Home > Articles > Business & Management > Finance & Investing

  • Print
  • + Share This
This chapter is from the book

The Execution Gap

There is a major gap between visionary strategies and financial analysis. At one extreme are the bold strategies of where we would like to be, and at the other extreme are finance-based analytical tools for evaluating investment opportunities that need to be made as an important step in reaching those strategic objectives. Unfortunately, neither the grand visionary strategies nor financial tools are enough on their own. There is a huge gap between strategy and financial analysis, what we call the execution gap. As shown in Figure 1.3, the execution gap is where managers create value for their companies by building a bridge between the financial analysis and corporate strategies. This step is the essential task and responsibility of management.

In one of his earliest meetings with security analysts after becoming IBM's CEO, Lou Gerstner, who recently retired from IBM, said that "the last thing IBM needs right now is a vision." Gerstner and his management team then committed their company to the business basics of execution. The company's subsequent success is well documented, and although Gerstner was obviously referring specifically to IBM when he made that statement more than 10 years ago, his words were prescient for all of us today.

Note the key word of execution as compared with the word vision. Gerstner clearly recognized the importance of getting the job done versus merely talking about it, and he focused the company's efforts accordingly. He was emphasizing the importance of moving away from management theories and talk to reality and results.

Gerstner's comments are not an isolated thought by an individual manager. The new CEO at General Electric, Jeff Immelt, was recently quoted in the Wall Street Journal. When discussing two major acquisitions by his company he said, "Most companies ultimately get judged on their ability to take a good strategy and execute it." Note again the key word execution.

In fact, the word execution is in the title of a recent best-selling business book, Execution: The Discipline of Getting Things Done.3 The authors of that book, Larry Bossidy, the former CEO of Allied Signal (now Honeywell), and Ram Charan, a consultant with McKinsey, write, "Execution is the great unaddressed issue in the business world today. Its absence is the single biggest obstacle to success and the cause of most of the disappointments that are mistakenly attributed to other causes."

The fact that Lou Gerstner, the CEO of IBM, Jeff Immelt, the CEO of General Electric, and Larry Bossidy, the CEO of Honey well, are focused on execution indicates its importance in the executive suite and for senior-level managers. Execution is just as important for midlevel managers, those charged with the day-to-day task of getting the job done. Many midlevel managers are often caught between the extremes of expectations of achievement of strategic visions and the constraints of financial tools. You want to get the job done well, but the execution gap holds you and your company back.

Although measurement and management systems like the Balanced Scorecard can provide an alternative to bridging the execution gap, most companies and most managers within them do not have the time or resources to devote to the development or implementation of broad-based management initiatives. These initiatives can often be very useful, but those managers on the firing line every day frequently find that what works in the corporate classroom is often just too complicated or difficult to remember or keep track of in the battlefield of day-to-day business. It is hard enough just to catch up with the work that piled up while you were away at a corporate seminar and training program, let alone put what you have learned into practice. Besides, you might have had the experience of being burned by your manager, who simply ignores you when you try to implement what you have learned, often with a comment along the lines of, "That's nice, but we have got to get the job done now."

You might be familiar with Good to Great by Jim Collins, which is one of the most successful business books of the past decade.4 Collins and his team studied companies in the Fortune 500 from 1965 through 1995 to determine which companies made, using their words, "the leap" from good to great. Their findings and suggestions for senior management are excellent, but, unfortunately, they are simply not enough in terms of the execution that is needed on a day-to-day basis by all levels of management to make the "leap." After reading books like Good to Great, you feel excited and enthusiastic about what should or could be done in your company, but ultimately you are left without a clear roadmap for implementing such fundamental changes.

This book provides you with a fabric that meshes the energy and the transformative capabilities of strategy together with the basic blocking and tackling of business basics, including basic and essential financial performance metrics. This approach does not require you or your company to go through extensive and expensive corporate transformation efforts. Read on, and you will see how you can build your existing methodologies and approaches to become significantly better and more effective at evaluating and executing the investments your company needs to gain efficiencies, grow your business, and increase your profits.

