In this episode of 'The Emergent Approach to Strategy,' guest Peter Compo joins to discuss the complexities of executing strategy effectively, focusing on Chapter 9 from his book. Compo addresses common misconceptions about execution and its distinction from strategy, emphasizing the importance of adherence to strategy frameworks. He explores real-world examples from businesses and sports, highlighting how excellent execution requires discipline and adaptability in dynamic situations. The conversation also delves into the integration of innovation within disciplined execution, using analogies from music and sports to illustrate key points.
00:00 Introduction and Overview
00:37 Understanding Execution in Strategy
02:55 The Misconceptions of Execution
06:23 Execution vs. Strategy: A Deeper Dive
08:57 Execution in Practice: Sports and Music Analogies
11:57 Challenges and Realities of Execution
20:52 Execution in Business and Innovation
23:26 Demming’s Red Bead Experiment and Its Lessons
39:15 Final Thoughts and Conclusion
Link to Peter’s website: https://emergentapproach.com
Link to Peter’s Music: https://www.youtube.com/channel/UCJsn2zbnx8dwvHJrisdkAtg
Link to Aidan McCullen for Keynotes, workshops and event MC.
https://theinnovationshow.io
Find us on Substack for Shownotes and competitions:
https://thethursdaythought.substack.com
Link to Frank Barrett’s episode “Yes to the Mess” part 1 and 2:
https://youtu.be/xgkk-Vlgtt0?si=-Ddv-aGFj8XtsDrF
https://youtu.be/D7dR5Gi7i80?si=bJ3NhwhhnuYWgVbl
strategy, innovation, execution, Peter Compo, Aidan McCullen, emergent approach, business strategy, military strategy, sports strategy, discipline, improvisation, music, jazz, leadership, organizational behavior, cognitive capacity, change management, tactical planning, operational excellence, resilience
Welcome back to another episode of the emergent approach to strategy with our guest, Peter Compo. Thanks for joining us once again. Good morning. Good afternoon. Great to have you back. But we're going to do an episode now brief episode compared to some of the other ones on execution, which is chapter nine for those who are reading along with us. And then we're going to finish with one last episode, the concluding episode to looking at a little bit of strings here in their threads here and there throughout the second part of the book, which is real application stuff. It is one of the most deeply researched books in one book that brings all these different things together. Military is in their other strategists are in their all their work and thinking is in there as well. So it's a pleasure to get through it. So let's start with execution. Peter, I'm going to set you up again as I've done in previous episodes with a lovely paragraph from this chapter. You say leaders, strategy writers and analysts attribute disproportionate blame for success and failure to execution. We do that all the time ourselves with strategy so often missing and confused, it is easy to invoke execution as the reason for poor or good results. A media opponent might say, wow, courier ink beat the streets earnings estimate by 25 cents a share. They really executed. Well, maybe, as Peter said, courier, this made up company executed and maybe they didn't, maybe they pulled sales into the quarter by signing bad contracts or gave discounts that will haunt them in the future or put cost into inventory. We know this stuff happens. Currency may have gone their way or a competitor may have screwed up or gone out of business leadership may have defunded programs like we talked about in the previous episode for a short term gain to protect their position to boost earnings for business unit leaders pulling in next quarter sales may be execution if the CEO demands it, but investors might not always see it that way. How often would a constant demand for more steam each quarter be viewed as execution, not to mention what portion of the results in any given quarter is determined by actions in those three months. There is so much in there, so much that we see wrong in organizations. Some of us have witnessed this stuff, sandbagging, bringing revenue forward, just closing sales, getting in the paperwork that the sale is over the line, knowing it's a poor customer, 08 and 09. All this stuff is in there. Over to you, Peter, to talk to us about the context for this chapter. Yeah, it's a heavy chapter. And I think what your introduction alludes to is that we associate execution with outcomes. And I think there's a lot of reasons for that. And maybe two big categories. One is that if you don't really have a definition of strategy, and if your definition of strategy is more goal-based and lists of goals, then really, you don't have a choice then to say execution means, well, meeting meeting all those goals. In essence, get good results as a definition of execution. I think another reason is that leaders are put in the position of driving their people, right? And it's easy for them to have in their head. If only my people would execute. We've got the goals, we've got the strategy. The only missing piece here is, did we do it? Are we doing it all? And there's truth in there, right? Did the people really do what they were supposed to do? Did I do what I was supposed to do? Maybe we had that, right? For the leader to ask themselves. But I think this all loses something very important, that if execution is just getting good outcomes, why would we even need the word? Why wouldn't we just say execution? Why wouldn't we just say get good results? Deliver. It wouldn't add any value to have the term. I think many people use the term execution and replacement just for like implement or get good results because it sounds better, right? It sounds