Which is more important- "Startegy or Execution"?
Strategy is a series of choices you make on where to play and how to win to maximize your long term value. Execution is producing results in context to those choices. Therefore, you cannot have good execution without having good strategy. Thus, stating strategy is less important than execution and vice versa is hard to refute. Both are equally important. Most everyone would agree that you cannot achieve good results without having a good execution. Similarly, most would agree that having a good strategy alone is no surefire formula for success.
Consider Toyota Motor Corporation and General Motor Corporation. Yes, Toyota produced better results than GM for many years because it executed better than GM. It was able to out execute GM because it made much clearer and more coherent choices about where it would play and how it would compete. This includes sharper choices about its target customers, its value propositions in terms of products, features and price points and the superior capabilities it needed to deliver that proposition to those customers. In other words, Toyota out executed GM because it had a clearer and better strategy than GM.
The airlines industry provides another example. Soutwest Airlines has outperformed American Airlines Inc. for decades. Is this beacuse Southwest has executed better than American Airlines? Absolutly. But its no coincidence that Southwest airlines also has a better strategy. It has more sharply defined the target market ( the point to point economy traveler), a more compelling value proposition (Lowest price, more convenient, and most passanger friendly) and a more cohrant set of capabilites to deliver that proposition (maintaining a simpler fleet, running a point to point operations). Having a better strategy has made it possible for Southwest to consistently out execute American.
Infact, no matter how much American Airlines improves it execution, it will never be enough to overcome the lousy economics of airline industry and make it a big value creator. The company would have to find a more distinctive strategy. Likewise, no matter how much GM improves its decision making culture, Product development processes or dealer operations, that effort wont be enough to produce better results without a coherant strategy.
