The innovation debate: Strategy vs. execution
It is an unfortunate but accurate truth that innovation strategies often fail because they lack strong execution.
We are surrounded by strategies being shouted, quite often tacked on to mission statements of corporations. Think about it. How many times have you heard “Our strategy is to maximise customer value” or “Our strategy is to become the next market leader”. Despite their best intentions, what are these strategies worth if they don’t contribute much to reaching goals? They might motivate the workforce, but even that is a bit of a stretch.
On the surface, if this is all strategy is, then it goes without saying that strong execution is more important in innovation.
However, a sound strategy is more than just a slogan.
Favaro writes that strategy is about thinking big picture. The series of decisions you make on how to play to deliver maximum long-term results. Execution is delivering excellent results in the context of these decisions. You can’t have one without the other.
The article puts forward the example of Toyota vs. General Motors. Toyota outperformed GM for several years because it had better execution processes in place. Toyota also had a clearer vision about its target customer base, its value proposition for products and price points, and the better systems it had in place to deliver its promise to customers.
Toyota’s business dipped in 2010 and 2011 and this backs up the theory that strategy alone is not enough.
Another example given by the article is the American Airlines vs Southwest Airlines battle. Southwest has outperformed its competitor for decades thanks to its fine-tuned strategy and execution. It has a clear-cut vision regarding its target market (it aims at the traveller looking to save money), a strong value proposition (low price, convenience, friendliness), and the ability to deliver on this proposition (a smaller, streamlined fleet and point-to-point operations).
No matter how much American Airlines tweaks its execution, it may never be enough to overcome the wafer-thin airline industry profit margins in such a way to deliver massive returns. It needs to take a look at its own strategy to give it a distinct competitive advantage. Similarly, even if GM improves its decision-making process, product innovation, and its retail operations, it may not be enough to beat Toyota in the motor race without a sound strategy.
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- The Future of Leadership – Empathetic Leaders - August 11, 2019
- Creating Time for Innovation - August 5, 2019
- 10 Lessons to Learn From Startup Failures - August 5, 2019
- The Top 5 Digital Transformation Insights from Mary Meeker’s 2019 Internet Report - June 20, 2019
- Bridal Wear and Business Model Transformation: What do They Have in Common? - June 19, 2019
- How Amazon is Reinventing Retail – Literally from The Ground Up! - May 28, 2019
Managing Director, The Strategy Group
Dr Tobias is an accomplished innovation consultant and entrepreneurship strategist, drawing expertise from the academic, entrepreneurial and corporate worlds. Jeffrey’s commercial and business experience is particularly focussed on lean startup, design thinking and leadership. Prior to The Strategy Group, Jeffrey was Cisco’s Global Lead for Innovation in the Internet Business Solutions Group helping Fortune Global 500 companies improve customer experience and grow revenue by transforming how they do business.
Jeffrey is a professor of innovation and entrepreneurship teaching MBA students at the Australian Graduate School of Business at the University of New South Wales. An active angel investor, Jeffrey is on the board of various well known startups. Jeffrey’s corporate background includes leading global innovation strategy at Cisco, working with large corporates such as Adobe, Westpac, Telstra, Woolworths, and Perpetual.