like you're saying something. It sounds like you're saying something sophisticated, but you're not. So I think the theory of strategy brings out a completely different view of what execution is. You say also execution is sometimes defined as operational excellence. And this is actually what a lot of people think it is. And we talked about sports before we talked about music before. And you say here, like when an analyst might say company X better stop all this innovation stuff and get back to executing, which we hear a lot in innovation world. Or as one consulting firm said, it's no secret innovation is difficult for well established companies. By and large, they are better executors than innovators. And most succeed lasts through game changing creativity than by optimizing their existing businesses. I've said that. So we all make those mistakes. And I want to remind here, everybody that's been following us that Peter tells us discipline and innovation are inseparable. And if anything, I've learned through doing all these shows, interviewing all these great people is discipline is absolutely at the heart of innovation. And it's not seen that way. And maybe you have some thoughts on that. I think this is the crux, what you brought in here, that execution to be a useful concept and additive concept has to relate to the discipline of adhering to what use to the strategy rules and to the rest of the strategy framework. And to think that you don't need discipline or that you don't need execution in order to innovate is a terrible message. How about, how about musicians? How about artists? You don't think that they have to execute? What does execute mean in creating a piece of music? Does it mean I don't even know what it would mean if it's the opposite of innovation? It would have no meaning, what would be to write the same type of pieces over and over? That wouldn't be anybody's idea of execution. So the definition of strategy as a central rule and tactics as rules, and then an entire framework that's built around that for the practitioners framework, I think you can only get to execution defined as, did you put the work in to adhere to the strategy framework to adhere to the hypothesis that you said would get you to good results? See, there's difference. If execution is just get good results, why would you need a strategy at all? You would just need a plan and just go do it. But it doesn't work that way. You can't directly plan good results. That's why you have a guiding strategy that enables you to take trade offs and accept pains and accept bad things and return for even greater big things. And for the fact that at the beginning of an endeavor, new product line development, improving a sports team, changing a military anything you name it, it's going to take time and you're going to have many choices to make as you go. And you need a guiding strategy to tell you how to make those choices. And execution will so many times be did you adhere to the strategy to make those choices. Even though at that moment, it might be seductive to do something else, right? Our strategy is that we're not going to sell to customers of this type anymore. And then someone shows up one day with a very lucrative possibility to sell to a customer just like that. What's execution? Is it to do it? Because now at this moment, it's going to boost earnings for a quarter? Or is it to say no, we've got a higher rule here that keeps us from being seduced by these short term local things. That's to me execution. Sticking with what you said, the theory of the case was, despite seduction of things that come at you. And this is exactly the same in music, you or any arts I talk about music a lot because it's my field. You come up with a phrase with a harmony with a rhythm that is very seductive on its own. Man, that's great. I love I got to get this in here. But it doesn't fit with the strategy of the piece. It's a local thing that doesn't fit with the whole. What's execution to go with it because you get this beautiful little section? Or is it to say no, either I got to change the style of the entire piece to add it? Or I got to take that bit and put it into the next piece, where it makes sense. Execution is a brutal thing to stick with the theory of the case, stick with the strategy framework you've designed until it's very clear that you should change it. And that's really hard to do. And it comes right back to where we started all this is that your strategy is like a guiding force to help you make those decisions in real time. So you can actually go, does it get me closer? Does it work towards that strategy to make that decision in real time? I thought about this on a personal level, because like you with music, mine was sports. And for example, the science of training has come on so, so much since when I played professional. And the only thing I was was disciplined. I wasn't that talented. I was disciplined. But I was disciplined often doing the wrong thing. And because I was doing the wrong thing really well, I got injured. So I trained harder than many of my colleagues in the gym. But we were doing the wrong exercises. And that still haunts me today. And that I have to I still go to the gym most days, five, six days a week. And it does not get me much more advanced. It's actually trying to undo a lot of those bad habits that I became really good at doing back in the day. And this spoke to me as a metaphor for for doing the right thing worse, because you could be accelerating the demise of your company if you're brilliant executor with the wrong strategy. See, I think you're bringing in a great example of where execution is confused as a definition and as as as a concept. Let's give another example