How New CEOs Can Balance Strategy and Execution
Every CEO must simultaneously develop strategy and drive execution. As we emerge from the Covid-19 crisis, companies will need to drive short-term results while also rethinking strategy in changing competitive environment and ways of working. It’s not strategy vs execution but it’s strategy and execution in the right balance in the right timeframes.
Research shows that few are good at it. We see many next-gen leaders who are competent at crafting strategy, but they lack operational experience and fail to realize that boards want to see that they can run the existing business before turning to future questions.
The result can be a dangerous lack of alignment. Boards care about short term goals and execution, while new CEOs focus on vision and strategy.
We have seen leaders fall into 4 traps:
1. Failing to diagnose the execution weaknesses of their business: building a strategy not grounded in the competitive, customer and cultural realities
2. Making decisions about their team too quickly: CEOs underestimate the importance of having a team with strong executions skills
3. Neglecting relationships with the execution side of the business: CEOs can miss out key drivers of the execution
4. Failing to develop a coherent, efficient strategy deployment process while maintaining execution excellence
The solution is to have a framework that provides a clear view of key phases of transition activity and the associated imperatives for new CEOs to develop strategy and drive execution.
We have three distinct phases that roughly correspond to the first 90 days, following 90 days and final 6 months of a CEO’s first 12 months (Defend, Extend, Transcend framework):
1. Defend the core: focus on understanding and defending the core business
2. Extend the core: extending the core business by expanding the portfolio and/or entering promising adjacent markets
3. Transcend the core: supporting sustainable growth
At the end of phase three, the corporate strategy should be well defined and communicated.
[Complete article, “How New CEOs Can Balance Strategy and Execution”, available at https://hbr.org/2021/07/how-new-ceos-can-balance-strategy-and-execution]
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