Thoughts & Observations

The Challenge of Execution Starts with Strategy

Reprinted from my “Practical Business Radical” column in The Business Press

The world is full of thoughtful strategy. Companies spend hundreds of hours every year and significant financial resources on ensuring that they have crafted a strategy that will lead them to success. When so much of a company’s intellectual capital is dedicated to building its strategic foundation, why does the execution of a strategy so often fall short?

First, crafting a strategy feels deceptively simple. It is a finite process. It involves a beginning (brainstorming, data gathering, conducting a situation analysis), a middle (analyzing and discussing data), and an end (crafting and writing the strategy). Even though this formal process may be revisited every few years, writing strategy is not work that a company has to do every day.

Execution, on the other hand, requires daily recalibration. If a strategy is going to be executed effectively, every moving part of an organization has to be aligned to delivering on that strategy, every single day. Even in small companies, it is difficult to align each department and staff person with the overall strategy of the company on a consistent basis.

It turns out that this challenge of execution can actually be tied back to an underlying problem with strategy. Often times, strategies sound visionary, but do not paint a clear picture for the individual employee of how they fit into the strategy. They may not see how their daily work needs to change or how they need to align themselves differently with another department in order to execute the new strategy appropriately.

Spending time at Zappos headquarters in Las Vegas back in October, I witnessed how a large company can effectively align all of its employees to its strategy. Zappos started as online shoe retailer and has come to be known not only for the shoes and other wares it sells online, but also for its phenomenal customer service, its creative culture, and its fast growth. Zappos’ first step in setting their strategy is defining their “BHAG” (Big Hairy Audacious Goal), which at Zappos is focused on growth in sales.

The BHAG is posted throughout the Zappos offices, complete with a graphic representation of the BHAG as a big, hairy beast, displayed proudly on the walls. Once the BHAG is established, the senior leadership at Zappos crafts plans for how each of their teams will contribute to achieving the BHAG. Each subsequent manager down the line finds a new way of refining the presentation to their group of employees to ensure that every employee knows what the BHAG is and knows how the work they do on a daily basis will contribute to achieving the BHAG. The employees in sports merchandising know what their growth in sales needs to be and the customer service representatives know what their level of performance needs to be in order to reach the company’s overall goal.

Taking a big goal and breaking it down into smaller, easily executable pieces is a daily occurrence at Zappos and is a skill that the company helps its employees develop. Zappos onsite coach, Dr. Vik, helps employees address a variety of personal challenges in their lives, from losing weight to reducing credit card debt. He teaches them the technique of setting their own personal BHAGs, and then slowly chipping away at their BHAG in small steps: doing 10 sit-ups a day or volunteering on a weekend instead of shopping. As employees see that this technique of accomplishing major personal goals one step at a time works, they start applying the same concept to the company’s BHAG. Everyone is focused on the BHAG and knows how they can help the company reach it, and it pays off.  Zappos recently achieved a huge BHAG – reaching $1 billion in annual sales.

Successful execution requires a strategy that is relevant to every employee. Although there are many factors that influence the outcome of execution, the rate of success increases dramatically when each employee can clearly see how they can contribute to achieving the company’s goals. How relevant is your BHAG?