The Gap Nobody Knows
Organizations don’t execute unless the right people, individually and collectively, focus on the right details at the right time. For you as a leader, moving from the concept to the critical details is a long journey. You have to review a wide array of facts and ideas, the permutations and combinations of which can approach infinity. You have to discuss what risks to take, and where. You have to thread through these details, selecting those that count. You have to assign them to the people who matter, and make sure which key ones must synchronize their work.
Such decision making requires knowledge of the business and the external environment. It requires the ability to make fine judgments about people—their capabilities, their reliability, their strengths, and their weaknesses. It requires intense focus and incisive thinking. It requires superb skills in conducting candid, realistic dialogue. This work is as intellectually challenging as any we know of.
The Leader’s Seven Essential Behaviors
What exactly does a leader who’s in charge of execution do? How does he keep from being a micromanager, caught up in the details of running the business? There are seven essential behaviors that form the first building block of execution:
- Know your people and your business.
- Insist on realism.
- Set clear goals and priorities.
- Follow through.
- Reward the doers.
- Expand people’s capabilities.
- Know yourself.
#1 KNOW YOUR PEOPLE AND YOUR BUSINESS
Leaders have to live their businesses. In companies that don’t execute, the leaders are usually out of touch with the day-to-day realities. They’re getting lots of information delivered to them, but it’s filtered—presented by direct reports with their own perceptions, limitations, and agendas, or gathered by staff people with their own perspectives. The leaders aren’t where the action is. They aren’t engaged with the business, so they don’t know their organizations comprehensively, and their people don’t really know them.
#2 INSIST ON REALISM
Realism is the heart of execution, but many organizations are full of people who are trying to avoid or shade reality. Why? It makes life uncomfortable. People don’t want to open Pandora’s box. They want to hide mistakes, or buy time to figure out a solution rather than admit they don’t have an answer at the moment. They want to avoid confrontations. Nobody wants to be the messenger who gets shot or the troublemaker who challenges the authority of her superiors.
#3 SET CLEAR GOALS AND PRIORITIES
Leaders who execute focus on a very few clear priorities that everyone can grasp. Why just a few? First, anybody who thinks through the logic of a business will see that focusing on three or four priorities will produce the best results from the resources at hand. Second, people in contemporary organizations need a small number of clear priorities to execute well. In an old-fashioned hierarchical company, this wasn’t so much of a problem—people generally knew what to do, because the orders came down through the chain of command. But when decision making is decentralized or highly fragmented, as in a matrix organization, people at many levels have to make endless trade-offs. There’s competition for resources, and ambiguity over decision rights and working relationships. Without carefully thought-out and clear priorities, people can get bogged down in warfare over who gets what and why.
#4 FOLLOW THROUGH
Clear, simple goals don’t mean much if nobody takes them seriously. The failure to follow through is widespread in business, and a major cause of poor execution. How many meetings have you attended where people left without firm conclusions about who would do what and when? Everybody may have agreed the idea was good, but since nobody was named accountable for results, it doesn’t get done. Other things come up that seem more important, or people decide it wasn’t such a good idea after all. (Maybe they even felt that way during the meeting, but didn’t speak up.)
#5 REWARD THE DOERS
If you want people to produce specific results, you reward them accordingly. This fact seems so obvious that it shouldn’t need saying. Yet many corporations do such a poor job of linking rewards to performance that there’s little correlation at all. They don’t distinguish between those who achieve results and those who don’t, either in base pay or in bonuses and stock options.
#6 EXPAND PEOPLE’S CAPABILITIES THROUGH COACHING
As a leader, you’ve acquired a lot of knowledge and experience—even wisdom—along the way. One of the most important parts of your job is passing it on to the next generation of leaders. This is how you expand the capabilities of everyone else in your organization, individually and collectively. It’s how you will get results today and leave a legacy that you can take pride in when you move on.
#7 KNOW YOURSELF
Everyone pays lip service to the idea that leading an organization requires strength of character. In execution it’s absolutely critical. Without what the authors call emotional fortitude, you can’t be honest with yourself, deal honestly with business and organizational realities, or give people forthright assessments. You can’t tolerate the diversity of viewpoints, mental architectures, and personal backgrounds that organizations need in their members in order to avoid becoming ingrown. If you can’t do these things, you can’t execute.
