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Execution – Larry Bossidy Style! A Three Part Series

Over the next few months, I hope to save you some precious time by summarizing the key points in Larry Bossidy’s book ‘Execution – The Discipline of Getting Things Done’. (It may save you a lot of money too!)

Over the years, I’ve seen the most excellent of plans ‘sit on the shelf’ for so many reasons with the top 7 being:

1. The President loses focus due to marketing, operational, financial or people concerns.

2. The purpose of the Business Plan was to raise capital and therefore it has served its purpose.

3. Lack of understanding as to why a strategic plan is needed, and, how it is connected to the annual operating plan to get results.

4. Key managers are not involved in building the plan and therefore not engaged or accountable for end results.

5. The strategies, goals and execution plan are not communicated at launch throughout the company, and, progress is not communicated throughout the year.

6. Aggressive goals are too difficult or too complex to execute.

7. Lastly, too often the very first execution steps stall due to lack of knowledge as to where to start and how to execute.

That’s where I come in. My clients love the strategies and plans that we’ve built. Over the last 3 years, I have been working with clients by providing on-going support and coaching so that the excellent plans that we have built together bring specific end results.

Yours truly, Eileen Ashmore, MBA

Part 1: Why Execution is Needed

One of the first things that Larry Bossidy makes clear is “Putting an execution environment in place is hard but losing it is easy.” In 2000, 40 of the top 200 Fortune 500 executives were removed – they were either fired or asked to resign. That’s 1 out of every 5 leaders!

WHY?

1. There is a gap between promises made and results delivered – an execution strategy narrows the gap.

2. Without execution, breakthrough thinking breaks down – big thoughts need to be broken down into concrete steps for action.

3. Execution must be firstly – a discipline, the job of a business leader, and, part of the culture – to get results.

4. Leaders need to engage in execution work to get results or else they are ineffective and incomplete.

Their Recommendations:

1. Involve all people responsible for outcomes in shaping the plan

2. Ensure that managers indicate ‘how’ they will achieve results before the plan is launched

3. Set milestones with strict accountability, and

4. Set up a contingency plan to deal with the unexpected.

Remember – “Execution is everything.’ (Emmit Smith, NFL Legend & ‘Dancing with the Stars’ winner) Larry King Live

It’s your FOCUS that matters.

Next newsletter – Part 2 – The Building Blocks of Execution

Yours truly, Eileen Ashmore, MBA

Part 2: The Building Blocks of Execution

With the alarming statistic that 20% of the top 200, Fortune 500 executives were removed in 2000, Larry Bossidy and Ram Charan make their point that execution is critical to maintaining leadership. Now, let’s move on to understanding their recommended building blocks for implementing an effective execution culture. They are as follows:

Building Block 1: The 7 Essential Behaviours of Leaders

They are - set clear goals & priorities and follow through. Insist on realism, reward the doers and expand your people’s capabilities. Know your people and your business, and, KNOW YOURSELF!

Building Block 2: Creating the Framework for Culture Change

As exciting as they are, the impact of a new strategy and a new organizational structure can greatly be decreased if the corporate culture isn’t aligned with these changes. For effective culture change, they are recommending implementing a set of processes which they call a ‘social operating mechanism’ to assist workers change their beliefs and behaviours so that these beliefs and behaviours are tied directly to bottom line results. This involves ‘operationalizing’ culture with new rules of engagement, and, rewarding performance. The social operating mechanism is basically a communication & coaching process that creates action to get results. It involves a consistent and intense informal dialog with all levels of the company to assist all workers focus on turning strategy into performance. This dialog surfaces business realities so that these realities can be realistically addressed. Some of this intense dialog is coaching workers by assisting them break down complex tasks into smaller steps. They recommend ‘robust dialogue’ to surface business realities and that the leader is the role model for exhibiting and determining worker beliefs and behaviour throughout the organization.

