What is More Important: Strategy Creation or Implementation?
Determining whether business strategy development or implementation is more important can be complex, as both are crucial to an organisation's success. However, understanding the nuances of each can provide insight into their relative importance and co-dependence.
Business Strategy Development
Direction and Vision: strategy development gives the organisation a clear direction and vision. It sets long-term goals and objectives, ensuring all efforts are aligned towards common aims.
Competitive Advantage: helps to identify and leverage unique strengths and opportunities in the market, essential for sustaining a competitive advantage.
Resource Allocation: effective strategy development ensures that resources (time, money, personnel) are allocated efficiently to areas that will maximise returns.
Risk Management: a well-developed strategy includes plans for potential risks and uncertainties, helping the organisation prepare and respond effectively.
Trade-offs: Guides management in choosing the target audience and the business model. To say no to some things and yes to others.
Business Strategy Implementation
Importance:
Execution of Plans: No matter how brilliant a strategy is, it cannot succeed without effective implementation. Execution is where plans are turned into actions and results.
Adaptability: Implementation involves monitoring progress and making necessary adjustments. It allows the organisation to remain agile and responsive to environmental changes. Rigidly sticking to the implementation plan when the world has changed often leads to failure.
Employee Engagement: Effective implementation involves engaging and motivating employees to understand their roles in achieving the strategic goals.
Performance Measurement: Provides the mechanism to track performance against strategic goals, enabling continuous improvement and accountability.
Gap Analysis: Determining what resources need to be developed or acquired, when, and how they should be deployed and managed to implement the strategy.
Interdependence and Balance
Both strategy development and implementation are interdependent and equally critical.
Implementation efforts may lack direction without a solid strategy, leading to wasted resources and missed opportunities.
Even the best strategies will fail to deliver results without effective implementation, rendering the planning effort futile.
Relative Importance
If forced to prioritise, the relative importance might depend on the context of the organisation:
Strategy development might take precedence for a startup or a company facing market changes, as setting the right direction is crucial for survival and initial growth. Achieving product/market fit is critical before funding is exhausted.
Implementation might be more critical for an established company, as executing plans effectively and maintaining operational excellence can be the key to sustaining success and achieving long-term goals. This is also the case when companies are scaling their operations. An efficient and effective operating model is key.
Conclusion
Ultimately, the question is not about choosing one over the other but ensuring that both are equally important and aligned. A successful business requires a well-developed strategy and the capability to implement it effectively. Focusing on both aspects and understanding their interdependence is the best approach for organisational success wherever the company is in its evolution.