Why it's better to be bad at the right things
Early in my consulting career, I remember drawing a small diagram on a flip-chart to help an executive team decide where they should focus their expansion efforts. I drew three intersecting circles and labelled them in turn: what you’re passionate about, what you’re great at, and what can make you money. “Your sweet spot,” I explained, “Is the area where they overlap: those things you’re passionate about, really good at, and can make money from.”
It did the job at the time and helped conclude a lively discussion with a clear set of outcomes that led to a plan, and more than a little commercial success over the next few years. But when I revisited the business a few years later, progress had plateaued, and the team felt they were being outpaced by the competition. In the project that followed, we used a far more expansive and creative process, and it had a really transformative effect. I left feeling pleased we’d opened a new chapter in their growth, but deeply concerned that the previous model I’d used – so neat and intuitive – might not have been such a good one after all.
My concerns were reinforced when I ran a different exercise for a group of CEOs at a retreat. Most CEOs generally tell me they are happy with their strategy but struggle to get it delivered at pace, so I decided to put that to the test. I put a 2x2 matrix on the wall, with strategy and execution on the axes, and “strong” and “weak” for each, to create the four boxes: strong strategy, weak execution; weak strategy strong execution and so forth.
To help them get past their preconceptions – that their strategy is fine, it’s just the execution – I had them call out iconic businesses that we’d all have heard of, successes, failures and anything in between, and we discussed each one and placed them in an appropriate box on the chart. As an exercise it was really useful to develop their objectivity – it challenged their preconceptions and brought them new insights on where to focus in their businesses. But more than that, it showed me an unexpected pattern, one that has appeared again and again, pretty much every time I’ve repeated the exercise with different groups.
What you find, and you can try this yourself with your colleagues, is that the obvious successes appear in the “strong strategy, strong execution” box, like Mercedes or Aldi, Emirates or Apple. And the obvious failures appear in the “weak strategy, weak execution” box, like Toys R Us and Carillion. But it’s in the other two where it gets interesting. In the “weak strategy, strong execution” box, we find the iconic failures: Kodak, Monarch, Blockbuster and the like, who were great at what they did, but didn’t change when the world moved on. Whereas in the “strong strategy, weak execution” box, we find the likes of Tesla (a car company that can’t seem to make cars), Uber (a game changer getting blocked at every turn), and RyanAir (no pilots in peak holiday period and customer care in meltdown). The difference is, these businesses are still in business.
No matter how many times I run the exercise, and how many names my groups put up on the chart, the consistent pattern is that businesses with a strong strategy but poor execution last far, far longer, than those with great execution, but a bad strategy – usually long enough to fix their execution and become great businesses. The conclusion is inescapable: it’s far better for a business to do the right things badly, than it is to do the wrong things well. Indeed, basing your strategy on the things you’re great at, like Kodak with film processing or Blockbuster with rental stores, isn’t merely constraining your potential, it might just be the worst strategic decision you can make.
So, take a look at your strategy. Does it play solely to your strengths, or does it take you into new areas where your capability is weak? Is it based on what you’re good at now, or on what customers will need in three years’ time? Because if it’s the former, I’ve got some bad news for you.