Question

4 Multiple Choice Questions with the correct answers from the article below.

The idea that execution is distinct from strategy has become firmly ensconced in management thinking over the past decade. So much so, in fact, that if you run a Google search for “A mediocre strategy well executed is better than a great strategy poorly executed,” you will get more than 42,600 references. Where the idea comes from is not certain, but in 2002, in the aftermath of the dot-com bubble, Jamie Dimon, now CEO of JPMorgan Chase, opined, “I’d rather have a first-rate execution and second-rate strategy any time than a brilliant idea and mediocre management.” In the same year, Larry Bossidy, former AlliedSignal CEO, coauthored the best-selling book Execution: The Discipline of Getting Things Done, in which the authors declared, “Strategies most often fail because they aren’t well executed.”

The trouble is, Dimon and Bossidy’s doctrine—that execution is the key to a strategy’s success—is as flawed as it is popular. That popularity discourages us from questioning the principle’s validity. Let’s suppose you had a theory that heavenly objects revolve around the Earth. Increasingly, you find that this theory doesn’t predict the movement of the stars and planets very well. Is it more rational to respond by questioning the theory that the universe revolves around the Earth or to keep positing ever more complicated, convoluted, and improbable explanations for the discrepancy? Applying Dimon and Bossidy’s doctrine rather than Occam’s razor would have you going in a lot of unnecessary and useless circles.

Unfortunately, this is exactly what often happens when people are trying to understand why their strategy is failing, especially when consulting firms are involved. In fact, Dimon and Bossidy’s approach can be a godsend for these firms because it allows them to blame their clients for any mistakes they might make. Firms can in effect say, “It won’t be our strategy advice that will let you down but your implementation of that strategy. (To help you get around that problem, we suggest that we do some change management work for you as well.)”Of course, lining the pockets of consulting firms does nothing to further most companies’ performance. I suggest a superior way to proceed. Rather than doubling down on the prevailing theory to try to get it to work, consider the simple possibility that the theory is wrong.

So let’s evaluate the idea of the brilliant strategy poorly executed. If a strategy produces poor results, how can we argue that it is brilliant? It certainly is an odd definition of brilliance. A strategy’s purpose is to generate positive results, and the strategy in question doesn’t do that, yet it was brilliant? In what other field do we proclaim something to be brilliant that has failed miserably in its only attempt? A “brilliant” Broadway play that closes after one week? A “brilliant” political campaign that results in the other candidate winning? If we think about it, we must accept that the only strategy that can legitimately be called brilliant is one whose results are exemplary. A strategy that fails to produce a great outcome is simply a failure.

As I hope to show in the following pages, the idea that we have to choose between a mediocre, well-executed strategy and a brilliant, poorly executed one is deeply flawed—a narrow, unhelpful concept replete with unintended negative consequences. But the good news is that if we change the way we think about the problem of strategy versus execution, we can change the outcome.

Let’s begin by exploring the consequences of the prevailing view of strategy.

A Misguided Metaphor

According to the accepted dogma, strategy is the purview of senior managers, who, often aided by outside consultants, formulate it and then hand off its execution to the rest of the organization. The pervasive metaphor that informs our understanding of this process is that of the human body. The brain (top management) thinks and chooses, and the body (the organization) does what the brain tells it to do. Successful action is made up of two distinct elements: formulation in the brain and execution through the body. At the formulation stage, the brain decides, “I will pick up this fork now.” Then, at the implementation stage, the hand dutifully picks up the fork. The hand doesn’t choose—it does. The flow is one-way, from the formulator brain to the implementer hand. That hand becomes a “choiceless doer.”

A neuroscientist may quibble with this simplification of the brain and body (and of the true order of operations between them), but it’s a fair description of the accepted model of organizational strategy: Strategy is choosing; execution is doing.

To make this more concrete, consider the example of a large retail bank. The CEO and his team formulate a customer strategy. They flow that strategy down to the bank’s branches, where it is executed by the customer service representatives (CSRs) on a day-to-day basis. The CSRs are the choiceless doers. They follow a manual that tells them how to treat the customers, how to process transactions, which products to promote, and how to sell them. The hard work of making all those choices is left to the higher-ups. Those on the front lines don’t have to choose at all—they just do.

Now consider an experience I had working with a large retail bank in the early 1980s. The bank was revising its strategy and, as a young consultant, I asked to shadow a teller to get a better sense of the bank’s operations. I was assigned to Mary, who was the top teller in her branch. As I observed her over the course of a few weeks, I began to see a pattern in the way Mary dealt with her customers. With some, she was polite, efficient, and professional. With others, she would take a little longer, perhaps suggesting that they transfer some of the extra money in their checking account to a higher-yielding term deposit or explaining new services the bank had introduced. And with some customers she would ask about their children, their vacations, or their health but relate very little about banking and finances. The transactions still got done in these instances of informality but took far longer than the other customer interactions did. Mary seemed to treat each of her customers in one of these three distinct ways.

After a while, I took Mary aside and asked about her approach. “Customers come in three general flavors,” she explained. “There are those who don’t really like banking. They want to come in, do their deposits or transfers, and get out again painlessly. They want me to be friendly but to manage the transactions as quickly as possible. If I tried to give them financial advice, they would say ‘That’s not your job.’ ”

“Then there’s the second kind of customer, who isn’t interested in my being her friend but thinks of me as her personal financial service manager. This customer wants me to be watching her other accounts.” She pulled out a drawer and pointed to a set of small file cards. “For those customers, I make up these little files that keep me posted on all of their accounts. This lets me offer them specific advice—because that’s what they want from me. If I were to ask about their children or their hip surgery, they’d feel as if I were wasting their time or, worse yet, intruding into their lives.”

