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How do you translate strategy into results? Execution is both an organizational culture and a specific set of behaviors. Leaders must be hands-on and intensively involved with three core interlinked processes -the people process, the strategy process and the operations process.
In Execution: The Discipline of Getting Things Done, authors Ram Charan and former Honeywell CEO Larry Bossidy share leadership strategies about how to hire doers that energize others, make decisions quickly, get things done through delegation and follow through. Business leaders who understand the reality of markets, customers and resources must own the strategy process and use the operations process to design new programs and tie performance to incentives. These three core processes are the foundation of competitive advantage.
How can these strategies be used to improve employee performance and productivity?View answer
The strategies mentioned in the content can be used to improve employee performance and productivity by hiring doers who energize others and make decisions quickly. This can lead to increased productivity as tasks are completed efficiently. Additionally, using the operations process to design new programs and tying performance to incentives can motivate employees to perform better. This can lead to improved performance as employees are motivated to achieve the incentives.
What are some resources that business leaders should understand and utilize?View answer
Business leaders should understand and utilize resources such as leadership strategies, market realities, customer needs, and available resources. They should also be adept at decision-making, delegation, and tying performance to incentives. Understanding and utilizing these resources can help them design new programs and gain a competitive advantage.
How can these strategies be used to improve customer satisfaction?View answer
These strategies can be used to improve customer satisfaction by ensuring that the company is led by individuals who are doers and can energize others. This creates a positive work environment which can lead to better customer service. Quick decision making can also lead to faster resolution of customer issues. Delegation and follow through ensure that tasks are completed efficiently and effectively, leading to improved customer satisfaction. Lastly, understanding the reality of markets, customers, and resources, and tying performance to incentives can ensure that the company is meeting customer needs and expectations.
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How does execution relate to the concept of continual improvement?View answer
Execution is closely related to the concept of continual improvement. In a culture of execution, leaders constantly monitor for deviations from desired outcomes across various areas, such as profit margins or promotions. When they identify a gap, they quickly take action to close it, thereby raising the standard for the entire organization. This process is similar to the Six Sigma process for continual improvement. Just like Six Sigma, execution only works when it is practiced continuously. Therefore, execution is a key component of continual improvement.
What are some ways to incentivize execution in an organization?View answer
There are several ways to incentivize execution in an organization. One way is to ensure that leaders are actively involved in the critical details of execution. They should ensure that people understand organizational priorities, assign tasks, follow up, and promote and reward people who execute. Another way is to constantly look for deviations from desired tolerance levels in execution across areas like profit margins to promotions. Leaders should swiftly close the gap and raise the bar for the entire organization. This creates a culture of continual improvement, similar to the Six Sigma process.
How does execution work when people practice it continuously?View answer
Execution works when people practice it continuously by constantly looking for deviations from desired tolerance levels in various areas such as profit margins and promotions. Leaders who execute do not preside, they actively lead. They are personally involved in the critical details of execution, ensuring people understand organizational priorities, assigning tasks, following up, and promoting and rewarding people who execute. Lack of execution can cost CEOs their jobs.
Execution requires leaders to be hands-on and intensively involved with their people and organizations. They must put vital leadership behaviors in place and create a culture of execution to run the core processes effectively. In this way, execution is a systematic way to expose reality and act on it.
How can leaders improve their execution skills?View answer
Leaders can improve their execution skills by being more hands-on and intensively involved with their teams and organizations. They should implement essential leadership behaviors and foster a culture of execution to manage core processes effectively. Execution is a systematic approach to expose reality and act on it, thus leaders should be open to reality and take appropriate actions based on it.
What are the key differences between organizations with and without a culture of execution?View answer
Organizations with a culture of execution are characterized by hands-on leadership, intensive involvement with their people, and effective running of core processes. They use execution as a systematic way to expose reality and act on it. On the other hand, organizations without a culture of execution may lack these characteristics, which can lead to inefficiencies and a disconnect between strategy and implementation.
