In Part 1 of this article, I hopefully gave you justification to consider why world class strategy execution is vitally important and how it can help grow the market value of your firm. In Part 2, I will give you a glimpse of what some leading firms do to practice world class strategy execution. Let’s consider first though the disaster in strategy execution at Encyclopedia Britannica (EB) that unfolded from 1983 until it was sold in 1996.
Firms like Canon USA, Hilton, BMW, Tata Motors, Merck, Infosys, UPS, GTE, Lockheed Martin, Duke Children’s Hospital and Mobil are some of the leaders in trying to grow their firm’s value primarily through world class strategy execution. They all feel that while strategy formulation is important, strategy execution is the key element in growing a firm’s value.
Innovation is at the top of the agenda of nearly every mid-sized and large publically traded American company. Here is a quick quiz: What is your firm’s percentage of each year’s revenue that comes from totally new products and services? If the answer is not at least 15-20%, your firm does not compare with the leading firms in the Global Innovation 1000, as measured by the consulting firm Booz and Company. Why do you need to care about innovation?
An organization’s competitive strategy is not just a description of its current products and services . Your current offerings help describe your current identity, but I hope to convince you that something much more is needed to describe your competitive strategy. Why is this important? A robust competitive strategy is the foundation point from which to grow the value of your firm, which is the central issue in this series of articles.
This article is a first in a new series that will discuss what the key dilemmas and opportunities are that face American business and CEOs trying to grow shareholder wealth. How do these issues compare to the issues for the mostly private, family businesses in our region of Northwest Louisiana? The series will help answer the question – what really grows the valuation of firms and a corollary.