Execution - by Larry Bossidy and Ram Charan

ISBN: 0609610570
Date read: 2007-02-12
How strongly I recommend it: 3/10
(See my list of 360+ books, for more.)

Go to the Amazon page for details and reviews.

In-depth look at the dirty discipline of getting things done in a large organization.

my notes

Execution:
- the missing link
- the main reason companies fall short of their promises
- the gap between what a company's leaders want to achieve and the ability of their organizations to deliver it
- a system of getting things done through questioning, analysis, follow-through. meshing strategy with reality, aligning people with goals, achieving results promised
- a central part of a company's strategy and the major job of any leader in business

The cause : strategies most often fail because they aren't executed well. Things that are supposed to happen don't happen.

Unless you translate big thoughts into concrete steps for action, they're pointless. Without execution, the breakthrough thinking breaks down, learning adds no value, people don't meet their stretch goals, and the revolution stops dead in its tracks. What you get is change for the worse because failure drains the energy from your organization. Repeated failure destroys it.

Execution must be a core element of an organization's culture.

Execution is a systematic process of rigorously discussing hows and whats, questioning, tenaciously following-through, and ensuring accountability.

Linking rewards to outcomes.

Includes mechanisms for changing assumptions as the environment changes and upgrading the company's capabilities to meet the challenges of an ambitious strategy.

Execution is a systematic way of exposing reality and acting on it. Most companies don't face reality very well.

You need robust dialogue to surface the realities of the business.
You need accountability for results - discussed openly and agreed to by those responsible - to get things done and reward the best performers.
You need follow-through to ensure plans are on track.

Which people will do the job, and how will they be judged and held accountable?
What human, technical, production, and financial resources are needed to execute the strategy?
Will the organization have the ones it needs two years out, when the strategy goes to the next level?
Does the strategy deliver the earnings required for success?
Can it be broken down into doable initiatives?

Strategy takes account of people and operational realities. People are chosen and promoted in light of strategic and operational plans. Operations are linked to strategic goals and human capacities.
The leader of the business and his leadership team are deeply engaged in all three. THEY are the owners of the processes - not the strategic planners or HR or finance staffs.

The leader has to be engaged personally and deeply in the business. Execution requires a comprehensive understanding of a business, its people, and its environment.
Only the leader can make execution happen, through deep personal involvement in the substance and details of execution.
The leader must be in charge of getting things done by running the three core processes: picking other leaders, setting the strategic direction, and conducting operations.

How could would a sports team be if the coach spent all his time in his office making deals for new players, while delegating actual coaching to an assistant?
Only a leader can ask the tough questions that everyone needs to answer, then manage the process of debating the information and making the right trade-offs.

Dialogue is the core of culture and the basic unit of work. How people talk to each other absolutely determines how well the organization will function.

Far too many leaders avoid debating about people openly in group settings.

Micromanagers rarely know as much about what needs to be done as the people they're harassing.

The leader who boasts of his hands-off style or puts faith in empowerment is not dealing with the issues of the day, not confronting the people responsible for poor performance, or searching for problems to solve, then making sure they get solved.

The leader who executes assembles an architecture of execution puts into place a culture and processes for executing, promoting people who get things done more quickly and giving them greater rewards. His personal involvement in that architecture is to assign the tasks and then follow-up. This means making sure that people understand the priorities, which are based on comprehensively understanding the business, and asking incisive questions. The leader who executes often doesn't even have to tell people what to do - he asks questions so they can figure out what they need to do. Coaching them, passing on experience as a leader, educating them to think in ways they never thought before. This helps them expand their own capabilities for leading.

Passionate about getting results.

Execution has to be embedded in the reward systems and in the norms of behavior that everyone practices.

The gap between the desired and actual outcome in everything from profit margins to the selection of people for promotion. Close the gap and move the bar still higher.

The leader doesn't just sign off on a plan. He wants an explanation, and will drill down until the answers are clear.

(story about leader who messed up) : Joe did all the right things. By the standards of execution, he did almost nothing right. The gap between goals and outcome reflected a chasm between Joe's ambitions and the realities of the organization. Though he chewed out his execs when they didn't make numbers, he never asked WHY they didn't make them. An execution-savvy leader would have asked that right away. Then focused on the cause.

Stretch goals can be useful in forcing people to break old rules and do things better. They're worse if unrealistic or if the people who have to meet them aren't given the chance to debate them beforehand and take ownership of them.

Involve all the people responsible for the strategic plan's outcome - including the key production people - in shaping the plan.
Ask people about the hows of execution : how, specifically, they are going to achieve their projected demand on a timely basis.

