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A Top Strategy Expert Shares 4 Reasons Why You Shouldn't Blame Execution for Bad Results
Understanding where the strategy gap really lies
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“We had a great strategy, we just didn’t execute.”
How many times have you heard that?
And how often have you heard leaders tell their people to “stay heads-down and execute?”
When they’re not seeing the results they expect, many leaders express disappointment and frustration with their people because they don’t feel their brilliant “strategic plans” were being “executed” properly.
According to Roger L. Martin, perhaps the preeminent strategic thinker of this century, the fault lies not with the downstream people and teams who don’t “get” it, or aren’t “executing,” but in four basic problems with the strategy in the first place.
A complete and proven strategy framework
Over the past 30 years, Martin has extensively applied his framework across a wide variety of industries to design strategies that have:
Revitalized an aging multinational consumer packaged goods giant into an innovative global leader
Vaulted the Chevy Malibu sedan from a distant third place to consistently match Toyota Camry sales
Turned a tiny snow-bound country into a global tennis powerhouse
Upgraded a small, underperforming academic institution into a world-class business school
Transformed LEGO into a successful media company
How can a single, simple strategy framework accomplish all this? What’s the secret behind it?
The power of the “Playing to Win” framework lies in how it redefines strategy design to bring together all of the essential elements a strategy needs to create positive change by stepping through just five simple questions.
But the “Playing to Win” framework is only one way to approach strategy design.
Regardless of the framework you use to design your strategy – Richard Rumelt’s “Good Strategy / Bad Strategy,” Stephen Bungay’s “The Art of Action,” Jeroen Kraajinbrink’s “One-Minute Strategy,” Ravi Mehta’s “Product Strategy Stack,” or Alex Osterwalder and Yves Pigneur’s “Business Model Generation Canvas” –
if you’re not aware of these four potential pitfalls, your strategy won’t have the opportunity to deliver the results it could.
The four mistakes that cause strategy to fail
According to Roger Martin, when strategy fails, it’s has nothing to do with “bad execution,” and everything to do with one or more of these four key mistakes:
1: Your Winning Aspiration is fuzzy
2: You don’t have a “Where to Play” that fits with your “How to Win”
3: You don’t have the “Must-Have Capabilities” to deliver on your “Where to Play” and “How to Win”
4: Your “Enabling Management Systems” disable you
Let’s dig into each to understand where your potential strategy gap really lies.
Mistake Number 1: Your Winning Aspiration is fuzzy
Many leaders tell their people to “execute,” but miss the opportunity to let their people know what benefit their work means for their end-user customers.
They assume their people should just know their work matters, and be grateful they have a job.
But this misses three basic aspects of work: finding purpose and meaning in what we do, for whom we do it, and why we do it.
These leaders resort to meaningless corporate-speak, pushing people to “grow our user base,” “be the best,” or hit some random number targets, with no context or clarity why they should even be trying to achieve that goal.
Why winning is important
“Each company doesn’t just want to serve customers; it wants to win with them. And that is the single most crucial dimension of a company’s aspiration: a company must play to win. To play merely to participate is self-defeating. It is a recipe for mediocrity. Winning is what matters—and it is the ultimate criterion of a successful strategy.”
— Playing to Win: How Strategy Really Works by A. G. Lafley, Roger L. Martin, p. 49
Also called a “Mission,” or a “Vision,” a “Winning Aspiration” represents an inspiring and aspirational qualitative stretch goal.
It can be a powerful motivator to get people to get out of bed in the morning, fired up to come to work and give their best.
A strong Winning Aspiration can also be an effective hiring tool to attract and bring the right people on board.
Strategy’s driving force
For any strategy to be effective, it needs clear and strong motivation.
That means starting with a Winning Aspiration that’s focused on nothing short of winning.
Don’t just play to play – play to win in your chosen area.
Starting with a strong “Winning Aspiration” is an essential first step in the Strategy Choice Cascade.
The key is to understand who your customer is, and work backwards from what winning looks like for them.
As you step through the seven-step Strategy Choice Structuring process, it’s fine to start with a somewhat loftier and more generic Winning Aspiration.
