Tuesday, January 25, 2011

What's the difference between execution and implementation?

In an earlier post on January 10th, the subject was raised about the difference between implementation and execution.

"Implementation is about people doing what you have listed in your plan and checking their actions off the 'to do' list. True execution is about measuring the impact of those actions on the results you want for your company."

What is your take?

Friday, January 21, 2011

Winning During the Slog - Part 9 – “From Ignorance to Results: Understanding Stages of Change from the CEO Perspective”

(From Issues for Growth Vol. 20, No.3)

This is the ninth of a series of articles about how companies and individuals are winning during the “The Long, Slow, Hard Economic Slog” that we are in (Issues for Growth Vol. 19, No.13). This article is written by Christy Pearson, Ph.D., of Opus Leadership Group www.opusleadership.com , who works with The Mead Consulting Group. – DPM

Without much argument, it can be said that CEOs cannot run their businesses as before and for many, the need to adapt is an obvious statement. However, determining how and where to start continues to be a challenge. A good first step is to understand how people respond to change. By understanding this dynamic, leaders can more easily adapt their leadership and help their leaders and the organization begin to adapt as well.

In the previous segments of this series, there has been much discussion about the need to adapt strategy, culture and leadership in response to these tough times. This requires CEOs and his/her leaders to do something different and for most people, this is a huge request. Despite a CEO’s best effort to develop an adaptive organization, nothing happens because adults are notorious for their resistance to change.

In the psychological literature there are two well-known and respected researchers of change, James O. Prochaska and Carlo C. DiClemente. These individuals created a model to explain how individuals change behavior, break old habits and develop new ways of adapting to their environment. Their model can easily apply in the business sector. According to Prochaska and DiClemente, people respond to change in the following ways: (names of stages have been changed for the purpose of this article)

Stage 1—Ignorance - Leaders are unaware that problems exist

This is the time that leaders are unaware that problems exist. Others may be aware of the problem but the leader believes the problem lies elsewhere or that no problem exists. Early in the downturn, CEOs may have believed that their company was immune from impact because of their industry, company size or global location. However, it soon became evident that the economy impacted all organizations in some manner and for some CEOs, the problem did not become evident to them until there was a consistent lack of growth or worse, declining profits over many quarters. Often, it was this smack in the face that prompted leaders to begin more thoroughly analyzing their business strategy and its relevance to the new economy. While ignorance is bliss, failing is misery and as a response, leaders will move to stage 2—Awareness.

Stage 2—Awareness - CEOs have an understanding of a problem and the consequences, but defer action

It is during this stage that CEOs have an understanding of a problem and the consequences it presents. CEOs begin to seriously think about their organization’s problems and its impact and begin to contemplate what should change. Common statements by leaders in this stage include “we should be okay right now, maybe in six months we will do something” or “we know there is a problem but we just don’t have the time or resources to address it”. Leaders spend a significant amount of time in this stage, likely hoping that things will return to “normal”. Leaders can also spend a significant amount of time in this stage developing the ideal strategy. This act of substituting thinking for action only delays the necessary response and the business continues to suffer. It is only with acknowledgement of the need to adapt can a CEO move to Stage 3—Planning.

Stage 3—Planning – CEOs begin to think less about the problems and more about the solutions

Movement in the right direction is evident when CEOs begin to think less about the problems and more about the solutions. CEOs also become more future oriented rather than ruminating upon what happened in the past and have realized the benefits of adapting are greater than the costs. It is also during this stage that CEOs have finalized their planning and have communicated the need for change to others within their organization. The risk here is planning continues but true action and adapting does not occur. Committees are formed, consultants are hired and meetings are scheduled but there is no movement in the organization or its leaders (if so, the leader is still in Stage 2). How does a CEO get from this stage to action—determine a goal, set a date, and begin making the changes. Any step in the new direction is progress and should be acknowledged as such. Adapting is a process and a process takes time. CEOs should avoid discouragement by acknowledging that any movement is better than before and momentum will build as others also move through their own stages of change.

Stage 4—Action - New organizational initiatives begin to be implemented

This is when the magic happens. CEOs have evolved their strategies and the new organizational initiatives have been implemented. This stage requires commitment and focus by the CEO and his/her leaders to ensure that the necessary changes are understood by others in the organization and that recognition is occurring. At this point, it is important that what CEOs have set into motion is something than can be measured, tracked, and rewarded. Action is only movement, it is not true change and regression to previous stages can occur at any time. For a CEO, regression may mean reverting back to old strategies, old approaches to problems or relying on a style of leadership that is no longer relevant or effective. To continue with progress, CEOs should remain focused on the determined solution and the future benefits to the organization.

Stage 5—Sustainability – Making it part of the ongoing culture

People live for this stage. This is when leaders and their organizations have worked through the problems, addressed them in a thoughtful manner, and are focusing on sustaining the change and related results. To remain in this stage and avoid reverting back to previous stages, it is important to ensure that the culture is supporting the change, senior leaders are aligned on expectations and outcomes and that further forward progress is recognized and rewarded. Change can occur quickly and be short-lived so the CEO and his/her senior leaders need to continue to focus attention on the implemented initiatives and remain aware of any barriers that may inhibit progress.