Set milestones for the progress of the plan, with strict accountability for the people in charge. Make an agreement it will be X% complete by Y date, and Z% of the people would be trained in the process.

Set plans to deal with the unexpected.

Especially when a business is making major changes, the right people have to be in the critical jobs, and the core processes must be strong enough to ensure that resistance is dissolved and plans get executed.

Executives couldn't get info about profit by customer, product line, or channel, so they had no way of making good decisions about where to allocate resources.

Innovator's Dilemma : companies with the greatest strength in a mature technology tend to be the least successful in mastering new ones.

Listening to tomorrow's customers as well as today's and planning for their needs.

Monday-morning conference calls : an ongoing operating review : performance for the previous month compared with the commitments people have made. Early warnings of problems instill a sense of urgency. People who fall short have to explain why, and what they are going to do about it.

Show me an organization that's wringing its hands, listening to rumors, anxious about the future, and I will show you leadership that behaves the same way. People imitate their leaders.

Develop a compensation system that links rewards to performance, along with a web-based set of evaluation tools to help managers sharpen their assessments of their people.

7 essential behaviours that form the first building block of execution:
* - know your people and your business
* - insist on realism
* - set clear goals and priorities
* - follow through
* - reward the doers
* - expand people's capabilities
* - know yourself

Tough questions : good people like to be quizzed, because they know more about the business than the leader.
When you probe, you learn things and your people learn things. Everybody gains from the dialogue. You dignify the leadership at the management level by allowing them to expound on the business.

Both parties came away with a clear agreement about what the manager needed to do to make the business better. Tough questions got the manager to see the realities of his business more clearly and connected them with the external environment. The dialogue schooled them in how to think about the business in a more rigorous and analytical way. Encouraging and motivating the plant team, creating energy.

As a leader, you have to show up. You've got to conduct business reviews. You can't be detached and removed and absent.

After a business review, write the manager a formal letter summarizing the things he agreed to do, but also write a personal note to say, "Great job. Things could be better and you need to work on it, but otherwise things are going great."

The personal connection is especially critical when a leader starts something new.

The leader's personal involvement, understanding, and commitment are necessary to overcome this passive resistance. Announce the initiative. Define it clearly. Define its importance in the organization. You can't do that unless you understand how it will work and what it really means in terms of benefit. Then follow-through to make sure everyone takes it seriously. You can't do this if you don't understand the problems that come with implementation: talk about them with the people doing the implementing, and make it clear - again and again - that you expect them to execute it.

Realism is the heart of execution, but many organizations are filled with people who are trying to avoid or shade reality. Why? Because it makes life uncomfortable. People want to hide mistakes, or buy time to figure out a solution rather than admit they don't have an answer at the moment. They want to avoid confrontations. Nobody wants to be the messenger that gets shot, or the troublemaker that challenges the authority of her superiors.

Embracing realism means always taking a realistic view of your company and comparing it with other companies.

Focus on 3 or 4 priorities.
Simplify things so that others can understand them, evaluate them, act on them, so what they say becomes common sense.

Many corporations do such a poor job of linking rewards to performance that there's little correlation at all. They don't distinguish between those who achieve results and those who don't, either in base pay or bonuses.

"When I see companies that don't execute, the chances are they don't measure, don't reward, and don't promote people who know how to get things done. Salary increases in terms of percentage are too close between the top performers and those who are not. There's not enough differentiation in bonus. Leaders need the confidence to explain to an employee why he got a lower-than-expected reward."

Otherwise, people think they're involved in Socialism. That isn't what you want when you strive for a culture of execution. Make it clear to everybody that rewards and respect are based on performance.

COACHING
Coaching is the single most important part of expanding others' capabilities.
The difference between giving orders and teaching people how to get things done.
Good leaders regard every encounter as an opportunity to coach.
Observe a person in action then provide specific useful feedback. Point out examples of behavior and performance that are good or need to be changed.

When the leader discusses business and organizational issues in a group setting, everybody learns. Wrestling with challenging issues collectively, exploring pros and cons and alternatives, deciding which ones make sense increases people's capabilities both individually and collectively - if it's done with honesty and trust.

Ask the questions that bring out the realities and give people the help they need to correct problems.

4 core qualities that make up emotional fortitude:
* - authenticity
* - self-awareness
* - self-mastery
* - humility

Most efforts at cultural change fail because they are not linked to improving the business' outcomes.

CREATE A CULTURE OF GETTING THINGS DONE:
* - Tell people clearly what results you're looking for.
* - Discuss how to get those results.
* - Reward people for producing the results.
* - If they come up short, provide additional coaching, withdraw rewards, give them other jobs, or let them go.

