By Richard Lepsinger
Ever wonder why some companies consistently meet their goals and others don’t? So did we. That’s why we decided to conduct a study of 400 companies to find some answers.
Here’s what we discovered: organizations that have the best performance results and are more effective at execution have five factors in common. I think of these factors as the “five bridges,” because they help companies bridge the gap between strategy and execution.
Each example below illustrates how an “execution superstar” used one of the five bridges to achieve stellar results:
Bridge #1: The Ability to Manage Change
Execution Superstar: Procter & Gamble
A few years back, P&G hit a home run with its Mr. Clean Magic Eraser. The product is relevant to Bridge #1 because of the way it came to fruition. The organization had a track record of developing new products in-house. With the Magic Eraser, it broke from that model. An employee discovered the prototype in Japan, and rather than limiting itself to internal ideas, P&G saw an opportunity to license a preexisting product, tapping into its own organizational competence to add value. Its plan to use ideas that had been developed outside the company worked due to P&G's openness to change and its ability to execute flawlessly.
Bridge #2: A Structure that Supports Execution
Execution Superstar: IBM
IBM set out to become a “globally integrated enterprise.” The key? It put in place a structure that best supports this strategy. Historically, IBM created miniversions of itself in each country where it operated. This strategy turned out to be inefficient and expensive. Now the company sets up shop wherever it finds the right talent at the right price: global IT service delivery in India, global supply chain in China, and global financing back office in Brazil. IBM also redesigned business processes and automated work with software to help coordinate these activities.
Execution Superstar: Google
Bridge #3: Employee Involvement in Decision Making
When Google started out, it was easy to keep all of its employees involved—primarily because there were so few of them. However, now that the company has expanded to thousands of employees, its leaders have had to find ways to ensure that everyone has a voice. One way they keep their ears open to grassroots ideas is by allowing engineers to spend at least one day a week working on their own pet projects. The company also uses smaller teams to develop new concepts—sometimes assigning only three or four people to a team.
Execution Superstar: Costco
Bridge #4: Alignment Between Leader Actions and Company Values and Priorities
James D. Sinegal, president and CEO of Costco, is one of the best and most consistent examples of a leader whose behavior is aligned with the organization's values and priorities. Costco operates with razor-thin margins yet manages to maintain solid earnings through its membership fee and its Spartan approach to costs. In this environment, store managers need to be obsessively focused on details. Sinegal models that behavior every time he visits a warehouse store. He quizzes store managers about the sales of each department, what they are doing to move merchandise, and the status of individual items.
Here's another way Sinegal signals the importance of keeping costs low: his office overlooks the parking lot of the Costco across the street and he has folding chairs for visitors. He answers his own phone and does not have an entourage like many successful senior executives. His salary and bonus total about $450,000. He truly is someone who lives the values and keeps the organization's priorities front and center every day.
Execution Superstar: Cisco
Bridge #5: Company-wide Coordination and Cooperation
To help ensure cross-organizational cooperation, Cisco, led by John Chambers, changed its compensation system so that people are paid not only for hitting their targets but also for how effectively they collaborate with their peers. Technology has also played an important role in facilitating teamwork. Cisco has installed 120 telepresence centers (a new high-end video conferencing system) across the company and uses social networking to bring together employees from around the world.
© Richard Lepsinger. All rights reserved. Adapted from Closing the Execution Gap: How Great Leaders and Their Companies Get Results (Jossey-Bass/A Wiley Imprint, 2010), by Richard Lepsinger.
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