Executing Strategy: Achieving Results
Jan 24, 2019
"If an organization can't execute, nothing else matters—not the smartest strategy, not the most innovative business model, not even game-changing technology," observes Rick Lepsinger, president of OnPoint Consulting and author of Closing the Execution Gap: How Great Leaders and Their Companies Get Results (Jossey-Bass/A Wiley Imprint, 2010).
Lepsinger's assertion is backed by hard evidence. OnPoint studied over 400 companies and found that 49% of leaders surveyed reported a gap between their organization's ability to formulate and communicate a vision and strategy and its ability to deliver results.
But this finding wasn't the surprising part. What really shocked Lepsinger was that only 36% of leaders who thought their company had an execution gap responded positively to the statement, "I have confidence in my organization's ability to close the gap between strategy and execution." That means a staggering 64% of leaders who saw an execution problem didn't believe their company could fix it.
"For companies struggling to pull themselves out of the ditch the recession kicked them into, the inability to get things done is very bad news," he says. "If you can't execute well, you're not going to be successful—and you might not be around for long."
So here's the question: If a clear and inspiring vision, a realistic strategy, employee commitment, a skilled workforce, and high levels of quality and customer service don't lead to successful execution, what does? What sets the best apart from the rest?
Lepsinger's research uncovered five characteristics and competencies, which he refers to as "The Five Bridges," that enable people to traverse the execution gap. It is these bridges that differentiate the companies that are consistently able to get things done from those that aren't. (Lepsinger calls the former "Gap Closers" and the latter "Gap Makers"—and he profiles some well-known examples of each in his book.)
BRIDGE #1: The Ability to Manage Change
Change is inevitable. We all know that. However, despite their sincerest efforts, many companies can't seem to operationalize that knowledge and turn it into positive action. And that's a dangerous shortcoming. Simply put, you can't run a successful business if you can't adjust to changes in the marketplace.
"If you're not flexible enough to bend with the winds of change like a palm tree or a bamboo, you'll snap in half like a Bradford pear when the first storm comes along," says Lepsinger.
A Gap Maker: Dell. Just as people can get stuck in a rut, so can businesses. Dell developed "the Dell Way," and its reluctance to tread off of the beaten path cost it its customers. The company was able to attract customers to its Website with low-cost offers that required the buyer to make additions in order to have the best computer (which meant the price would end up being more than the original low-cost offer). But when tons of affordable computers with all of the bells and whistles that consumers wanted became readily available through other online outlets and retail stores, consumers didn't have to go to Dell to get a "custom-made" computer.
Here's where Dell turned a problem into a huge problem. When its leaders realized they were losing business to competitors, they fell back on a practice that had always worked for them before: they cut costs to maintain market share. One area that suffered was customer service, which had originally been one of the company's biggest strengths.
"Dell created a customer service nightmare," says Lepsinger. "It's recently made changes to get back on course but once you've lost consumer confidence, it can be hard to get it back."
BRIDGE #2: A Structure That Supports Execution
Simply put, successful organizations strike the right balance between centralization and decentralization. Many companies go to great lengths to develop an exciting vision, create a realistic strategy, and get employees engaged. But then they just assume the current organizational structure and systems will support the new strategy. Often, it's just not true.
And structure isn't just about efficiency, says Lepsinger. A good one enhances accountability, coordination, and communication. Plus, it ensures that decisions are being made as close to the action as possible. These are all key components of getting things done.
A Gap Closer: Hewlett-Packard. When Mark Hurd became CEO of Hewlett-Packard, he was constantly asked if he thought acquiring Compaq was a good idea. His answer? The question is irrelevant. Basically, Hurd said what's done is done, and his job now was to find a way to make it work. He did just that when he reorganized the company into three divisions, each with its own sales force (with the heads of the divisions responsible for sales). He also reorganized the IT function. Instead of having 85 data centers, he centralized them into three.
"Hurd decentralized the sales force and centralized the IT function of the company," says Lepsinger. "This is the opposite of the way the company was organized before, and it ensured the organizational structure would be better aligned with the business strategy."
BRIDGE #3: Employee Involvement in Decision Making
Admittedly, this is a controversial notion. Some leaders view involving employees in decision making as a sign of weakness. Others fear giving up control. In reality, though, the world is too complex for any leader to go it alone. To make good decisions, you must seek out the perspectives of a wide range of people—and who knows better than employees what the closest-to-the-ground issues are?
