What’s more important to a company’s future, strategy or execution?

Execution is the obvious answer.

Most companies have operational strategies to help increase profits and market share, and achieve cost reductions. Xerox, according to the authors, learned how to reduce costs, improve quality, and satisfy customers by the early 1990s. But pursuing quality, customer satisfaction and operating efficiencies did not help much against Canon. What’s more, Xerox’s pioneering roles in laser printing,

Networking, icon-based computing, and the laptop computer failed to help it create substantial new businesses outside copiers.

Xerox left money on the table, write Hamel and Prahalad, by getting “better without getting different.”

The two authors, both management professors and consultants, are well known for their work in redefining competitiveness and strategic intent. They consult widely and have published articles and videos. Their first book is a thoughtful amalgam of seventeen years collaborating. As such, its ideas are fully developed and represent an evolution of modern strategic thinking for large firms.

Beyond reengineering, the authors write, top managers must know how to reinvent their entire industries, a la CNN, Wal-Mart, Service Corporation International, Motorola. These path breaker organizations recognized their core competencies and developed strategies to reshape industry structures around the most competitive of their core competencies.

Here are some ideas from the book managers can use:

Industry foresight. Get your employees to feel a sense of urgency about the future, that they can make a difference. Avoid being hostage to existing markets. And develop foresight to create the future, not just in your company, but in your entire industry.

Core competencies. Identify the most highly-evolved core competencies which can be leveraged for the future. Sony pioneered transistor radios, but isn’t still making them. Its core competency of miniaturization enables it to continually amaze consumers, in pioneering new things to miniaturize.

Look to strategy for a broad agenda. Komatsu’s policy of “encircling” Caterpillar, as the latter entered Komatsu’s home market in the 1960’s, resulted in improving their base business of small bulldozers, intercepting Cat’s technology, and successfully attacking its more vulnerable markets. NEC recognized, in the late 1960s and early 1970s, that communications and computers were converging. As a result, they built up their competencies in systems and digital manufacturing. Recognizing the relationship of telecommunications, computer systems, and components businesses may be old hat today, but in 1977 it represented foresight tied to a broad agenda on NEC’s part.

Rebuild leadership before you need to. In 1992, EDS committed itself to rebuilding industry leadership in the face of new competition ranging from Andersen Consulting to AMR Corporation. The company adopted a top-to-bottom challenge of its existing assumptions, involving less-than-senior managers, to achieve its current strategic architecture, summed up in the words “globalize, informationalize, and individualize.”

Some of these ideas pertain more to large companies than the nimble ones which act instinctively without deep thought. Large companies may have more resources, but the future will go to whoever leverages resources the best. Sony and Yamaha, for example, leverage resources through their “banner” brands which, omnipresent on all products, present consumers with the least brand confusion. The trendiest way to leverage resources is to look for coalitions with other companies as has been done in the interactive TV and personal communications industries.