“Strategy” is a loaded word in the corporate world; its definitions are often vague and can be entirely different depending on who’s defining it for you.
For some, it might mean defining your business dreams, where you see your company in 10 years, and for some, it might mean a few nerve-wracking weeks spent on a slide deck that is discussed once a year and is forgotten for the rest of it.
The definitions may vary, but there’s one thing that we can all unanimously agree on—even the best strategies are worthless if they aren’t executed.
A lot of things need to come together to execute a strategy well. You need all hands on deck; your planning needs to be rooted in strong rationale, your timing needs to be just right, and so much more. So it’s no surprise that so many enterprise businesses fail at the final stretch, even though they have some of the best strategic minds at their helm. But when you take a closer look at some of history’s biggest failures, you start noticing underlying patterns that boil down to a few key reasons. These reasons have forever defined the fates of many big brands over the years and could very well be the defining factor of your business trajectory.
Having empowered leading brands worldwide to build and implement successful strategies from scratch, we at Cascade understand the importance of execution, which is why we came up with this playbook to give you a comprehensive guide to strategic execution: its value proposition, its key tenets, and its drivers, backed with case studies and quantitative insights.
Once you're done with this playbook, you'll walk away with a strong understanding of the basics of great strategic execution. You'll learn about all the positives that strong execution brings to the table, how industry giants have failed and succeeded in this endeavor and what we can learn from them, along with some actionable best practices that will set you up to execute your business strategies with finesse.
But before we dive so deep, let’s start with the most important question.
Here’s a definition of corporate strategy according to CIO Index:
A corporate strategy entails a clearly defined, long-term vision that organizations set to create corporate value and motivate the workforce to implement the proper actions to achieve customer satisfaction.
Let’s take a closer look at that definition.
A business strategy starts with establishing why your business exists. It starts with envisioning the pinnacle of your business in the market. Next, you need to imagine what your business looks like when it fully realizes its potential—the goals it achieves, the problems it solves, and the people it impacts.
What challenge is your business looking to solve? How is it going to solve it? When? How is the solution going to impact and benefit your customers?
It’s important to have clear, well-defined answers to these questions since these will help set the direction towards which your efforts should move. Think of vision as your business’ North Star—however small or big your company is, and however your company grows, establishing why your business exists will help keep it on the right track.
When your business sets out to solve a problem, what unique value does it add? How does it set itself apart from existing solutions in the market?
Your strategy needs to leverage the unique solution you provide to differentiate yourself in the market. A strategy that ignores market differentiation is an incomplete one at best. Every successful brand that you use solves a problem in a unique way that attracts customers and retains them despite growing competition.
Data and history prove that value-driven strategies have the highest chance of success, making the biggest impact in customer advocacy and profitability.
TSR = Total shareholder return (A measure of the company’s financial performance over time)
A survey by PwC found that companies with a well-defined strategy of market differentiation and brand identity tend to perform much better than companies that compete based on diversification, economies of scale, lucrative assets, etc. This method is referred to as a capabilities-driven approach.
This approach helps define why customers should choose your business and why they should choose only you. While factors like pricing do play a large role, in the long term, offering unique value that customers can connect directly to your business sustains your corporate strategy in the long run.
This is the ultimate step that most companies fail at. Most companies excel at the first two steps—they create well-thought-out strategies accompanied by colorful charts and slide decks. But very few companies see these strategies make it out of these slide decks to reality and reach their goals.
According to the US Bureau of Labour Statistics, approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more.
The main reason for this is that the top management creates corporate strategies but do not get exposed or communicate meaningfully to the rest of the organization. As a result, teams aren’t aligned in the same direction and don’t have clarity on their role in the grand scheme of things. Expecting employees to achieve the strategy’s outcomes while not planning the execution is why so many companies with immense potential fail.
Communicating the corporate strategy and making it a part of the day-to-day routine in the company can make the difference between leading to success and fading into obscurity.
Now that we’ve nailed down the fundamentals of building a solid strategy, it’s time to focus on the most important part of the process: making the strategy a reality through powerful and thorough execution—and how some of the biggest companies in the world have succeeded (and failed) at this stage.
