Strategy vs Execution.
It can be difficult to know how much time to spend on strategy vs execution. Do you need more planning, or do you need to have head down and get things done?
There are two potential pitfalls:
One can spend far too much time on strategy. Or, there are often large strategic changes, which means little time left for execution or wasted work. When we are stuck at the 30,000-foot view, everything is about the future. We’re not thinking about what we need to do right now to make that future happen.
The second risk is that we choose the wrong strategy and then spend large amounts of time executing. This leads to even larger waste. Without an understanding that what we are doing is not working, we can get stuck for long periods of time. We are not understanding the larger picture.
The solution to this problem is not necessarily clear. I have seen organizations with their corporate strategies as well as individuals with their life strategies struggle to get a grip on this problem.
A deeper root-cause problem is that in any given situation there are many different ways to move forward. There is no way to be 100% sure which option will be the right one. Even in hindsight, when things go well, we do not know if things could not have gone even better had we taken an alternative route.
We don’t have the luxury of a sandbox environment or a time machine where we can try multiple paths again and again until we find the one that works. We have constraints such as time, money, health, or a specific opportunity or set of circumstances that are unlikely to repeat.
What is clear, is that at some point we do need to commit to a specific strategy. We need a clear set of actions that we will take soon that we expect will have a certain result.
So the initial problem to solve is to build a meta-strategy. Creating a strategy for deciding between competing strategies. I like to use matrixes for this where you estimate (which is a lovely term for the more banal word of “guess”!) various attributes of the strategy. This might things such as the likelihood of success, the cost involved, the downside risks, and you can even quantify your “gut feeling” into a number between 0 and 1.
You can then multiply all these values to arrive at a strategy strength score. Then, you have a way to compare different strategic initiatives.
The reason why this works quite well is that it’s based on an interesting principle called Fermi Estimations. This is a technique pioneered by the Italian physicist Enrico Fermi. He is famous for his work on the Manhattan project as well as the aptly-named Fermi paradox. It allows normal people with very little specific knowledge to make uncannily accurate estimates, such as the number of piano tuners working in Chicago.
This follows a logical process of understanding the various variables involved. Then one makes guesses about what the various numbers could be. In the case of the piano tuners in Chicago, this can be:
- The number of people living in Chicago
- The average number of pianos per person in a first world city
- The average number of piano tunings per piano
- The number of piano tunings a piano tuner can complete in a year
What’s incredible is that you will often find that the estimates produced by this method are quite accurate. This is because the various mistakes made in each step of estimation tend to average out. So while you may overestimate the population of Chicago by 150%, you are also likely to underestimate some other factors such as the average number of piano tunings per piano.
Okay, back to strategy.
So we can use a comparison matrix with estimates of various attributes to get a score for each strategy. You don’t have to pick the top-scoring one, but you do have to pick a strategy.
To reduce the risk of spending too much time on strategy, I would say that strategy should take no more than 5-10% of any project time frame, and less. Remember that the quality of your thinking is not related to how much time you spend thinking. It is more about the depth of thinking and the mental models that you develop and use.
The second problem to solve is what happens if we spend all our time and execute the wrong strategy. The way to combat this is to set goals (or “KPIs”, Key Performance Indicators in corporate jargon) before you start to execute. These goals need to be specific enough and also time-bound, so you easily evaluate yourself or your team against them.
An example of a bad goal:
This new strategy will delight customers and improve customer satisfaction.
An example of a good goal:
This new strategy will ensure that within six months we will respond 80% of all customer support queries within 1 hour, and that our customer feedback score for support is above 94%.
The good goal is clear, and within six months you can check the numbers and see how things went compared to the plan. In fact, you are likely to know far in advance if you are close to hitting your goal or not.
Ok, so we understand the importance of setting clear goals upfront before you start executing. So what happens if you are not achieving these goals?
Well, it could be one of two problems:
- You picked the wrong strategy, and there is something fundamentally wrong with your approach.
- You are not doing a good job at the execution.
Diagnosing which problem you have is not straightforward. I am going to leave this for another essay, but I hope these initial thoughts are useful.
