# Table stakes or a lead *Choose the execution that lasts* --- In twenty years I haven't been in a single meeting where the senior management team sat around asking which moat to build, or who was attacking the one we had. It's one of those ideas that's more useful as an after-the-fact lens than as a thinking tool for the people inside a business. There's a real nugget of insight in it. Some businesses have one or more mechanisms that protect them from competition, and so protect their returns and ultimately their value. It's a nice picture, and it helps investors explain why certain businesses are worth more than others. My favourite version is Hamilton Helmer's *7 Powers*, and that's all well and good as far as it goes. Looking back, you can ask why a business is expensive, and the answer is that it has a moat. By that point, by definition, it does. As powerful as the imagery is, it comes with limitations, and some of them matter for an operator in particular. You build a moat in peacetime, before you're attacked, knowing what it is and where it has to go. The reality of running a business is that you're protecting it from competitors in real time, and building a moat while you're being attacked is nonsensical: you can't dig it fast enough to stop an attack that has already started. There's only one lowest-cost operator in a market, so until you're it you don't have that moat. A network isn't a moat until after you've built the network, and it's unclear where the threshold is. Switching costs: how much is enough? In each case you only find out you had one after the fact. ## Everything is execution Running a business and making it better is the work of improving durable advantage. I just don't think the moat is the best picture of how an operator does it. Everything in business is execution, and the art of leadership is figuring out which execution levers are going to break you ahead of the pack, and which are ultimately going to get eroded away and become table stakes. That turns into a question you can ask of any single initiative before you spend on it: could every competitor have this too, and how soon? If they could, it might still be worth doing, but it won't set you apart. ## The unglamorous ones That's why I find case studies of slightly unglamorous businesses more instructive than the frameworks: the ones that at first glance just look operationally efficient. There's something neat in how their operational discipline leads to durable advantage, because the effort they put into operational effectiveness doesn't get competed away, or it's harder to. In my mind that's the bridge between execution and strategy, and it's what operators really need to care about. Michael Porter's famous line is that operational effectiveness isn't strategy, because rivals copy it. Most of it does get copied, and becomes table stakes. The interesting cases are the ones where it doesn't, and looking back you can name what they built: [[Building density|density on a delivery route]] is what Helmer calls scale economies, and execution that rivals can't copy is his process power. The labels only come afterwards, though, and at the time each one was a bet on which bits of execution would still be a lead once everyone else had caught up. Those things aren't always obvious, and you're constantly having to make those bets.