Vision. Value. Implementation. These three components hold the key to a strategy’s success or failure on a very broad scale. More importantly, businesses need to lean in on all three components in equal measure. It’s easy to think that one of these components is not as important as the others.
As explained earlier, this part of the strategy needs to be clear and concise. The vision statement is core to the focus areas of the strategy—is the main objective in line with the company’s vision? How does this strategy tie into achieving your vision in the long run? At this stage, it’s easy to identify companies that know what they’re out to achieve and companies that are likely to struggle to grow.
Let’s take a look at Netflix’s vision statement:
Becoming the best global entertainment distribution service. Licensing entertainment content around the world. Creating markets that are accessible to filmmakers.
Netflix had a clear, actionable vision that they worked towards while constantly innovating and strategizing to create an unrivaled user experience. This differentiated them from Blockbuster, the market leader at the time who failed to adapt and ended up in bankruptcy.
Becoming the best global entertainment distribution service
Licensing entertainment content around the world
Creating markets that are accessible to filmmakers
Here’s something even better—Nike’s vision statement from 1960:
It’s a simple but powerful statement—it inspires the entire company and aligns them towards a single goal. It’s easy to add targets and deadlines to this statement, as compared to:
“Maximize our users' ability to get their work done”
Vague vision statements create confusion and prevent stakeholders from being invested in the growth of the organization. So here’s a simple way to look at it: if you’re able to answer the following questions or if you’re able to construct a plan to the following questions by looking at your vision statement, it’s good to go. If not, your company might be having an existential crisis.
That’s pretty much it. A good vision statement is rooted in purpose and clarity and lays the foundation for your business strategy.
There are very few areas of business where an organization can operate with zero competition—even building space rockets for tourism can’t seem to escape this phenomenon.
“Many companies focus too much on the outside when developing their strategy, and don’t combine that market-back perspective with a clear view of what their organization is great at doing. In all the research we’ve done on the topic of value creation, we see that the essential advantage lies within. A few differentiating capabilities drive a company’s identity and success.”
— Cesare Mainardi, chief executive officer, Strategy&
Research shows that companies that have a value-driven approach to business tend to be more successful. So let’s dive deeper and understand why.
Think of a few smartphone brands. (No, we’re not talking about Apple. Yet.)
Some quickly come to mind: Samsung, Motorola, and maybe even Nokia.
But there’s a brand that was once an industry pioneer, a valued and trusted brand that we almost completely forgot about: Sony.
Here is an excerpt from the company’s vision statement:
To design and create innovative products which would benefit the people.
Akio Morita, the co-founder of Sony and the rest of the company’s leadership, spent countless hours innovatively thinking about how to use technology to improve lives.
With such a passion for creating new markets, Sony became an early creator and pioneer in the consumer electronics industry. Sony made the world’s first camcorders, it created the Walkman—a way for people to carry music in their pockets, pioneered the development of CDs for music, and the list goes on.
In short, Sony was changing the way people lived and was undoubtedly one of the most innovative tech brands in the world. So it was only a matter of time before they revolutionized the smartphone market, too, right?
According to Forbes, Sony executives spent 85% of their time on technology, products, and new applications/markets, 10% on human resource issues, and 5% on finance.
If you think about it, Sony’s trajectory wasn’t so different from the way Apple functions.
So what went wrong?
When Sony teamed up with Ericsson to make smartphones, its main focus was volume and cost reduction, without compromising on innovation. However, under Akio Morita, Sony still stayed focused on the products, experimenting with different designs and styles, while keeping the price competitive.
But in 2005, Sony’s new management started leaning more heavily into the cost-cutting model—Howard Stringer, the then newly-appointed CEO of Sony, exemplified the industrial strategy by laying off 9,000 of 30,000 U.S jobs. The focus was not on innovation or new markets. Instead, it was focused entirely on price and volume.
So with the launch of the game-changing Apple iPhone in 2007, Sony started struggling and chose to stick with its volume-based strategy rather than a value-based one.
