels like the very first time.

If any of this sounds familiar, you may be part of (or have previously been part of) an organization that has challenges with management competency as defined by the study's authors.

What does good look like?

Sadun et al. identified management competency as those organizations that "had rigorous performance monitoring, systems geared to optimize the flow of information across and within functions, continuous improvement programs that supported short- and long-term targets, and performance systems that rewarded and advanced great employees and helped underperformers turn around or move on."  (Sadun et al., 2017)

Some final thoughts

So what is more important?  Strategy or Operational Execution?  My position is that they are both equally important.  In certain situations, the organization that consistently displays a high degree of management competency will outperform those with a great plan and a lack of execution rigor.

The key for leaders who want to achieve breakthrough improvement results is to ensure they do not underemphasize the importance of fundamental operational excellence, measuring what matters, and driving results through daily management.  The key is to convey to everyone on the team the importance of building a culture of efficiency, metrics, continuous improvement, and accountability.

Next Steps

I am curious about what you have seen in organizations with management competency challenges.  Did they recognize it as a problem? How will you work to become part of the solution that drives your team's different way of thinking?  Do you feel empowered even to do so?  Please leave your answers in the comments below.

References