that's related to your sports example, you had what you're describing is that you had a strategy of exercise, a theory of exercise, right? That turned out to be wrong. Your execution actually was excellent. So let's give another example. I read one, my famous strategy writer, who said execution is a bankrupt concept has no value. Why? And he gave an example is just like yours for modern day forward back in the in the maybe 2008 2007 somewhere in there had really worked hard on production of the cars, quality throughput costs. And they were really putting out cars at a better rate in a better way than they had before. But it turns out nobody wanted the cars they were making, exaggerating, actually, the point that this writer made was execution is a bankrupt concept, because actually their cars were not the designs that people wanted. But that's blaming the wrong thing. Can't you have a bad strategy? Here's another beautiful example of blaming everything good and bad on execution. Whereas the problem with Ford at that time was their diagnosis of what the market needed and what they should produce and the strategy for doing that. And it's exactly what you just described in sports. Another angle on sports, I'd like to bring out on execution is how many times will a strategy be in place for a team on how to win against a specific opponent, a specific opponent. But then the players in the heat of the moment gets seduced by an opportunity, right? A simple example, right? We're going to double team the best player on the other side. We're not going to let that this is a very famous generic strategy in sports, right? We're not going to let the best player on that other team beat us. We're going to force it that the lesser players have to do it. It's extremely valid strategy. But then in the heat of the moment, all of a sudden, a player who's part of that double team sees an opportunity to do something look like a hero, right? Now, and they go ahead and they violate the double team rule. And they even get a goal, or they get a good role. I'm sorry, rug in rugby, right? What do you call it? Try, yeah, try. You when you get a try, whatever you want to call it, even if you got a good result, did you execute? No, you violated the strategy. Execution only has meaning, because it should allow for failure. And it should allow for the case that a good result was poor execution. Because maybe in one game, it worked. But now what about over the whole season? Let's give the example, the Vince Lombardi story you tell in the book, because I love that and the flexibility in the moment. And what struck me about this example was was Lombardi right, or was the Hall of Famer right? Well, for those who might not know, in American football, there is a legendary coach named Vince Lombardi, who was most famous for taking coaching the Green Bay Packers football team in Wisconsin, in the upper Midwest and in the States to I think it was five championships over eight years or something like that he won the first two Super Bowls as well. And I think it was 67 and 68. And he had a player at the end of one of those Super Bowls that had a very specific assignment and American football is extremely regimented about what everybody's supposed to do for each play. It's not as fluid as rugby and and world football soccer. And depends on the coach man depends on the coach coach on the strategy. They're all in American football, they're all very set plays, right? Each each offensive play is starts the clock starts and then you play out what happens. And a defensive player on Green Bay saw an opportunity to what was called a blitz where you run like a maniac to try to get the quarterback who's trying to throw it. And he pulled he did this blitz and got the guy and really won the game because of it because the other team was about to score. And what did let Vince Lombardi say to him afterwards, he was mad at him. He was mad at him because he didn't follow his assignment. He did something that violated it. And this brings out a really important thing is that sometimes when you're on the front line, there has to be flexibility to improvise. But I think any coach, any leader would agree that these should be the exceptions. And that when you're doing it, you should be aware of the deviation from what the plan was, what your strategy requirements were, that there should be a attention around that so that the organization maintains its discipline in the long term, because seasons aren't made out of great single occasional plays. Seasons are made out of the discipline of sticking to the strategy. And you see this where, you know, in every sport, there's a enigmatic player who may be a prima donna, or maybe perceived as a prima donna. Why the heck aren't they picking Campo? Campo should be in that team. He's amazing. He looks amazing. He's able to do amazing things, amazing skill. But the coach won't pick him either because he's the wrong characteristics for the organization or the team. Or to your point, he doesn't fit the way the coach wants to play doesn't fit the strategy. So he may be brilliant on his own in isolation, he may be brilliant when things are loose. But for the strategy, the coach wants you just don't fit. And I say that because I wanted to make this a little bit human as well, because when we're talking about strategy, I think a lot more and more about people's lives that were entering into this period where AI is definitely going to disrupt the workplace. And people are going to find themselves at odds with where they belong and maybe struggling from a resilience perspective, etc. And knowing thyself becomes really important. And I say all that say that conceiving execution is getting good results doesn't