Execution trumps strategy

Companies often find themselves explaining strategies to investors, and investor relations people should be experts on how our corporations are creating value, building competitive advantage and so on. But strategy isn’t the whole story.

Some words of wisdom on strategy – and execution – come from Paul Polman, chief executive officer of Unilever, in the McKinsey Quarterly (text herevideo here):

I’ve always said execution is strategy in our business. This is consumer goods. I cannot speak for other industries, but for us, execution is strategy. It’s absolutely important. In fact, the strategies that we have as companies might differ a little bit, but that’s 5 percent or 10 percent of the work. And then the other 90 percent is execution.

I’ve seldom met a consumer—and I go to a lot of home visits or go around with shoppers—and I’ve seldom met a consumer who buys our wonderful Knorr products or Lipton or Omo or Skippy because they like our strategy. And so, our business is a very simple one of getting the right products at the right place at the right quality at the right price—all the time.

And in our industry, share movements are often happening because of lack of execution on the other side. So, this is a very, very important part of us. Now, organizations normally don’t tend to gravitate towards execution, because strategy is the sexy part of all of this.

An interesting thought, in its implications for messages to investors.

One question is, How do we communicate execution as a key message? Surely not just by waiting for the earnings numbers to prove management is executing well – although that’s the ultimate test. IR people need to scour our companies’ everyday and exceptional happenings for achievements that demonstrate skill and discipline in execution. And we need to be telling those stories, as well as our strategies.


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2 Responses to “Execution trumps strategy”

  1. Twitted by irbloggers Says:

    […] This post was Twitted by irbloggers […]

  2. Robin Says:

    Fully agree with Mr Polman.

    The key observation for CEOs presenting to investors is that strategy doesn’t deliver revenue, implementation does.

    International specialist in strategy implementation

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