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Unlike the aimless ‘Sunday drive’ where the journey is the benefit, the success of organization travel is typically defined by achieving a stated goal. The plan or the journey is not the goal. While the journey may provide enjoyment and growth for the members, it should not be mistaken for organizational success. This fundamental I believe is missed by many.
Organizations, big or small; public or private; profit or not, can take a life of their own, where the ride becomes more important than the goal. One only needs to look at the business obituaries to find examples of companies driven by leaders whose claim to fame was burning through investors’ cash in experiments that had no hope. The .com fiascoes are a good example where the enticements of rapid growth and huge returns were not substantiated with solid business models and plans. Without a clear roadmap in place, their travel was marked by huge flameouts and crashes.
So if corporate travel needs a destination, what should it look like? Well that depends on the nature of the business. Not-for-profits have different end destinations than those motivated by return on investment. A family owned enterprise, while profit oriented, may be motivated by succession plans for the offspring as much as financial growth. A charitable organization with lofty, humanitarian aims and ideals will define winning using very different criteria.
However defined, the destination needs a clear and reliable map with milestones in place, and members need to be aligned and committed to take passionate action. Fuzziness is the enemy of execution. What does “optimized customer loyalty” really mean? How about “maximizing the inherent benefits of our products”. And what the heck is “growing through employee engagement”? I am not challenging the goodness of these statements but as clear beacons of direction they fail the test of visibility. One should be able to look at an organizational goal, mission, or vision and say “I get it. I know what I need to do on Monday to help the enterprise, my department, and my team get there.” One also needs to know where one is every day relative to the goal. ‘Are we there yet?’ is a question every parent hears during a family journey.
One of my clients is in the plumbing business. He calls it a boring business but has breathed life into his small, family run business with innovation. They are very well known in the industry as providing solutions for plumbers. Their products are very, very good—so good in fact that the owner pays big bucks to lawyers for patents.
Their destination vision? “Our products installed on every plumbing fixture….one country at a time”. That’s pretty darned clear! Their growth plan includes selected (specific, targeted, measurable) American regions. Not the whole country. They took their first American order a few months ago. The buzz in this small business was deafening. They arrived at their first milestone destination. And they all knew it.
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Unstoppable. It’s what opposing coaches said of Vince Lombardi and the Green Bay Packers of the ‘60s, the iconic football club from small-town Wisconsin. Over a seven-year time span, the Packers out-executed team after team, one rich franchise after another, en route to five world championships – among them the first two Super Bowls – and the unofficial title of most storied franchise in NFL history.
Today, sports fans still wonder: How did they do it? How did a small-town team with just one win the year before, and a new, unproven coach, manage to turn it around to beat the NFL’s finest?
The answer, I believe, rests in coach Lombardi’s unique insights on strategy execution – and his hyper focus on winning. Business leaders today would be well advised to use Lombardi’s philosophies to move their own strategies forward.
Let me explain.
Coach Lombardi believed in the relentless pursuit of excellence. He was an execution fanatic, and trusted that executing the basics, over and over again, would win the game. He believed that the ‘right play’ would come to personify the heart and soul of the entire team.
How right he was. Shortly after taking the helm, Lombardi instituted a relatively simple play, involving teamwork, called ‘the sweep’. In the play, the quarterback hands the ball to the running back, who runs the ball to one side of the offensive line. The offensive line then acts as blockers, allowing the running back to gain important yardage.
The sweep, arguably the most simple in all of football, became legendary. NOBODY could stop it. Even though opponents knew the Packers were going to use it – and indeed, developed defensive strategies, none worked. The sweep was unstoppable.
How many business leaders would like to have organizations that are unstoppable?
Lou Gerstner, the CEO credited with turning IBM around, once said that great companies prioritize and practice the most important strategy of all: execution excellence. “They out-execute their competition, day in and day out, in the market place, in their manufacturing plants, in their logistics, in their inventory turns, in just about everything they do. Rarely do great companies have a proprietary position that insulates them from the constant hand-to-hand combat of competition.”
According to Harvard Business Review, most companies do not execute their strategies well and since 2008 it is getting worse. What an opportunity for those companies that can get a little bit better than their competitors! You don’t need to be faster than a lion, just faster than the guys behind you.
What’s the key to great strategy execution? Time and again I’ve learned that it’s not about fancy processes, pricey work-style assessments or systems to drive efficiency. These can often hide people who are doing the wrong stuff.
It’s about the fundamentals. It’s about executing the basics, over and over again, with accountabilities that are clear, concise and undeniable. It’s about each person understanding the company’s strategy so well that they know what they need to do each and every day to help move it forward.
Vince Lombardi understood the importance of complete and laser-perfect alignment to a strategic plan.
It’s what made him and his Green Bay Packers so unstoppable.