"Involving employees in decisions gets them focused on generating solutions to problems rather than complaining or waiting to be told what to do," notes Lepsinger. "It creates a valuable sense of ownership."
A Gap Maker: The NBA. When the National Basketball Association (NBA) tried to introduce a new basketball, guess who they forgot to involve in the decision: the players. That's right. The NBA came up with a new ball design and never once asked the players how they liked it while it was in development. There's no reasonable explanation for this faux pas. Asking the players would have increased the quality of the ball itself and the acceptance of the "new ball" decision.
Instead, the NBA ended up with a ball that players refused to use because they felt it was difficult to handle when it was damp and it would actually cut their fingers. Because of the player backlash, the NBA had to scrap its "improved" model and go back to the ball the players preferred—the one they have been using for decades.
"This anecdote is a glaring example of why it is important to involve people whose support you need to execute decisions that affect them," says Lepsinger.
BRIDGE #4: Alignment Between Leader Actions and Company Values and Priorities
No company should ever have two sets of values and expectations: one for the leader(s) and one for the employees. When leaders say one thing and do another, business suffers. Of course, we all know that leader behavior is relevant. Still, it might surprise you to learn exactly how much execution depends on how consistent your behavior is with organizational values and priorities.
One, if you're a leader, employees pattern their behavior after yours. Two, if how you behave signifies that "we are all in this together," people are more likely to be motivated and go the proverbial extra mile. When you expect employees to behave a certain way (such as better serving the customer or minimizing waste) or ask employees to focus on certain priorities (like cost containment or innovation), you'd better do the same.
"A do-as-I-say-not-as-I-do attitude sends mixed messages and breeds resentment," says Lepsinger.
Gap Makers: TARP Bailout-Seeking Auto Executives. The CEOs of General Motors, Ford, and Chrysler shocked members of Congress and the American people when they used private jets to travel to Washington, DC, for a hearing. After all, the purpose of the trip was to ask for government assistance to help their companies get through the worst recession in U.S. history and the worst market for car sales in the history of their industry.
"Behavior so inconsistent with what was being described as a crisis is an example of how the automotive executives helped create the problem they now found themselves in," notes Lepsinger. "It aimed a 10,000-megawatt spotlight on their lack of awareness of the connection between their behavior and the situation at hand."
BRIDGE #5: Company-wide Coordination and Cooperation
Most employees have good intentions. They want to cooperate with colleagues and coworkers. (Who is going to consciously sabotage their own livelihood?) Yet, ensuring that decisions and actions are coordinated across organizational boundaries requires more than faith and words alone. It takes shared goals, clear communication, and well-defined roles.
"In addition, people must be held accountable for doing what they're supposed to do," says Lepsinger. "That takes two things: clear performance expectations and systems that encourage and reinforce appropriate employee behavior."
A Gap Maker: Toyota. Many people were surprised when Toyota, a brand known for its quality and reliability, recalled over six million cars due to a faulty accelerator pedal. How did this once mighty brand end up with such a PR disaster on its hands?
Toyota used to work with one supplier for each part, explains Lepsinger. But when a fire at a supplier's facility caused twenty plants to shut down for five days, the company decided it needed a second source as a back-up. For the accelerator, Toyota failed to ensure the parts it was receiving from the two suppliers were identical.
"Analysts chalk this failure up to a bureaucracy that could not accommodate the company's rapid growth," says Lepsinger. "They also point to an overly aggressive focus on profits—one that led executives to ignore principles that had contributed to its previously untarnished reputation."
These five execution bridges are critical, says Lepsinger. Without them, you'll have a tough time achieving your company's goals. The more bridges you have in place, the more likely you are to do so—and the lack of any one of them could potentially derail your efforts.
Also, as the Toyota breakdown aptly illustrates, these bridges are not permanent. They are quite fragile. Once you've built them, you must keep vigilant watch over them and work hard to maintain them over time. "It's quite possible for a company to have a bridge in place one year, only to discover that over time it's weakened or even crumbled and is no longer able to help your people traverse the gap," Lepsinger notes. "Execution is not a single-point event; it's an ongoing process. But since your ability to execute well and consistently is the very fabric of success, I can think of no better place to focus your time and energy."