How New CEOs Can

Balance Strategy and

Execution
By Millán Alvarez-Miranda and Michael D. Watkins
July 13, 2021

Submitted by: Armenay Shehzad (21470)

Introduction
• Develop Strategy and Drive Execution, simultaneously

• The Need to do both at once has never been more urgent

• Emergence from the Covid-19 crisis, companies need to:

o Drive short-term results
o Rethink strategy

Strategy vs Execution Strategy & Execution

Right balance in the right

timeframes!
CEOs & their Roles
• While all leaders need to do this, research shows that few are
good at it

• Particularly acute for newly appointed CEOs

• Next-gen leaders are competent at crafting strategy but:

o Lack deep operational experience
o Fail to realize that boards first want to see that they can
run the existing business before turning to future
questions

• Boards assume that CEOs understand that short-term goals

and execution are vital priorities, while new CEOs instead
focus on vision and strategy
 Example

First-time CEO recruited from a general manager role in a fast-growing multinational into a
smaller national company in a different industry. He aspired to expand his new organization in
size and geographical coverage substantially and, with a small team of new reports and
external consultants, jumped into defining a new strategy. But in a year, the company’s P&L
was burdened by unresolved operating problems, making it impossible to raise the funds
necessary to make those long-term changes. The CEO lost the board’s trust and soon departed.
Avoiding Some Dangerous Biases

• They build a strategy that is not grounded in the competitive,

Failing to diagnose the execution weaknesses of customer, and cultural realities
their businesses

• When they don’t see sufficient strategic thinking ability or

Making decisions about their teams too quickly openness to change, they rush to judgment

• New CEOs can miss out on enlisting key drivers of execution

Neglecting relationships with the execution side who may dismiss the new leader as being out of touch with work
of the business
at the front lines

Failing to develop a coherent, efficient strategy • The strategy remains conceptual not operational.
deployment process while maintaining
execution excellence.
Balancing Strategy
and Execution 
 Phase 1 – Defend the Core
(The first 90 days)

Strategy Execution
• Diagnose business situations • Assess and build high performing team

• Set business priorities • Focus team on short term execution, including

stopping non-value-adding activities
• Redefine incentives
• Implement/refine operating model
• Align with board and team
• Secure some early wins that improve
performance
• Build alliances to ensure better execution
• Role-model the right behaviors
 Phase 2 –Extend the Core
(The next 90 days)

Strategy Execution
• Identify promising adjacencies and extensions • Drive strategy deployment (objectives and key
results)
• Set/refine direction (vision, strategy and
• Implement supporting systems, skills and
goals)
processes
• Design platforms and ecosystems
• Strengthen/accelerate product development
• Consider potential acquisitions and investments
• Secure investment buy-in from board • Develop team, promote high potentials and
• Lead/champion transformation attract talent
• Shift to needed behaviors
 Phase 3 – Transcend the Core
(The next 180 days)
Strategy
• Understand and anticipate market trends and
potential disruptive technologies
• Identify the best supporting methodologies
(design thinking, business model prototyping)
• Select where will you make your bets
Execution
• Stimulate transformational internal innovation
• Drive agile development (prototype test and
proof of concepts)
• Build outside partnerships
• Make external investment and acquisitions
• Spread talent throughout the organization
• Transform culture to focus on the future
Success of the Framework
• Worked with a new, first-time CEO helping him preparing his strategy and business review for presentation
to the board.

• Initial draft: mainly focused on forming a vision and longer-term strategy and left business diagnosis and
execution priorities to the last few slides

• Introduced the Defend, Extend, Transcend framework

• The CEO’s revised presentation started with a deep dive into these issues, then focused on future strategy.

• The board was reassured that he was on top of execution and, critically, concluded that he could spend time
and resources on the new strategy while still maximizing short-term revenue and earnings.

• They gave him the green light to move forward on both.