Execution

1. Execution is the critical gap between strategy and results

The gap between what a company's leaders want to achieve and the ability of their organizations to deliver it.

Execution is the missing link. Many companies fail to deliver on their promises because they lack the discipline of execution. It's not enough to have a great strategy; the ability to execute that strategy is what separates successful companies from those that struggle. Execution involves questioning, analysis, and follow-through. It requires a comprehensive understanding of a business, its people, and its environment.

Key components of execution:

• Linking strategy with reality
• Aligning people with goals
• Achieving promised results

Execution is not just tactics; it's a discipline and a system. It must be built into a company's strategy, goals, and culture. Leaders who excel at execution immerse themselves in the details of their business and use their knowledge to constantly probe and question.

2. Leaders must be deeply engaged in the execution process

Leading is more than thinking big, or schmoozing with investors and lawmakers, although those are part of the job. The leader has to be engaged personally and deeply in the business.

Leaders must be present and involved. Effective execution requires leaders to be intimately engaged with their people and operations. They can't delegate the core processes of execution - picking other leaders, setting strategic direction, and conducting operations. Leaders need to show up, conduct business reviews, and foster honest dialogue.

Leadership responsibilities for execution:

• Running the three core processes: people, strategy, and operations
• Setting the tone for dialogue in the organization
• Making the personal connections that build commitment and passion

Leaders who are disconnected from the daily realities of their business can't drive execution effectively. They need to be on the playing field with their management team, practicing constructive debate consistently and forcefully.

3. The right people in the right jobs are crucial for execution

If you don't get the people process right, you will never fulfill the potential of your business.

People are the key to execution. Having the right people in the right jobs is critical for executing strategy. The people process evaluates individuals accurately, identifies and develops leadership talent, and fills the leadership pipeline. It's not just about past performance; it's about whether individuals can handle the jobs of tomorrow.

Elements of an effective people process:

• Linking people to strategy and operations
• Developing a leadership pipeline
• Dealing with nonperformers
• Transforming HR to focus on business results

Leaders must be personally committed to the people process, spending significant time and energy on selecting, appraising, and developing people. This immense personal commitment is time-consuming but essential for building a company's competitive advantage.

4. Robust dialogue and reality-based thinking drive execution

Execution is a systematic way of exposing reality and acting on it.

Face reality and act on it. Robust dialogue brings reality to the surface through openness, candor, and informality. It's essential for gathering information, understanding it, and reshaping it to produce decisions. Leaders must insist on realism and create an environment where people can speak honestly about what's really happening in the business.

Characteristics of robust dialogue:

• Open-mindedness
• Candor
• Informality
• Closure and commitment to action

Leaders need to model and encourage this type of dialogue. They should ask incisive questions, listen carefully, and create an atmosphere where people feel safe expressing their views and challenging assumptions.

5. Link people, strategy, and operations processes for effective execution

Execution is fundamental to strategy and has to shape it. No worthwhile strategy can be planned without taking into account the organization's ability to execute it.

Integrate the core processes. Effective execution requires seamless integration of the people, strategy, and operations processes. The strategy process defines where a business wants to go, the people process determines who will get it there, and the operations process provides the path.

Key linkages:

• Strategy must consider organizational capabilities
• People selection and development must align with strategic goals
• Operating plans must translate strategy into specific actions

Leaders need to oversee this integration, ensuring that each process informs and reinforces the others. This linkage helps ensure that strategies are realistic and executable, and that the organization has the right people and resources to implement them.

6. Create a culture of accountability and follow-through

Execution should begin with the senior leaders, but if you are not a senior leader, you can still practice it in your own organization.

Build execution into the culture. A culture of execution emphasizes accountability and follow-through at all levels. It rewards people who get things done and deals decisively with those who don't. This culture is created through consistent behaviors and practices, particularly from leaders.

Elements of an execution culture:

• Clear goals and priorities
• Robust dialogue about performance
• Linking rewards to results
• Consistent follow-through on commitments

Leaders create this culture by modeling the desired behaviors, setting clear expectations, and holding people accountable. They must have the emotional fortitude to confront poor performance and make tough decisions.

7. Develop a leadership pipeline through continuous improvement

Meeting medium- and long-term milestones greatly depends on having a pipeline of promising and promotable leaders.

Invest in future leaders. Developing a strong leadership pipeline is crucial for long-term execution success. This involves continually assessing and improving the capabilities of current and potential leaders, and ensuring succession depth.

Key aspects of leadership development:

• Continuous improvement of individual capabilities
• Succession planning
• Reducing retention risk for key talent
• Providing challenging experiences and coaching

Leaders need to be actively involved in identifying and developing future leaders. This includes providing honest feedback, creating growth opportunities, and ensuring that high-potential individuals are prepared for future challenges.

8. Synchronize the moving parts of the organization

Synchronization means that all the moving parts of the organization have common assumptions about the external environment over the operating year and a common understanding—the left hand knows what the right hand is doing.

Align and coordinate. Effective execution requires synchronizing the various components of the organization. This means ensuring that all parts of the business are working with common assumptions and coordinated goals.

Aspects of synchronization:

• Matching goals of interdependent parts
• Linking priorities across the organization
• Reallocating resources as conditions change

Leaders need to create mechanisms for sharing information and coordinating actions across the organization. This might include regular cross-functional meetings, shared information systems, or collaborative planning processes.

9. Base operating plans on sound assumptions and realistic goals

You have to debate the underlying assumptions before you even begin to think about a financial expression of numbers.

Start with reality. Effective operating plans are built on a foundation of sound assumptions and realistic goals. This requires thorough debate and testing of assumptions about the business environment, customer behavior, competitive actions, and internal capabilities.

Key elements of sound operating plans:

• Robust debate on assumptions
• Realistic assessment of organizational capabilities
• Contingency planning for various scenarios
• Clear linkage to strategic objectives

Leaders need to foster open and honest discussions about the assumptions underlying their plans. They should encourage people to challenge conventional wisdom and bring forward alternative viewpoints. The goal is to create plans that are both ambitious and achievable.

Last updated: August 8, 2024