What is "Execution Risk" - and how have you been navigating it?

A question for CEOs of small and medium sized companies: what is “execution risk” and how have you been navigating it?

I spent some time talking with Mina Johl, CEO of Purple Wins, on this subject, and here’s her answer: “Execution risk is the chance your organization can’t convert a decision into the result it promised. In other words, it’s the distance between the strategy on paper and what lands.”

She goes on to explain that “execution risk is also the largest, least measured variable behind every major commitment that a company makes”.

Regular readers of my columns and blogs know that I have often noted how founders and CEOs of small and medium sized companies south of the border make bigger, “riskier” decisions far faster than their counterparts north of the 49^th, and when I dive into the question a bit deeper, the word “certainty” comes up as one of the first reasons why.

Canadian leaders have historically tended to want more “certainty” before making a big decision, and this condition has only been exacerbated by all the uncertainty caused by the deteriorating relationship between the Canadian and US governments.

Most CEOs I know can read and understand their financial statements well. They rely on them as their primary feedback that they are doing the right things and are on the right course. But sometimes that reliance gets in the way because those statements are backwards looking. If you have any aversion to risk at all, they will encourage you to “stay the course” (I.e. avoid risky decisions) unless those financials indicate the course is going in the wrong direction – and in that case, it’s too late. The course may be reversable, but you’ve lost a year, or two in time and momentum, and a lot of money in losses or lost opportunity, and energy and enthusiasm in failed execution.

In times like these that we’re experiencing now, it’s important to make the right decisions sooner, and after making them, to get insights and feedback on the effectiveness of those decisions far faster. You can’t wait until next year’s statements to tell you you’re on the right course or not.

Hard decisions, like a big capital bet, a key senior hire that has to land, an AI rollout, an international expansion (or a domestic one) — it would be great to know what these decisions will do to the P&L before you commit to it.

It seems like the classic “chicken and egg” question, but it doesn’t have to be. Nor does it have to boil down to “instinct, gutfeel and courage” (although it always will, to some degree). And certainly, it should never have to come down to desperation because nothing else is working.

Mina Johl and her team at Purple Wins have been taking these questions on and have developed an approach that leverages AI to help CEOs make smarter and more impactful decisions faster. It doesn’t replace anyone on the executive or leadership team, it gets them on the same page – or perhaps put better, it gets everyone using the same map and the same compass. New directions get set with more clarity (more certainty, even in uncertain times), and faster feedback systems allow for course adjustments to be made far earlier.

The old business axiom, “time is money”, holds true today. Making the right decisions faster, or knowing you made the wrong ones sooner, will absolutely make it to your bottom line. Wouldn’t you like to know in advance, well ahead of them showing up in your year-end financial statements?

And this brings up a sharper truth underneath that's worth talking about. The risk usually isn't in just the decision itself — it's in whether the layers of the company underneath it can (and is willing to) deliver on it. That capability gap is where profit quietly leaks or plans and strategies completely fail. It’s not just making the right decisions at the right time - it’s knowing your team’s capacity and willingness to execute, and sometimes even your board.

Regular readers of my blogs and columns will know that I have spent decades founding and building businesses, and my focus has largely been on developing or deploying technologies for the benefit of people-centric companies. Over the last few years, I have seen a lot of new AI technology developed and deployed to benefit engineers, production workers, administration people and finance officers, but this is the first one I’ve encountered that is aimed specifically for the CEO.

If this is a topic you’re interested in, or if you would like to test drive Mina’s new platform, send me a quick note to paul@tpi-3.ca

My belief is that if we are to remain competitive in a challenging and increasingly competitive world, our companies need their CEOs to be the best they can be.