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When I was a teaching-assistant in Graduate School, way back when, I worked for a very successful senior executive who had an unwavering focus on total quality and execution excellence. He would always point out that businesses predominantly struggle with execution complexities rather than a lack of strategic direction, customer-focus or business model clarity. As our world is becoming more volatile, uncertain, complex and ambiguous – to borrow the VUCA concept from the US military – excellence in execution becomes mission critical. The most successful companies seem to be able, in addition to managing extraordinary challenges and creating a winning culture with a growth mindset, to construct an execution framework which encourages nimbleness and balanced risk-taking. These firms foster resilient execution models. In looking at several case studies, I found, non-surprisingly, that many factors determine execution resilience, but three concepts jumped out which are worthwhile to explore further:
The first concept centers on companies not mistaking successful past execution with current and future execution requirements and they are simply excellent in avoiding the competency trap. Many companies make the mistake that they rely to heavily on one successful business strategy and the capabilities and strengths they built in executing this strategy. This strong "competency view" is being reinforced by many factors – including strong business performance, peer benchmarking, internal expertise, etc. Sometimes these firms realize too late that their primary attention around executing their existing business strategy did not allow them to see other opportunities. Organizations with strong execution resilience however shift their focus to "exploiting" current strengths while "exploring" new ventures at the same time. They continuously challenge the status quo and think outside the box how execution evolves. Recently, I heard a great statement which supports this concept: successful firms "play to win versus playing not to lose".
The second very "cultural" concept highlights that successful firms are extremely comfortable with failure. In fact, they encourage a culture in which failure is celebrated, encouraged and rewarded! These companies are able to fail fast, learn from the process, reinvent and keep exploring. In most companies failure continues to be punished, avoided at all costs and even feared. Companies which foster execution resilience see their strategy as a sense of direction around which to improvise. This creates a culture of openness and adaptability to change the course, try out something new and pivot into a different direction. Critically, these firms are also able to establish an effective control and governance construct facilitating "failure" without betting the organization's future or creating unintended consequences or exposing the company to unwanted risks. I think being comfortable with failure is actually very hard and requires us to push ourselves out of our own comfort zones. We cannot ask others to be comfortable to fail if we don't tolerate it for ourselves…
The third aspect which jumped out for me was that successful companies have an unwavering focus on talent – but more specifically on "talent potential". They simply know what makes them successful today is no guarantee for success tomorrow. They also know that to be able to continuously challenge the status quo, everyone on their team must embrace a mindset of continuous learning. Common sense of course, however, as the saying goes, common sense is rarely common practice. Execution resilience without the focus on fostering strong talent will not be resilient in the long-term. To effectively do that companies are shifting their attention to "talent potential" assessment tools, which specifically focus on evaluating curiosity, insight, engagement and determination and de-emphasize skills, past experience and IQ. I think this is an interesting way to assess talent – however, de-emphasizing "harder" skills could have unintended consequences, which need to be guarded against.
It is clear that execution resilience is difficult to achieve and that many different aspects will need to be considered, but to me, avoiding the competency trap, being comfortable with failure and an unwavering focus on talent potential are critical ingredients to enable successful business execution. Quoting a fellow Austrian, Peter Drucker: "There is nothing quite so useless as doing with great efficiency something that should not be done at all."