I believe the answer is both.
Execution without strategy is aimless. Strategy without execution is meaningless. It is that simple.
Think about a strategy to enter a new retail area, say move a US retail brand into the UK. The strategy, at the first level, is to establish a successful beachhead and then grow at some prescribed rate. That is the strategy. It sets the context. It provides meaningful direction. It will not happen if the organization doesn’t have the right people, processes, products, pipeline, real estate assets, localization, etc. in place. That is execution.
Strategy describes intention. Execution fulfills intention.
As I describe in Management by Design, strategy, and execution are balancing forces, and they need to remain in play against each other even after decisions have been made. The reality of executing in an uncertain world is that strategy must be questioned when execution meets unexpected resistance.
In the latest PWC CEO Survey, the consulting firm found that having the right talent in place, or not (talent was the number one concern of CEOs) can impact innovation, market opportunities, the ability to deliver on strategic initiatives, growth, and quality. Talent is only one aspect of execution. If you can’t get the right people to make the new retail expansion successful you then need to go back and adjust expectations on the strategy. 24% of the CEOs in the PWC survey reported that “We canceled or delayed a key strategic initiative” because of talent constraints.
Strategy and execution require balance and balance require a feedback loop. Those responsible for execution should not go off blindly working to fulfill a goal, adjusting as necessary on the journey without clearly and transparently sharing their experiences with those responsible for the strategy–and the executives seeking to achieve a strategic goal must be cognizant of the reality on the ground or that goal may prove more costly, even too costly, to provide any strategic advantage. If execution informs strategy of issues, the strategy must be adjusted to reflect reality or the reality changed (with new people, investments, etc.) in order to meet the strategy–but that execution decision affects the strategy in terms of time or money or both. When you have to adjust the cost of a strategy increases and that must be accounted for. And if global priorities change, organizations need to be willing, and able, to walk away from failed strategic initiatives (or those no longer relevant) regardless of sunk cost because maintaining them provides no strategic advantage, even if they are executed well. Strategic retrenchment is strategic and retrenchment requires as solid an execution model as does expansion or innovation.
If you ever wondered about the ROI of knowledge management and collaboration, ask yourself about the strategy-execution feedback loop and how developing open and transparent dialog, access to content and informed decision making would benefit both those who set strategy and those responsible for executing it. You may have a cost model for project execution, but do you really know what it costs, and what it takes, to execute strategy?