“I’d rather have a first-rate execution and second-rate strategy any time than a brilliant idea and mediocre management” – Jamie Dimon current CEO and chairman of JPMorgan Chase & Co. Dimon was named in Time Magazine’s 2006, 2008 and 2009 lists of the world’s 100 most influential people.
We had an interesting debate ‘for’ and ‘against’ the above in our strategy class at the Asian School of Management yesterday. It is true that the importance of implementing a strategy is often overlooked. Perhaps strategy formulation is considered a glamorous exercise in which the top-guns in the boardrooms participate. After-all the
future direction of the company is being decided in this elite group. Execution or implementation on the other hand is viewed as routine stuff that follows a predetermined path dealing dealing with the nitty-gritty – shirt sleeves rolled-up and the grime and dust of the shop floor. No excitement and little scope for creativity. Crafting a strategy and execution are both sides of the same coin and need to resonate together. Like to share a few of the critical points in execution that we discussed in our class:
Top Ten Challenges in Strategy Execution
- Strategy is formulated on assumptions – but the environment may have changed at some point of time during implementation. The assumptions too would need periodic revisits.
- Vision, value statements and trust – are emphasized during formulation of the strategy but during implementation – forgotten. An ‘End justifies the means’ approach results in a compromise of values and eroding ‘trust and shared values’. The answer lies in transparency and communication and admitting mistakes.
- Hubris (or overconfidence) in leaders – where the leaders and organizational members believe their brand is more powerful than the competitors leading to complacency in implementation. Forecasts are based on what may happen in future often based on optimistic estimates of uncertainties. As such one must be realistic.
- Organizational trap – is an excessive focus on efficiency with no flexibility to adapt to changes. A no mistake-syndrome prevails. No questioning or challenging the current strategy.
- The status quo bias – risk aversion. It is the entrepreneurial spirit that helps overcome hitches. This has to be built into the culture by encouragement.
- Strategy before people – strategy not aligned to organizational culture will meet with resistance and opposition. Meaningful communication is the key.
- Strategy and structure not being in sync. -E.g., a diversification strategy may have a better fit with a divisional structure.
- Effective leadership – failure occurs due to weak empowerment and lack of perseverance. Focus on knowing rather than doing. Things get worse before they get better so inspiring the team with the vision and mission is important.
- High emotional intelligence in leaders – will banish negative emotions from breeding in the workplace. What are needed are positive energy and a calm mind to deal with the fluid situation.
- The sunk cost effect – A familiar problem with investments is called the sunk-cost effect, otherwise known as “throwing good money after bad.” When large projects overrun their schedules and budgets, the original economic case no longer holds, but companies still keep investing to complete them rather than change.
To end this post - an apt quote by Sun Tzu, in 514 BC in his ART OF WAR – “Weak leadership can wreck the soundest strategy; forceful execution of even a poor plan can often bring victory”.
Your views are always welcome please. Thanks.