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What's more important to a company's success? Good strategy or good execution?

This age old question is hotly debated in management consulting circles but I was wondering from the esteemed Proformative member community opinion which you believe is more responsible for a company's success? Your answer could be time dependent as short term needs (e.g. quarterly sales/EPS) drive potentially different behaviors than long term (i.e. sustained performance over many years) but was very interested in your insight and experience. Thanks.


Topic Expert
Linda Wright
Title: Consultant
Company: Wright Consulting
(Consultant, Wright Consulting) |

You need a good not necessarily great strategy, but you must deliver on execution. The right KPI's will guide you to the next step--either an adjusted strategy or a rekindled execution route.

Roger Whitham
Title: Managing Director
Company: Bassett Bridge Associates
(Managing Director, Bassett Bridge Associates) |

Bob - In my experience good strategy and good execution are not mutually exclusive. Good execution of a bad strategy and poor execution of a good strategy usually ends in disaster over the long term. While both may yield acceptable short term results, for a business to thrive over the long term it has to have both a good strategy and good execution. Anything less and the business will not achieve its maximum potential.

The above said, it also depends on the business's current state. If, due to a bad strategy, the company is spiraling down then the business likely has no other choice but to execute on its current strategy, though it be a bad one. And if this is the situation then good execution becomes essential if the business is to survive long enough to reset and begin executing a new and better strategy.

Though we never think our strategies are bad until the results begin to be measured, putting in place a rigorous evidence base measurement system with prospective performance indicators will greatly aid improving on execution while allowing for on going adjustment to strategy.

As mentioned above, strategy and execution are really never mutually exclusive.

Sarah Jackson
Title: Associate Editor
Company: Proformative
(Associate Editor, Proformative) |

Relevant to the strategy part of this topic, proformative offers an online course titled,

"Corporate Finance and the CFO as Facilitator of Strategic Management"

And, here is a video introduction. to this Proformative course.


Best... Sarah

Thomas Phillips
Title: President
Company: Effective Agreements
(President, Effective Agreements) |

Your strategy will vary over time. It is usually reflected in a "living document". Your execution may depend on changes in the strategy, but many of your basic tenets of execution will not change. Best practice financial procedures, for example, adapt easily to any change in the strategy and may remain unchanged in any case.

If your day-to-day execution of what must be done is always exceptional many problems with the strategy can be overcome.

Proper execution of a fatally flawed strategy will result in disaster. But, if execution is really top notch, problems with the strategy will become apparent early enough to make changes.

So, I come down on the side of execution.

Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

The biggest issue with the Executive Team is execution.

Team alignment brings together a strategy, but unless leadership and managerial skillsets are exercised by the CEO, execution falters.

Bob Katz, CMA, CFM, CFP®
Title: Treasurer and Board Member
Company: Partners in Performance Excellence (PiPE..
LinkedIn Profile
(Treasurer and Board Member , Partners in Performance Excellence (PiPEX)) |

I'm always reminded by a quote from Thomas Edison, who might know a thing or two about strategy and execution: "Genius is one percent inspiration and ninety-nine percent perspiration."

Gerard van Stijn
Title: Head of Finance
Company: Simon Lévelt B.V.
(Head of Finance, Simon Lévelt B.V.) |

The answer is not or but and. Both are important. I think both are equally important. I've seen badly executed good strategies be a problem as well as well executed bad strategies.

Topic Expert
Jaime Campbell
Title: Chief Financial Officer
Company: Tier One Services, LLC
(Chief Financial Officer, Tier One Services, LLC) |

I quite agree with my colleagues saying that these are not exclusive choices and that KPIs are essential to make sure the company is on track to meet or exceed specific measurable results.

Behaviors needed to cause stellar short-term results do not by default sap at the effectiveness of long-term results.

In your planning, start with long-term goals, including specific, measurable results. Then work backwards and create KPIs for measurable milestones as well as ongoing measurable standards.

Jorge Marquez
Title: Consultant
Company: ITCF LLC
(Consultant, ITCF LLC) |

I have seen many companies almost go bankrupt when an incorrect strategy was being correctly executed. If the strategy has short and long term measurable goals, and those are monitored, and the corrective action is taken when needed, most companies will succeed.

Jim Holloway
Title: CFO
Company: Contract Lumber, Inc.
(CFO, Contract Lumber, Inc.) |

I feel we are often confronted with false choices because, as Roger said above, these are not mutually exclusive items, in fact they go hand in hand. That being said, without great execution you may as well not waste any time with strategy because you are setting yourself up to fail. If you have great execution but a poor strategy you should be able to have enough success to make corrections to the strategy.

