Execution is Exponential
The math that quantifies how much execution matters
Every business will, from time to time, go through rough patches. And in these moments the people who run the business are usually pretty motivated to make changes and do something about it. But the types of actions they can imagine are often limited. Whole categories of possible moves—many of which may contain solutions to their problems—are invisible to them. They don’t enter into the consideration set. In a way, these managers are limited by habit and instinct.
If a perfect AI robot manager were to take their job, I think its process for diagnosing the causes of lackluster performance would look like a decision tree. And the most important fork in that tree is to classify the situation as a “strategy problem” or an “execution problem.” In other words, do we need to do a better job of executing our current plan? Or do we need a new plan?
The more stories I hear about how companies succeed or stagnate, the more I realize that it’s extremely common for creative founders (also known as “idea people”) to have a persistent bias towards seeing everything as a strategy problem, even when it’s really an execution problem. So when we’re in trouble, we often look for the next big idea that will fix everything. We get excited about big narratives that explain where we are, why we’re struggling, and what we need to do differently in order to fix it. We get hyped to embark upon a bold new chapter—only to realize later that our fortunes haven’t changed that much, the team is starting to get tired of all the changes, and we’re running out of cash. I’ve seen it happen over and over again. I have done it myself.
A lot of times, instead of thinking big, we actually need to think small. Instead of getting hyped about broad narratives that explain our predicament, we need to just buckle down and ask ourselves how we can do what we’re already doing—but much, much better. We need to focus on execution, not strategy.
So why don’t we?
The main reason, at least in my experience, is we don’t realize just how much better we could be executing, and just how much the metrics could improve if we did. We assume we’re performing most of our key activities roughly 80% of the way to perfection, and pushing harder to get the remaining 20% wouldn’t move the needle that much. In my experience this is usually false. We may not be able to imagine how, but 10x or even 100x improvements are possible more often than we think. And the ultimate effect of making that kind of change on every activity has compounding, multiplying effects.
There are two ways of proving this and showing how it works: 1) through an example, and 2) mathematically.
First, the example. Here are three different ways of getting intros to possible investors:
Startups, please note re asking VCs for fundraising intros:
- Poor: (pls intro me to) interested investors
- OK: someone at Fund x
- Best: attached is a spreadsheet of partners at firms and their related investments. Intro me to who you know
You will get 10x more Inteos 🙏
How many high-quality intros do you think the first method would yield, of just asking existing investors for intros? Let’s assume you have 10 existing investors, I think probably a couple of them might make several intros, a couple more might make one, and the remainder might not make any intros. So that’s roughly 15 intros total.