(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.
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.
COMING ATTRACTIONS IN 2011
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?