The 3 Pieces to Successfully Execute on Your Strategy - Analysis, Formulation and Implementation

In this post, we're going to talk about strategic analysis. I'd like to begin with a few examples. My first example is Blackberry. Blackberry as you may be aware, was a successful entrant into the smartphone market, but as the market began to evolve in particular with the entry of the iPhone, Blackberry stuck to their original design, in particular, the idea of external keyboard as a critical part of the design of their phone. As you could imagine, Blackberry failed to make the transition to the newer designs of it's smart phones and has become now secondary player in that market. Kodak is another example. The interesting thing about the Kodak’s story is that it was well aware about the rise of digital photography. So while their bankruptcy might not have been surprising to those given their emphasis on film based cameras, what people tend to not recognize is that Kodak was well aware of that, they understood where the market was going. They had a strategic vision for what they needed to do, but at the end of the day, they were unable to make the transition. Last but not least, Saturn Motor. Saturn Motor was a division of the General Motors Company. Saturn was formed in response to General Motors need and desire to enter in more forcefully into the small car market. Because they've had some failures in the past, they decided to start a whole new division, a white sheet approach as they call it. And in fact at first, they have had some great success with the Saturn brand, but over time, they failed to continue to invest in the brand, and ultimately, the brand is now gone away.

What these three examples highlight for us are failures in strategy execution. Each one, however, emphasizes a different element of what a successful strategic execution requires. In our first example of Blackberry, one could argue it was a failure of strategic analysis. They failed to understand the market trends, failed to read customer demand and therefore chose a bad strategy. In the Kodak case, I would argue it was a failure of strategy formulation. At one level they understood where the market was going and the threat that digital technology had for their core business, but at the end of the day, they weren't able to get together as an organization and come up with a viable strategy to move them forward in the new digital world. Last but not least, in the Saturn case, we have an example of what might be a good strategy, one that was well conceived and in the short run actually had some success, but ultimately, it was a failure of implementation, a failure to build on their success and grow the business moving forward. These three elements, analysis, formulation and implementation are all necessary and critical conditions for successful strategy execution. Many companies, some estimates of upwards of 90% fail to execute strategies well.

That’s why I would like to spend some time on these 3 pieces. Where we're going to go we're going to discuss each of these elements individually, but recognize that they're mutually reinforcing. They are not necessarily done sequentially but in fact, support one another and are done iteratively and support each other over time. So when one thinks of strategic analysis, one wants to think about analyzing a strategy, doing the work to try to figure out and conceive of a strategy. Formulation refers to the process by which strategy is set in the organization. Maybe it's a strategic planning process done on an annual or biannual level, but it also refers to the organizational elements that bring together to devise the strategy. Finally, implementation refers to once we have envisioned our strategy, how do we actually bring it to bear. Again, strategy execution requires proper analysis, proper formulation, and ultimately, proper implementation.

In the next 3 posts, we will go deeper into each of these 3 areas of successful strategy execution.