You’ll be able to come back and refine what “winning” looks like as you step through the other four boxes of the Strategy Choice Cascade,
Mistake Number 2: You don’t have a “Where to Play” that fits with your “How to Win”
Two questions make up the “heart” of strategy:
Where to Play?
How to Win?
Frequently, businesses are launched and millions are spent with only one or the other of these two essential elements defined.
Having only a “Where to Play”–
“Win in Europe”
“Win with women 35-50”
“Win in the short-form mobile video space”
But do those choices align and make sense with their “How to Win?”
Create bespoke, localized versions of your mobile app for every country and language combination
Create a bright, colorful, glittery, and fruit-flavored makeup line
Offer content from some of the greatest directors and actors
On their own, each of these might seem to be great ideas, but the “Where to Play” choices from the list above won’t achieve the desired results when paired with the associated “How to Win” from the list below.
Align around the “heart” of strategy
While all five boxes in the Strategy Choice Cascade need to be made with awareness of the others, nowhere is this more important than in your “Where to Play” and “How to Win” choices.
“Never forget that WTP and HTW are an inseparably matched pair — and are the heart of strategy. Any decoupling of them will make your strategy weaker — so don’t, even if it feels easier. Tackle the challenge of creating a matched pair.”
— Roger L. Martin, “On the Inseparability of Where-to-Play and How-to-Win”
Where to Play and How to Win in messaging apps
Slack, Discord, and Microsoft Teams are three of the most widely-used messaging applications, but have vastly different matched sets of “Where to Play” and “How to Win” choices that mutually reinforce each other. Offering the optimal set of functionality for creatives, gamers, or enterprise teams, respectively, is what allows each of these applications to dominate and thrive in their chosen area.
(Although in Microsoft Teams’ case, monopolistically bundling it with Office365 certainly has helped them compete with the other two.)
Now that you know for whom you’re going to be delivering a great experience, and how you’ll differentiate in a unique way, do you have the ability to sustainably deliver there?
Mistake Number 3: You don’t have the “Must-Have Capabilities” to deliver on your “Where to Play” and “How to Win”
Maybe you’ve chosen a clear and inspirational “Winning Aspiration,” and have paired it with a matched set of “Where to Play” and “How to Win” choices.
But does your organization have the right mix of skills in-house to make this a reality, in terms of both consistency and scale?
“Think of your Capabilities as the key activities in which you must invest disproportionately and perform distinctively to underpin your theory of competitive advantage…. Matching competitors on a range of activities while outperforming them on a few key Capabilities is the key to Playing to Win!”
— Roger L. Martin, “Distinguishing How-to-Win from Capabilities in Your Strategy Choice”
Does your company excel in the few, but key “Must-Have Capabilities” to win on its chosen playing field?
Or do others have better capabilities in these areas than you do?
If your strategy is to offer the premier Enterprise SaaS (Software as a Service) OKR (Objectives and Key Results) software platform, do you have the capabilities to support the complex GRC (Governance, Risk, and Compliance) needs of your Enterprise customers?
If your strategy is to be the premier maker of lowest-cost, highest-performance gaming laptops for young gamers on a budget, do you have the capabilities to design and manufacture laptops that will truly stand out and win with your chosen customers?
Never start with your strengths, but with what your strategy needs
“Rather than starting with capabilities and looking for ways to win with those capabilities, you need to start with setting aspirations and determining where to play and how to win. Then, you can consider capabilities in light of those choices. Only in this way can you see what you should start doing, keep doing, and stop doing in order to win.”
— Playing to Win: How Strategy Really Works by A. G. Lafley, Roger L. Martin, p. 132, KIndle Edition.
Again, the power of working back and forth through the five boxes of the Strategy Choice Cascade brings deceptively powerful simplicity and focus.
A powerful way to unearth these capabilities is to use “What Would Have to be True” questions as part of your Strategic Choice Structuring process.
When considering a set of strategic choices, ask,
“What does this assume would have to be true about our company?”
This will help uncover a clearer understanding of which capabilities would be necessary to make that set of strategic choices come to life, and whether you have them.
Aligning people with strategic choices
Successful organizations have the courage to ask the right questions, and answer them, critically and honestly.