Building Block 3: Having the Right People at the Right Place

Bossidy and Charan assert that your competitive advantage is due to having quality people and that with quality people you have captured the ‘elusive sustainable advantage’. They tell us that the reason why the right people aren’t in the right place is due to the leader’s lack of knowledge, courage and commitment. The leader may make hiring and promoting decisions based on feeling comfortable with the worker rather than hiring or promoting the right person for the job. They call this a ‘psychological comfort factor’. When hiring and promoting workers, they instruct the leader to look at yourself first. Do you energize your people? Are you decisive on tough decisions? Are you effective at getting things done through other people? Do you follow through and get the results planned for? Given that you are the role model for showing how to ‘get things done’, they go on to recommend that for getting the right people in the right place is to hire people who have a track record of ‘getting things done’ and show enthusiasm for doing so. These are people who have ‘an enormous drive for winning’, know ‘how’ to get things done without burning out staff or damaging the organization, and, can be coached for improvement.

This completes a synopsis of Part 2 – The Building Blocks of Execution from “Execution – The Discipline of Getting Things Done” by Larry Bossidy and Ram Charan.

Remember - It’s your FOCUS on executing your strategies to get results that creates success.

Next newsletter – Part 3 – The Three Core Processes of Execution

Here’s the first of a 3 part series on Execution – The Discipline of Getting Things Done.

Yours truly, Eileen Ashmore, MBA

Part 3: The Three Core Processes of Execution

The three core processes of execution are the people process, the strategy process and the operations process. Without a strategy (and plan) to guide the people and the right people in place and the operationalizing of the strategy, execution falters.

Bossidy and Charan emphasize that it’s the people in your organization that are able to translate strategy into operations and indicate that “If you don’t get the people process right, you’ll never fulfill the potential of your business.” They advise linking people to the short, medium and long term strategy first to ensure that you have the right people at the right time. The next step is training people to become future leaders. And lastly they discuss the importance of a putting in a retention plan while preparing for succession within or if a key employee leaves the company. They discuss what to do with nonperformers. They strongly recommend linking the HR function to business results where HR is proactive in recruitment and in training/building personnel for the next level development as per the strategic plan. They go on to discuss the importance of continuous assessment and candid rapport with each and every employee to ensure that the right people are in the right place delivering on business results as per the strategic plan.

Basically a strategy is a directing process to attain a certain positioning in the market place. And once the direction and position is determined, the strategy must be converted into an action plan to show management and staff ‘how to’ execute on it. A strategic plan lays out understandings of where the company is now, where it’s going, the budget, capital resources needed and customer and market demand. The strategic plan analyzes risks (like a SWOT), analyzes competitor positioning and what constitutes success, indicates how the company will grow in the current environment, understands obstacles to success and critical issues facing the business, determines continuing sustainability. A strategic plan lists major milestones – if a milestone is missed, the course of action has changed and therefore the execution strategy needs to change. Lastly, the strategic plan questions the company’s ability to execute the plan, lists assumptions and is flexible enough to be open to new opportunities not foreseen at the time of the planning stage.

The strategic plan should be less than 50 pages and explainable within 20 minutes and describable in 1 page. For most businesses, a strategic plan in my opinion is 10-15 pages long with 3-5 minutes to explain and can be summarized in 1 page!

The operating plan breaks ‘long term outputs into short term targets’ so that employees have a guide for how to execute on the strategy. The operating plan is the link to reality. Goals are set, action plans are built and all parties involved agree to their commitment on the execution. Quarterly reviews maintain commitment and serve as an opportunity to build contingency plans as needed. Bossidy and Charan are totally adverse to budget planning driving the annual goals and objectives because this type of planning is not connect necessarily to market reality or the reality of how managers/employees get work done. Therefore, it must be the operating unit that commits to building and executing the operating plan that is aligned with the company strategy.

This completes the 3rd part in a 3 part series summarizing the book ‘Execution’. This is the last newsletter until the fall where I will review Bossidy’s & Charan’s chapter on ‘How to Conduct a Strategic Review’.

Have a wonderful summer. Remember, that the summer months are a good time to update your website, marketing & sales strategies and business plans in preparation for having a strong, successful and sustaining fall season.

Yours truly, Eileen Ashmore, MBA

Why Marketing Strategy & Planning?

Sun Tse, one of greatest and most strategic generals of all times, said it best when he said: "Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before the defeat." circa 500 BC.

