Can a good strategy lead to poor execution? It can… but you can avoid it by planning EXECUTABILITY!
While others think that these two are separate acts, as an independent professional, you have to understand the reality that planning and execution are not distinctly separate from each other as they are both important concepts in business. Let’s take a look at how these processes are important in delivering genuine offerings to your target market.
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Can a good strategy lead to poor execution? It can… but you can avoid it by planning EXECUTABILITY! For almost 20 consecutive years, American toy, clothing, and baby products retailer company Toys R Us experienced a decline in cash flow returns. It’s a bit sad to know that this company, which was once a leader in toy sales, has fallen behind dramatically. Despite the firm's attempts to create new plans and strategies to revive sales, not even one succeeded in doing so. Where did Toys R Us go wrong? Here’s one instance where the company failed to fill the gaps between planning and execution properly… In the late 1990s, Toys R Us built an online presence, www.toysrus.com, as a response to the booming Internet and the World Wide Web factor in the retail market. At first, that strategy seemed to make sense. In fact, competitive analysis showed that the company had a powerful brand that would be easily recognized whether online or offline. Toys R Us had warehouses chock full of inventory, ready to be sold to the market. Aside from that, the company’s purchasing capability for restocking its shelves was strong, thanks to all necessary toy manufacturer relationships that had already been established. So, what happened next? Toys R Us succeeded in generating VERY HIGH online sales. Its site attracted millions of shoppers online. However, that situation also became a disaster. Why was that so? It’s because Toys R Us failed to plan executability, a concept that fills the gap between planning and implementation. Because of that, the company failed to determine whether or not the warehouses were capable of “pick-and-pack” shipping methods. [Pick-and-Pack Method: A type of order fulfillment used by most e-commerce retailers that receive small orders that are shipped across the globe.] In other words, the inventory management system in place at Toys R Us warehouses was only designed to ship entire pallets of toys at a time to be restocked at the store shelves. Imagine this: Loading a crate of 100 Barbie dolls onto a truck is different from picking up just one Barbie doll and packaging it in a box with 3 or 4 other individually picked toys. Because of the inability of the company’s warehouses to employ a pick-and-pack method, thousands of customers got disappointed because their gifts weren’t able to arrive in time for Christmas Day. This caused angry customers to wreak havoc at Toys R Us’ physical stores and many of them swore to never buy from the company again, whether online or offline. See? Many of Toys R Us’ problems could have been discovered early on and avoided if executability had been given ample attention during the strategic planning process. Remember: In the continuum of planning and implementation, there should always be planning of implementation. By failure to do so, Toys R Us also failed to successfully and effectively deliver offerings to its customers. Since the Return Driven Strategy’s Tenet Four (Delivering Offerings) is a Competency Tenet, that means its focus must be on achieving the higher tenets in the framework. Cash flow returns follow a focus on the executability of plans and the effective and efficient delivery o f planned offerings. One of the reasons why Toys R Us had been recording declines in its cash flow returns is because of its failure to plan for implementation or executability. As an independent professional, what’s one of the key insights you can get from this narrative? As you plan and execute strategies for your firm, keep in mind that the results you get must drive a consideration of your strategies. Always take note that as an independent professional in your field or industry, your implementation of plans today is simultaneously part of the development plan of tomorrow. True, strategy and execution are two different focal points, but they are both important elements of a great business process. So, in case in the future, someone asks you, “Which is more important: Strategy or execution?” You just have to answer with one word: BOTH. Hope you found this week’s insights interesting and helpful. Follow us on LinkedIn. Stay tuned for next Tuesday’s Return Driven Strategy! Learn more about How to Innovate Offerings on next week’s Return Driven Strategy! |