Strategies based on assets, scale, and diversification are less likely to succeed and even less likely to stay that way.
Source TSR = Total Shareholder Return
Apple’s approach to the value-based strategy is clear, right from its vision statement to the way it distributes its products, but it isn’t the only right approach to this strategy.
Microsoft, for example, takes a more balanced approach to this strategy. As a result, they provide unique value, while also focusing on other areas like diversification, targeting a wider segment of the market, etc. This works well for Microsoft in most cases.
A survey by PwC shows the difference between Apple’s and Microsoft’s strategy—and while their approach to value-based strategy is different, the value proposition is present and remains their priority.
So it doesn’t come as a surprise that these are the only two companies globally that are valued at $2 Trillion.
“Given the competitive intensity in today’s business environment, companies need more than just one or two great products to win in the long term — differentiation through capabilities is quickly becoming the only path to sustainable value creation in most industries. Coherent companies, in every industry we’ve studied, outperform their less coherent competitors.”
— Paul Leinwand, partner, Strategy&
While value can seem like an abstract, subjective term, there are some methods you can follow to create distinctive value and make it a part of your corporate strategy. Here’s one such method—an interactive toolkit that can help you clearly define your value-based strategy from scratch. This is one of the most effective methods used by thousands of companies to capture their market and stay on top of the industry.
The “final” step when it comes to corporate strategy is its execution. Most companies are able to come up with a competent vision statement, have clarity of their capabilities, and often have very strong strategies on paper.
But time and again, we’ve seen multinational giants fluster and fail when it comes to execute their strategy.
A report from The Economist Intelligence Unit shows how most companies place very little importance on implementation and are, unsurprisingly, unsuccessful with the implementation.
Why is that? The foundation is seemingly strong. Companies toil for months and spend long hours in conference rooms to create and discuss the elaborate presentation. So what exactly could be the issue that stops them from putting all this to action? Well, there are multiple reasons—giants fail for a reason. This is the trickiest part of strategizing.
Let’s take a closer look at the various obstacles to implementing your strategy, how poor implementation can affect a company’s performance, and how you can avoid them altogether.
We saw earlier that only 25% of new businesses make it to 15 years or more. Between 2009 and 2019, almost 370,000 small businesses failed to survive beyond their first 10 years in the US alone. Yet 90% of the companies develop detailed strategic plans with much higher targets.
This chasm between ambition and execution, according to HBR’s research, is because 95% of a company’s employees are unaware of, or don’t understand, the strategy.
The departments within the organization don’t align their goals with the corporate strategy, the employees who communicate with customers daily are not aligned with the strategy, and the top-level executives do nothing to ensure that every single process within the organization fits with the bigger picture.
“It should not be a question of developing a strategy and hoping it works, but of developing a strategy and following a logical plan to reach it.”
— Lawrence Hrebiniak, Professor Emeritus, Department of Management, The Wharton School of the University of Pennsylvania
Chrysler, the American automobile giant, struggled due to its old-fashioned method of strategy execution. In 2002, the company was staring at a possible loss of over $5 billion. In order to retain its position as a Big Three in the US automobile market, it needed an implementation overhaul.
The newly-appointed CEO of Chrysler, Deiter Zetsche, introduced the Balanced-Scorecard method to ensure smoother implementation of the corporate strategy.
A dedicated team, called the Office of Strategy Management, was assigned to communicate its strategy to every one of its 90,000 employees. The team also collected input and data from various processes throughout the organization on the scorecard to measure how it all aligns with the overall strategy.
Through the balanced scorecard, the top executives became aware of the issues that needed the management’s attention—the OSM team followed up with these areas after each meeting, ensuring quicker course correction and better alignment of processes with the strategy.
The OSM ensured that all processes and employees were aligned with the corporate strategy, and also assisted business units in developing new products. As a result, the team became a permanent fixture in Chrysler, and it paid off very well for them. While the nation’s automobile market struggled in 2004, Chrysler launched a series of new cars and earned $1.2 billion that year.
