The Strategy vs Execution Fallacy
My three tips for demonstrating effective improvisation and strategy
By Dan Winter, Full Circle Venture Capital and Black Sheep Capital
In the world of big business, we often hear cliché quotes such as “The perfect strategy, poorly executed, will fail. A lousy plan or strategy, well executed, is often successful” — and all the others like it. There has been extensive discussion in recent years over whether execution is more important than strategy, and vice versa — and I don’t plan on contributing to it.
I will say, I found this Harvard Business Review article sums it up very well: “It’s impossible to have a good strategy poorly executed. That’s because execution actually is strategy” — I recommend reading the article in full.
Since shifting from big corporates to the world of start-ups I have had the benefit of being able to draw some interesting comparisons between how both approach strategy and execution.
Corporate approach to strategy/execution
In large organisations and those consulting to them, planning, strategy and execution are physically separate. By ‘physically separate’ I mean they consist of separate activities, separate deliverables, separate objectives and often separate teams; where plans tend to be driven by time constraints and strategies driven by budgets. It’s not unusual to see corporates plan how strategising should be carried out before actually strategising, then plan how to execute on the strategy only before going on to establish a designated implementation unit designed only to execute. Yes, you read that correctly.
This convoluted structure is often placed one document behind the ‘Corporate Strategy’ within a polished pdf titled ‘X’s Project Planning and Implementation Framework’, or something like it. It does however serve a purpose, and that is that often there are so many competing pains and priorities in these organisations they need a stage gate driven process to prove which pains are worse and more worthwhile correcting before they will even be considered by leadership.
There is also a problem with this approach — often expensive solutions are devised when the business pain is strongest — and at that very point fixing the problem is paramount so the price is justified. As the project progresses through execution and some pains are alleviated, others newly identified, the focus often shifts from solution to expenditure and it becomes less about achieving what you set out to in the first place and more how much you are spending. This quickly escalates to ‘the consultants cost too much’ or the ‘strategy was poor’.
A quick google search will reveal some discouraging stats to support this. One survey indicates that only 10% of corporations manage to achieve two-thirds of their strategy objectives. Over half achieve less than 50% of their objectives.
The start-up advantage
Within startups it’s all completely different. Startups have the advantage of literally being born from problems and from day one are driven by obtaining optimal solutions for them. Time can be adjusted and where the case is strong enough, capital secured.
Highly successful early stage ventures, those that manage to continually exceed traction and performance expectations, are continuously strategising and executing in parallel often driven by consistent improvisation and a clear vision. All in conjunction with a flatter team structure and tighter collaboration eliminating the need for lengthy development cycles consumed by planning, strategising and then planning for execution before actually executing.
A recent article on modern strategy/execution with reference to Googles ‘5 day method’ noted: “As strategy is becoming more fluid — more like software that needs constant upgrading — two alternative concepts are emerging: vision and improvisation. Vision incorporates the long-term, if not permanent, purpose and principles of an organisation, which serve as the north star for all its actions. Improvisation suggests a fundamental openness and flexibility at a tactical level — the willingness to explore, experiment, and iterate. When you incorporate both into strategy creation, it becomes a transformative event rather than a long-winded process.”
In every start up I have had the opportunity to work with I can see this new approach has originated from the agile software development methodology they deployed from birth. And for the better, this concept of short development sprints has spread to most other components of the start-up approach to building a business — by remaining agile to accelerate growth, product development, and innovation.
So, what can new and existing founders take from this to ensure their strategy and execution go hand-in-hand?
1. Retain your focus on solving the problem (Your vision)
Keep your eyes on the end goal and deploy an iterative approach to achieving it.
2. Become an execution expert by utilising effective improvisation
When potential investors talk to you they want to see a track record of executing against goals, not a well written plan or strategy on a piece of paper. Focus on teaching your business to implement, revise and learn as you go.
3. Prove it through doing, not through saying
Words are cheap. Any investor faces endless spiels and concepts. Actually putting your plan in action is what will get you over the line with them.
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As the concept of agile itself suggests, I believe most things in business should be in a constant state of motion and improvisation. With this in mind, I am excited to continue working with our start-ups and supporting them through the evolution of future strategy.
Dan Winter is an investment associate at Black Sheep Capital / Full Circle VC, a former Management Consultant who worked on major global tech transformation and investment projects while also founding start-ups himself. He is on a mission to help build Australia’s early stage tech landscape by investing in and working with upcoming Australian businesses.
