Unfortunately that’s not how it is in the real world, and while not every business can be huge, most businesses can certainly do better, be bigger and grow faster. So why do so many businesses underperform against their potential and plateau too early?
A few years ago I had dinner with the chief executive of an aviation business and his view was very clear and quite damming. He said that most businesses are badly run. That resonated with me and here’s why. For growth to be a constant, a business needs at least some of the basic elements in place. The list is a long one, but examples include: a customer culture; differentiated products; high value service propositions and great people development. At a more generic level there is innovation, efficiency and at the top of the list – leadership.
Many of these items appear in some guise or other in business strategies, no doubt informed by the huge executive development industry that has mushroomed over the past 20 years. Hard skills such as planning, marketing and operations and soft skills such as communication, coaching and team building are everywhere. Executives are improved, and competencies are developed. More and more companies invest executive time and company budgets trying to make change stick and growth happen.
Competitive pressures keep getting stronger. The pace of change accelerates, the treadmill moves faster and everyone works harder, but results improve slowly or sometimes not at all.
The problem is not the programmes, the corporate commitment or even the executive commitment. The problem is that there’s way too much focus on creating the strategic plan and way too little focus on the execution of that plan. In other words, not enough thought and effort goes into the bit where the rubber hits the road, where the growth is delivered and where the money is made. Try Googling ‘Strategy Development’ and then ‘Strategy Execution’ and you’ll see what I mean. For me the 800lb gorilla that impairs performance and frustrates change is lack of execution. The amount of emphasis placed on creating the strategic plan is way out of balance with the emphasis placed on executing the plan.
Even when a business goes the extra mile to focus on execution it’s not so easy to stay the course. A senior executive of a large services business recounted to me that they had invested a lot in getting the strategy execution piece up and running. However the first time the quarterly sales numbers were missed, the leadership panicked and reverted back to doing things the old way. When organisations snap back like this, they default to what I call the ‘just sell more stuff strategy’. This never works.
Strategy formulation can be very challenging of course but the greatest strategic challenge that most organisations face, most of the time is in strategy execution. So I find it extraordinary that so little attention is given to dealing with this real world issue in businesses and in business schools.
But every problem is also an opportunity, so can you imagine the effect on a business if executional excellence was driven from the top as a corporate imperative – all that latent potential. At a regional level the East Midlands economy would greatly benefit from a long-term programme to assist businesses to really drive up the quality of strategy execution. The top 200 businesses today employ around 50,000 people, so even a small improvement could make a huge impact on job creation, business growth and regional investment.
Strategy execution is fundamental to successful growth and a decent strategy executed excellently beats a great strategy executed poorly every time. Or to put it another way – strategy without execution is delusion.
Ed Vernon OBE Chairman Macildowie Recruitment