Val Kennings
Title: CFO
Company: Nonprofit
(CFO, Nonprofit) |

I, too, have a favorite quote on this from Thomas Jefferson, "Vision without execution is hallucination."

Scott Smith
Title: Experienced CFO/Interim CFO
Company: Self-Employed
(Experienced CFO/Interim CFO, Self-Employed) |

Strategy is defining what it is that you want to do and execution is everything involved with knowing how to do it well, so my answer would be "yes". Brilliant execution won't generate success from an ill-founded strategy and poor execution of any strategy - just forget about it. This question is like asking "Which is more important for survival - air or water?"

Philip Rooms
Title: Board Member
Company: Smartesting
(Board Member, Smartesting) |

It's a very good question. I agree with most of what has been said already - the two certainly go hand in hand.

A sound strategy, if not accompanied by operational excellence in terms of execution, could easily result in failure.

Furthermore the trouble with strategy is that you don't really know whether it's optimal from the outset. It could be obsolete 12 months down the line and as Thomas says, it will vary over time. Using business performance related KPI's should reveal trends that will either support the current strategy or cause management to modify it.

Operational KPI's should reveal whether execution is optimal (by benchmarking with competitors), and either improving or deteriorating (by trend analysis).

Mark Matheny
Title: VP - FInancial Planning and Analysis
Company: Novolex (formerly Hilex Poly)
(VP - FInancial Planning and Analysis, Novolex (formerly Hilex Poly)) |

Isn't it like the chicken and the egg? Obviously, the strategy is worthless if it is not executed. However, if you don't have a strategy how do you know what to execute? Strategy in this context doesn't have to be a five year plan it can be day to day directional guideposts.

Guillermo Caneto
Title: Mr.
Company: Sika Argentina
(Mr., Sika Argentina) |

Why not aiming to both excellent strategy and execution? This would certainly make the difference...

raef lawson
Title: VP-Research
Company: IMA
(VP-Research, IMA) |

In one of their books, Bob Kaplan and Dave Norton note that conventional wisdom holds that less than 10% of organizations can fully implement their strategies. This "wisdom" is actualy based on an article that was published in Fortune over 30 years ago.
To assess the accuracy of this assertion today, at IMA (Institute of Management Accountants) we've just recently completed a study, based on a survey of our members, around strategy execution.
Our results show that 13% of companies believe they were VERY successful at executing their strategy in 2012, 28% successful, 44% somewhat successful, and 14% were unsuccessful.
75% of companies that were VERY successful at executing their strategy were good at BOTH strategy formuation and monitoring execution on goals and objectives so, yes, both are important.
Kaplan & Norton are correct with regard to the importance of strategy execution: doing a good job at monitoring and executing on goals and objectives is twice as important as having a good mechanism for formally defining strategy in terms of successful executing strategy.
More of our results can be found in our article in the upcoming Mar/April 2014 issue of Journal of Corporate Finance & Accounting. Another article may be forthcoming in Cost Management.

Topic Expert
Mike Caruana
Title: Director of Financial Services
Company: Diamond Resorts International
(Director of Financial Services, Diamond Resorts International) |

Execution...definitely. Jim (among others) hit it right on the head. Having a great strategy is meaningless if you can't execute on it.

Title: Operational risk manager
Company: BRD
(Operational risk manager, BRD) |

I know some banks which go in bankruptcy due to poor executions of strategy. Comparing to what it sas int the last 5 years, currently blackberry is not performing well comparing to iphones (poor strategy). Therefore, there is a complementarity between strategy and execution.

Bob Katz, CMA, CFM, CFP®
Title: Treasurer and Board Member
Company: Partners in Performance Excellence (PiPE..
LinkedIn Profile
(Treasurer and Board Member , Partners in Performance Excellence (PiPEX)) |

There is an interesting article in this week's Economist (11/9) about how the large operational consulting firms (IBM, Accenture and the Big Four) are continuing to move into strategic consulting (Deloitte/Monitor, PWC/Booz) to provide their clients with end-end solutions, at the risk of a conflict of interest.

Adam Auten
Title: Director of Finance and Administration
Company: Shade Structures, Inc.
(Director of Finance and Administration, Shade Structures, Inc.) |

Strategy is being able to see where it is you want to go. Execution is the putting one foot after another to get there. They are two sides of the same coin. If you are going the wrong way, being an accomplished sprinter won't get you to your desired destination. Similarly, if your direction is perfect, but you are continuously tripping over yourself, you're not going to get to the results you seek.
Strategy must be sound enough to make sure you are heading in at least the right general direction. Good leadership will course correct as needed.
Execution similarly needn't be perfect, but continuous improvement should be everyone's goal.

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