How Leaders Mistake Execution for Strategy (and Why That Damages Both)

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When discussing strategy, executives often refer to some version of a vision, a mission, a purpose, a plan, or a set of goals. Ken Favaro, a Senior Partner at Booz & Company, calls these "the corporate five." It's important to keep in mind that the corporate five may help bring your strategy to life, but none of them should be mistaken for a strategy.

Unfortunately, as the author observes in a recent Strategy+Business article called "How Leaders Mistake Execution for Strategy (and Why That Damages Both)," the five elements are often treated as if they were the strategy. But, when that happens, real damage can ensue. If the corporate five are the cart, and strategy is the horse, leaders who put the cart first often end up with no horse at all.

Before they get to the corporate five, companies need to address five much more fundamental, and difficult, questions. Let's call them the "the strategic five":

  • What business or businesses should you be in?
  • How do you add value to your businesses?
  • Who are the target customers for your businesses?
  • What are your value propositions to those target customers?
  • What capabilities are essential to adding value to your businesses and differentiating their value propositions?

Most companies can articulate:

  1. A vision (for instance, "to be the leading biotech company").
  2. A mission ("to find and commercialize innovative drug therapies").
  3. A purpose ("to improve patients' lives").
  4. A plan ("to develop molecule x, enter market y, and partner with company z").
  5. A goal ("to bring three innovative molecules to market by 2025").

However, few businesses can convincingly answer all five strategic questions, especially with one voice, across their top teams and down their organizations.

They don't have to answers those questions because, often, they haven't asked them in a very long time, if at all. Instead, the corporate five have become a mask for strategy.

When that happens, the real substance of strategy, which is making deliberate and decisive choices about where to play and the way to play, is lost. There is no foundation for decision-making and resource allocation. Everything becomes important. Indiscriminate cost-cutting and growth become the order of the day and, sooner or later,...

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