Time after time, I am surprised when business leaders have difficulty describing their marketing strategy. With many businesses, all they need to do is add more salespeople and their sales revenues increase. With some businesses, all they need to do is add more advertising. Given sales revenue results, why do you need to consider building a marketing strategy?

The primary reason for building a marketing strategy is to determine the best position for effectively targeting your customer base. This will give you the most leverage so that you have the opportunity to accelerate your sales revenues and profits. Although you may be increasing sales revenues today, you may not be setting your organization up for long lasting and sustaining sales revenues over time. Envisioning the big picture and determining the best position in the market place to gain leverage will assist you grow today, and, sustain growth over the long term.

A good marketing strategy is usually only one sentence or a short phrase as it represents the key 'approach' for gaining leverage in your market place. Your marketing strategy dictates your choice of the best marketing and sales tools (the tactics) to deploy to get the best sales revenue results.

What are the best marketing and sales tools for building a marketing-sales mechanism - the engine that consistently generates sales revenues? What are the components of your marketing-sales mechanism? And, what fuels this engine so that it consistently 'forces' marketing and sales action? It helps to list the components of your marketing-sales mechanism and then draw a diagram showing how it works. What is the mix between marketing and sales activity? For the most part, marketing is about preparing the way for your sales and customer service people so that they have the most leverage when they are with your targeted customers.

For start-up businesses, sometimes they rely too heavily on branding and advertising activities and not enough on sales activities. For established companies, sometimes they rely too heavily on sales activities, customer service and repeating revenues and not enough on marketing activities.

As you look at the diagram of your marketing-sales mechanism, you'll start seeing where you are weak and where you are strong and can start formulating ways to:

1. Increase your leverage

2. Increase the engine 'speed'

3. Consistently 'force' marketing and sales actions, and

4. Operate 24/7.

The marketing-sales mechanism (once you've got it working and working consistently), becomes an unstoppable force for not only securing opportunity but for creating it.

Your next step is to build a Marketing-Sales Action Plan. A Marketing-Sales Action Plan directs your team to specific goals that can be tracked to get revenue results. Your Plan must budget for resources and deploy resources to get results. For ease of execution, it may help to build the annual Marketing-Sales Action Plan and then break the Plan down into monthly and quarterly goals.

What is 'measured is managed'. By tracking your results monthly and quarterly, you and your team can quickly decide to course correct as needed. You will see what is working with your marketing-sales mechanism and how to make it more effective on a continuous basis. You will also see what is not working with your marketing-sales mechanism and what needs to be changed or tweaked to get better revenue results.

Most businesses track traditional performance measures like revenue, profit, profit margins, cash flow, sales orders, etc. Tracking for short term and long term sustainability* is one level deeper. Tracking for short term sustainability is like tracking key performance measures with a few basic differences. For example, your firm's monthly revenue target might be $1,000,000. But, your sustainability target might be $700,000 from repeating sales and $300,000 from new sales. $700,000 in base revenue covers all of your operating and marketing costs whereas $300,000 in new sales revenue contributes to your gross and net profit margins and grows your company. With this revenue formula, your business sustains at its most optimum level.

Why track for long term sustainability? Because, it allows you to put resources in place today so that your business moves to its next level of development. If your goal is to grow your firm by 50% within 3 years, what financial, production, marketing, sales, human resources, products and services do you need to put in place today so that you can move to the next level? To get the most leverage, align your long term sustainability measures with your marketing and business strategies.

Walter Gretsky said it best when he said "Hockey is a thinking game, go where the puck is going not where it came from." That's strategy in a nutshell - so KEEP YOUR FOCUS!

Executing Your 2008 Strategic Plan

As promised, here is a summary of Chapter 8 ‘How to Conduct a Strategy Review’ from Larry Bossidy’s and Ram Charan’s book Execution - The Discipline of Getting Things Done.

They tell us that a strategy review must get everyone thinking and talking about reality. The questions to ask – is it plausible, realistic, internally consistent, does it match critical issues and assumptions, and, is everyone committed and accountable to their part of the Strategic Plan? They recommend asking these more in-depth questions:

1. How well versed is everyone/every business unit about the competition’s strategies to increase market share and block expansion initiatives of other competitors?

