When I was in business school, I read case after case where companies had fundamentally flawed strategies which lead to the firm's ultimate demise. Bad assumptions, a lack of understanding of how a critical part of the market worked, inattention to a killer competitor -- the reasons were different in almost every case. And while we focused on the big, company-killing strategic errors, other cases pointed out that smaller strategic errors clearly happened on a regular basis, as well.
Once I entered executive management, it was clear to me the view from inside the company is completely different -- there all strategies seemed to be labeled as "brilliant," and every failure was the result of "poor execution."
The reason for this isn't difficult to see -- senior executives, particularly CEO's, are the ones who develop strategy, and they also pass along the execution part (read: the hard part) to lower level management and professionals. Of course, the senior executives are the people who assess the cause of a failure, so it shouldn't be any great shock that almost all are a result of "bad execution."
This is a phenomena humorously referred to as "drinking your own bathwater" by one of my former bosses.
And I don't think this part of the equation is likely to change any time soon, because there is absolutely no advantage to those passing judgment in pointing the finger of guilt back at themselves.
At one of my employers, a senior executive fell in love with a concept for a new product (one for a new market -- already danger alarms should have been sounding). The product concept was innovative, cheaper than what was on the market at the time, and contained a few performance advantages as well -- at least that was how it was portrayed. For more than five years the company invested millions of dollars developing the concept, but also meeting significant resistance from potential customers. When I took over responsibility for the project, a few customer conversations at a trade show made it obvious to me that unless the product offered huge cost advantages over the current method, customers wouldn't switch. After an exhaustive study, I was able to determine it didn't, and shut the project down.
So was it bad execution? Or bad strategy? Bad strategy, of course. No amount of hard work in the execution could drive the costs anywhere close to low enough to gain acceptance from the customers. So why hadn't this been figured out five years and ten million dollars earlier? A defect in strategy development and planning.
In this case, which I've found to be true in most of these stories, the only ones punished were the "executors." The grand strategist blamed them for "misleading" him about the costs of the product. And somehow the resistance of customers to the design ended up being the "executor's" fault, too. They departed the company, while the strategist continued on to strategize another day (hopefully he learned something in the process).
And that's the way it usually seems to go.
If you're on the "execution" end of this process, how do you protect yourself? There are a few tactics you can use, but it's still easy to find yourself in a "no win" situation. Here's what I've seen work over the years...
- Assess the strategy yourself, and avoid those projects that have obvious flaws, or where the odds of success seem too low.
- Get an outside opinion to counter the senior executive's optimism on the project. And get it early.
- Raise concerns and objections yourself -- this often gets you labeled as "negative," but at least it can keep you from taking full blame for the thing when it ultimately fails.
- Quit before the whole thing falls apart.
To do any of this means that the manager responsible for execution needs to develop a keen eye for good versus bad strategy themselves, and an ability to make those judgments quickly. If you have this, you can avoid many of these problems.
And once you make it to senior management, at least be aware of the bias and try to drink a little less of your own bathwater.
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Non-Fiction: NAVIGATING CORPORATE POLITICS (released 7/19/12)