Strategy shouldn’t be static

June 21, 2009

My previous company trademarked the phrase “aligning execution with strategy” to emphasize that one of the most severe inhibitors to performance is that what companies do (their execution) often doesn’t match what they say they want to do (their strategy).    The phrase became so ubiquitous among employees, partners, and customers that we would chide people when they slipped up and said “aligning strategy with execution”.   It seemed like cooking the books to set objectives and metrics after the fact.

Five years later I think we may have been too rigid in our thinking.  While it’s true that no one should be able to choose targets after the actual values for KPIs have been measured, execution should in fact influence strategy.  Said another way, strategy shouldn’t be static. 

Too often, organizations treat strategy development as a once-per-year exercise.  They extend extraordinary amount of energy coming up with strategic objectives and associated key performance indicators, they codify it in a strategy map and detail it in a strategic plan.  But after rolling it out to the company, they don’t revisit it again until the following year.

This static view fails to take into account that the real world changes strategy.  The most obvious ones are the changes in KPI target values or the addition/deletion of a strategic objection.  But sometimes, the entire mission needs to be updated.

In ‘How Wawa became a success’, Anthony Wood provides an interesting example of how Wawa transformed itself from a Delaware County milk-delivery business to the third largest convenience store chain in the Northeast. According to the article, coffee became the company’s signature product by accident. Vic Russo, currently a regional manager and 35 years ago the general manager of the second Wawa store, brought in a percolator to make coffee for the staff.  After customers started asking to buy coffee, Vic’s incremental sales had a big enough impact on the cash register that headquarters noticed.  Soon, all Wawas were selling coffee; a clear case of execution influencing strategy.

Selling coffee may not seem like a fundamental change in strategy but it led the way to other prepared foods, accelerating the transformation into what we now call convenience stores.  While the original Wawa stores focused on grocery store staples and had butcher counters, the Wawa convenience stores which emphasized prepared foods were exempt from the old Pennsylvania blue laws that prevented most businesses from operating on Sunday. As a result, Wawa stores became more than just time-savers but shopping destinations.

Strategy clearly dictates execution.  Execution can influence strategy.  This two-way street is why we have adjusted the phrase to “closing the gap between strategy and execution.”