"Sixty-one percent of corporate strategists say poor strategy execution is the primary reason that new growth initiatives fail,” says Marc Kelly, VP at Gartner. “It’s more of a problem than the strategy itself or the funding of that strategy, and it stems from a range of issues."
The 5 Pillars of Successful Strategy Execution. Gartner. July 17, 2023
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 those people. It breaks long-term output into short-term targets. Meeting those here-and-now targets forces decisions to be made and integrated across the organization, both initially and in response to changes in business conditions. It puts reality behind the numbers. The operating plan is not budgeting for "We did better than last year." Such budgeting looks into the rearview mirror to set its goals; an operating plan looks forward to the hows.
Execution: The Discipline of Getting Things Done by Larry Bossidy & Ram Charan with Charles Burck. 2002. Crown Business, NY, NY. p. 226, 227
Know thyself - it's advice as old as the hills, and it's the core of authenticity. When you know yourself, you are comfortable with your strengths and not crippled by your shortcomings. You know your behavioral blind sides and emotional blockages, and you have a modus operandi for dealing with them - you draw on the people around you. Self-awareness gives you the capacity to learn from your mistakes as well as your successes. It enables you to keep growing.
Nowhere is self-awareness more important than in an execution culture, which taps every part of the brain and emotional makeup. Few leaders have the intellectual firepower to be good judges of people, good strategists, and good operating leaders, and at the same time talk to customers and do all the other things the job demands. But if you know where you're short, at least you can reinforce those areas and get some help for your business or unit. You put mechanisms in place to help you get it done. The person who doesn't even recognize where she is lacking never gets it done.
Execution: The Discipline of Getting Things Done by Larry Bossidy & Ram Charan with Charles Burck. 2002. Crown Business, NY, NY. p. 81, 82
An organization can execute only if the leader's heart and soul are immersed in the company. Leading is more than thinking big, or schmoozing with investors and lawmakers, although those are part of the job. The leader has to be engaged personally and deeply in the business. Execution requires a comprehensive understanding of a business, its people, and its environment. The leader is the only person in a position to achieve that understanding. And only the leader can make execution happen, through his or her deep personal involvement in the substance and even the details of execution.
The leader must be in charge of getting things done by running the three core processes - picking other leaders, setting the strategic direction, and conducting operations. These actions are the substance of execution, and leaders cannot delegate them regardless of the size of the organization.
How good would a sports team be if the coach spent all of his time in his office making deals for new players, while delegating actual coaching to an assistant? A coach is effective because he's constantly observing players individually and collectively on the field and in the locker room. That's how he gets to know his players and their capabilities, and how they get firsthand the benefit of his experience, wisdom, and expert feedback.
It's no different for a business leader. Only a leader can ask the tough questions that everyone needs to answer, then manage the process of debating the information and making the right trade-offs. And only the leader who's intimately engaged in the business can know enough to have the comprehensive view and ask the tough incisive questions.
Only the leader can set the tone of the dialogue in the organization. Dialogue is the core of culture and the basic unit of work. How people talk to each other absolutely determines how well the organization will function. Is the dialogue stilted, politicized, fragmented, and butt-covering? Or is it candid and reality-based, raising the right questions, debating them, and finding realistic solutions? If it's the former - as it is in all too many companies - reality will never come to the surface. If it is to be the latter, the leader has to be on the playing field with his management team, practicing it consistently and forcefully.
Specifically, the leader has to run the three core processes and has to run them with intensity and rigor.
Execution: The Discipline of Getting Things Done by Larry Bossidy & Ram Charan with Charles Burck. 2002. Crown Business, NY, NY. p. 24, 25
Most important, the leader of the business and his or her leadership team are deeply engaged in all three [picking other leaders, setting the strategic direction, and conducting operations]. They are the owners of the processes - not the strategic planners or the human resources (HR) or finance staffs.
Execution: The Discipline of Getting Things Done by Larry Bossidy & Ram Charan with Charles Burck. 2002. Crown Business, NY, NY. p. 23,24
Businesses that execute... prosecute with rigor, intensity, and depth. Which people will do the job, and how will they be judged and held accountable? What human, technical, production, and financial resources are needed to execute the strategy? Will the organization have the ones it needs two years out, when the strategy goes to the next level? Does the strategy deliver the earnings required for success? Can it be broken down into doable initiatives? People engaged in the processes argue these questions, search out reality, and reach specific and practical conclusions. Everybody agrees about their responsibilities for getting things done, and everybody commits to those responsibilities.
