Strategy and Execution - How to Dominate Your Competitors through Flawless Execution
Strategic planning and the execution of a plan actually originated thousands of years ago when army leaders came to the conclusion that winning armies required a strategy, a plan of execution and an organizational structure to win a war. If the war leader did not have an effective plan he mostly lost. If the war leader was not able not execute the plan properly he more than likely lost. Losing a battle or a war meant death or slavery for the vanquished soldiers and their families.
Recently some long established multi-nationals companies lost too many battles and eventually the war against competitors. By seeking bankruptcy protection if will take decades to recapture their former glory if ever. As a result many of the GM, Chrysler and Nortel employees and suppliers have suffered near economic extinction. For example if you are a key supplier to GM or a GM dealer your sales are now down 50% to 60% providing you have not been already terminated as a supplier or a dealer. If you are an employee who has been jettisoned from these companies you are now out of work with no severance pay, perhaps no pensions or benefits and bleak employment prospects until the global economic ship rights itself.
In light of these recent bankruptcy developments I decided, over the weekend, to re-read the best seller book on Execution that was written in 2002 by Larry Bossidy and Ram Charan.
Too many leaders fool themselves into thinking their companies are well run. When corporate leaders start understanding how the GE’s and Emerson Electrics of this world are run—how superbly they get things done—they discover how far they have to go before they become world class in execution.
Here is the fundamental problem: People think of execution as the tactical side of
business, something leaders delegate while thy focus on the perceived “bigger” issues. This idea is completely wrong. Execution is not just tactics—it is a discipline and a system. It has to be built into a company’s strategy, its goals, and its culture. And the leader of the organization must be deeply engaged in it. He can delegate its substance. Many leaders who fall victim to the gap between promises they’ve made and results their organizations delivered. They frequently say my people aren’t doing the things they’re supposed to do to implement a plan. Execution is a specific set of behaviours, accountabilities, authorities and techniques that companies need to master in order to have a competitive advantage.
Running a company, any company, isn’t easy. Much like what Winston Churchill said about history, “It’s just one damn thing after another.” Most often today the difference between a company and its competitor is the ability to execute. If your competitors are executing better than you are, they’re beating you. It impacts on the President’s credibility and will get him or her fired.
Let’s review how this best seller book describes executing to win.
Execution- the Discipline of Getting Things Done by Larry Bossidy & Ram Charan, 269 pages, ISBN 0-609-61057-0
About the Authors:
After a long, stellar career with General Electric, Larry Bossidy transformed AlliedSignal into one of the world’s most admired companies and was named CEO of the year in 1998 by Chief Executive Magazine. Accomplishments such as 31 consecutive quarters of earnings-per-share growth of 13 percent or more didn’t just happen; they resulted from the consistent practice of the discipline of execution: understanding how to link together people, strategy, and operations, the three core processes of every business.
Ram Charan is a legendary advisor to senior executives and boards of directors, a man with unparalleled insight into why some companies are successful and others are not.
Together Bossidy and Charan have pooled their knowledge and experience into the one book on how to close the gap between results promised and results delivered that people in business need today.
Bossidy and Charan offer advice and guidance that can be used effectively by
anyone, in any circumstances that require things to get done – timely and well. Leading for execution does not simply involve following a set of directives – on the contrary, it is a way of doing things that calls for a leader to be “deeply and passionately engaged in your organization and honest about its realities with others and yourself.” It is a way of leading that is assertive in getting others to bridge the gap between understanding what should be done and actually following through with the tasks. It is a straightforward idea that nonetheless gets overlooked too often.
To illustrate their points, the authors tell stories of Richard McGinn, a former CEO of Lucent Technologies, Richard Thoman from Xerox, and Michael Armstrong from AT&T– leaders with strong character, intelligence, and vision who, nonetheless, were unable to achieve success for their respective organizations. Bossidy and Charan highlight the importance of analytical thinking in transforming conceptual ideas into measurable outcomes, yet they also refer to the process as a significant “emotional challenge.” This idea relates to a larger concept of emotional intelligence and its integral role in effective leadership.
The format and style of the book are reflective of its purpose – getting readers to
understand why execution is essential, providing examples of how to create the discipline of execution, and showing how to put the principles discussed into practice. This “what, why- and-how-to” guide consists of three parts.
In Part I, the authors explain the value of execution, which is based on three building-blocks discussed in Part II (the leader’s behaviors, a framework for cultural change, and having the right people in the right jobs). The authors see these building blocks as critical to implementing the three core processes of execution – the people process, the strategy process, and the operations process – outlined in Part III. The essence of each part is briefly outlined below.
In Part 1 “Why Execution Is Needed” the authors refer to execution as “a systematic process of rigorously discussing the how’s and the what’s, questioning, tenaciously following through and ensuring accountability.” In explaining the need for the leader’s direct engagement with the people and processes in organization, Bossidy and Charan attack a common notion that “the top dog is exempt from the details of actually running things.” They believe that way of thinking is wrong and “creates immense damage.” To illustrate the point, there is an example of Dick Brown, who took over EDS when it had a culture of little accountability and pervasive indecisiveness. To tackle these issues, he personally went around the world to talk to the organization’s employees, listened to their complaints and suggestions. He then created messages in response that clarified the company’s objectives, issues, and a new leadership style – one of clearly defined decision-making and accountability.