allow for any failure. And this is really important. That's why I brought the thing about the sports to try and make it relative to people is that you like, I often think about working somewhere, Peter, that you can be working really, really hard in the wrong organization. And constantly having problems with mental health, physical health as a result of your mental health, whatever it might be. But you're still working really, really hard. And if you zoomed out a little bit and went, actually, I can still work hard in a different place and get way better results because maybe the strategy is better. Maybe the timing is better. Maybe it's not a sunset business or a sunset industry. All those things become really important. And I thought you'd have some thoughts on this just not only from a life perspective, but that that equates also into an organization. I think that what you're bringing out touches again on the distinction between execution and strategy, and that they are two completely different things and get goods results, doesn't describe that. If people are straining, right, if people are unhappy, if people are struggling, maybe it's because they are trying to execute what they believe to be the right things to do. And they're executing brilliantly in a sense. This comes up forward executing brilliantly on the wrong cars, or your weightlifting on the wrong regime. And that you've got to use, I think what it brings out is that you've got to use good execution as a way to judge the strategy. As a way to say, well, do we have the right theory of the case here? Unless you execute, how could you even know? How could you know whether a strategy is right or wrong, if you don't actually adhere to it, to be able to judge? And so when I think about people that you describe who are struggling, they've got to be able to articulate, well, why is it I'm doing what I'm doing? Why is this the way I'm living? Is it because I'm not doing what I said I would do? Or is it that what I said I would do just doesn't make any sense? And I think the power of execution as a concept is only brought in when we think of it as adhering to the theory of the case, versus am I getting good results? Should we mention Peter, the Demings red bead experiments? Demings been a bit lost over the years. If you were in a corporation in the 90s, you heard Deming all the time and maybe, maybe you went to one of his meetings that he would do and got this book and he was quite a guy. Also, he wrote music too. He would write very old style classical music symphonies and oratorials and things like that. But he had a very famous demonstration that he would do in these big seminars. And it was called the red beads. And he would it was really quite hilarious. There was a big pile of beads, 20% of them, I may not get every detail right, 20% were white, and 80% were red. And they were all identical beads. And he had a little paddle that would use shove into this well mixed thing. And he would say your job is to get as many red beads as possible. And then he would bring up like five people out of the audience. And then one was like a checker and one was a boss. And they would go through this ritual of putting in the paddle and coming out. And then they would count how many red beads, right? And if you got if you got a lot of red beads, he would say, great, great job. You're really a good worker. Fantastic. And if you got only a few, and of course, right, how many you got was completely random, because you had no way of picking out white or red beads at all, you just stuck in this paddle and pulled out whatever came up. And then someone would come in and they would get very few red beads. And he'd say, Hey, buddy, you want a job here? Because you're not doing the job and you're gonna you're you are in trouble. It was very funny. He would go through this whole routine. But if you really accepted it for what he was trying to express, there was no execution there at all. It was totally random noise. And that we were judging execution by good results in a totally random process. And in how many corporations is whether you do well in a given quarter or safety results, for example, are they just part of a distribution over time, a time series where you can have good results for a period, or you can have bad results for a period. And you end up attributing things to execution that aren't execution at all. I thought that was such an important thing for innovation Peter as well, because I was thinking about how that distribution. So it's a non even distribution. And say you're working on the future in innovation. So you are in a legacy organization, you're the change maker, you're the catalyst, you're the person trying to drive change, the corporate explorer, whatever stuff you did in DuPont. And you're trying to drive change, or you're trying to introduce a new product. And that marketplace is small. So a place I saw this firsthand was in a legacy media company being the the digital transformation agent. So bringing in new digital revenue. And you're consistently fighting with those who resisted change, the analog traditional sales. Of course, that marketplace was bigger. But you were having these really small wins. And like a 50 grand win was huge at the start because there was nothing there to begin with. And then the next year, 250, the next year, 500, whatever. And I thought about that this red bead experiment that you were getting this sport, you should have been getting a more commendment for actually driving that type of change, despite the the existing marketplace, because the marketplace was going to this place in the future. And you were investing in that future. So that was one thing. And then I thought about