This approach enables you to move from theory and talk to reality and results, because it puts everyone in your company on the same page, allows them to see an investment through from the beginning to the end, helps to ensure that precious resources are not squandered, and provides opportunities to increase value for all stakeholders in your company. You will be able to leverage your existing knowledge and resources and get an immediate benefit in the work that you and your team are involved with every single day.

The key theme throughout the pages that follow is that success comes not from the choice of a specific investment, but from developing the competencies to assess and to manage the investments your company does choose with a clearly defined, disciplined approach, an approach called the Business Investment RoadmapTM. Fundamentally, the Business Investment Roadmap is built on the concept that successful investments require a mastery of the business basics. If you are used to analyzing opportunities primarily with financial metrics, you will see that the Business Investment Roadmap uses financial analysis as only one (albeit important) aspect of the investment process, and, therefore, it complements and enhances traditional finance-based analytics, rather than substitutes for them.

The Business Investment Roadmap connects strategies to financial analysis; it gives you the framework to bridge the execution gap. In fact, although ROI and other finance-driven analytical tools will certainly remain important in evaluating investment opportunities, the most crucial metrics are those that will enable you to achieve and deliver the promised returns to your company's shareholders. These are execution-driven metrics, and they directly relate to the who, what, when, where, why, and how of investments.

  • + Share This
  • 🔖 Save To Your Account

InformIT Promotional Mailings & Special Offers

I would like to receive exclusive offers and hear about products from InformIT and its family of brands. I can unsubscribe at any time.


Pearson Education, Inc., 221 River Street, Hoboken, New Jersey 07030, (Pearson) presents this site to provide information about products and services that can be purchased through this site.

This privacy notice provides an overview of our commitment to privacy and describes how we collect, protect, use and share personal information collected through this site. Please note that other Pearson websites and online products and services have their own separate privacy policies.

Collection and Use of Information

To conduct business and deliver products and services, Pearson collects and uses personal information in several ways in connection with this site, including:

Questions and Inquiries

For inquiries and questions, we collect the inquiry or question, together with name, contact details (email address, phone number and mailing address) and any other additional information voluntarily submitted to us through a Contact Us form or an email. We use this information to address the inquiry and respond to the question.

Online Store

For orders and purchases placed through our online store on this site, we collect order details, name, institution name and address (if applicable), email address, phone number, shipping and billing addresses, credit/debit card information, shipping options and any instructions. We use this information to complete transactions, fulfill orders, communicate with individuals placing orders or visiting the online store, and for related purposes.


Pearson may offer opportunities to provide feedback or participate in surveys, including surveys evaluating Pearson products, services or sites. Participation is voluntary. Pearson collects information requested in the survey questions and uses the information to evaluate, support, maintain and improve products, services or sites, develop new products and services, conduct educational research and for other purposes specified in the survey.

Contests and Drawings

Occasionally, we may sponsor a contest or drawing. Participation is optional. Pearson collects name, contact information and other information specified on the entry form for the contest or drawing to conduct the contest or drawing. Pearson may collect additional personal information from the winners of a contest or drawing in order to award the prize and for tax reporting purposes, as required by law.


If you have elected to receive email newsletters or promotional mailings and special offers but want to unsubscribe, simply email information@informit.com.

Service Announcements

On rare occasions it is necessary to send out a strictly service related announcement. For instance, if our service is temporarily suspended for maintenance we might send users an email. Generally, users may not opt-out of these communications, though they can deactivate their account information. However, these communications are not promotional in nature.

Customer Service

We communicate with users on a regular basis to provide requested services and in regard to issues relating to their account we reply via email or phone in accordance with the users' wishes when a user submits their information through our Contact Us form.

Other Collection and Use of Information

Application and System Logs

Pearson automatically collects log data to help ensure the delivery, availability and security of this site. Log data may include technical information about how a user or visitor connected to this site, such as browser type, type of computer/device, operating system, internet service provider and IP address. We use this information for support purposes and to monitor the health of the site, identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents and appropriately scale computing resources.