We don't think ourselves into a new way of acting, we act ourselves into a new way of thinking.

When people violate one of the company's basic values, the leader must step forth to publicly condemn those violations. Anything less is interpreted as a lack of emotional fortutide.

The beliefs that influence specific behaviors are more likely to need changing.

If they believe others who do less than they do will get the same rewards, that belief will drain their energy.

EXAMPLE OLD BELIEFS:
We are in a commodity business. We can't grow at market rates. Profits follow revenues. Each leader owns all resources - control is key. My peer is my competitor. People aren't accountable.
EXAMPLE NEW BELIEFS:
We can grow faster than the market - profitably and using capital efficiently. We can increase productivity every year. We are committed to our clients' success. Collaboration is key.

An agenda for attitude change.

Behaviors are beliefs turned into action.

This is less about individual behavior than about norms of behavior: the accepted, expected ways groups of people behave.

The foundation of changing behavior is linking rewards to performance and making the linkages transparent.
A business's culture defines what gets appreciated and respected and rewarded. It tells the people in the organization what's valued and recognized, and in the interest of trying to make their own careers more successful, that's where they will concentrate. If a company rewards and promotes people for execution, its culture will change.

People love to give rewards. They love to be loved. But they don't have the emotional fortitude to give honest feedback and either withhold a reward or penalize people.

The process has to have integrity: the right information must be collected and used, based on behavior and performance criteria.

If you did the same job this year, you're rated lower because you didn't get any better and everyone else did. You've got to realize, the company is improving, everyone's got to improve the job they do, and if you're staying the same, you're falling behind.

Other leaders design rewards for new behaviors of execuation but implement them brutally. They don't take the important steps of helping people to master the new required behaviors. They don't coach. They don't teach people to break a major concept down into smaller critical tasks that can be executed in the short term, which is difficult for some people. They don't conduct the dialogues that surface realities, teach people how to think, or bring issues to closure.

These are the meetings where there's no robust debate and therefore nobody states their misgivings. Instead they simply let the project they didn't like die a quiet death over time.

Leaders who create disproportionate awards for high performers and high-potential people are creating social software that drives behaviors : people work harder and differentiating themselves.

They let people who normally don't have much contact with one other exchange views, share info and ideas, and learn to understand the company as a whole.

Spread the leader's beliefs, behaviors, and mode of dialogue throughout the organization. Other leaders learn to bring these beliefs and behaviors to the lowest-level meetings and interactions, including coaching and feedback. It becomes their beliefs, behaviors and dialogue as well.

How to work together in constructive debate. No one person has all the ideas or all the answers. If we have a problem in one place, people will respond by getting together and finding a solution, not by sitting around and moaning that they don't have a solution or deciding to engage a consultant.

Practicing such constructive debates over time builds confidence in people to tackle unfamiliar issues as they arise.

Robust dialogue ends with closure. At the end of the meeting, people agree about what each person has to do and when. They've committed to it in an open forum. They are accountable for the outcomes.

Robust dialogue brings out reality, even with that reality makes people uncomfortable, because it has purpose and meaning. It's open, tough, focused, and informal. The aim is to invite multiple viewpoints, see the pros and cons of each one, and try honestly and candidly to construct new viewpoints. This is the dynamic that stimulates new questions, new ideas, and new insights, rather than wasting energy on defending the old order.

To build an execution organization, the leader has to be present to create and reinforce the social software with the desired behaviors and the robust dialogue.

You hire a talented person, and they will hire a talented person.

What are the three non-negotiable criteria for the job?

Every business needs a discipline that is embedded in the people process, with candid dialogues about the matches between people and jobs, and follow-through that ensures people take the appropriate actions.

Most people know someone in their organization who doesn't perform well, yet manages to keep his job. The usual reason is the person's leader doesn't have the emotional fortitude to confront him and take decisive action. Such failures can do considerable damage to a business. If the nonperformer is high enough in the organization, he can destroy it.

Many jobs are filled with the wrong people because the leaders who promote them are comfortable with them. It's natural for leaders to develop a sense of loyalty to those they've worked with over time, particularly if they've come to trust their judgements, but it's a serious problem with the loyalty is based on the wrong factors. For example, the leader may be comfortable with a person because that person thinks like him and doesn't challenge him, or has developed the skill of hiding the boss from conflict.

The most important question : how good is this person at getting things done?
There's very little correlation between those who talk a good game, and those who get things done.