Sven Smith, who we had on the show from McKinsey, in his book strategy beyond the hockey stick. He talked about say, for example, your police chief, and you go, we think the killers in one of these three three places, and send one squad to point A one to point B one to point C. And then the one that comes back and apprehends the murderer. You're like, well done to you and to the other two, you're like, you guys suck, you guys disgraceful. And he said, that's the problem, you know, and it brings all this to life. And it's open up all types of wounds for me as well. No, absolutely. It's such a it's such an easy trap to fall into to attribute cause to outcomes, right? Correlation is not causality. And execution falls into this trap. They must have executed. They must have done something right. If they got a good result. Well, then we don't need the word execution. Let's just say let's get good results. But when you do that, you throw away the whole concept of strategy. So two two more things. One is the your definition of execution. I thought that was really useful one to share for people as well. And because it makes it distinct from strategy. So maybe we'll do that very briefly. And then I wanted to share how you talk about when something changes. So when something changes, everything needs to change. But oftentimes it doesn't if you're focused on execution. I think this is probably what makes execution a very tricky subject. Even if you want to define it as adherence to the theory, adherence to your strategy framework that you've created to guide your actions. Well, what if conditions change? And there's not time. Or there's little time to talk about the whole big picture, right? To to make a change to the theory. Hence the Lombardi thing. That guy made the decision in the moment, took it on himself. One the one the game. Right. What about an in military? We had made a we had made a strategy that that things we're gonna stick with this approach to attack a city. And then you find out that the got that the the adversaries aren't where you thought they were. And you've got to find a way to react to that. So execution is defined here as adhere to the strategy framework that you said you would follow. And put the work in to do that, right? Execution has a work as an energy and and drive aspect to it. And change the framework. As soon as you see, it's not valid. And this makes execution very difficult. This makes life very difficult, right? When to know that you should violate and change. Because in how many cases is that you haven't really adhered to it well enough to know or that it just takes time for a new strategy to take place? How about in a sports team where a new coach comes in and puts in a new system a new strategy framework for how they want to play. In the first effort, is it going to come to fruition? Are you going to base whether to stick with that strategy on the results of the first few games or matches? Probably not. You need the time to see if the system can develop, whether it can emerge. And this was make execution so difficult. Should we change? Or should we stick with what we said we would do? And there's no magic recipe for this, right? And many to I think in many cases, this is where talent and some people just have a sense of, yeah, we said we would do it that way. But can you read the tea leaves here? Can you see what's happening? We're not in the right direction we have to modify. And that's the idea of the positive deviance. And also we used to talk about in sport and player led teams, because a coach cannot it's not like NFL where you have that lipboard and you can call the calls. You don't have that luxury. So if a team has a philosophy of how they play, one team I played for to lose, that's what we did. We played to a philosophy. And we had starter moves that would get you in the game. But after that, it was very, very difficult to defend. And they're five times champions. They're the most successful club in the world. But tell me, was there not a discipline to that fluid motion? Did everybody do whatever they thought was best in their local view? Or did they have disciplines around what was valid and what was not? And that that defined execution of that system? Absolutely discipline and discipline are playing that what looked like this fluid game. And we practice that ad nauseum, that way of playing. And then the other moves just became starter plays to get us into that flow of things. So that was the big difference. But but even look at what this reveals. Why would you have to practice? If there was no rules, if there was no discipline to the system, why would you even need to do it? Everybody could just go off and do their own exercises and practice on their own. It reminds me of an article I read about the Brazilian football team soccer team. And we've really come around to emergence. They said, people look at us, and they think we're just improvising, and just doing whatever we think's good to do. And he said, but you're missing that there is a deep, very deep discipline to our play as a team. And that that's what makes us brilliant. Yes, we can deviate here and there, but it's part of a deeper scheme. And this is where the word emergence comes in in any field that the disciplines that we talk about needing for innovation are at a lower level. They're not as obvious. They don't look the same as the result you're looking for, which makes it so difficult for an outsider to say, Oh boy, I can see why to lose. Right it was to lose. Why they're scoring so many tries or however you say correctly, right, you know, why they're winning so much. I can see it. Look at how great they're playing. They don't see maybe sophisticated watchers do, but