How can leaders maintain a culture of execution in the long term?View answer
Leaders can maintain a culture of execution in the long term by being hands-on and intensively involved with their people and organizations. They should put vital leadership behaviors in place and create a culture of execution to run the core processes effectively. Execution is a systematic way to expose reality and act on it, and leaders should consistently apply this approach.
Here are seven things you must do to execute:
How can leaders effectively delegate tasks to get things done?View answer
Leaders can effectively delegate tasks by knowing their team and business well, setting clear goals and priorities, and ensuring follow-through. They should engage actively with their staff, have candid discussions about operational realities, and share the organizational vision. This approach earns the team's respect and makes delegation more effective. Leaders should also insist on realism in all dialogues within the organization, asking employees about what the business is doing right and wrong. Setting clear priorities helps people make better daily trade-offs and avoid organizational politics. Finally, leaders should ensure follow-through to see tasks to completion.
What are the benefits of making decisions quickly in business?View answer
Quick decision-making in business has several benefits. It allows businesses to respond swiftly to changes in the market, seize opportunities as they arise, and maintain a competitive edge. It also promotes efficiency and productivity, as it reduces the time spent on deliberation and indecision. Furthermore, it encourages a culture of decisiveness and confidence among employees.
How can leaders ensure that they hire doers that energize others?View answer
Leaders can ensure they hire doers that energize others by implementing a thorough hiring process that includes behavioral and situational interviews to assess the candidate's ability to take initiative and inspire others. They should also look for candidates who demonstrate a positive attitude, resilience, and the ability to work well in a team. Additionally, leaders can provide a clear vision and goals for the organization, which can help attract and retain motivated and energetic employees.
Efforts at cultural change fail because they are not linked to business outcomes. Usually, values don't need to be changed. Instead, work to change the limiting beliefs that affect behavior. Behaviors are beliefs turned into actions. Behaviors deliver results.
Beliefs are conditioned by experience, what people hear inside and outside the organization, and perceptions about their leaders. If employees believe that those who perform less will gain the same rewards, they will be unmotivated and work poorly.
Four steps to a culture of execution
There are four steps to create a culture of execution.
Link rewards to performance
A business culture ultimately tells the people in the organization what kinds of behaviors are valued and rewarded. The compensation system must reward not just substantial achievement on numbers but also desirable behaviors that people adopt.
Social operating mechanisms
A vital part of the organizational software is ""Social Operating Mechanisms,"" which include any place where dialogue occurs in an organization. Social Operating Mechanisms could be formal or informal meetings, emails, presentations etc.
Social Operating Mechanisms cut across functions, disciplines, work processes and hierarchies. They create new information flows, working relationships and improve transparency and collective action. Social Operating Mechanisms are critical to share the leader's behaviors, beliefs and mode of dialogue throughout the organization. Other leaders who are present adopt these as their mode of operation
These candid and open dialogues improve the organization's ability to gather information, process it and make decisions. Informality encourages questions, helps colleagues take risks and surfaces out-of-the-box ideas.
The best long-term competitive differentiator is the quality of an organization's talent pool. Leaders need to spend up to 40% of their time and emotional energy in the selection, appraisal and development of people. While a CEO may not interview every leadership candidate, employees will follow the standard set by the CEO for hires across the organization.
What Kind of People to Hire: You can spot the doers by their work habits. Here are qualities to look for in candidates:
Energize People: Some leaders drain energy from people while others create it. Hire candidates who energize their fellow employees.
Be Decisive on Tough Issues: Some candidates waver, procrastinate and avoid reality. Choose candidates with the emotional fortitude to decide on complex issues swiftly and act on them.
Get Things Done Through Others: Without this ability, leaders cannot get the full benefit of the team's capabilities. Leaders who cannot get work done through others put in 80-hour weeks and push their team to do the same. If a candidate cannot get things done through others, they are sure to burn out.
Follow Through: Every leader who is good at executing follows through religiously. Follow through ensures that people do the thing they have committed to do on time. Never finish a meeting without follow-throughs.
