With a nod to Tom Davenport, I’d like to welcome you to Competing on Execution.
Strategy Execution: Avoid the Extremes, a post by Tom from a few years ago, is a good place to start the discussion. Tom contrasts two extremes of strategy execution. “Strategic Engineering” is the traditional school, where workers are cogs in the wheel, management knows best, and strict systems prevail. The pitfalls with this strategy are legendary. Strategy happens in the corporate ivory tower, reality happens everywhere else.
“Strategic Anarchy” is the New Age of strategy execution. Google’s Shona Brown and Stanford Professor Kathleen Eisenhardt describe this school in “Competing on the Edge: Strategy as Structured Chaos“, modeled on complex adaptive systems. Here, the management team models company values and lets simple, clear rules create self organizing behavior. While I support this model in spirit, I have often found in practice it only works because “a rising tide floats all boats”. When the company is growing, there is enough opportunity to mitigate too much self interest. However, in a tougher climate, self interest usually prevails at the expense of constructive, co-operative behaviors.
There can be a balance between the extremes of Strategic Engineering and Strategic Anarchy. Tom strikes this balance with what he calls “Entrepreneurial Execution“. He finds many of the characteristics needed in small startup companies. These companies live too close to the edge to ignore realities, and need every hand on deck so they can’t afford to ignore employee input. Tom states “In small startup companies, successful entrepreneurs innovate, take risks, and solve problems as they arise.” Tom stresses the importance of experimentation and learning and participative management practices. Entrepreneurial Execution is process focused. “To understand a process, managers must rely not only upon official reports, but on seeing and experiencing the process personally.”
There is an implication that entrepreneurs create this balance of entrepreneurial execution naturally. Successful small startup companies do, but for many, this is not the case. Small startup companies suffer from significant strategy execution challenges, but unlike larger corporations, have little or no runway to play with. As a result, poor strategy execution is one of the leading causes of failure. They can’t afford to be anything but excellent.
Strategy execution is critical for young companies, and deserves significant attention, but isn’t getting it. I was in Fortune 500 corporations for many years. I had a somewhat idealistic view of entrepreneurial execution, full of risk taking, innovation and problem solving. I jumped head first into the entrepreneur’s dream and yes, it is all true. But there is still a big execution mess.
- Entrepreneurs sometimes lack the basic business skills and management mechanics needed to run a team and a company.
- Funding is so consuming it becomes an end instead of a means.
- Entrepreneurs often discount the importance of an execution culture and of establishing and modeling company values.
- They too often want to take the just one big step with a big VC, and ignore the many small steps needed to build a business.
Strategy execution is the Elephant in the Living Room of small startup companies. My goal for the Competing on Execution blog is to start the discussion. Let’s talk.
