BusinessDay 10 Apr 2018

A4 BUSINESS DAY
Tuesday 10 April 2018
STRATEGYBRIEFING
IDEAS THAT POWER HIGH PERFORMANCE
The Strategy and Execution Gap
Closing the gap that breeds corporate mediocrity
Statistics available
from statista.com indicates
that advertising
spending in Nigeria
in 2017 amounted
to US$618.06 million and is
expected to increase in 2018.
That’s a lot of money. This
spending only represents a
part of what companies spend
on their sales effort. Borrowing
from the words of Mark
Twain, ‘put all your eggs in one
basket, then watch that basket’.
Meaning if you are going to
spend that much money on
sales, then you better take your
sales very seriously. Unfortunately
business executives
don’t seem to do this.
Research indicates that
sales is, by far, the most expensive
part of strategy execution
in many companies.
Yet, on average, companies
deliver only 50% to 60% of
the financial performance
that their strategies and sales
forecasts have promised. And
more than half of senior executives
(56%) say that their
biggest challenge is ensuring
that their daily decisions
about strategy and resource
allocation are in alignment
with their companies’ strategies.
That’s a lot of wasted
money and effort. This limits
growth, impedes superior
performance and therefore a
case of serious concern.
What this mean is that the
decisions, behaviours, allocation
of time and other
resources at many companies
cannot enable them follow
in the strategic direction
they have determined. So
even though a company may
have committed resources to
the development of a strategy,
it cannot translate into
a superior performance. The
reason for this is not difficult
to find. Strategy is still generally
misunderstood by many
executives. Of those that understand,
misconceptions
about strategy shuts them out
of strategic effectiveness. For
example an assessment by
GrowthPlay, a sales focused
consulting firm among senior
executives and sales professionals
indicates the problem
stems from gaps between the
perceptions, attitudes, and
information flows between
executives and sales reps.
The results from the assessment
shows that executives
have a high level of
understanding of their companies’
strategic priorities, while
sales professionals usually
not involved in the crafting of
their company strategy did not
demonstrate the same understanding.
Senior leaders have a better
relative understanding of the
company’s direction than sale
reps, but are concerned that
they lack the right sales processes
and people to executive
the strategy.
On their own, sales processionals
are confident in their
abilities to produce results
but admit they have little understanding
of the strategic
direction, and its implications
for their behavior. When sales
professionals lack the understanding
of their companies
strategic direction, they more
efficient at their routines, even
when these same routines
keep the firm, and its top team,
from gaining experience with
procedures more relevant to
changing market conditions.
Why does this happen? Why
are the front line sales professionals
and senior executives
in such disalignment even at
the expense of superior performance?
Well to begin with many
companies don’t even have
a strategy even though think
they do. They have mission
statements, they have shared
values, they have particular
intentions they want to pursue
like internationalizing but for
them any of these might be the
strategy. Unfortunately none
of that constitutes a strategy.
If there is no strategy how can
senior executives communicate
something that does not
exist? Strategy is a company’s
unique approach to competition
and the competitive
advantages on which it will be
based. Its not a particular action,
its holistic and cuts across
all the functions.
Another issues and its a
pretty one is that most senior
executives are scared that
communicating their strategy
will expose them to strategy
theft. But come to think about
it, such executives should understand
that they stand a
more serious problem than
strategy theft. You see strategy
is useless without execution.
Preserving your strategy so
that your competitors don’t
know about it and at the same
time shutting your people out
means it will not be executed
and that means you will at best
play along others as a corporate
mediocre.
How often have you read
about the strategy of Google,
Apple, Bulberry and Nike?
For example it took US car
manufacturers many years
to get good atToyota’s lean
manufacturing methods,even
though Toyota willingly gave
factory tours to it’s rival executives.More
recently,traditional
companies continue to struggle
to adopt the digitally
powered methods of online
leaders like Amazon.com and
Google,although the outlines
of these methods are well
known. What does it show?
Communicating your strategy
doesn’t compromise your
position if you really have a
strategy (read my article on
‘Nigerian companies rarely
have a. strategy’)
In a world with a global infrastructure
of consulting firms
and others paid to disseminate
corporate information, confidentiality
as a reason for not
communicating strategy is myopic
and a pathway to failure.
Your people cannot execute
what they don’t understand.
This gap is the reason most
companies only struggle along.
Brian Reuben(@brianoreuben) is an advisor on
strategy and leadership. He regularly conducts
keynote presentations and senior executive
workshops with companies around the world on
strategy and leadership. He heads BusinessDay
Training
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