Strategy and Execution Skills

Two factors critical to the success of business and marketing projects are the appropriateness of a particular strategy to the intended market segments and the level of execution skills available to the organisation.

You either have an appropriate strategy or an inappropriate strategy.  You have good skills available to execute a strategy or you have poor skills.  This leads to four potential outcomes for a business project; Success, Chance, Problem or Failure.

Success will most likely occur where you have an appropriate market strategy and good execution skills.  This is the ideal situation and there should be little or no problems in delivery of the project or campaign.

Chance occurs where there is a poor strategy but good execution skills.  Poor strategy may develop because market analysis is poor or their is no existing business strengths on which to base the strategy.  There is a chance of success because of successful execution of the strategy.  For example, an organisation may be able to use its skills base to adapt the strategy from a weak base.  However, the degree of inappropriateness of the strategy is important.

For example, a classic example of the Chance position was the Sinclair C5 electric vehicle.  Sir Clive Sinclair, a successful computing entrepreneur promoted the C5 as the perfect electric vehicle for general travel such as commuting and shopping.  The C5 a recumbent tricycle which sat inches above the road.  It was powered by an adapted washing machine motor and it needed to be pedalled up even small inclines.  The C5 was soon seen as a potential death trap when used on roads where it would mix with cars and lorries.  Sir Clive also decided that the main retail outlet for the C5 was electricity board showrooms.  The product bombed and Sir Clive had to sell his successful computing business to Alan Sugar’s Amstrad to stop bankruptcy.

It was clear that Sinclair had reasonable execution skills; his computers and calculators had sold like hot cakes; but in relation to the C5 his strategy was completely inappropriate.

Professor Malcolm McDonald, the noted marketing academic, actually wrote to Sinclair at the time of the launch of the C5 warning that the strategy of promoting the vehicle as a multi use road vehicle would fail horrendously.  He advised Sinclair to change tack and to promote the C5 as a leisure vehicle for use in parks or at leisure resorts.

The bankrupt stock of C5’s was eventually sold to a Spanish businessman who went on to sell the lot to large holiday parks using exactly the strategy espoused by Macdonald.

A problem position exists where the strategy is appropriate but the execution skills are poor.  In effect, the right things are done badly.  A great example of this is the creation of the Amstrad console game developed to tie in with the film E.T.

At the time Amstrad had the biggest selling home games console.  E.T., the Steven Speilberg cinema epic was the big family Christmas film.  A console game as a tie in to the film was definitely an appropriate strategy and Amstrad handed the project to its most prominent game designer.  However, there were massive problems in executing the game project.  The game developer simply did not have enough time or sufficient resources to develop the game in time for a simultaneous release with the film.

The game was released but it was full of bugs.  Amstrad console users complained of poor gameplay.  As the game was sold on a cassette which was plugged into the console, bugs could only be fixed by replacing all the games sold.

The game E.T. failed so badly it bankrupted Amstrad and allowed Sony and Nintendo to take their market.  Six thousand copies of E.T. were recently exhumed from a Florida landfill!

Then we come to the Failure position.  This is where inappropriate strategy is used and poor execution skills are applied.

An example of this failure position happened recently at my local council.

Shropshire Council decided that it would become a commissioning only public body.  All the council’s services would be commissioned from the private sector.  The council set up a company I, P and E Ltd to provide services.  The company had two main aims, to provide services to Shropshire Council; such as school meals and consumer protection; and to sell the expertise in those services to other local authorities.

The company was set up to benefit from a piece of European case law called the Teckel exemption.  This allowed public bodies to avoid the normal compulsory competitive tendering rules which were laid down in European law but there were three provisos:

  1.  That the company had no profit motive.
  2.  That the company was a joint venture by two or more public bodies
  3. That the company was run in the same manner as other council departments.

I, P, and E Ltd was set up with the clear aim of making a profit to subsidise the provision of services in Shropshire.  Originally, the idea was to invite other local authorities to join in as company shareholders but when there were no takers, this aim was quietly dropped.  Staff, particularly senior managers, were transferred to I, P and E on different terms to those remaining within the council.  The company failed to meet all the Teckel exemption criteria.  The commissioning strategy was woefully inappropriate as a result.

No manager or councillor applied the strategic question, “why would other local authorities, many with greater resources, buy services from a small authority such as Shropshire?”.  They also seemed to think that Shropshire had a level of excellence in service provision which was not available elsewhere; when in fact larger, better financed authorities elsewhere, often had equally excellent service provision.  Shropshire Council also failed to properly account for the presence in the market of large private sector commissioning forms such as Serco and G4S.

I, P and E, Ltd also had a poor execution skills mix.  Its board was made up of Councillors with no experience in public service commissioning.  The company went through three CEO’s in four years.  Officers with qualifications in nutrition, environmental science and consumer law were now supposed to act as commercial sales reps, with no training.  Many services transferred to I, P and E Ltd were cost centres where income generation was impossible.

One of the council teams transferred to I, P and E Ltd was the council’s marketing team.  This was previously called the Graphic Design team.  A company website was created but for two years, it was a single title page which failed to say what the company did or how to contact it.  Hardly a good start if you are trying to sell expertise in digital marketing!

I, P and E Ltd was a disaster.  It cost Shropshire Council millions yet, in its final year of operation achieved only £16,000 in external sales.  These external sales were from contracts that previously existed at internal council departments.  The company has recently been wound up and the services transferred to it are being re-absorbed into the Council.

So, if you want a project or marketing campaign to succeed, you must first ensure you have the correct skills base and appropriate strategies for your intended market.