BTS Strategic Execution Blog

Need Successful Strategy Execution? Just go to IKEA.

Wednesday, June 04, 2014 | Category :
    • Strategy Execution
    • Blogs

By Rommin Adl

Rommin Adl Photo

For any organization finding the right balance between strategy development and execution is a top challenge.

Consider IKEA. Hugely successful, the Swedish furniture, appliance and home accessories company has achieved continuous and profitable growth for over fifty years through a coherent and integrated approach to market segments, logistics and products. The company’s differentiated strategy has been consistently executed and strong growth projections continue for the years’ ahead. So how did IKEA achieve its success? Was it the result of a perfect strategy development project or exceptional execution?

IKEA’s results are the product of strategy development and execution in tandem—continuous trial and error and testing and learning. The company’s management learns while executing, and the faster they learn, the more they refine and strengthen the company strategy over time. Strategy development and execution are integrated, not separate and distinct.1

While this process does not adhere to classical textbook definitions—first analyze and formulate the strategy and only after implement—it is proven to deliver results for organizations across industries.

The Keys to Successful Strategy

Our recent research conducted in partnership with The Economist Intelligence Unit reveals that 26 percent of surveyed leaders invest more time developing strategy, 44 percent spend more time implementing strategy, and another 26 percent adopt a balanced approach, focusing equally on both.2

Strategy Execution or Development?

However, superior performers in revenue growth, market share and profitability are most likely to strike a balance between strategy formulation and implementation.

In contrast, companies that place a disproportionate emphasis on strategy formulation are more likely to be subpar performers. In comparison with their market-leading competitors, executives from profitability-lagging organizations are 35 percent more likely to report that they are busier formulating strategy than executing it.

For IKEA, these research findings are likely no surprise. To maximize impact, strategy development should not occur in a vacuum, disconnected from implementation. Market-leading companies start implementation planning during the strategy formulation phase and then work to optimize the execution levers at their disposal to effectively engage and develop the organization’s leaders.

So, as leaders, does your organization value strategy development, execution or both? Where does your organization invest time and resources? How does this emphasis impact the your company’s results?

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About the Author: Rommin Adl is an Executive Vice President at BTS.

1 Cunningham, James and Brian Harney, Strategy & Strategists, Oxford: Oxford University Press, 2012.

2 “Cracking the Code: The Secret to Successful Strategy Execution & Lessons for the C-Suite,” BTS, Survey Conducted in Partnership with The Economist Intelligence Unit, 2014.

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