Part II Covers the Three Building Blocks of Execution
Building Block One:
The Leader’s Seven Essential Behaviours:
1. Know your people and your business
2. Insist on realism
3. Set clear goals and priorities
4. Follow through
5. Reward the doers
6. Expand people’s capabilities
7. Know yourself
The theme of this section is connectedness and immediacy – a leader needs to be consistently present in the organization, “show up with an open mind and positive demeanour,” and form personal connections with the people. The authors emphasize the seventh behaviour, knowing oneself, by telling how “emotional fortitude that comes from self-discovery and self-mastery” is necessary for understanding and leading other people. This emotional fortitude would also help one facilitate cultural change and make sure that the right people are doing the jobs that they can accomplish and flourish.
Building Block Two:
Creating the Framework for Cultural Change
In this section the authors argue that most efforts at cultural change fail because they are not linked to improving the business’s outcomes. The ideas and tools of cultural change are fuzzy and disconnected from strategic and operational realities.
Their basic premise on cultural change is simple. Cultural change gets real when you aim is execution. You don’t need a lot of complex theory or employee surveys to use this framework. You need to change people’s behaviour so that they produce results. First you tell people clearly what results you are looking for. Then you discuss how to get these results, as a key element of the coaching process. Then you reward people for producing the results. If they come up short you provide additional coaching, withdraw rewards, give them other jobs, or let them go. When you do these things you create a culture of getting things done.
Building Block Three:
The Job No Leader Should Delegate-Having the Right People in the Right Place
This may be the most important building block as you need to right people in the right place to execute and win. Otherwise the leaders will have to work in the weeds most of the time to execute the strategies and consequently the leaders will lose sight of the more strategic longer term issues for growth and survival.
In chapter five Bossidy describes how he personally would ensure that execution occurs within his businesses. Start with the right people. Too many times we assume people are merely interchangeable cogs, but great business leaders who get results know differently. Chapter 5 discusses the responsibility and focus required to ensure the right people are in the right jobs. Even as a CEO, Bossidy spent up to 40% of his time on developing and hiring the right people.
The authors claim that the quality of the people in a company is the best competitive differentiator. Choosing the right people is what creates that elusive sustainable competitive advantage. Examples used are Dell out-competing Compaq because they had the right people in the right jobs who understood how to execute the Dell business model superbly.
The authors show how the ideas already discussed all fit into making an organization achieve its objectives. Among the three processes, the people process is most important. After all, the people are the ones making the other two happen. The strategy process, in turn, makes the link between people and operations. The authors zero in on what matters in a strategy process review by saying that in evaluating an idea, the leader must assess its feasibility – how realistically it fits into the environment where it will be implemented. The third core process of execution – operations – connects strategy and people. “The strategy process defines where a business wants to go, and the people process defines who’s going to get it there. The operating plan provides the path for these people. … It puts reality behind numbers.”
Every organisation uses these processes in one form or another, but Bossidy and Charan believe that most organisations allow them to stand apart, like separate silos. An execution culture is about the intersection of the three areas.
The People Process
This is about having the right people in the right place, it is about knowing the strengths, weaknesses, capabilities and capacities of the people in an organisation and it is about development as well as about hiring and firing. All this may sound par for the course, but few organisations assign the level of importance to it advocated by the authors. In their view the people process is more important than either the strategy or operations processes as it is the people that will make an organisation succeed or fail. Moreover, they argue that most people processes are backward looking, evaluating people against the requirements of today rather than looking at the requirements of the future. For example, how often have you seen organisations leave someone in post even though they are generally regarded as not being the right person to take the business to the next level?
The Strategy Process
In many organisations this is an annual meeting at which people present numerous PowerPoint slides and answer a few questions. The authors argue that these sessions are too short-lived and rarely examine the subjects under discussion with the rigor and robustness that they deserve. Another problem is that strategies are often settled upon that are intellectually appealing but that the organisation is incapable of implementing. For example, when AT&T acquired several cable companies the strategy made sense but the management did not have the ability to run them. When Richard Thoman became CEO at Xerox he set about transforming the business by simultaneously launching two sweeping initiatives. The company had a history of poor execution and failed to achieve any of its objectives, the stock price plummeted and Thoman was fired.
The Operations Process
Once the strategy has been agreed upon, it is all too common for organisations to then set targets, agree on budgets and allocate resources, give the unit manager a slap on the back and then move on to the next topic with absolutely no discussion as to how, or even whether, you can get the desired results.
A good way to appreciate the value of an operations process is to consider its outcomes:
1. It identifies goals that can be realistically achieved.
2. It encourages substantive learning.
3. It creates opportunities for coaching sessions.
4. It builds confidence and engenders success.
Execution offers more than a quick fix to these issues – it inspires a new way of thinking.
As Bossidy and Charan point out, 80 percent of learning occurs “outside of the
classroom” – and every leader needs to be a teacher, giving the employees the tools they need. In their book, the authors practice what they preach – they give you the tools you need to create the discipline of execution. The next step is all about doing it.
I believe that the book Execution shows how to get the job done and deliver results . . . whether you’re running an entire company or in your first management job. It does require a second read if you are going to grasp anything from the book, like most business books with a series of guidelines for implementation.
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