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The Best Advisory Businesses Create Value Deliberately

Terry Mullen
Jun 22, 2018

We see and evaluate hundreds of financial advisor practices and business, and there is most definitely a difference between the two. Strong Practices normally present themselves as boutiques, offering particular and specific expertise and services delivered with the care of fine craftsmen. Strong Businesses, on the other hand, are built to scale and grow, carefully and intentionally implementing and executing deliberate strategies, and they are far more valuable than practices. This is because the leaders of the best financial advisory businesses are focused on strategies to build value in their enterprises, and they are tenaciously focused on implementation and execution.

In an absorbing article for Harvard Business Review entitled Defining Strategy, Implementation, and Execution, business advisor Ken Favaro writes, “Strategy, implementation, and execution are three co-incident determinants of a company or business unit’s ultimate output — its results — that are very difficult to parse into their individual effects. When we see a company or business unit producing poor results over multiple years, no one can say for sure whether that’s due to poor strategy, implementation, or execution. But in my experience, it’s very difficult to implement a poor strategy well and doubly difficult to produce excellent results with a poor strategy that’s being poorly implemented. (And, yes, of course, having a great corporate or business strategy is no guarantee of great results either; you still have to implement and execute well.)”

The distinctions he makes aren’t between thinking and doing, deciding and acting, or planning and producing, all of which are involved in all three determinants of strategy, implementation, and execution. But that doesn’t mean they’re all the same thing. Each involves specific effort and resources, “and when business leaders conflate strategy, implementation, and execution, they usually end up with a lot of the trappings of running a modern-day company or business unit — such as goals and targets; plans and initiatives; and mission, vision, and purpose statements — but very little actual strategy, implementation, or execution.”

It’s striking how much confusion there is on this point. In fact, we see many attempts to standardize or templatize strategy in the financial advisor world, but far less real implementation. Is strategy about making choices where we want our business to go, where we play, and how we win? Does it try to address unforeseen issues and sudden opportunities? Do implementation or execution simply mean getting things done, and can you separate them from strategy formation?

Unsurprisingly, these semantics don’t matter much to many business leaders in our industry, but they should. A clear understanding of the distinctions between strategy, implementation, and execution is key to running a business that succeeds in the real world. Navigating in a haze, on the other hand, leads to meandering and less successful businesses.


According to Favaro, strategy consists of two categories, depending on the structure of a business, which are analogous to businesses of various sizes: corporate strategy and business unit strategy.

Corporate strategy includes top executives defining three choices: What should the business be? What capabilities should differentiate the business? What comparative advantage should add value to the business? These choices frame and guide all the decisions that a business makes every day, including how to run it, what it buys, what market it operates in, how success is measured, etc.

Business unit strategy also has three key decisions that can’t be delegated by its leader: Who should be the customers that define the target market? What should be the value proposition that differentiates products and services to customers? What should be the capabilities that make the business competitively better at delivering the value proposition? These choices should drive the decisions a management team, functions, and staff make every day, including client pricing, technology selection and integration, outsourcing decisions, and many more.


Implementing a strategy involves all the decisions and activities needed to realize the two sets of strategic choices. If an advisory business already has the capabilities, enterprise advantage, customers, value proposition, and skills it has chosen, its strategy is fully implemented.

However, as a practical matter, a strategy can never actually be fully implemented because the assumptions it is based on (customers, technology, regulation, competitors, etc.) are constantly changing. In our industry, now more than ever before, business leaders have to continuously evolve their strategies to remain relevant and competitive. So, there will always be a gap between where their business is and what their strategies call for. “Closing that gap is implementation,” Favaro says, adding, “Thus, strategy and implementation are running almost continuously in parallel rather than in sequence.” Of course, anyone paying attention in our industry knows this.


Favaro defines execution as “the decisions and activities you undertake in order to turn your implemented strategy into commercial success” — to realize the best possible results a strategy and its implementation will allow.

Once you’ve crystallized your strategy, you can set goals and plans for the business, provide the right incentives, refine a purpose-driven mission, and create other such things to get results. Those are all activities needed to produce results within the context of an implemented strategy. This is execution.

Getting the terminology straight can make all the difference in the world to your business. As Lim Chow Kiat, CEO of Singapore-based FCLT Global aptly put it, “Nomenclature is destiny. We are meticulous about word choice. The wrong words can corrode, if not corrupt, our business.” Favaro agrees, noting “business leaders do themselves a great disservice by not being more thoughtful about what they mean when they say strategy, implementation, and execution.”

More articles related to: Practice Management

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