Execution in Strategy with Peter Compo

That brings all these different things together military is in there other strategists are in there 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 gonna set you up again as i've done 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, what strategy so often missing and confused it is easy to invoke execution as the reason for poor or good results, a media pundit might say, "wow, courier inc beat the streets earnings estimate by twenty five 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, a competitor may have screwed up.

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 organization some of us have witnessed this stuff sandbagging, Bring in 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.

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 add 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, 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.

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 last through game changing creativity than by optimizing their existing businesses i've said that we all make those mistakes

and i want to remind everybody that's been following us that Peter tells us discipline, 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

Peter Compo (2): I think this is the crux, what you brought in here, that execution to be a useful concept, an 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 it 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 practitioner's 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 this 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.

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 in 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.

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, 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 it. I gotta 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 strategies 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 on a personal level cause 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 disciplined i wasn't that time i was disciplined, what 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

Peter Compo (2): See, I think you're bringing in a great example of where execution is confused as a definition and 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 by a famous strategy writer who said execution is a bankrupt concept, has no value. Why?

And he gave an example that's just like yours. Ford, modern day Ford, back in the, in the maybe 2008, 2007, somewhere in there, had really worked hard on production of the cars. Quality. throughput, cost, 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 get 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, or I'm sorry, in rugby, right? What do you call it?

When you get, try Peter Compo (2): when you get a try, whatever you want to call it, even if you got a good result, did you execute? 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 cuz i love done and the flexibility in the moment, what what struck me about this example was was lombardi rice or was the hall of famer right. Peter Compo (2): 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, 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 and world football, soccer. And, um, so man, depends on the coach Peter Compo (2): Coach, but these plays, they're all In American football, they're all very set plays, right? Each, each offensive play is, it 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 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 tension 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 maybe a prima donna, or maybe perceived as a prima donna why the heck aren't they picking compo, compo 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 them either. Cause he's the wrong characteristics for the organization or the team, or to your point, it doesn't fit the way the coach wants to play. It 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 of human as well, because.

When we're talking about strategy, I think a lot more and more about people's lives that we're 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, et cetera, and knowing thyself becomes really important. And I say all that to 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.

I'm 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, zoom that a little bit 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 since that 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

Peter Compo (2): 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 good 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, Ford executing brilliantly on the wrong cars or, 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. Am I getting good results?

should we mention Peter the beat experiment Peter Compo (2): Deming's been a bit lost, over the years. If you were in a corporation in the nineties. You heard Deming all the time and maybe, maybe you went, maybe you went to one of his, his meetings that he would do and, and got, got this book and he, he was quite a, quite a guy. Also he wrote music too. He would write very old style classical music symphonies and oratorios and things like that. But he had a very famous.

Demonstration that he would do in the, 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 percent of them, I may not get every detail right, 20 percent were white and 80 percent were red. And they were all identical beads, and he had a little paddle that would, you'd 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 out. 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? Cause 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, 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 so it'sn unn 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 are you 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 bring in a 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, cause there was nothing there to begin with, and then the next year, two 50, 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.

Existing marketplace cause the marketplace was going to this place in the future and you were investing in the future so that was one thing and then i thought about spence smith who we had on the show from mckinsey and his book strategy beyond the hockey stick he talks about say for example you're a 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 on, 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 opening up all types of wounds for me as well. Peter Compo (2): 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, it makes it distinct from strategy. So maybe we'll do that very briefly.

And then I wanted to share how you talk about it when something changes. So when something changes, everything needs to change, but oftentimes it doesn't, if you're focused on execution. Peter Compo (2): 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. Can I just say, hence the Lombardi thing, that guy made the Peter Compo (2): Yeah, in the moment, took it on himself, won the, won the game. Peter Compo (2): right. What about in a military? We had made a, we had made a strategy that, that things we're going to stick with this approach to attack a city.

And then you find out that the guy, 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 aspect and energy 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 it 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. And many, I think in many cases, this is where talent and some people just have a sense. 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 the clipboard 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 Toulouse. 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. Peter Compo (2): 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 at playing that what looked like this fluid game and, and we practiced 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. Peter Compo (2): But hey, 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 is 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 Toulouse. Right, it was Toulouse. Why they're scoring so many tries or however you say it 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 at that little local instant. And I think sports is such a beautiful example of it. And if you've 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 the two. 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 percent 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 you that series we did with Frank Barrett on free and it was essentially on freestyle style jazz, and I know that's you love your jazz and you're a musician and the discipline of the phrase to be able to go off.

i look like you're freestyling and making it up as you going it's so much work behind 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 Peter Compo (2): Why would you need to practice? Why would you need, why would you need a theory to improvise if it could be whatever you want it to be? Execution and improvisation in jazz. What do you just play? Anything that you feel?

No, it doesn't work that way. 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. Considered the greatest jazz improviser of all time by many. An alto saxophone 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 improvised over that chord structure. What did he say? Learn the changes and then forget them. And what was he, 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 brilliance in his improvisations came from rules and disciplines at such a low level that he didn't even have to think about them. 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. It's, we call it muscle memory, but it's mind memory, right? Translated to the memory, to the muscles. beautiful beautiful and it talks to so much stuff your, 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.

I knew 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. Are 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 the things that only come to an age and i'm sure it's the same in music as well when you get into the flow state,

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 gonna do it naturally. That's execution.

which has a 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 learned loads really internalizing this make an implicit myself so i'll be able to play strategy like jazz in the future, author of the emergent approach the strategy Peter campbell thank you for joining us. Peter Compo (2): Thanks, Aidan.