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Earlier this year Harvard Business Review published results of a large-scale study of 8,000 managers from 250 organizations on the topic of why strategy execution unravels. The data were a big surprise to many, especially related to the managers’ confidence – or lack thereof – in others to deliver on promises. While a full 85 per cent reported they could rely on their boss and direct reports either ‘all or most of the time’, only about 60 per cent placed the same confidence in colleagues in other departments. Indeed, commitments by colleagues in other functional areas were seen as no more reliable than promises made by external suppliers and distributors.
What happens when organizations aren’t aligned horizontally? An interesting phenomenon occurs, which I like to refer to as ‘silo’ fever. It’s caused by departments/functions that are focused on their objectives to the detriment of peers in other departments, who are in turn not receiving what they need from other departments to be effective. Left unchecked, silo fever can fester and grow, resulting in duplicated efforts, delayed deliverables – and conflict between functions and units.
If you think your organization is suffering from silo fever, here’s some tips to ensure that horizontal, or cross-functional alignment, is not ignored.
First, ensure that your objectives – be it for the strategic plan, the annual plan or even a project plan – are set in a team setting versus a one-on-one setting with the team leader. In a team setting, each person, who is likely to be a leader of his/her own team, can ensure that what is required as outputs from peers are clear with measurable standards of performance.
Next, establish what specifically is required from peers with respect to dependencies. What does Operation need from Engineering, Logistics, HR and IT to be successful? What are the outputs, the metrics of success and the objectives to be met? Capture these items in a document that serves as a blueprint for the project.
This document should be given the very same consideration as a Service Level Agreement (SLA), a contract between a service provider and the end user that defines the level of service expected from the provider. SLAs are often used when an outside vendor/service supplier is involved, however these days, I often recommend that leaders establish SLAs with internal departments. For example, Operations could have an SLA with Engineering that lays out what quality specifications for new product designs must be submitted and by when; it could also have a separate SLA with HR, outlining the recruitment protocol and timelines for job openings.
SLAs are not a new idea for external suppliers, but they are increasingly being used internally. I fully support the idea, as a way to facilitate horizontal alignment.
As any organization can attest, achieving a balance between vertical and horizontal alignment is a key component of strategy execution excellence. Such balance leads to increased productive communication and less conflict between functional units.
Importantly it also leads to fewer cases of silo fever.
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In the late 19th century Italian economist Vilfredo Pareto made a startling observation: he found that 80 per cent of the country’s land was owned by only 20 per cent of the population. Upon further reflection, he also observed that 80 per cent of the peas in his garden came from only 20 per cent of the pea pods! He came to the astute conclusion that for many events, roughly 80 per cent of effects come from 20 per cent of causes.
The Pareto Principle, or 80-20 rule as it’s now known, remains particularly relevant for businesses today, and is used to inform strategy related to everything from sales (roughly 80 per cent of revenue comes from 20 per cent of clients in most organizations) to customer service, where 80 per cent of complaints come from about a fifth of customers. You get the idea.
But what does it means in terms of strategy execution? How can the 80-20 rule help us get our business plans moving forward?
This is an important and timely question, especially as Harvard Business Review recently named strategy execution as the top concern among today’s business leaders. (Yes, most CEOs admit to being poor at turning strategy in to action. And they’re very worried about it.)
The good news is, our friend Pareto can help.
His philosophy suggests that when it comes to strategy execution, only about 20 per cent of tasks are vital. The other 80 per cent are comparatively trivial. And, after 25 years of counseling clients on strategy execution, I couldn’t agree more.
So here’s my advice for getting the 20 per cent right:
- Make sure everyone “gets” it — that they understand the plan and how they contribute to it
I’m not talking about paraphrasing/regurgitating/reciting the mission, vision or the goals of the plan. I’m talking about making sure that each and every team member understands how they specifically are contributing. Each person needs to be able to say, “here’s what I am working on today, this week or this month that will directly impact on our planned goal.” Individuals who can’t do this either don’t know where the enterprise is going or don’t know how to help.
HOT TIP: Meet with your team to discuss the plan in terms that you understand and that you can translate into action. What needs to be done and why? How does that action support the strategic plan? Who will do it and when? Use SMART objectives. (Specific. Measurable. Achievable. Relevant and Time bounded).
- Empower yourself – and your team members – with authority
Lack of authority is what stops a lot of people from getting things done. When they try to make a decision or take an action, someone like a boss, a peer or a subordinate says, ‘you can’t do that. That’s not your decision. That is not in your job description. Let me check your work first. Leave it with me, I’ll get back to you.’ This is a sure recipe for failure.
HOT TIP: When assigning a team member to a task or activity, also give him/her the authority level that allows them to own it. If you are the person being assigned a task, ask authority-seeking questions: Can I spend? To what limit? Can I change the spec’s or just recommend? Can I reject the work of others? Who decides if the quality is acceptable?