The people process is more important than the strategy or operations process. People make market judgments, create strategies and translate them into operational realities. A people process accurately evaluates individuals, provides a framework to identify and develop leadership talent and creates a leadership pipeline that builds a strong succession plan. There are four building blocks to a robust people's process.
Tell me more about four building blocks to a robust people's process.View answer
The four building blocks to a robust people's process are:
1. Talent Identification: This involves recognizing individuals with potential and the ability to contribute significantly to the organization. It includes assessing their skills, knowledge, and potential for growth.
2. Leadership Development: Once potential leaders are identified, they need to be nurtured and developed. This could involve training programs, mentorship, and providing them with opportunities to lead and manage projects.
3. Succession Planning: This involves preparing for the future by identifying and developing potential successors for key positions. It ensures that there are capable individuals ready to take over when leaders leave or retire.
4. Performance Management: This involves evaluating individuals' performance, providing feedback, and setting goals. It helps to ensure that everyone is contributing effectively to the organization's success.
These four elements work together to create a strong people process that supports the organization's strategy and operations.
Tell me more about people processView answer
The people process is a critical aspect of any organization, focusing on the management and development of its human resources. It involves various activities such as recruitment, training, performance evaluation, and succession planning.
Recruitment is the first step, where the organization selects individuals with the necessary skills and potential. Training and development then help these individuals to grow and adapt to their roles.
Performance evaluation is another key aspect, where the organization assesses the performance of its employees, providing feedback and identifying areas for improvement.
Finally, succession planning is about preparing for the future. It involves identifying and developing potential leaders within the organization to ensure a smooth transition when current leaders leave or retire.
Overall, the people process is about ensuring that the organization has the right people in the right roles, and that these individuals are continuously developed and prepared for future challenges.
Link people to strategy and operations
Leaders must have the correct numbers and kinds of people to execute their strategy. The people's process must be linked to strategic milestones in the near (0-2 years), mid (2-5 years), and long-term. These milestones must also be linked to operational targets to understand what new talent to hire and what capabilities to develop.
Develop leadership principles
A pipeline of promotable leaders is essential to meet mid and long-term targets. The people's process must assess candidates and decide what they need to do to become ready for leadership responsibilities.
The Leadership Assessment Summary is a matrix with performance and behavior as axes, both with a scale of low, medium and high. The Leadership Assessment Summary gives an overview of candidates who are high-potential and promotable. Similarly, it shows those who exceed performance standards but need coaching on behavior and vice-versa.
Retention risk analysis evaluates a person's potential for mobility and the organization's risk if they leave. If a candidate is both high mobility and critical to the future of the business, the organization will take actions like recognitions and rewards to retain them.
Succession depth analysis evaluates if the company has the talent pipeline to fill critical positions. It also evaluates if high-potential people are stuck in the wrong jobs.
Retention and success at GE
In the mid-1990s, when GE was widely seen as the best producer of leadership talent, every senior leader was a retention risk. GE's people process swiftly moved to retain critical candidates. GE offered them long-term financial rewards like stock grants that they could not cash in until retirement. However, if a critical person left, GE's succession depth approach could replace them within 24 hours.
Deal with nonperformers
A robust people's process must distinguish between candidates who need to be moved to a lesser job and those who need to be fired. When you have to let people go, it's best to do it with as much dignity as possible. It reinforces the positive nature of the performance culture.
Lastly, link HR to business results. Apart from people skills, the HR representative in charge must be a business leader with a point of view on how the people process can help achieve a business objective or a strategic plan.
A good strategy emerges from people closest to the action who understand the market, customers, and resources. While staff can help with numbers and analysis, ultimately, business leaders must develop a strategic plan.
To be realistic, leaders must link their strategy to the people process. The organization must have the right people in the right place to execute the strategy. The operational plan must link the strategic plan specifics to align the different parts of the organization towards its target goals. A business unit strategy must be less than 50 pages and easy to read. You should present its essential components within one page and describe your strategy in 20 minutes in simple language. If you find this difficult, it means that you will have to clarify your thought process.
