In the 30 years that I’ve spent observing business success and failure, there is a question that has puzzled me more than most: why do some organisations transform successfully, while others do not? And why do some leaders whittle away their organisation’s choices until the only ones left are whether to shut it down today or shut it down tomorrow?

For a long time I thought it was mostly a question of strategy, and in some instances it certainly has been. Nokia’s decline and eventual sale of its handset business to Microsoft under the stewardship of Stephen Elop is one example. It seems standing on a burning platform is not a great place from which to make existential strategic decisions.

But there are plenty of other instances where the strategy has been fine, and the business or project has failed anyway.

So if strategy alone doesn’t explain the difference, something must be happening between the decision and the outcome.

That missing piece is execution.

Because the best strategy is of little value if those tasked with implementing it can’t turn it into reality.

The concept of execution has also long fascinated my frequent collaborator Peter Fritz AM and the team at Global Access Partners, who have encompassed it in a concept they have developed called Execution Economics.

The principle behind Execution Economics is relatively simple. It asks whether those responsible for executing a decision have the genuine authority and control required to do so, whether they have access to the information needed to track its implementation, and if they have sufficient freedom from interference by others who might derail it.

These factors come together to determine Decision Sovereignty, which describes an organisation’s capacity to translate a decision into a realised outcome.

While the basic concepts behind Decision Sovereignty seem obvious, that is part of their strength. Its value lies in giving organisations a way to understand their execution capability and, when deficiencies become apparent, identify where they need to intervene.

Decision Sovereignty does not pass judgement on the quality of the strategy itself. Rather, it indicates the extent to which the value contained in that strategy can survive the journey from decision to outcome.

You’ll hear me talking a lot more about Execution Economics and Decision Sovereignty over the next year as we work to take the concept mainstream.

I introduced it recently in a presentation to a group of private healthcare executives at HAMBS in Adelaide. That presentation explored four factors that I believe are essential to successful transformation:

• Choice – the goal of transformation should be to increase the range of positive choices available to an organisation.
• Foresight – he ability to understand what might be coming and recognise the need to respond.
• Strategy – the codified response to that foresight.
• Execution – the translation of strategy into action in pursuit of an outcome.

If culture eats strategy for breakfast, then execution is where choices go to die.

All too often I have witnessed poor execution whittle away the choices available to an organisation, as cost overruns, skills gaps, supplier delays, competing priorities, and organisational interference erode the potential value of an outcome.

That matters because transformation is ultimately about preserving choice. Every failed implementation, blown budget, missed deadline, or compromised outcome narrows the range of choices available next time.

So perhaps the answer to the question I’ve been asking for 30 years isn’t simply that some organisations develop better strategies than others. It is that some are much better at preserving the value of a good decision as it passes from intention, to action, to outcome.

Execution Economics enables us to understand why.