Perhaps your strategic choices depend on capabilities that only one person has, who’s already overcommitted to five other initiatives. Alternatively, you may have people with experience in related areas you can develop into high performers.
But if there’s no one in-house available, you’ll either have to hire for the skills and build the right team from scratch, or perhaps consider another set of “Where to Play” and “How to Win” choices that may be better aligned to your group’s skill sets.
Provided you are able to pull the right capabilities together, how will you be able to tell if you’re effective in delivering against your chosen strategy, and continuously improving those capabilities?
Mistake Number 4: Your “Enabling Management Systems” disable you
“A company needs management systems that build and maintain the distinctive capabilities that underpin a unique how to win in the chosen where to play that meets its winning aspiration.”
— Roger L. Martin, “The Role of Management Systems in Strategy”
The final box in the Strategy Choice Cascade represents your “Enabling Management Systems.”
These are the systems that provide the ability to measure and continuously improve your must-have capabilities, strengthening them to ever-greater levels of performance and effectiveness.
Perhaps one of the greatest gaps I’ve seen at many organizations is trying to apply legacy management systems designed to support completely different strategic choices– say, big, internally-focused, up-front planning Waterfall software development delivered over yearly cycles–and mis-apply them to small, nimble, client-centric software teams working in short, two-week cycles.
This disconnect will be painfully apparent to everyone involved in the dynamic, causing teams’ work to be micromanaged. Delivery under these circumstances will be, at best, no better than chance.
Without systems specifically designed to support the strategy, the legacy management systems will disable instead of enable teams to deliver and continuously improve.
Confusing OKRs or analytics with strategy
Seen through the lens of an Enabling Management System, OKRs, and the analytics that inform them, are simply intended as a way of measuring the effectiveness of your strategy.
Having only one component of an Enabling Management System with actually having a complete strategy is like having only coaches and referees, and no players on the field to score points and win the game.
Jumping on the OKR bandwagon
Organizations new to Objectives and Key Results frequently jump right into setting OKRs without understanding their intended role as a management system. In the absence of a consciously-designed set of strategic choices, teams will do whatever they can to hit the arbitrary goals.
They may or may not hit them, but there won’t be any strategy orchestrating the effort of the organization.
So even if they do hit their numbers–say, for user growth, they’ll end up doing so at the expense of another teams’ retention goals.
Where OKRs can help
Providing your group has taken the time to collaboratively step through the Strategy Choice Structuring process to design an integrated set of strategic choices, OKRs can provide an effective goal-setting process to align to that strategy.
A skillful and well-managed OKR implementation aligned to a well-designed strategy creates a truly enabling management system, allowing regular confidence check-ins to provide a powerful feedback loop to refine and improve your efforts.
Do you have systems that enable your strategic choices, and are you using them to measure and continuously improve the effectiveness of those choices?
Now when you hear managers criticize their people for not “executing,” you’ll understand that it’s closer to the truth to say they haven’t put the necessary thought into designing their strategy.
Pay attention to these four things: And don’t call something a strategy until you can challenge the people proposing it to think through all five strategy choices.
Once we understand the comprehensive nature of the Strategic Choice Cascade, we see that our “Must-Have Capabilities,” and “Enabling Management Systems” are what most people typically think of as the “execution” part. Seen this way, we understand we can’t really consider them as separate and apart from our other strategic choices.
Collaboratively stepping through the Strategy Choice Structuring Process will allow you and your teams to:
1: Start with a strong, clear Winning Aspiration
2: Design a set of “Where to Play” choices that clearly fit with your “How to Win” choices
3: Identify and put in place the “Must-Have Capabilities” to deliver on your “Where to Play” and “How to Win”
4: Intentionally design a set of “Enabling Management Systems” that measures the effectiveness of your strategy and continuously improves your capabilities
Through these four steps, we can take advantage of a simple, comprehensive, effective, and proven approach to strategy design, and get closer to making that strategy a reality.
That’s it for this edition!
Join me next time as we continue to go Up- and Downstream to explore the Full Value Delivery Stack.
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Lafley, A. G.; Martin, Roger L.. Playing to Win. Harvard Business Review Press. Kindle Edition.