Creating the Framework for Cultural Change
When a business isn’t going well, its leaders often think about how to change the corporate culture. They’re right to recognize that the “soft” stuff—people’s beliefs and behaviors—is at least as important as hard stuff, such as organizational structure, if not more so. Making changes in strategy or structure by itself takes a company only so far. The hardware of a computer is useless without the right software. Similarly, in an organization the hardware (strategy and structure) is inert without the software (beliefs and behaviors).
Most efforts at cultural change fail because they are not linked to improving the business’s outcomes. The ideas and tools of cultural change are fuzzy and disconnected from strategic and operational realities. To change a business’s culture, you need a set of processes—social operating mechanisms—that will change the beliefs and behavior of people in ways that are directly linked to bottom-line results.
#1 LINKING REWARDS TO PERFORMANCE
The foundation of changing behavior is linking rewards to performance and making the linkages transparent. A business’s culture defines what gets appreciated and respected and, ultimately, rewarded. It tells the people in the organization what’s valued and recognized, and in the interest of trying to make their own careers more successful, that’s where they will concentrate. If a company rewards and promotes people for execution, its culture will change.
Whatever approach you use to determine rewards, the goal is the same: the compensation system has to have the right yields. You should reward not just strong achievements on numbers but also the desirable behaviors that people actually adopt. You should increase the population of A-players, defined as those who are tops in both behavior and performance. You should remove the nonperformers. Over time, your people will get stronger and you’ll get better financial results.
#2 THE IMPORTANCE OF ROBUST DIALOGUE
You cannot have an execution culture without robust dialogue—one that brings reality to the surface through openness, candor, and informality. Robust dialogue makes an organization effective in gathering information, understanding the information, and reshaping it to produce decisions. It fosters creativity—most innovations and inventions are incubated through robust dialogue. Ultimately, it creates more competitive advantage and shareholder value.
Robust dialogue starts when people go in with open minds. They’re not trapped by preconceptions or armed with a private agenda. They want to hear new information and choose the best alternatives, so they listen to all sides of the debate and make their own contributions.
When people speak candidly, they express their real opinions, not those that will please the power players or maintain harmony. Indeed, harmony—sought by many leaders who wish to offend no one—can be the enemy of truth. It can squelch critical thinking and drive decision making underground. When harmony prevails, here’s how things often get settled: after the key players leave the session, they quietly veto decisions they didn’t like but didn’t debate on the spot. A good motto to observe is “Truth over harmony.” Candor helps wipe out the silent lies and pocket vetoes, and it prevents the stalled initiatives and rework that drain energy.
#3 LEADERS GET THE BEHAVIOR THEY EXHIBIT AND TOLERATE
Once you understand social software, it becomes plain that no leader who’s disengaged from the daily life of the business can possibly change or sustain its culture. As Dick Brown puts it, “The culture of a company is the behavior of its leaders. Leaders get the behavior they exhibit and tolerate. You change the culture of a company by changing the behavior of its leaders. You measure the change in culture by measuring the change in the personal behavior of its leaders and the performance of the business.”
To build an execution organization, the leader has to be present to create and reinforce the social software with the desired behaviors and the robust dialogue. She has to practice them and drill them relentlessly in the social operating mechanisms.
For example, some leaders use regular conference calls as an operating mechanism to drive change in the culture by forcing new candor and realism into the dialogues and decision making of the company’s top leaders. The calls introduce accountability and follow-through. The leader’s own behavior, including her communications with people at all levels, modeled and reinforced the beliefs and behavior her people needed to learn.
The dialogue the leader conducts in these calls develops the total company picture for all to see. Everyone has come prepared to explain what will be done in the coming month to deliver on commitments if results are lagging expectations. By discussing the entire business and having a focus on the external environment, everyone participating knows more about overall trends, competition, issues, and roadblocks. If they are doing their job to help build a culture of execution, this information will cascade through the company.