You're searching for people with an enormous drive for winning. People who get their satisfaction from getting things done.
You can easily spot the doers by observing their working habits. They're the ones who energize people, are decisive on tough issues, get things done through others, and follow-through as 2nd nature.

Never finish a conversation without summarizing the actions to be taken.

GETTING THINGS DONE THROUGH OTHERS
Getting things done through others is a fundamental leadership skill. Indeed if you can't do it, you're not leading.
Some smother their people, blocking their initiative and creativity. They're the micromanagers, insecure leaders who can't trust others to get it right because they don't know how to calibrate them and monitor their performance. They wind up making all of the key decisions about details themselves, so they don't have time to deal with the larger issues they should be focusing on, or respond to the surprises that inevitably come along.
Others abandon their people. They believe wholeheartedly in delegating: let people grow on their own, sink or swim, empower themselves. They explain the challenge (sometimes at such a high level of abstraction that it amounts to superficiality) and toss the ball entirely into their people's court. They don't set milestones, and they don't follow through. Then, when things don't get done as expected, they're frustrated.
Both types reduce the capabilities of their organizations.

The 80-hour-week is actually a major weakness. "You have to come in here less, but your performance can't change. It must be as good as it is now. Learn how to get things done through others."

Follow-through is the cornerstone of execution. It ensures that people are doing the things they committed to do, according to the agreed timetable. It exposes any lack of discipline and connection between ideas and actions, and forces specificity.

Never finish a meeting without clarifying what the follow-through will be, who will do it, when and how they will do it, what resources they will use, and how and when the next review will take place and with whom.
Never launch an initiative unless you're personally committed to it, and prepared to see it through until it's embedded in the DNA of an organization.

Look for energy and enthusiasm for execution. Does the candidate get excited by doing things, or just talking about them? Is her life full of achievement and accomplishment?
What does this person want to talk about? The thrill of getting things done, or keeps wandering back to strategy or philosophy?
Does she detail the obstacles she had to overcome?
Does she explain the roles played by the people assigned to her?
Does she seem to have the ability to persuade and enlist others in a mission?

If you sit down with your boss, and your boss hasn't said something about your weaknesses, go back! Otherwise you're not going to learn anything.

The leader sits down with the person and discusses the appraisal. At the end I'll say, "Now I'm going to give you the last line. You've heard what I think. What would you like to add to this?"

Instead of debating the quality and performance of individuals, they became more focused on how we can help so-and-so overcome this gap in knowledge or experience or capability, or where we should move him.

If you have leaders with the right behavior, a culture that rewards execution, and a consistent system for getting the right people in the right jobs, the foundation is in place for operating and managing each of the core processes effectively.

PEOPLE PROCESS

A robust people process does 3 things:
Evaluates individuals accurately and in depth.
Provides a framework for identifying and developing the leadership talent - at all levels and all kinds - the organization will need to execute its strategies down the road.
Fills the leadership pipeline that's the basis of a strong succession plan.

One of the biggest shortcomings of the traditional people process is that it's backward-looking, focused on evaluating the jobs people are doing today.
Far more important is whether the individuals can handle the jobs of tomorrow.
The shift in skill mix that will be required for the new environment.

Make Strategy Milestones: (EXAMPLES:)
Near-Term (0-2 years): * expand product selection, *launch new initiative to expand services to installed base, *secure new expertise in technology
Medium Term (2-5 years): *engage and evaluage alliance partners, etc.
Long Term (5+ years): *become pioneers of leapfrog technology, *build more useful alliances, *develop low-cost sourcing ideas

Leadership Assessment Summary:
Y-axis is "PERFORMANCE" : top = "exceeds standard", bottom = "below standard"
X-axis is "BEHAVIOR" : top = "exceeds standard", bottom = "below standard"
Make a square & put people in these.

Continuous Improvement Summary:
Like a traditional performance appraisal, but not only captures key performance highlights (good & bad) but includes clear specific useful information on development needs. Helps the individual become a better performer.
List of skills on left. 1-5 score on right to match up to each.
Below, summary of "performance highlights", "targets missed", "challenges", "summary strengths", "development needs", "development plan", "potential next moves (long term) & also (short-term)"

Focus on what needs to be done to retain critical people and replace those who leave unexpectedly, are promoted, or fail.

Retention Risk Analysis looks at a person's marketability, potential for mobility, risk a business faces if s/he leaves. If she's been in her existing job too long, she's likely to feel blocked from moving upward, and susceptible to headhunter calls.

Succession depth analysis determines whether the company has enough high-potential people to fill key positions. Looks at whether there are high-potential people in the wrong jobs and whether key people will be lost if a job is not unblocked for them.

