Strategy Versus Execution
Think of strategy as doing the right things, and execution as doing things right. Both are important, and you start with a strategy to define where you want to go and how you plan to get there. From a customer-centric viewpoint, your strategy determines who you want to serve and how you plan to create value for them (and you). Once you have your strategy in motion (with clarity and coherence), it goes hand-in-hand with execution (with accountability and actions), both feeding and guiding each other. Remember, execution is where real action happens relating to your customer discovery, problems, solutions, outcomes and value creation. You leverage the key insights from execution to shape or reshape your strategy. It is a continuous cycle; a repeated process of learning, planning and doing.
Strategy is not what you do but what you don’t do. Execution is really what you do. Strategy requires a clear sense of purpose since you cannot be all things to all people. In essence, strategy is the culmination of two key decisions on “where-to-play” and “way-to-play.” Where to play defines your target customer, and way to play is a combination of two things: 1) your unique value proposition to that customer and 2) your core capabilities necessary to deliver that value proposition. Execution is essentially the process of creating and delivering the value to your target customer in the context of the two decisions above.
Karl Moore recently wrote an interesting article, “Strategy Without Execution Is Hallucination!” I’d add the viewpoint that “Execution Without Strategy is Dissipation!” In essence, strategy and execution are the front and rear wheels of a bike, and you cannot deliver a great outcome to your customer with just one wheel.
Invention Versus Innovation
Invention is making a new thing. Innovation is making a new thing that people want to buy. Innovation is a practical translation of ideas or inventions into value-creating offerings for customers. Strong and sustained value creation is the essence of innovation. Ideas can be old or new, and we don’t always have to invent something new to achieve innovation.
In summary, Innovation = Exploration (big customer problem) + Experimentation (minimal viable product/solution) + Execution (customer value creation).
Invention may play a critical part during any stage, i.e., exploration, experimentation and/or execution. However, successful invention does not translate to successful innovation, and you can have a successful innovation without any invention. Generally people have a tendency to imply that anything new is innovation. The notion of something “new” or “groundbreaking” is a relative concept. What may be “new” or “radical” to one person may be totally “routine” for others. Hence the only way to gauge innovation is to look at it from an end-customer’s point of view.
You can call your new offering (i.e., new product, service, solution, system, process, method, experience or business model) innovation if:
- It matters to someone i.e., it solves a real problem for a real customer at a real price.
- It provides a step-change improvement (i.e., 5X, 10X or higher) in how customers get their jobs done today.
- You are the only company that can execute and deliver such a value proposition.
The innovations with incremental customer value (i.e., evolution types) are more of table stakes now. Incrementalism is innovation’s worst enemy. So to drive and thrive in today’s dynamic environment, companies need innovations with step-change customer value (i.e., revolution types). One way to think about step-change value creation is the rule of 10X. Can you provide a unique value proposition to your customer that is at least 10X better than the current alternatives in terms of time, costs, revenues, returns and/or risks? If you are not constantly challenging your team with this type of thinking, you risk becoming a “me-too” company that does not inspire anyone (i.e., employees, customers or shareholders).
- True – Are you basing your innovation assumptions, insights and actions based on factual data? Who have you approached to verify and validate the truth?
- Helpful – What is the big problem and who are you helping and how? Can you qualify and quantify the benefits of solving this problem?
- Inspiring – Are you creating innovations that inspire people both within and outside of your company? What is your unique value proposition to realize transformational ROI for your customers (e.g., a gain/pain ratio of 10X or more)?
- Necessary – What are the capabilities (i.e., people, process, technology) necessary for you to execute? How are you going to build these capabilities (e.g., build, buy, partner, acquire) to over-deliver on the value promise?
- Kind – Are you defining the success based on your customers’ success? Do you have a deeper purpose to positively impact customers’ lives and give something back to the community?
In summary, the future belongs to companies that are consistently delivering step-change value to their customers through perfect orchestration of strategy and execution and invention and innovation. These companies are driven by a clear purpose and deeper meaning around their existence, and they are bold and brilliant at the same time.