If a CEO wants his/her organization to adapt to the new business environment, they must first understand how they respond to change to better determine how their leaders will respond. If an organization and its leaders have not responded to the new business world by adapting its strategy, leadership and culture, it is likely the CEO has not led the charge. It is only with insight and understanding that a CEO can then provide the necessary direction and guidance to move his/her organization to a more successful outcome. Adapting one’s leadership, strategy, and organization can be less challenging by understanding the process and the dynamics that promote or inhibit progress.

Some companies are experiencing significant “new thinking” results. What are you doing to change how you think about your business and create a culture of adaptability? Email us your comments.

Monday, January 10, 2011

Winning During the Slog - Part 8 - Creating an Adapting Company Is Not Complicated

(from Issues for Growth Vol. 20, No.1)

This is the eighth of a series of articles about how companies and individuals are winning during the "The Long, Slow, Hard Economic Slog" that we are in (Issues for Growth Vol. 19, No.13). This article is written by Chris Carosella who works with The Mead Consulting Group. - DPM

Confusing Execution with Implementation The four CEOs were gathered for their last monthly meeting of the year. While their discussion was supposed to be summarizing what they've learned about how to create effective strategies, develop the right leadership, and create an adapting culture, one of them had a more urgent need for advice.

"My team and I have worked hard on our strategic plan for next year but I have to admit to the rest of you that I'm not convinced we can do it. I can't be candid with my managers because I need them to be confident when they begin implementing our plan in two weeks. But we're missing something amongst all our strategies and tactics."

"It is possible that you're focused on implementation as opposed to execution?"

"I thought they were the same. What's the difference?"

"Implementation is about people doing what you have listed in your plan and checking their actions off the 'to do' list. True execution is about measuring the impact of those actions on the results you want for your company."

"That's exactly what we're missing! So how do I connect execution to everything else we've been discussing? It seems a bit overwhelming. Is it possible to have the right leaders, a focused strategy, an adapting culture, and effective execution? "

Yes! Here's how...

What you need before you can effectively execute:
strategy, people, culture

Execution is the leader's #1 job. It happens when you understand how to measure the impact of leaders and employees on the business strategy in an adapting culture while achieving company results.

"It is not always what we know or analyzed before we make a decision that makes it a great decision. It is what we do after we make the decision to implement and execute it that makes it a good decision." William Pollard, Chairman of ServiceMaster


First and foremost, develop a business strategy that shows you understand where you are now and where you want to be. The strategy has to provide a clear sense of direction and a vision for the company, specific actions to move toward desired goals and how progress will be measured. For example, an educational software company wants to reach a revenue target of $50 million in 2011, which represents a 20% growth rate. To reach that goal, the company will develop strategies to expand its product lines to include the arts along with the sciences. Another strategy will be to sell to high schools in addition to their current college base. Once the main strategies are identified, the overall plan is shared at the next level of the organization to determine the specific tactics to achieve the strategies. Key performance indicators are then attached to each strategy so leadership can measure and monitor progress. At that point, accountability is assigned by identifying who will do what and the necessary deadlines. Once the plan is complete, it's up to the CEO to make sure the goals, strategies, and results are communicated at every opportunity.

Companies invest so much time, eneon a poor strategy. However, in most cases, it's not the strategy that should be blamed; it's the execution of the plan that caused the enterprise to falter.

Many studies confirm that poor execution is the #1 reason businesses fail.

Adaptive Leadership
Second, you must have the right leadership (confident, flexible, creative, decisive, results-oriented, empowering) and the right people in the right jobs. Adaptive leaders will assist the CEO and the organization in navigating through these tough times and will help move the organization toward stability. These types of leaders are resilient and possess the necessary capacity and intelligence to address multiple issues and attend to the demands in their area of responsibility.

I've been blessed to find people who are smarter than I am, and they help me to execute the vision I have. Russell Simmons, co-founder Def Jam Records, entrepreneur, philanthropist

Connect culture with strategy
Third, you must connect culture to strategy. An organization can have the best strategy in the world but a culture that won't allow it to happen is doomed. You must purposely create a culture capable of adapting to any challenge - one that includes all employees learning how to anticipate possible scenarios with customers, competitors, or within the company. It means teaching critical thinking and leadership skills at all levels. And it means top management must have the confidence to let go.

Gary Hamel, ranked by the Wall Street Journal as the world's most influential business thinker, has said, "Today, the overriding problem for every organization is how to change, deeply and continually, and at an accelerating pace."

Metrics and Measurement
To be successful, you must have a strategy that provides direction for your employees to reach your objectives within certain time frames. The leadership team should decide what key performance indicators will be used and the frequency of measurement. Milestones should be a clear part of your strategy along with who is responsible for achieving the objective.

What do I measure?