they don't see the underlying discipline that you're following as a player, necessarily. Maybe a sophisticated person does who's well versed in the field. But this is why execution is part of innovation. You're sticking to your theory about what is going to lead to something new and something brilliant. But that theory is not just let's do something new and let's do something brilliant. It's a strategy that says how we're going to interact, how we're going to work, how we're going to behave and make choices despite what might seem like the right thing to do with little local instant. And I think sports is such a beautiful example of it. And if you played professional sports like yourself at a high level, I think you see discipline and innovation side by side. But somehow in business, we don't connect it to. In fact, we see that they're opposites. And that execution is the opposite of innovation because you're adhering to rules. Well, it's not true. Execution is adhering to rules. But these low level sophisticated rules that don't look like the result you want. Hence, the opposite test, our strategy is to win 10% more games this year. More matches, right? Our strategy is to win these kinds of games. Our strategy is to become a better football team, a better rugby team. It all comes together with execution in many ways. And the discipline to bring it full circle to you to music. I sent to that series we did with Frank Barrett on free. And it was essentially on freestyle jazz. And I know that's you love your jazz and your musician. And the discipline of the phrase to be able to go off and look like you're freestyling it and making it up as you're going. It's there's so much work beyond that. It's like being fit in a team. You have to be really fit to be able to play a certain style. You have to be really disciplined to be able to play a certain style of music. Why would you need to practice? Why would you need? Why would you need a theory to improvise if it could be whatever you wanted to be execution and improvisation and jazz? What do you just play anything that you feel? Oh, it doesn't work that way. And here's another great illustration of how deep it has to be. It may be unconscious, the rules that you're following in many cases it is. And in fact, I use this often in presentations, the grit considered the greatest jazz improvivizer of all time by many. An alto sax foam player from the 40s and 50s named Charlie Parker, who's legendary. Charlie Parker said, learn the changes, then forget them. What are the changes? They are the chord structure, the harmony of a tune over which you improvise. When you're no longer playing the melody, the standard melody, you now play, you improvise over those at his time, you improvise over that chord structure. What did he say? Learn the changes and then forget them. And what did he mean? He meant internalize the tune so deeply, internalize the harmonic structures so deeply that when you improvise, you could adhere to it in a way that makes sense. But you don't even have to be conscious of it because it's so deep. Another illustration of emergence of innovations at a high level, his brilliant improvisations came from rules and disciplines at such a low level that he didn't even have to think about. And I know in sports, it's exactly the same. You don't think about every activity you do, every move you make. It's unconscious. We call it muscle memory, but it's mind memory, right? Translated to the memory, to the muscles. Beautiful. Beautiful. And it, you know, it talks to so much stuff. Your cognitive capacity in high stakes when you don't have to think about that. It's literally like, people used to say to me in sport, you're thinking too much. You're thinking about it too much. I didn't know what they meant when I was a kid. And you now I know what they mean. And it's that freedom of thought to be able to make. And this is why you see the best players in the world. Having that time on the ball or the time in the moment, it looks like they're playing a computer game, you know, they see things in slow motion. And these are things that you have to do. And it's like, you know, these are things that only come to your age. And I'm sure it's the same in music as well when you get into that flow state. Exactly the same. And why can't we get to this ideal in business as well? An organization, people become so internalized of the reality that they're dealing with and that the reality they want to create that they don't have to think about every little detail every minute. Like the five disqualifiers, it's in their gut, it's in their heart. They've learned it and they can forget about it, because they're going to do it naturally. That's execution. Mike drop. Well, though, man, that's beautiful for people who want to find out more and internalize how to do emerging strategy, how to do proper strategy. Where is the best place to find your Peter? Well, you can, of course, on Amazon.com around the world, you can find the book emergent approach to strata and then audiobook, audiobook now is available. Audio book is now available. You can go to the website emergent approach.com, which has chapter supplements and additional examples and guidebook. And then you can look for me on LinkedIn, Peter Campo, where I post often and you can get lots of little tidbits about the book where I'll post about a particular figure or particular concept and expand on it a little bit. So those three places. Absolute pleasure, man. As always, I learned loads really internalizing this, making it implicit myself. So I'll be able to play strategy like Jaz in the future. Author of the emergent approach to strategy Peter Campo. Thank you for joining us. Thanks, Aidan.