Though the method was introduced in the 1990s, billion-dollar companies still use the balanced scorecard as a core element of their strategy today. According to a 2020 survey, 77% of organizations believe that the scorecard approach has risen in value and importance during the pandemic and has helped them strategically align teams effectively while working from home.
The approach is vertical-agnostic too—A host of companies dominating in different markets like Ford, Apple, Wells Fargo, and more, use variations of the balanced scorecard for the same purpose: to give their teams both the big and the little picture to mobilize them effectively.
While it may not be possible to hire a dedicated team solely for communicating the strategy to the whole company, you can still take the essence of the approach, and apply it meaningfully to the context of your organization to create your own version of success.
In almost every company, there’s an annual strategy discussion—held after many discussions—leading to more discussions about the final draft, making sure every aspect of it is absolutely perfect. But here’s the thing about strategy—it often loses its relevance in about 4-6 months.
The market is dynamic, and so are your competitors’ strategies. So to stay one step ahead, your strategy has to keep evolving with the market. The core can be rooted in your company’s vision, but there has to be continuous innovation, iterative growth, and increasingly faster execution.
Companies that sit around, waiting too long to do so can find themselves becoming as irrelevant as their strategy. There’s one organization that realized this and went on to eliminate its competition by executing its strategy faster than any other in the market.
Established in 1993, Nvidia Corporation is an American multinational tech company and designs graphics processing units and 3-D graphics chips for the gaming and professional markets.
Today, Nvidia is a market leader for 3-D graphics chips, but that wasn’t always the case. In 1995, it was struggling to keep up with the rival startup 3Dfx Interactive. 3Dfx was leading the industry because it was able to meet the rapidly growing demand from gamers for fast 3-D graphics chips. However, Intel was all set to make the race even more difficult with plans to introduce its own chip.
Nvidia’s problem was that its rivals were implementing their strategies a lot faster, and to survive, it had to act right away.
Nvidia’s problem was not with its quality or even value—it was simply that they were taking far too long to execute their processes.
So, Nvidia’s CEO, Jen-Hsun Huang, realized that the solution was to beat the rivals with speed. No, not by matching their speed of implementation—but by making their strategies expire faster.
The industry’s standard rate of releasing newer chips was 18 months. So Nvidia added a small yet critical change to its strategy—“Release a faster, better chip three times faster than the industry norm.”
To accommodate this change in strategy, Nvidia:
Over the next decade, Nvidia toppled its formidable competitors—Intel, having entered the space in 1998, made a quiet exit the very next year since it couldn’t keep up with Nvidia, and in 2000, 3Dfx Interactive went bankrupt. In 2007, Forbes named Nvidia “Company of the year”.
Nvidia uses the same strategic advantage to this day—with its revenue jumping 53% in fiscal 2021 to $16.7 billion, thanks to its lead in the gaming business—which is Nvidia's biggest source of revenue. In addition, their latest line of RTX 30-series graphic cards was a massive leap from the previous set of RTX 20-series cards, jumping far ahead of the competition and even themselves in the process.
With a dominant market standing in the gaming market, 50% of the company’s total revenue in Q1 of 2021 came from its gaming GPUs, with a 67% YoY growth.
The reason for its enormous success? Nvidia says that its Ampere GPU (graphics processing unit) architecture is created at twice the pace of its predecessors, the Turing and Pascal cards.
The speed of their strategy implementation has led to incredible results—as of Q2 of 2021, Nvidia now holds 83% of the GPU market share and is constantly increasing its foothold by 3% YoY.
So when it comes to corporate strategy, it’s safe to say that speed does not kill.
There’s no fixed blueprint for success, but from all our research, these steps are the ones that figure the most in speedy implementation success stories:
9 in 10 organizations fail the execution game because they fell victim to at least one of the following challenges:
These problems are impactful enough to warrant strategies of their own, but this begs the question: how do you solve problems with tools that are problematic themselves?
Presentations and spreadsheets are useful tools in the workplace, but they are not meant for strategy execution. Let’s explore just a few reasons why that’s the case:
For a business-critical function like strategy, barebone tools get you to the starting line, but they don’t help you compete. You need software tools that will help you layout your strategy with nuance and clarity, provide a platform for brainstorming and collaboration, measure key information in real time, and take incremental steps towards your goals.
