"How Do You Weigh Strategy, Execution, and Culture in Organization's Success?"

How Do You Weigh Strategy, Execution, and Culture in an Organization's Success?

Published:

June 2, 2010

Author:

Jim Heskett http://hbswk.hbs.edu/ Summing Up Strategy, execution, and culture: Do we have our priorities right? First, my thanks to all of you who weighed in on the issues of the month regarding ways of thinking and asking questions about the relative importance of strategy, execution, and culture in an organization's success. I hope the comments were as helpful and thought-provoking to you as they were to me. Those of you willing to venture to place weights on the determinants of success gave the nod to culture by a wide margin. As Mouaz AlZayyat put it, "Growth plans and articulated business tactics cannot be sustainable without a framework of cultural values and rules." Drew Williamson pictured the relationship as "a virtuous circle that can break at any of the three points. It starts with a happy, innovative culture that generates a strategy for success." In Phil Clark's words, "Just thinking about D-Day in the context of your question… . Even as many failures and unplanned events unfolded, the culture and training sustained the men to the ultimate execution of victory on that day." Jobe Mabaso added, "A sound organizational culture is a basis for solid planning and flawless execution." The importance of execution was advanced, for example, by Mercedes Fernandez, who reminded us that "execution … makes things happen." Bob Legge said: "An outstanding strategy weakly executed will always be trumped by a weak strategy with outstanding execution." Those placing the greatest weight on strategy were characterized by Pete DeLisi's observation that "it's hard to perform if you don't have the right solutions, addressing a real need, provided to the right customers when they are needed, and in a way that differentiates you from competition." Several noted that "it all depends" on other factors. For example, Basel Kakah commented that "[responses to] those questions could … [depend on] the nature and size of the organization as well as the nature of the industry and business environment…." Fidel Arcenas cited "prevailing conditions" and Ahmed Issa mentioned "external and internal factors" as influences on possible responses. Perhaps the most interesting responses were to the questions themselves. Gopal Padinjaruveetil commented that "there are no obvious answers to these questions and the answers lie somewhere else … [for example] … good leadership." Yan Song said, "To ask which of these components is more important is equivalent to asking which part of our body—head, torso or heart—is more dispensable." Gerald Nanninga suggested that "it may be as relevant to ask how much is the level of my execution diminishing my level of profits…." Eddie Jiang provided an alternative way of thinking about the relationship of these three factors by suggesting that they are multiplicative rather than additive. "Organization success = Culture x Strategy x Execution." This argues for a different way of formulating the questions. Several commented on the importance of the thought behind the questions, leading to yet another question: Are their important differences between these responses and the relative emphasis placed on strategy, execution, and culture in today's business school curricula? If so, why? And can they best be addressed? What do you think? My POV (Posted at HBS Working Knowledge @ http://hbswk.hbs.edu/): In Powershift, Alvin Toffler posits that to excel in any endeavor, be it in business, politics, or any other field, one needs strategy, resources and organization. He refers to these as the 3 M's: mind, money, and muscle. The right mix in the use of these components depends on prevailing conditions. But an organization's success will first depend on its strategies to attain its long term (or strategic) objectives. This where the mind (at the top level) comes of utmost importance. The level of certainty that such strategies will work will in the end determine the success or failure of the organization. This is not saying that financial and human resources are less essential. The tactical maneuvers at the department level and the operational activities of those in the front lines, although of equal importance, must be attuned to the organization's strategic objectives. Fidel M. Arcenas TIEZA