The assessment of the external environment
The strategic plan must explicitly state assumptions it makes about the social, political and macroeconomic context. Successful strategists can perceive patterns of change and relate them to their landscape and business far before everyone else.
Understanding customers and markets
Sometimes organizations can lose awareness of consumers' needs and purchase patterns due to excessive focus on the production and sales of their products.
Market segment maps are helpful to define growth opportunities. A.T.Cross, the pen manufacturer, has three primary consumer segments: individual buyers, gifters and corporate purchases for institutional gifts. Each product segment will have different competitors, channels, economics and price.
A robust strategic plan must address these questions:
The operations process breaks long-term strategic outputs into short-term targets. It looks at the programs like product launches, sales plans and manufacturing plans that the business must complete to achieve desired objectives. The leader has to set goals actively, link details of the operations process to the people and strategy processes and lead operating reviews to align the organization to the plan. The operating plan is fundamentally different from a budget, which usually uses the previous year's numbers to set targets. In contrast, an excellent operating plan begins with the strategy document and breaks down long-term strategic goals into short-term targets. Many companies prepare an operating plan based on the budget. In reality, the budget should be a financial expression of the operating plan.
Debate every assumption
There is usually an inherent conflict of interest as people see the review through their respective lenses. In a formal budget review, they negotiate to achieve compromise. Instead, the operating review aims to surface all assumptions, debate them out and validate them with customers and suppliers. An operating review must thoroughly debate every assumption, not only big-picture assumptions but little assumptions and their effect on business, item by item. You cannot set realistic goals unless you have examined the assumptions behind them.
As it offers the last chance to test and validate the strategy before it faces the real world, the strategy review must feature a robust debate with all key players present. People must leave with closure on the discussion and clear accountability for their parts of the plan. Leaders should ensure everyone is clear about outcomes.
The Strategy Review is a good place for leaders to learn about and coach other team members. At the end of the review, the leader gets a good perspective of the strategic thinking capabilities of the people involved and their potential for promotion. At the strategic review, the same questions raised when the team formed the strategic plan will be raised again with a broader group with more diverse views.
Here are some additional questions to consider:
Is the plan scattered or sharply focused?
In a quest for expansion, sometimes businesses can end up with far more goods and services than they can manage. Check if your strategy avoids fragmentation of effort and if the company plans to enter too many market segments simultaneously.
Are these the right ideas?
Companies can strategize themselves into markets and business ideas they cannot succeed in. Irrespective of how well you execute, the odds are highly stacked against the company's success when ideas don't fit into current capabilities or require costly acquisitions.
First, set targets like revenues, productivity, market share and operating margin from the outside-in and top-down. Outside-in means that the numbers must reflect economic and competitive realities. Top-down means leaders set goals from the organization level to the business unit level.
Second, develop action plans and make necessary trade-offs. These include significant programs for the year across sales, marketing, production and capital spends. The plans originate from business units as a response to the targets set. Leaders look at the assumptions that might be the most vulnerable and create and ask people to develop contingency plans for those scenarios.
Finally, the leader gets agreement and closure from all participants and establishes follow-through measures. An excellent way to ensure follow-through is to send a memo that outlines the details of the agreements. Quarterly reviews keep the plan up to date and reinforce synchronization.
Apart from clarity on achievable targets, the operations process is an excellent opportunity to coach for leadership. Leaders who participate see the company as a whole, think about every facet of the business and understand how they fit in. They learn to allocate and reassign resources when the environment changes. People get to practice trade-offs to balance the short and long-term.
Finally, the operations process builds confidence. The team knows they can meet the targets because leadership based them on realistic assumptions. Additionally, the company has simulated the moves necessary to achieve those targets in all but the most uncertain circumstances.
These three processes complement each other to create a virtuous spiral of excellence in execution. These three core processes, when done right, are the differentiation between you and your competitors.
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