Web Analytics

Pearson may use third party web trend analytical services, including Google Analytics, to collect visitor information, such as IP addresses, browser types, referring pages, pages visited and time spent on a particular site. While these analytical services collect and report information on an anonymous basis, they may use cookies to gather web trend information. The information gathered may enable Pearson (but not the third party web trend services) to link information with application and system log data. Pearson uses this information for system administration and to identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents, appropriately scale computing resources and otherwise support and deliver this site and its services.

Cookies and Related Technologies

This site uses cookies and similar technologies to personalize content, measure traffic patterns, control security, track use and access of information on this site, and provide interest-based messages and advertising. Users can manage and block the use of cookies through their browser. Disabling or blocking certain cookies may limit the functionality of this site.

Do Not Track

This site currently does not respond to Do Not Track signals.


Pearson uses appropriate physical, administrative and technical security measures to protect personal information from unauthorized access, use and disclosure.


This site is not directed to children under the age of 13.


Pearson may send or direct marketing communications to users, provided that

  • Pearson will not use personal information collected or processed as a K-12 school service provider for the purpose of directed or targeted advertising.
  • Such marketing is consistent with applicable law and Pearson's legal obligations.
  • Pearson will not knowingly direct or send marketing communications to an individual who has expressed a preference not to receive marketing.
  • Where required by applicable law, express or implied consent to marketing exists and has not been withdrawn.

Pearson may provide personal information to a third party service provider on a restricted basis to provide marketing solely on behalf of Pearson or an affiliate or customer for whom Pearson is a service provider. Marketing preferences may be changed at any time.

Correcting/Updating Personal Information

If a user's personally identifiable information changes (such as your postal address or email address), we provide a way to correct or update that user's personal data provided to us. This can be done on the Account page. If a user no longer desires our service and desires to delete his or her account, please contact us at customer-service@informit.com and we will process the deletion of a user's account.


Users can always make an informed choice as to whether they should proceed with certain services offered by InformIT. If you choose to remove yourself from our mailing list(s) simply visit the following page and uncheck any communication you no longer want to receive: www.informit.com/u.aspx.

Sale of Personal Information

Pearson does not rent or sell personal information in exchange for any payment of money.

While Pearson does not sell personal information, as defined in Nevada law, Nevada residents may email a request for no sale of their personal information to NevadaDesignatedRequest@pearson.com.

Supplemental Privacy Statement for California Residents

California residents should read our Supplemental privacy statement for California residents in conjunction with this Privacy Notice. The Supplemental privacy statement for California residents explains Pearson's commitment to comply with California law and applies to personal information of California residents collected in connection with this site and the Services.

Sharing and Disclosure

Pearson may disclose personal information, as follows:

  • As required by law.
  • With the consent of the individual (or their parent, if the individual is a minor)
  • In response to a subpoena, court order or legal process, to the extent permitted or required by law
  • To protect the security and safety of individuals, data, assets and systems, consistent with applicable law
  • In connection the sale, joint venture or other transfer of some or all of its company or assets, subject to the provisions of this Privacy Notice
  • To investigate or address actual or suspected fraud or other illegal activities
  • To exercise its legal rights, including enforcement of the Terms of Use for this site or another contract
  • To affiliated Pearson companies and other companies and organizations who perform work for Pearson and are obligated to protect the privacy of personal information consistent with this Privacy Notice
  • To a school, organization, company or government agency, where Pearson collects or processes the personal information in a school setting or on behalf of such organization, company or government agency.


This web site contains links to other sites. Please be aware that we are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of each and every web site that collects Personal Information. This privacy statement applies solely to information collected by this web site.

Requests and Contact

Please contact us about this Privacy Notice or if you have any requests or questions relating to the privacy of your personal information.

Changes to this Privacy Notice

We may revise this Privacy Notice through an updated posting. We will identify the effective date of the revision in the posting. Often, updates are made to provide greater clarity or to comply with changes in regulatory requirements. If the updates involve material changes to the collection, protection, use or disclosure of Personal Information, Pearson will provide notice of the change through a conspicuous notice on this site or other appropriate way. Continued use of the site after the effective date of a posted revision evidences acceptance. Please contact us if you have questions or concerns about the Privacy Notice or any objection to any revisions.

Last Update: November 17, 2020