2. How strong is your organization’s capability to execute the strategy such that your value proposition is so good that it increases customers’ revenues (and your financial results)?

3. Is the plan scattered where your focus is diluted or is the plan sharply focused?

4. Are you choosing the right ideas that will move your organization forward that are within your organization’s capability, and, are possible within market realities so that you make money?

5. Are the strategy goals clearly linked with people and operations capability?

6. Can the strategic plan be seamlessly transitioned to the operations plan?

7. Do you follow through to ensure the strategic plan is executed? They suggest that you write each team member a letter reviewing their role and then use this letter for measuring future progress

Often there are divergences within a Management Team on the direction and goals of the company. When I work with my clients, I conduct an assessment to uncover similarities and differences. In a strategy session, we discuss these similarities and differences and work towards bringing the team together as a stronger and more directed unit to achieve company goals. As the leader, you are a role model for ‘getting things done’. Your focus in building and executing a strategy that is within your company’s capability, and, within market reality will determine your progress in 2008. Lester R. Bittell said it best when he said “Good plans shape good decisions. That’s why good planning makes elusive dreams come true.”

Yours truly,

Eileen Ashmore, MBA

Business Strategy - Its Elements & Essence

As you work through your business planning process, it may be helpful to review the elements and essence of your business strategy to ensure that your 2006 Business Plan is based on a business strategy that is robust enough to move your firm forward in 2006. The elements of business strategy are simple and a good business strategy is founded upon how you are:

• Communicating your vision, mission and intent

• Communicating your shared values

• Sustaining and growing

• Differentiating to gain competitive advantage

• Gaining customer top of mind through branding

• Following through on goals and objectives

• Correcting for obstacles and opportunities as they arise, and

• Tracking for results to ensure that you are sustaining and growing as per your end goals.

What is complex about drafting business strategy is ensuring for the alignment of each element with each other element. By aligning the elements, you will eliminate confusion and uncertainty.

Now, what about the essence of your business strategy? When you step back and review all of these elements, you'll find that the essence of your firm's business strategy can be summarized in a short phrase or sentence. Can you do this right now? If you can't, it may be time for you re-think your business strategy.

What simple phrase will give internal power to motivate you and your team, and, external power to draw customers to your firm? Do you lead with Service or Quality or Price as per Tom Peter's advice? Is it working? If yes, GREAT! If not, why not?

To summarize, the elements and essence of your business strategy are simplistic in nature but they are founded upon complex strategic thinking. By communicating the essence of your business strategy in a short phrase, you will focus your company with a focused, united and motivated battle cry. Sun Tse said it best when he said "Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before the defeat." Circa 500 BC.

Where's the 'Power' in Your Business Strategy?

Where's the 'power' in your business strategy so that your organization continues to sustain revenue, profits and customers while growing to your next level development? When we talk about 'power' we're talking about the 'impact' of your current business strategy to get the results that you want.

Wouldn't you agree that sustaining, consistently, is one of the key components for building 'power' into your business strategy? Sustaining consistently is one of the most important critical success factors for running your organization. But what about growing your business? Is your business strategy big enough and strong enough to take your company to its next level?

The 'power' in business strategy is about determining if your current business strategy has the strength and wherewithal to allow you to grow your company to the next level. The 'power' in a business strategy comes from:

1. Describing how your company currently sustains

2. Determining the key components of sustainability and setting measures to consistently attain sustainability for your current operations, and then

3. Strengthening all of the key components of sustainability to build a stronger financial and operational foundation for future growth, and proceeding to

4. Continually execute on reaching the key sustainability goals, and lastly

5. Tracking, and revising as needed, and then executing on the revisions.

It starts with understanding the components of sustainability first and then moves to re-evaluating your current business strategy for its robustness, strength and resilience for taking your company to the next level.

Remember - business strategy and sustainability - it's a partnership if you want to grow your company.

Yours truly,

Eileen Ashmore, MBA

Goal Setting for Breakthrough Success!

Why is it that although management teams build excellent business plans, they don't seem to reach their goals over the year? As soon as the goal is set, it seems like everything happens to get in the way of reaching the goal. I've started telling clients that the word 'goal' means the word 'obstacle' simply because a force field forms that slows or deters goal attainment. The force field could be imagined obstacles or real obstacles. And then again, it could look like and feel like an obstacle course.

