Archive | Action Cycles

Strategy vs Execution: Which is the more important and why?

“Successful people start before they feel ready.” – attributed to Sir Richard Branson

I like to ask groups that I am working with which is the more important: Strategy or Execution? This always results in a highly animated discussion about why strategy is the more important of the two. If the strategy is not in place to be executed how can you be sure you will achieve the desired outcomes and results? Good common sense thinking. Then, one person in the room will say “but they’re both important you can’t have one without the other.” I like this response because it is a sign of intelligence as they haven’t accepted the question in the binary form that it was asked i.e. Strategy or Execution (A or B). They have moved to Strategy and Execution (A and B). So for those people I have a secondary and more challenging question which is: “Of the two, Strategy and Execution, which one is the more important and why?” Then we have an even more animated and by now passionate discussion.

Of course life is not binary. Consider the Strategy-Execution matrix above. On the vertical axis is Strategy with Poor Strategy at the bottom and Great Strategy at the top and on the horizontal axis is Execution with Poor Execution being on the left and Effective Execution being on the right creating four quadrants.

Question: Where is the best place to be and why? Quadrant 1, 2, 3 or 4?

The obvious answer: Clearly, the goal is to be in quadrant 2 – Great Strategy / Effectively Executed. No question. Easy! But not so easy to do!

The less obvious question is: what is the second best quadrant to be in and why? Essentially this comes down to a choice of two possibilities. Quadrant 4 – Poor Strategy / Effectively Executed, or quadrant 1 – Great Strategy / Poorly Executed and here again the room is divided into which is the better quadrant to be in, 1 or 4?

The not so obvious answer: The answer is quadrant 4 where execution is the key to success because that allows us in the case of a poor strategy to fail fast and the faster we can fail the quicker we can move to a recovery plan to adapt, change, reformulate or replace the strategy, and go through the cycle again. Failing is an opportunity to start over, to re-assess and to learn. So the second best option is to be in quadrant 4, to execute quickly and effectively on a poor or emerging strategy.

“When in doubt, try it out.” Which requires the courage to experiment and permission to fail fast (and recover quickly).

The next best quadrant to be in his quadrant 1 – Great Strategy / Poor Execution. This can be best described as a missed opportunity as we cannot validate if the strategy is good or if it should be adapted, changed, reformulated or replaced.

The quadrant that we want to avoid at all costs is quadrant 3 Poor Strategy / Poor Execution. This is slow death as we cannot determine what is working and what is not working; Strategy or Execution.

Takeaways: Execution is key. Execution is king. When in doubt, try it out. Fail fast, correct, adjust and adapt quickly. Then execute again. This is the new “execute, recalibrate and execute again” adaptive path to success in the digital world.

PS: I worked with a group recently that challenged themselves as a group to assess where they were today on the Strategy-Execution matrix. Responses varied around the room from “we have pockets of execution across the organisation” to ” we are quadrant 4 for some parts of the business and quadrant 1 for others. (No quadrant 2 and no quadrant 3). An extremely insightful self-assessment of their executional performance using this simple 2 x 2 matrix.

3

Customer Adoption is the new ROI

Customer Adoption is the ultimate measure of Return On Investment. Period! I hear a lot of people talking about ‘Time to Market’, but I don’t think that this is what they really want to achieve. “Great, we have our new offer in market, but the channels aren’t familiar with it…..yet”, or “customers cannot find it on our website…..yet”, or “we cannot handle orders over the phone…..yet”. So, what is the use?

Time to Market is necessary, but not sufficient.

Time to Market, based on this definition, is a misguided and a delusional goal. A far more meaningful and useful goal to aspire to, to plan for and to measure is ‘Time to Revenue’. The two metrics may be used interchangeably but I would argue that this is a dangerous error. Because the difference between Time to Market and Time to Revenue is Customer Adoption. (see diagram)

Time to Customer Adoption:

“There is more to success than hard work.” – Anonymous

What are the drivers of adoption and what are the barriers to adoption? And how can we align with those drivers and overcome the barriers when potential customers are evaluating and considering purchasing our products and services?

Consumer psychologists tell us that dissatisfaction is the beginning of all behavior. If we were not dissatisfied, we would simply stick to what we have. There would be no need to change what we do. The gap between where we are now and where we want to be is what drives us to make changes in our lives, and of course that is what makes us change the products we own and the services we consume. Geoffrey A. Moore’s work on “Crossing the Chasm” tells us that Innovators and Early Adopters will be cognisant of their dissatisfaction and unmet needs and take positive action to resolve them. Customer adoption then is all about helping the early majority and other post-chasm customers to feel the need and follow the lead of the Innovators and Early Adopters.

People make emotional decisions that they then rationalize and justify with logic.

Success means eliminating Barriers to Adoption:

1. GAIN vs PAIN. If the perceived GAIN is less than 10 X the perceived PAIN, then the effort (also PAIN) to change will be considered as insufficient to be worthwhile. Business Implication: Sell the PROBLEM, not the SOLUTION. Use a diagnostic conversation to help the customer probe for PAIN. Take them to the negative future. Let them ‘wallow in the PAIN.’ Then take to the positive future, to the un-troubled state where they can enjoy peace of mind AND then show them how they can get there with minimum time and minimum effort by adopting your products and services.

2. Align with consumer’s self-perception. Consumers choose products that are consistent with their perceptions of themselves and reject those that are incongruous with them (Sirgy, 1982). Business Implication: Determine what you stand for as a Company, your core values and then align your product, service and company values with those of your target customer groups.

3. Re-frame the Customer’s Perceived Risks:

Uncertainty leads to “no decision”. And uncertainty in business has never been higher than it is today. Business Implication: Cloud Computing and SaaS are a perfect antidote or cure for business uncertainty because they put control back in the hands of the business. As one customer said: “The rate of change in business today really puts you at a disadvantage if you make long-term investments in anything.” That is an outstanding endorsement of the benefits of the Cloud.

Question: What are you going to do to accelerate Time To Revenue by maximising Customer Adoption of your Products and Services?

Read blog post: The Buyer’s Journey Part 2
Read blog post: The Buyer’s Journey Part 1
View slideshare: Customer Adoption is the new ROI
Read Book: Outside in: The Power of Putting Customers at the Center of Your Business

Enhanced by Zemanta
0

Resilient Thinking: Leading in a world of Volatility, Uncertainty, Complexity and Ambiguity

“Its not what happens to you in life. Its how you react to what happens to you that makes the difference.”

One of the biggest challenges a leader faces today is learning to live with volatility, uncertainty, complexity and ambiguity despite an increasing oversupply of information. This makes decision making more difficult and problematic than ever before. How can we deal with this growing confusion in our world?

Using Resilient Thinking we can turn around the above with a combination of Vision, Understanding, Clarity and Agility. The 4 antidotes to Volatility, Uncertainty, Complexity and Ambiguity work like this: Continue Reading →

1