When a key person does leave, the process provides a needed replacement within 24 hours.

Identifying high-potential and promotable people avoids two dangers. One is organizational inertia - keeping people in the same jobs for too long. The other is moving people up too quickly.

Why would an assessment be sent back? Maybe the words are lukewarm. The assessor says a person is doing "wonderfully", and under development needs puts "none". Who is this manager kidding? How can a leader help a person when he tells her she's got no development needs? I tell these people, "Go back and do the assesment you've been asked to do."

Sometimes important issues are omitted in the assessments and then brought up in the meeting. Why weren't they on the sheet? How does the manager know about them? Don't talk to me about things you haven't talked to her about. If she's got a problem, put it on the sheet and have her acknowledge it.

When several people who've watched the same person over time pool their observations in robust dialogue, subjective views become objective.

Even the best people process doesn't always get the right people in the right jobs. It can't make everybody a great peformer.
Some managers have been promoted beyond their capabilities and need to be put into lesser jobs. Others just need to be moved out.

HR has to be linked to stragegy and operations, and to the assessments that the managers ultimately make about people.
Demand that the company use ALL of its capabilities to make money.
"I want bigger margins than anybody else, and to accomplish this, we have to have great people and train them better and faster than everybody else.
We need to have educational programs that are focused on key business issues and problems, the things that matter.
HR's role is to help me solve those problems."

The HR person not only has to be well trained in the craft : how to teach people, develop them, make them interested in staying with us, and know what's important for building momentum and morale in an organization - but also must have the same characteristics as any business leader has. Business acumen, understanding how a company makes money, thinking critically, a passion for results, linking strategy and execution.

Forces executives to really drill down and identify what the critical jobs are.

The right people are in the right jobs when information about individuals is collected constantly and leaders know the people, how they work together, and whether they deliver results - or fail to.
It's the consistency of practice that develops expertise in appraising and choosing the right people.
The people process begins with one-on-one assessments, but when developed and practiced as a total process, it becomes incredibly effective as an execution tool.

Strategic plan must be an action plan that leaders can rely on to reach objectives. In creating it, ask whether and how your organization can do the things needed to achieve its goals.
Start with identifying and defining the critical issues behind the strategy.
Bad stratgegy is disconnected from both external and internal realities. Didn't test its critical assumptions to see if they were robust, and had no alternative plan for what to do if one or more of them proved wrong.

Substance of any strategy is summed up by its building blocks : 1-6 key concepts and actions that define it.
Pinpointing the building blocks forces leaders to be clear as they debate and discuss the strategy. Helps judge whether it's worth doing and exploring alternatives.
If building blocks are clearly defined, the essence of even the most complex strategy can be expressed on one page.

Keep strategy up-to-date, reviewing the plan 3 times a year, and refining it as conditions change.

To be effective, a strategy has to be constructed and owned by those who will execute it, namely the managers.
They know the biz environment and capabilites because they live with them. They're in the best position to introduce ideas, to know which ideas will work in their marketplace and which ones won't.

Stragegic plan must answer these questions:
* - What is the assessment of the external environment?
* - How well do you understand the existing customers and markets?
* - What is the best way to grow the business profitably, and what are the obstacles to growth?
* - Who is the competition?
* - Can the business execute the strategy?
* - Are the short term and long term balanced?
* - What are the important milestones for executing the plan?
* - What are the critical issues facing the business?
* - How will the business make money on a sustainable basis?

The strategic plan must explicitly state the external assumptions that management is making.

Milestones bring reality to a strategic plan. If the business doesn't meet milestones as it executes plan, leaders have to reconsider whether they've got the right strategy after all.

The reason your managers have been in on the plan from the beginning : because they helped build it and they own it, they carry it around in their heads all the time.

Strategy Review:
* - How well versed is each business unit team about the competition?
* - How strong is the organizational capability to execute the strategy?
* - Is the plan scattered or sharply focused?
* - Are we choosing the right ideas?
* - Are the linkages with people and operations clear?

Focus not on what the competition has done in the past, but what they're up to and likely to do next.
* - What are our competitors planning to do to serve their customer segments and prevent us from serving them?
* - How good are their sales forces?
* - What are our competitors doing to increase market share?
* - How will they respond to our product offerings?
* - What do we know about the background of our competition's leadership?
* - What do we know abou their leader and his motivations, and what does that mean for us?
* - What acquisitions will our key competitors make that will affect us?
* - Could a competitor form an alliance and attack our segment?
* - What new people have competitors added that alter the competitive landscape?