Results Driven by Execution

The following pages will explain the discipline of execution, why it is so important today, and how it can differentiate extraordinary companies from ordinary companies. It will describe fundamental building blocks that need to be in place and what I have identified as the leader's personal priorities, the social software of culture change, and the leader's most important job of selecting and appraising people. There are three core processes discussed: people, strategy and operations and how to make them effective and how the practice of each process is linked to and integrated with the other two. The people process is discussed in length as this is the most important of the three. Done well, it results in a leadership gene pool that can conceive and shape executable strategies and convert them into operating plans and specific points of accountability. The strategic plan brings conceptual thinking to reality and tests its executability. It also links back to the people process. If the strategy proposed and its backup logic is clearly in sync with the realities of the marketplace, the economy, and the competition, then the people process has worked. Finally the operations process shows how to build block by block, an operating plan that will deliver the strategy. Both the strategy and operations plans link with the people process to test the match between organizational capabilities and what is required to execute the operating plan.

In 2007, forty CEOs of the top two hundred companies on Fortune's 500 list were removed- not retired but fired or made to resign. They were all highly regarded when they were appointed- they seemed to have all the right qualifications. But the reason they lost their jobs was because they couldn't or didn't deliver what they said they would. When 20 percent of the most powerful business leader in America lose their job, something is clearly wrong. This trend has continued and in such cases it's not just the CEO who suffers-so do the employees, partners, shareholders and even customers. And it's not just the CEO whose shortcomings create the problem, though of course he or she is ultimately held responsible.

What is the problem? Is it a rough business environment? Yes. Whether the economy is strong or weak, competition is fiercer than ever. Change comes fast and investors have turned unforgiving when companies don't deliver on their commitments. The most frequent explanation is that the CEO's strategy was wrong. But the strategy by itself is not often the cause. Strategies most often fail because they aren't executed well. Things that were supposed to happen don't happen. Either the organizations aren't capable of making them happen or the leaders of the business misjudge the challenges their companies face in the business environment or both.

Every one talks about change. In recent years, a small industry of changemesters has preached revolution, invention and quantum change, breakthrough thinking, audacious goals, learning organizations and the like. I'm not necessarily debunking this stuff, but 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 goals and revolution steps dead in its tracks. What you get is change for the worse, because failure drains the energy from your organization. Repeated failure destroys it. These days we're hearing a more practical phrase on the lips of business leaders. They're talking about taking their organizations to the "next lever," which brings the rhetoric down to earth.

No company can deliver on its commitments or adapt well to change unless all leaders' practice the discipline of execution at all levels getting things done has to be part of a company's strategy and its goals. It's the missing link between aspirations and results. As such, it is a major job of a business leader. The heart of execution lies in the three core processes: the people process, the strategy process and the operations process. Every business uses these processes in one form or other. But more often than not they stand apart one another like silos. People perform them by rote and as quickly as possible, so they can get back to their perceive work. I have found the senior leader teams allot less than half a day each year to review the plans, people, strategy, and operations. And the reviews are not particularly interactive. People sit passively watching PowerPoint presentations and they don't ask questions. They don't debate, and as a result they don't get much useful outcome. People leave with not commitments to the action plans they've helped create. This is a formula for failure. Robust dialogue is required to surface the realities of the business. Accountability for results should be discussed openly and agreed upon by those responsible to get things done and reward the best performers- follow-through is required to ensure the plans are on track.

These processes are where the things that matter about execution need to be decided. Businesses that execute, as we shall see, prosecute them with rigor, intensity, and depth. Which people will do the job and how will they be judged and held accountable? Everybody needs to agree about their responsibilities for getting things don, and everybody commits to those responsibilities. The processes are also tightly linked with on another, not compartmentalized among staffs. 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. I believe the most important factor is the leaders of the business and his or her leadership team are deeply engaged in all three. They are the owner of the processes. Only the leader can set the tone of the dialogue in the organization. Dialogue is the core of culture and the basic unit or work. How people talk to each other absolutely determines how well the organization will function. The leader has to be on the playing field with his management team, practicing it consistently and forcefully. Specifically, the leader has to run the three core processes for people, strategy and operations with intensity and rigor.

The people process is not about micromanaging which I believe is a big mistake and diminishes people's self-confidence, and stifles their ability to think for themselves. Micromanagers rarely know as much about what needs to be done as the people they're harassing, the ones who actually do it. The leader who boasts about hands-off style or puts faith in empowerment is not dealing with the