Recently I
read an article titled ‘Execution as Strategy’. The title fooled me into
thinking that authors are talking about a new approach to strategy. Fortunately,
to my understanding, there wasn’t any such attempt in the article because
execution is not strategy. In fact another good article that I read this week,
‘Strategy or Execution', which is more important’ clearly explains why execution
is not strategy. I am still puzzled over the choice of title to the first
article I mentioned above. It nevertheless is an intriguing and insightful
article.
From a
research, covering 18 companies (in emerging economies), across Asia, Latin
America and Middle East, the authors present cases of three companies and their
approach to business growth. They all focused on execution as strategy, authors
claim. I do not agree with them that execution is the strategy or that these
companies do not have a strategy. But those cases presented an interesting picture.
They highlighted the difference in strategic make-up and the relevance of it in
strategy formulation.
What is the
role that experience with respect to stability / environment / economic
conditions play in the minds of people who strategize? The way they perceive risk? The way they
operate? A business that has roots in a country known for instability and
environment hardships and handled all of them would in all probability be better
positioned to take on risks that a western company would hardly be prepared
for. The article, 'Execution as strategy' presents the case of Orascom Telecom's, which is from Egypt,
entry into turbulent hotspots like Jordan, Lebanon, Yemen, Tunisia, and Algeria
and to places like North Korea to capitalize on business opportunities to grow
the business. How many western telecom players would consider these countries
as potential market for entry? These countries do present business opportunities
and some of them with huge markets, yet not all who are capable would enter
these markets that too straight away It requires experience of handling things
in similar markets or terrible guts. Not just that, but readiness to compromise
on some of the proclaimed corporate values. That begs a question whether companies
from the developed world are at a disadvantage, irrespective of their strategy
and operational capabilities and sophistication, compared to companies from
emerging economies in capturing business opportunities in emerging countries?
It’s not
just entering turbulent / unstable economies that emerging economy companies
have advantage in but also they can decide and act quickly as exampled by Grupo
Bimbo’s case, as given in the article ‘Execution as strategy’. Businesses for
which stability is not a given and grew up in fluctuating environments would move
faster to seize opportunities. They would probably not go through tedious
strategic planning exercises to vet numbers and then decide on entry. Planning
an entry in five years’ time or even in two years’ time, as would many western
companies plan, would be foreign to them.
Strategy is
about choices but how aggressive are those choices and how quickly a business
can strategize and move are determined by the background of a business or the
people who lead the business if we go by the cases presented by the authors of
‘Execution as strategy’. In the article
they claim that businesses from emerging economies have a higher appetite for
risk and higher tolerance for failure. So the strategic make-up if I could it
term it that way, plays a vital role in the strategy of a business. How
aggressive is the strategy and how quickly a business decides and acts is
hugely determined by the strategic make-up of the company.
