What's more important to a company's success? Good strategy or good execution?

You need a good not necessarily great strategy, but you must deliver on execution. The right KPI's will guide you to the next step--either an adjusted strategy or a rekindled execution route.

Your strategy will vary over time. It is usually reflected in a "living document". Your execution may depend on changes in the strategy, but many of your basic tenets of execution will not change. Best practice financial procedures, for example, adapt easily to any change in the strategy and may remain unchanged in any case.

If your day-to-day execution of what must be done is always exceptional many problems with the strategy can be overcome.

Proper execution of a fatally flawed strategy will result in disaster. But, if execution is really top notch, problems with the strategy will become apparent early enough to make changes.

So, I come down on the side of execution.

The biggest issue with the Executive Team is execution.

Team alignment brings together a strategy, but unless leadership and managerial skillsets are exercised by the CEO, execution falters.

I'm always reminded by a quote from Thomas Edison, who might know a thing or two about strategy and execution: "Genius is one percent inspiration and ninety-nine percent perspiration."

The answer is not or but and. Both are important. I think both are equally important. I've seen badly executed good strategies be a problem as well as well executed bad strategies.

I quite agree with my colleagues saying that these are not exclusive choices and that KPIs are essential to make sure the company is on track to meet or exceed specific measurable results.

Behaviors needed to cause stellar short-term results do not by default sap at the effectiveness of long-term results.

In your planning, start with long-term goals, including specific, measurable results. Then work backwards and create KPIs for measurable milestones as well as ongoing measurable standards.

I have seen many companies almost go bankrupt when an incorrect strategy was being correctly executed. If the strategy has short and long term measurable goals, and those are monitored, and the corrective action is taken when needed, most companies will succeed.

I feel we are often confronted with false choices because, as Roger said above, these are not mutually exclusive items, in fact they go hand in hand. That being said, without great execution you may as well not waste any time with strategy because you are setting yourself up to fail. If you have great execution but a poor strategy you should be able to have enough success to make corrections to the strategy.

I, too, have a favorite quote on this from Thomas Jefferson, "Vision without execution is hallucination."

Strategy is defining what it is that you want to do and execution is everything involved with knowing how to do it well, so my answer would be "yes". Brilliant execution won't generate success from an ill-founded strategy and poor execution of any strategy - just forget about it. This question is like asking "Which is more important for survival - air or water?"

It's a very good question. I agree with most of what has been said already - the two certainly go hand in hand.

A sound strategy, if not accompanied by operational excellence in terms of execution, could easily result in failure.

Furthermore the trouble with strategy is that you don't really know whether it's optimal from the outset. It could be obsolete 12 months down the line and as Thomas says, it will vary over time. Using business performance related KPI's should reveal trends that will either support the current strategy or cause management to modify it.

Operational KPI's should reveal whether execution is optimal (by benchmarking with competitors), and either improving or deteriorating (by trend analysis).

Isn't it like the chicken and the egg? Obviously, the strategy is worthless if it is not executed. However, if you don't have a strategy how do you know what to execute? Strategy in this context doesn't have to be a five year plan it can be day to day directional guideposts.

Why not aiming to both excellent strategy and execution? This would certainly make the difference...

In one of their books, Bob Kaplan and Dave Norton note that conventional wisdom holds that less than 10% of organizations can fully implement their strategies. This "wisdom" is actualy based on an article that was published in Fortune over 30 years ago.
To assess the accuracy of this assertion today, at IMA (Institute of Management Accountants) we've just recently completed a study, based on a survey of our members, around strategy execution.
Our results show that 13% of companies believe they were VERY successful at executing their strategy in 2012, 28% successful, 44% somewhat successful, and 14% were unsuccessful.
75% of companies that were VERY successful at executing their strategy were good at BOTH strategy formuation and monitoring execution on goals and objectives so, yes, both are important.
Kaplan & Norton are correct with regard to the importance of strategy execution: doing a good job at monitoring and executing on goals and objectives is twice as important as having a good mechanism for formally defining strategy in terms of successful executing strategy.
More of our results can be found in our article in the upcoming Mar/April 2014 issue of Journal of Corporate Finance & Accounting. Another article may be forthcoming in Cost Management.

Execution...definitely. Jim (among others) hit it right on the head. Having a great strategy is meaningless if you can't execute on it.

I know some banks which go in bankruptcy due to poor executions of strategy. Comparing to what it sas int the last 5 years, currently blackberry is not performing well comparing to iphones (poor strategy). Therefore, there is a complementarity between strategy and execution.

There is an interesting article in this week's Economist (11/9) about how the large operational consulting firms (IBM, Accenture and the Big Four) are continuing to move into strategic consulting (Deloitte/Monitor, PWC/Booz) to provide their clients with end-end solutions, at the risk of a conflict of interest.