Execution: The Discipline of Getting Things Done by Larry Bossidy & Ram Charan with Charles Burck. 2002. Crown Business, NY, NY. p. 23
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 in the here and now, and the financial markets won't wait to see if your elaborate strategy plays out. So leaders who can't execute don't get free runs anymore. 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...
Here is a fundamental problem: people think of execution as the tactical side of business, something leaders delegate while they 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 cannot delegate its substance. Many business leaders spend vast amounts of time learning and promulgating the latest management techniques. But their failure to understand and practice execution negates the value of almost all they learn and preach. Such leaders are building houses without foundations.
Execution: The Discipline of Getting Things Done by Larry Bossidy & Ram Charan with Charles Burck. 2002. Crown Business, NY, NY. p. 5,6
There are two diagnostic questions that business leaders and their executive teams should use to assess the nature, scale, and timing of the change required in their specific context:
Change can involve magnitude, activity, or direction, and the first step toward a clearer vision for change is to clarify what form of change should be considered:
Companies that have doubled down on flawed or outdated business strategies, for example, Kodak, Nokia, Xerox, BlackBerry, Blockbuster, Tower Records, and J.C. Penney are guilty of believing that a change of magnitude was sufficient instead of either a change of activity, such as adopting new technologies or distribution channels, or a change of direction, such as exiting certain businesses altogether.
Contrast these examples with companies whose ambitions led to risky changes in direction when their context called instead for changes of activity or magnitude: GE’s attempts to be a first mover in green energy and the industrial internet of things through Ecomagination and Predix; Sony’s move into entertainment content; or Deutsche Bank’s efforts to become a global investment bank.
Many of the most impressive and successful corporate pivots of the past decade have taken the form of changes of activity — continuing with the same strategic path but fundamentally changing the activities used to pursue it. Think Netflix transitioning from a DVD-by-mail business to a streaming service; Adobe and Microsoft moving from software sales models to monthly subscription businesses; Walmart evolving from physical retail to omnichannel retail; and Amazon expanding into physical retailing with its Whole Foods acquisition and launch of Amazon Go.
Based on Prosci's change management research report with 650 participants, employees prefer two primary senders of change messages. Not surprisingly, they also prefer specific message content from each of these senders. Immediate supervisors are the preferred senders of messages related to personal impact including:
When it comes to business issues and why the change is needed, receivers want to hear from the person in charge.
In any business environment, change happens.
Let’s rephrase: In any business environment, change should happen. It shows you're committed to the kind of growth and evolution it takes to stay modern, relevant, and competitive.
Countless factors make change inevitable. Think of technological advancements, globalization, cultural shifts, and shifting economies. And since nobody's corporate goals include falling behind or growing stale, embracing change is a must.
But what kind of change are we talking about here? Change can include things like:
These all fall under the umbrella of organizational change. If you’re already on board with shaking things up, you’re ahead of the game. And you're not alone.
According to Gartner, 99% of all organizations have undergone a major organizational change in the last three years. But big or small, change doesn't happen naturally. Therefore, effective change requires a clear action plan.
"7 Organizational Change Management Frameworks That Stick," Remesh Blog. October 10, 2021
Given what I’ve revealed about short-termism at Honeywell, you might wonder if we had a formal strategic planning process in place. We certainly did. Each July our businesses made presentations to the CEO, with similar presentations taking place down through the ranks. These presentations were, in a word, bullshit. Leaders had no clue how they would run their businesses over the next five years, what big initiatives they would have to push to make their goals, or what changes in their industry they should anticipate, or better, lead. Rather than choosing goals thoughtfully, they picked ambitious targets they thought would please their bosses, without regard for whether the business could realistically achieve them. They might have factored in the benefit of downsizing, the introduction of new products or services, process improvement, or other cost-savings initiatives, but then didn’t include as an expense the funds to bankroll these initiatives because it would depress the outlook. To cover themselves, they threw around lofty language and piled on hundreds of pages of charts and tables, hoping to look smart. Without much critical analysis, leaders gave their blessings, leaving the businesses to go execute whatever they wanted without follow-up or accountability. “Strategy,” such as it was, had no relevance. Operational considerations and making the quarter became daily concerns, with strategy fading to the background.
Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term. HarperCollins Leadership. 2020. p. 38
Hilderman, J. (2022). Strategy Execution Using the Balanced Scorecard (thesis). Levene Graduate School of Business, University of Regina (Canada).
"A mission is what you wish the company to be over the next three-to-five years." Again, it should contain "to be." Your mission sets a shorter-term agenda for steps that will allow you to someday achieve your vision...
"Objectives (interchangeable with 'goals') are what you want to have."
Not "be." "Have."
The key is to sift through all the possible metrics and KPIs to determine the goals that most define success. Dunkin's mission was to be "the dominant doughnut and coffee provider in each and every market" in which it competed. Its early objectives?
Strategic initiatives are, "the four-to-six most important tasks an organization must execute in order to bridge ever-scarce resources to achieve stated objectives..."
Tactics are, "the four-to-six action steps needed to support the achievement of each department's strategic initiatives..."
Jeff Haden, quoting Robert Rosenberg - CEO of Dunkin' Donuts'
"Think Company Vision Statements Are a Waste of Time? How Dunkin' Donuts' CEO Created a Plan to Recover From Disaster," by Jeff Haden. Inc. Nov. 17, 2020
"Strategy is a framework to guide critical choices to achieve a desired future,” said MIT Sloan senior lecturer Donald Sull in a new MIT Sloan Management Review webinar....[A] strategic vision must be detailed enough to lay out a clear vision while being broad enough to allow for flexibility and adjustment....
An ideal strategy provides enough guidance to empower workers to make trade-offs, formulate goals, allocate resources, prioritize activities, and clarify what people are committing to do. At the same time, it offers enough flexibility to allow people to seize opportunities and adapt as needed....
Take American Airlines versus Southwest Airlines. American has goals like “be an industry leader” and “look to the future.” Inspiring but vague. Southwest, on the other hand, has initiatives like “fleet modernization” and “growth of Rapid Rewards program.” Precise and defined.
"How to turn a strategic vision into reality," Ideas Made to Matter: MIT. Mar 28, 2018
Being aware of such biases doesn’t help one avoid them. As Dan Ariely, one of the foremost thinkers in the field, declares, “I am just as bad myself at making decisions as everyone else I write about.” Fortunately, however, there are a number of proven and practical tools to minimize biases in decision-making. These include, among others, the following: the “pre-mortem” (generating a list of potential causes for failure of a recommendation and working backward to rectify them before they happen); “red team-blue team” (assigning one person/group to argue for, and one to argue against, a decision); “clean-sheet redesign” (developing a system from only a set of requirements, free from considerations related to current investments or path); and “vanishing options” (taking the preferred option off the table and asking, “What would we do now?”). Importantly, simply ensuring you are engaging a diverse team in decision-making will reap significant rewards – which research reveals can improve decision-making quality by more than 50 percent.
Scott Keller and Bill Schaninger
Beyond Performance 2.0: A Proven Approach to Leading Large-Scale Change. John Wiley & Sons, Inc. 2019
Set the Stage
1. Create a Sense of Urgency
Help others see the need for change and the importance of acting immediately.
2. Pull together the Guiding Team
Make sure there is a powerful group guiding the change – one with leadership skills, credibility, communications ability, authority, analytical skills, and a sense of urgency.
Decide What to Do
3. Develop the Change Vision and Strategy
Clarify how the future will be different from the past, and how you can make that future a reality.
Make It Happen
4. Communicate for Understanding and Buy In.
Make sure as many others as possible understand and accept the vision and the strategy.
5. Empower Others to Act.
Remove as many barriers as possible so that those who want to make the vision a reality can do so.
6. Produce Short-Term Wins.
Create some visible, unambiguous successes as soon as possible.
7. Don’t Let Up.
Press harder and faster after the first successes. Be relentless with initiating change after change until the vision is a reality.
Make It Stick
8. Create a New Culture.
Hold on to the new ways of behaving, and make sure they succeed, until they become strong enough to replace old traditions.
