To get better insight about why execution is such a tough challenge, we analyzed the quarterly and annual earnings performance of 200 companies over a twenty year period.

The following graph shows the annual earnings rate on the vertical axis. The horizontal axis shows the volatility produced by that growth. Volatility is another word for how predictable the growth was. The farther to the right the more Unpredictable the earnings performance is. The first thing we learned in this analysis was that as the growth rate increased beyond about 15% per year the volatility increases faster than the growth rate.

For example, when growth rate doubles from 20 to 40%, the volatility increases from 20% to 150% — a 7 fold increase. The faster a business grows the more unpredictable it becomes. So there is something about growth that makes execution more difficult.

As Karl Albrecht said in his book Corporate Radar, “The majority is not always right, the conventional wisdom is not always wise, and the accepted doctrine could well be flawed. The more fashionable an idea, the more it is likely to be exempt from critical evaluation. Breakthrough thinking sometimes calls for contradicting the most widely held assumptions and beliefs.”

Consider what you think is your biggest business challenge. Is it growth? Competition? Innovation? Cost containment?

I’d like to challenge how you think about your biggest business challenge. In fact, I propose that what you think is your biggest business problem, isn’t.

The foundational challenge - one that transcends all other business problems - is executing strategy. In other words, building an organization that has the ability to plan and execute, while at the same time, overcoming the inevitable surprises - is the biggest and toughest challenge in business.

The good news? This one problem, if solved, will make solving all other problems easier.

That’s what the Execution Revolution….is all about!

Want to know how to thrive, not just survive during a slow economy?

Jim Blasingame at the Small Business Advocate interviewed me on Monday, May 5. During the interview, I joined Jim and offered some thoughts on what businesses can do internally to focus on the main characteristic of succcessful organizations:  EXECUTION.

Listen to the podcast interview here.