- Own it
Yoda said it best, “there is no try, only do”. Do you believe you can get it done? Motivational experts say that belief is 80 per cent of success. Remember customers don’t care about trying; they want what they ordered, perfectly, every time and at a fair price. Just like your internal customers.
So start now. Use the Pareto Principle to turn your strategic plans into action. Make sure you and your team get it, own it and get it done with authority. By using these tips, you can eliminate the trivial tasks and focus on the most important: the 20 per cent.
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I’ve been wondering about that ever since I read the groundbreaking June 2008 Harvard Business Review report, “The Secrets to Successful Strategy.” That study revealed that a full 60 per cent of organizations assessed themselves as ‘poor’ at turning plans into results.
At the time, that admission surprised many leaders. It also motivated them to seek answers.
Much has been written on how to get better at strategy execution – and much has been postulated about why organizations don’t seem to ‘get it’. Interestingly, the answer is so simple that it’s often overlooked. And amazingly, even when the solution is identified, we don’t immediately address it.
Instead, with the greatest of intentions, we invest in ‘solutions’. We install new systems and processes such as CRM, TQM, MRM, ZBB and countless others (insert your preferred systems-solution acronym here). We set out to build performance cultures with training, team building and work-style assessments (what colour is your parachute?). We change organizational structures by downsizing, right-sizing and designing requisite structures. Millions of dollars and oodles of time are often expended.
Yet we still have a hard time turning plans into results. And we’ve now got new evidence to prove that this is true. Harvard Business Review has just published a follow-up to its 2008 report and – and not surprisingly – it’s reporting that organizations have gotten WORSE at strategy execution.
According to the March 2015 Harvard article, a full 75 per cent of organizations now assess themselves as ‘poor’ at turning plans into results. And, 400 CEOs surveyed rated “execution excellence” as their top concern, ahead of issues including growth and innovation.
So how then, do organizations get better at execution? The original 2008 Harvard study gave a glimpse of the ‘solution’ that I alluded to earlier in this post. Of the 60 per cent of companies who rated themselves as poor at turning plans into results, only one third said they were clear on what actions they should take and what decisions they can make.
Clarity. It holds the key to better execution. If you watch this column for my next posting, I’ll share with you some tips for what your organization can be doing to ensure clarity, alignment and commitment to your strategic plan. To drive better execution.
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I recently facilitated a strategic planning session involving three teams tasked with the job of creating a project plan. While two of the teams huddled and debated, the third tackled the exercise with confidence and focus, finishing a full 45 minutes ahead of the others. (It then, in the spirit of competitiveness, proceeded to rib the other teams about their tortoise-like progress.)
Impressive? Sure, they finished early, but how good was the project plan?
Interestingly, in our debrief session, one thing became abundantly clear: while the ‘hares’ got the plan done quickly and efficiently, they neglected to define the desired outputs. The destination. The desired results. In their haste to complete the plan, they also failed to create success metrics for measuring progress.
It’s an error that can be fatal for businesses. But unsurprisingly, it’s also very common. All too often, organizations approach strategic planning as a check-the-box exercise, rather than as a strategic session that requires honest thought, reflection and – most importantly, clear outputs and metrics. Consequently, they put ambitious strategies and growth targets in place, without first determining where they are going and how they will measure progress.
After 30 years in the business, I like to think of strategic planning a road trip: You can’t answer the question, “Are we there yet?” if there are no markers for success along the way. The journey, as they say, is almost as important as the destination.
Below are three important guidelines for developing any plan, strategic, operational, annual or project plan.
- Make sure the destination – the output – is hawk-eye clear. The very first step is clarity of goal. Ask yourself “Why are we doing this?” The answer to this question needs to be expressed in terms of results (e.g. Improve Customer Loyalty, Increase Sales).
- Separate ‘outputs’ from activities. Try this test: Do any of the words describing your desired results, end in ‘ing’? Example: Analyzing, Reporting, Proposing? If so, you are focusing on activities, not the result. Asking the question ‘why’ will lead you to the output.
- Establish your success metrics.
Here are some ideas for success metrics for Customer Loyalty:
- Percent of revenue from repeat customer sales.
- Net Promoter Score: How many of your customers would recommend your company versus how many would not? Admittedly a tough metric, and not for those that are not totally committed to customer loyalty. Apple uses it.
- Customer Loyalty Survey (ask questions about why they come back or don’t; why they recommend you to others, or don’t) and KEEP IT SHORT!
With these guidelines in mind, you and your teams will be able to check your progress along the path to your destination, and correct your course if necessary. The ultimate payout is (of course) long-term business success and increasing shareholder value.
