By Bob Irish
Published in CEO-IQ, Volume 6, May-June 2004
Business research has shown over and over again that even companies with a written business plan have failed when there has been poor execution of that plan.
How do you tell if a company is not executing well? Just compare what is promised with what is delivered, internally and externally. Compare what the leadership of the company envisions with what the company is actually accomplishing. Look at customer satisfaction, re-work, returns, aging inventory, decreasing gross margins and the bottom line.
Execution is what gets the job done, whatever it is. Execution is not strategy nor is it tactics. According to Larry Bossidy in his book, Execution, it “is a defined set of behaviors and techniques that companies need to master in order to have competitive advantage.” This requires discipline to follow a system, i.e. a process of thoroughly discussing what the company is experiencing in all areas, then closely examining how things are done. It means questioning without mercy the who, what, when, where, and why of areas determined to be executing poorly, i.e. exposing reality and taking action. It demands following through and following up on the follow-through to ensure that what has been planned is still on track.
If the leader does not have a detailed understanding of his business, the people he employs, and the environment, he cannot execute well. Many executives regard detail work as beneath their dignity. Nothing could be farther from the truth. Execution is a business leader’s most important job. The inability to identify and address execution issues is the greatest impediment to an organization’s success. It is the genesis of most disappointments that erroneously gets blamed on something or someone else. A leader/CEO does not have to “do the details” himself, just delegate them to competent staff. As the old saying goes, “The devil is in the details.” The leader who doesn’t inspect what he expects is letting details go unexamined and his organization’s ability to execute deteriorates.
All that is required for a company to execute well is for the CEO to have unrelenting passion for honesty about himself, his team members and his organization. Another way to say this is that you must have an intensely focused pursuit of reality and tie that to processes that constantly improve you, your teammates, and your organization. This kind of passionate focus will drive cultural change that will ensure the things CEOs usually watch i.e., sales, margins and profits are where they should be and the leader’s vision becomes reality.