· Relevant business measurements such as quarterly and annual revenue and profitability targets, growth, market share, number and type of acquisitions along with stages of integration, customer satisfaction

· Measure the effectiveness of your leadership team

· Measure culture changes

The scope of this article does not permit detailed discussion of metrics and measurement. For more information, contact us.

Some companies are experiencing significant "new thinking" results. What are you doing to change how you think about your business and create a culture of adaptability? Post your comments here or email us.


Watch for the following upcoming series

1. From the Front Lines: Company Success Stories

Stories of Companies that are Growing and Breaking Through Despite the Downturn

2. The Coming Window for Selling Your Business: Are You Prepared to Sell During the 2012-14 Window?

Monday, January 3, 2011

Happy New Year - Do You Need a Fresh Approach?

(from Issues for Growth Vol. 19, No. 20)

Happy New Year? Yes, It Can Be!

As we come to the end of 2010, I have been reviewing a number of articles and listened to a number of speeches about what companies should do to succeed in this "long, slow economic slog." It occurred to me that many of the so-called experts may be providing advice that worked in previous recoveries but that this advice may actually prevent companies from taking the actions that will help them thrive in a slow-growth economy. While most of us prefer to be optimistic, as business leaders it is our job to be realistic - even if the outlook is less than crystal clear.

We have been observing a number of different planning strategies within companies. Here are some of the planning behaviors we are seeing:

1. Hunker down and continue to stay the course. Many organizations are still waiting for the economy to come back. They did all of the right things (expense cuts, program delays, reductions in force, etc.) that have worked before in previous recessions. The problem is, that, in the best scenarios, 75% or more of leading economists indicate that the output gap in the U.S. economy will not be filled to 2007 levels until 2015 - at the earliest. And if that is true, companies will have been in defensive mode for 7-8 years. It takes about three years to change a culture - will companies now become defensive and risk-averse as a cultural norm. What will that do to a company's competitive position and value?

2. Review your old plans from prior to the recession. We are seeing some retreads of old strategies. The problem with this approach is that the world really has fundamentally changed. Companies have learned to operate with fewer employees, improved supply chain management techniques have led to leaner inventory management, buying behavior has changed. What is also true is that in many industries the fundamental dynamics between buyer and seller have changed. It used to be the seller had an information advantage - this has changed with greater information flow to the buyer. Buyers now have access - at the click of a button - to competitive supplier pricing and, in many cases, to the underlying seller costs.

3. Sell your way out of it. This approach may have worked in previous recoveries when the increases to demand were very sharp. But this time things are different. There has been NO SIGNIFICANT UPTICK IN DEMAND. Using the old aggressive (market share stealing) sales techniques into slow-growth mature markets that have an overcapacity of supply can yield success - but only at the expense of lower price and lower margins. That success may be unsustainable, however. To assume that your sales people will all be superior and that competitors are going to let you steal precious market share without a fight is naive indeed. They will defend their turf, match your lower prices, and everyone will lose. It's a case of too much supply chasing too little demand. Also the trend from differentiation to commoditization has become so fast that the products and services that you were selling in 2007 are now likely undifferentiated commodities.

4. Shrink to smaller size. Many companies, faced with lower demand in their primary markets, have reluctantly decided that the way to survive is to become smaller companies. While this may indeed to be a healthier and more profitable approach, it generally results in companies that have a lower value and may be only a temporary strategy. In order to maximize value for future sale, companies need to have a growth strategy so that prospective buyers can see a potential return on investment.

Maybe It's Time to Change your Aim. What do you suppose would happen when everyone is aiming at the same target (a target that is not getting any bigger) and just blasting away...other than a shredded target with lots of holes. Perhaps it's time to change your aim - look for new targets.

There are companies that are growing during this downturn. Companies are entering new markets with new products and services. There are new business models and new approaches being tested and proven. Many of these models have dramatically different cost structures and value propositions than those of the high-ranking incumbent competitors. Others have taken innovative approached to differentiating their products and services. There are changes in competitive standing that are occurring. These changes may not be recognizable to the incumbent competitors, until it's late in the game.

It's Time for New Thinking, New Approaches.

There is no rising tide that will float all boats ... coming anytime soon. These times call for new approaches to planning and execution. Planning needs to be more situation-based, more scenario-based, more fluid. Planning cannot be based on a fixed set of assumptions about the future environment. There needs to be more frequent monitoring and adjustment of the plans during execution. This environment calls for a different type of management aptitude and skill. Adaptability and the ability to rapidly react to market changes are leadership skills that are becoming far more important than traditional control and execution of a plan.

As you move from 2010 into 2011 ask yourself a question: How would I characterize my organization's approach to planning and execution? Are we taking the necessary steps to grow- or are we accepting something considerably less? Are we doing what's necessaty to have a Happy New Year?

Email us your comments or post on this blog.


Watch for the following upcoming series

1. From the Front Lines: Company Success Stories

Stories of Companies that are growing and breaking through despite the recession

2. The Coming Window for Selling Your Business: Are You Preparing to Sell During the 2012-14 Window?

Check out the archives of the last 10 years of Issues for Growth on our website