How can performance be tied to incentives in the execution process?

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.

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.