“Finally, there’s a group of people who view a branch visit as an important social event, and they’ve come in part to visit their favorite teller. If you watch the lineup, you’ll see some people actually let others go ahead of them and wait for a specific teller to be available. With those folks, I have to do their banking, but I also need to talk to them about their lives. If I don’t, it won’t be the event that they want, and they’ll be disappointed with our service.”

Intrigued, I asked Mary to show me in the teller manual where it described this strategic segmentation scheme and the differential service models. Mary went white as a sheet, because of course none of this was in the manual. “It’s just something I’ve tried,” she explained. “I want customers to be happy, so I do whatever I can to make that happen.”

“But for the middle segment,” I pressed, “you have to make these files yourself, cobble something together that bank systems could be designed to provide.” (Of course bank systems did eventually catch up, and banks created sophisticated computerized customer information files that looked a lot like Mary’s file cards.) “And frankly,” I continued, “other tellers and customers could benefit from your approach. Why don’t you talk to your bank manager about the three segments and suggest doing things differently?”

That was too much for Mary. “Why would I ever do that?” she replied, suddenly impatient. “I’m just trying to do my job as best I can. They’re not interested in what a teller has to say.”

Mary had been set up as a choiceless doer. She had been given a manual that essentially said, “It’s all about the transaction—just do the transaction and be friendly.” But her own experience and insight told her otherwise. She chose to build and implement her own customer service model, understanding that the ultimate goal of the bank was to create happy customers. To do that, she had to reject her role as a choiceless doer. Rather than obey the teller manual and deliver subpar service, she decided to make choices within her own sphere. She had decided, dare I say, to be strategic.

But Mary understood just as clearly that she was in no position to influence the decisions made at the top of her organization. Although she had chosen to reject the conventional, her superiors had not. So the bank, which could have benefited from her strategic insights, was shut out. It’s a pattern I have seen again and again throughout my career. Often, what senior management needed most—although it was rarely able to recognize it—was to have someone talk with the rank and file in order to understand what was really happening in the business. Senior management couldn’t get that information itself because it had created a model in which its employees were convinced that no one was interested in what they had to say.

The Choiceless-Doer Dilemma

The strategy-execution model fails at multiple levels of the organization, not just at the front line. Executives, too, are constrained—by the boards, shareholders, regulators, and countless others that dictate to them. Everyone from the top of the organization all the way down to the very bottom makes choices under constraints and uncertainty. Each time a frontline employee responds to a customer request, he is making a choice about how to represent the corporation—a choice directly related to the fundamental value proposition the company is offering.

A Warning Unheeded

Most managers are so used to believing that strategy and execution are distinct from one another that they are blind to whether the strategy-execution approach makes any sense. The notion that strategy and execution are connected isn’t new. But apparently we didn’t listen carefully enough to the great management theorist Kenneth Andrews, who established the distinction between the formulation of a strategy and its execution in his 1971 book, The Concept of Corporate Strategy. He wrote,

“Corporate strategy has two equally important aspects, interrelated in life but separated to the extent practicable here in our study of the concept. The first of these is formulation; the second is implementation.”

Despite the warning that strategy formulation and implementation or execution are “interrelated in life” and “equally important,” four decades later, the strategy-execution theory artificially conceptualizes them as separate. It is high time that we delved a little deeper into the twisted logic of our current approach. If we don’t, we are almost certain to fail.

Answer 1

1. What is the key to a strategy’s success as per Dimon and Bossidy’s doctrine?
   1. The profits made by the strategy
   2. The number of people covered by the strategy
   3. The execution of the strategy
   4. The marketing plans of the strategy

Answer: Option c: The execution of the strategy

Most of the strategies fail because they are not well executed. The Dimon and Bossidy’s doctrine stresses on the fact that execution is the key to a strategy’s success.

2. In this article, what is used as a metaphor to hint at the strategy decision-making taken by senior managers in an organization?

1. Broadway
2. Human Body
3. Retail bank
4. Political campaign

Answer: Option b: Human Body

Strategy is the purview of senior managers, who, often aided by outside consultants, formulate it and then hand off its execution to the rest of the organization. This process is metaphorically linked with the human body. The brain (top management) thinks and chooses, and the body (the organization) does what the brain tells it to do.

3. Who is the choiceless doer, as per the article?

1. The top management involved in strategy formulation
2. The front line managers involved in strategy execution
3. The customers who receive the results of the strategy
4. None of the above

Answer: Option b: The front line managers involved in strategy execution

The top management formulates strategy and an action plan is sent to the front line managers, who are required to execute it. The front line managers usually do not have a say in strategy formulation.

4. What are the two important aspects of a Corporate Strategy?

1. The formulation and conceptualization
2. The conceptualization and rationalization
3. The formulation and rationalization
4. The formulation and implementation

Answer: Option d: The formulation and implementation

The strategy-execution approach is interlinked. Both the aspects are equally important. The formulation of strategy must be done holistically and its execution must also be done systematically.