You can’t compromise on the tools you use if you want to bring the best out of your strategy and execute it flawlessly. Here’s a handy checklist of green flags for strategy execution software to let you know you’re making the right choice:
A platform that offers these capabilities can make life easier for your entire organization and keeps the strategy flowing smoothly from inception to execution.
When you execute your strategy, you succeed or you fail, but you learn either way. The biggest companies in the world have seen failure in one form or the other—and the only way to not repeat those mistakes is by analyzing the entire process.
“ The natural starting point was to ask what worked well and why [in the past], and to bring those lessons into the new process. That was key for us.”
— Bali Padda, COO of LEGO
It sounds obvious, but base your next annual strategy on the learnings and insights of the previous year’s outcomes. Studies show that almost 77% of people agree that incorporating lessons from successful or failed strategic initiatives is essential.
Yet, less than 35% of the companies, according to the study, are good at closing this feedback loop. Even worse, 33% of the companies don’t even have a process in place to analyze and incorporate lessons from the previous strategic initiatives.
Each company has its own method to gather information from earlier successful or failed initiatives. But there are some effective methods that can be observed from companies that are good at executing their strategies.
Let’s take a closer look at each of those methods:
This is the fastest way to close the cycle. When closely involved with its execution, the people in charge of creating strategies get a first-hand analysis of what works and what doesn’t. It goes straight back into the loop, and with no third-party line of communication involved, there’s very little room for things being left out or misunderstood.
Ensuring higher involvement of top-level executives with the execution of the strategy is again proving to be an essential element to the strategy’s success, from start to finish.
Executives who are involved in breaking down the strategy into actionable objectives bridge the gap between executives heading the strategy and the teams executing it. They identify and incorporate valuable information that helps speed up the execution, motivate the team with specific targets, and help align teams better with the overall strategy. This is particularly effective when the organization’s foundation (i.e., vision and value) is strong, and managers are empowered to take control of their objectives.
This is the method we saw Chrysler use, with its Balanced Scorecard method. Though a bit slower and indirect, if done right, this method can be extremely effective. The feedback comes from the people in charge of carrying out the finer details of the strategy and this is often extremely relevant and accurate.
Collecting feedback from the employees before developing the next strategic initiative ensures that lessons from failures and successes are captured effectively.
Executing your strategy year-on-year is similar to a circuit race: after finishing a lap, you’re back at the starting line, but you have more clarity on your position among others in the race, and the momentum to move faster than the last lap. Unfortunately, without a process in place to incorporate feedback into your strategy, you’re starting from the first lap every single time.
Strategy is hard, and success doesn’t come easy. Industry giants like Apple and Microsoft echo this sentiment too. However, companies like Apple and Microsoft are more than likely going to be successful regardless of their strategy, why? Because companies like Apple and Microsoft are able to attract and afford the top 1% of talent. These are the individuals that will execute the desired results regardless of the strategic plan.
A major part of the problem with organizational strategy begins before the planning even starts. At only 17% of companies, implementation is seen as strategic. Instead, at 56% of firms, it is considered to be an operational task. There are many ways to build and execute successful strategies, but it has to start with a change in perception—there are plenty of examples of good and bad strategic decisions that we’ve tried to highlight here. Taking a leaf out of the experiences of these multinational giants can help, but the actual execution of it all remains with you.
This is where Cascade comes in, as the worlds #1 strategy to execution platform we help thousands of organizations in over 100 countries align, act and adapt their strategy. We’re changing the perception of strategy, democratizing the strategic process making strategy available to everyone in your organization. The Cascade framework enables adaptive organizations to adjust their strategies quickly and accelerate the execution of their plan.
This is why we wrote this playbook, driven with data and insights from history’s biggest case studies through the Cascade strategic lens. We hope that the insights and actionable templates in this playbook bring you closer to better executing your strategy and take you a few steps closer to realizing your company’s vision.