Think of any game - what would the game of hockey be like without the opposing team, and, the opposing fans? The game of business starts the minute we set a goal and so does an automatic force field establish itself - real or imagined.

So what do we do to achieve goals with breakthrough success? We can:

1. Make sure the goal is one that your firm values dearly so that your team is up to 'moving mountains' to attain the goal.

2. Is the goal directly connected to your vision where you can see that by attaining the goal your company comes closer to realizing your vision?

3. Know that every successful person and every successful business deals with adversity everyday. It is enthusiasm, perseverance and our belief in our products and services and how we help our customers that are the key factors determining our success.

4. It requires focus and its hard work - most successful people that I've met have told me that their success is based on hard work - not luck - hard work.

5. Sometimes the goal is too ambitious and if it is broken down into smaller parts or if it's spread over a longer period of time, it becomes more manageable and realizable.

6. After Plan A, do you have a Plan B or perhaps even a Plan C to achieve your end result?

7. Lastly in reviewing your goals, ask yourself 'Is the goal realistic, measurable and doable? 'Doable' means that you can execute on the goal with confidence. 'Measurable' means that you can measure the goal and that you do so every week, month or quarter to stay on track. 'Realistic' means that you're working with what is possible with the resources that you have.

Wayne Gretzky's said it best - 'One hundred percent of the shots you don't take don't go in'. The more valued the goal, the greater the force field, and, the greater victory and celebration on succeeding. Remember the Red Mile!!!

Yours truly,

Eileen Ashmore, MBA

Habit & Execution - Your Dynamic Duo

Last month we discussed the elements and essence of your business strategy so that you build a business strategy robust enough to move your firm forward in 2006. Now, as you complete your business planning* for 2006, you'll be considering your execution strategy. Just like New Year's resolutions, the execution strategy may fall by the wayside a couple of months down the road if an execution plan has not been established. In the book 'Execution', Larry Bossidy and Ram Charan said it best when they said "Putting an execution environment in place is hard, but losing it is easy1".

Execution is about forming the habit of accountability with your team and your employees. It is a habit of doing 7 things:

1. Maintaining your focus on your business strategy each day for how you will attain your long term and short term goals.
   
   

2. Following through on the 2006 goals by building a realistic, doable action plan that indicates how the goal will be achieved, by whom and by what time.
   
   

3. Communicating these goals within your organization and with your advisors so that it is not derailed as some point during the year because someone had not bought into the business strategy, goals, action plan or execution process.
   
   

4. Tracking results to ensure that your action plans are working to sustain and grow your firm.
   
   

5. Reviewing your goals with your management team each month.
   
   

6. Reviewing your goals in more depth each quarter with your management team by indicating the status of goal attainment - 10%, 25% or 30%, etc.
   
   

7. Correcting as needed to address new opportunities and/or obstacles for attaining your goals.
   

Start the habit of setting review meetings on a regular basis. Your monthly review meetings could be 2 hours each month and the quarterly review meetings could be 4 hours each. If someone on your team is not available at the scheduled time, have them conference in to the meeting.

Many a leader has felt beleaguered, befuddled and confounded because he/she could not get the team focused and directed on attaining the goals of the business plan. Don't let that leader be you in 2006 by forming the habit of accountability with regular review meetings. ."Motivation is what gets you started, habit is what keeps you going." Unknown. Let the habit of execution bring you more opportunities this year than ever before - it's your dynamic duo - Habit & Execution.

Yours truly, Eileen Ashmore, MBA

About Eileen Ashmore: Eileen is a planning and strategy specialist offering the services of strategic planning, business strategy development, business planning & execution, marketing strategy development, marketing planning & execution, market research/customer research (& their deployment). Now in its 23th year!!, Eileen's firm has completed over 200 projects since its inception. Eileen works with and supports your team in building strategies that move your firm to its next level. Her business philosophy is: 'If the purpose of a business strategy is to sustain growth and profitability, the purpose of a marketing strategy is to accelerate growth and profitability.' Stay tuned as Eileen will be completing her book on the topic of marketing for executives for publication in the fall of this year. Return to Top of page