THE BALL IS IN YOUR COURT
Jayashantha Jayawardhana offers guidance on how to execute business strategy
It isn’t hard to find business leaders with brilliant ideas and bold visions. But only a few possess the capacity to execute their strategies. As a result, there’s a gap between strategy and execution.
In a 2013 survey of nearly 700 executives across a variety of sectors by Strategy&, which is the strategy consulting division of PricewaterhouseCoopers, respondents were asked to rate the effectiveness of the leaders of their companies – i.e. how many excelled at strategy and how many at execution?
The results indicated that only eight percent of the leaders were very effective at both. And it confirmed the existence of the gap and how wide it really is.
Sadly, the situation doesn’t seem to have improved very much between then and now.
Larry Bossidy and Ram Charan who wrote the seminal book ‘Execution: The Discipline of Getting Things Done,’ shed light on the matter of strategy execution. According to them, the problem is that many corporate leaders look on execution as the tactical side of their businesses – i.e. as something that’s delegated to others while they focus on the perceived ‘bigger issues.’
But even a billion rupee strategy won’t be worth a cent regardless of the resources that go into discussing, planning and authoring it, if it isn’t executed properly. Execution isn’t simply about tactics; it’s a discipline and system that should be built into any company’s strategy, goals and culture.
On 21 November 2017, the Harvard Business Review (HBR) blog featured an interesting post by renowned business scholar and writer Roger Martin under the headline ‘CEOs should stop thinking that execution is somebody else’s job; it is theirs.’
Let’s consider a hypothetical scenario…
You’re the CEO of a motor manufacturer. As you study the industry, it strikes you that its future lies in electric vehicles (EVs). So you decide that 90 percent of your production should be EVs by 2028.
Considering where the industry is heading, it’s undoubtedly a clever decision. So you contemplate a strategy to achieve your ambitious goal.
First, you have to obtain board approval and then engage your R&D team to establish how your company could produce EVs. You have to decide how to raise the required capital, acquire the technical know-how and necessary skills, design and develop a concept EV, and assess existing manufacturing capabilities.
You also have to determine how to integrate new technologies into your existing manufacturing facility, reshuffle your supply chain and decide whether current factory capacity needs to be scaled up or down, in addition to the degree of automation required. In addition, you have to consider regulatory compliance, training, motivation, marketing and branding. You also have to think about how to continue existing operations.
Complex as it seems, you can still document all of this or create a deck of slides to present your strategy. You may even prepare a budget for this and delineate the key milestones to reach over a decade. But a clearly documented strategy by itself won’t be sufficient to pull it off.
However, your role as the CEO of the company will not be complete once you explain your strategy to the senior executive team.
Executing strategy means making a certain number of decisions correctly. Some of those decisions may be above their pay grade – and some executives could be out of their depth in certain areas. So in executing your strategy, you still have a crucial role to play because at the end of the day, as the CEO, you’re responsible for both your strategy and its execution.
Martin introduces what he terms the ‘layered choice cascade’ as a set of levers for executing strategy.
First, work on choices that you are more capable of making. Second, explain the choices that have been made and the reasoning behind them. Third, clearly identify the next downstream choice. Fourth, assist in making the downstream choice as needed. And lastly, commit to revisiting and modifying your choices based on downstream feedback.
This was further simplified by one of Martin’s students at a seminar when he proposed that “execution is the act of setting up this series of choice cascades, identifying the manager responsible for the choices in each cascade and following up to ensure that they make the choices for which they are responsible.”
Martin observes: “Strategy is the act of making choices about ‘where to play’ and ‘how to win,’ across the various levels and parts of the organisation. Execution is the act of parsing out responsibility for those choices, making sure people actually choose (instead of waffling around in indecision).”
The bottom line is that as the CEO, the ball is in your court! You should know how to play it and win, as Martin outlines.