If your organization is like so many others, it seems to have all the ingredients for success firmly in place. A well-thought-out vision? Check. A realistic strategy? Check.Skilled, highly engaged employees, quality products and services, strong customer relationships? Check, check, check. So why, in the face of everything you’re doing right, can’t you deliver consistent results? Rick Lepsinger sums up the answer with a concept he’s been studying for years: the execution gap.
“If an organization can’t execute, nothing else matters – not the smartest strategy, not the most innovative business model, not even game-changing technology,” observes Lepsinger, president of OnPoint Consulting and author of Closing the Execution Gap: How Great Leaders and Their Companies Get Results (Jossey-Bass/A Wiley Imprint, June 2010, ISBN: 978-0-4705313-0-3, $45.00). “And for many companies there is a clear gap between intent and execution.”
Lepsinger’s assertion is backed by hard evidence. OnPoint studied over 400 companies and found that 49 percent of leaders surveyed reported a gap between their organization’s ability to formulate and communicate a vision and strategy and its ability to deliver results.
But this finding wasn’t the surprising part. What really shocked Lepsinger was that only 36 percent of leaders who thought their company had an execution gap responded positively to the statement, “I have confidence in my organization’s ability to close the gap between strategy and execution.” That means a staggering 64 percent of leaders who saw an execution problem didn’t believe their company could fix it.
“For companies struggling to pull themselves out of the ditch the recession kicked them into, the inability to get things done is very bad news,” he says. “If you can’t execute well, you’re not going to be successful – and you might not be around for long.”
So here’s the question: If a clear and inspiring vision, a realistic strategy, employee commitment, a skilled workforce, and high levels of quality and customer service don’t lead to successful execution, what does? What sets the best apart from the rest?
Lepsinger’s research uncovered five characteristics and competencies, which he refers to as “The Five Bridges,” that enable people to traverse the execution gap. It is these bridges that differentiate the companies that are consistently able to get things done from those that aren’t. (Lepsinger calls the former “Gap Closers” and the latter “Gap Makers” – and he profiles some well-known examples of each in his book.)
BRIDGE #1:The Ability to Manage Change
Change is inevitable. We all know that. However, despite their sincerest efforts, many companies can’t seem to operationalize that knowledge and turn it into positive action. And that’s a dangerous shortcoming. Simply put, you can’t run a successful business if you can’t adjust to changes in the marketplace.
“If you’re not flexible enough to bend with the winds of change like a palm tree or a bamboo, you’ll snap in half like a Bradford pear when the first storm comes along,” says Lepsinger.
A Gap Maker: Dell. Just as people can get stuck in a rut, so can businesses. Dell developed “the Dell Way,” and its reluctance to tread off of the beaten path cost it its customers. The company was able to attract customers to its website with low-cost offers that required the buyer to make additions in order to have the best computer (which meant the price would end up being more than the original low-cost offer). But when tons of affordable computers with all of the bells and whistles that consumers wanted became readily available through other online outlets and retail stores, consumers didn’t have to go to Dell to get a “custom-made” computer.
Here’s where Dell turned a problem into a huge problem. When its leaders realized they were losing business to competitors, they fell back on a practice that had always worked for them before: they cut costs to maintain market share. One area that suffered was customer service, which had originally been one of the company’s biggest strengths.
“Dell created a customer service nightmare,” says Lepsinger. “It’s recently made changes to get back on course but once you’ve lost consumer confidence, it can be hard to get it back.”
BRIDGE #2: A Structure That Supports Execution
Simply put, successful organizations strike the right balance between centralization and decentralization. Many companies go to great lengths to develop an exciting vision, create a realistic strategy, and get employees engaged. But then they just assume the current organizational structure and systems will support the new strategy. Often, it’s just not true.
And structure isn’t just about efficiency, says Lepsinger. A good one enhances accountability, coordination, and communication. Plus, it ensures that decisions are being made as close to the action as possible. These are all key components of getting things done.
A Gap Closer: Hewlett-Packard.When Mark Hurd became CEO of Hewlett-Packard, he was constantly asked if he thought acquiring Compaq was a good idea. His answer? The question is irrelevant. Basically, Hurd said what’s done is done, and his job now was to find a way to make it work. He did just that when he reorganized the company into three divisions, each with its own sales force (with the heads of the divisions responsible for sales). He also reorganized the IT function. Instead of having 85 data centers, he centralized them into three.
“Hurd decentralized the sales force and centralized the IT function of the company,” says Lepsinger. “This is the opposite of the way the company was organized before, and it ensured the organizational structure would be better aligned with the business strategy.”
BRIDGE #3: Employee Involvement in Decision Making
Admittedly, this is a controversial notion. Some leaders view involving employees in decision making as a sign of weakness. Others fear giving up control. In reality, though, the world is too complex for any leader to go it alone. To make good decisions, you must seek out the perspectives of a wide range of people – and who knows better than employees what the closest-to-the-ground issues are?
“Involving employees in decisions gets them focused on generating solutions to problems rather than complaining or waiting to be told what to do,” notes Lepsinger. “It creates a valuable sense of ownership.”
A Gap Maker: The NBA.When the National Basketball Association (NBA) tried to introduce a new basketball, guess who they forgot to involve in the decision: the players. That’s right. The NBA came up with a new ball design and never once asked the players how they liked it while it was in development. There’s no reasonable explanation for this faux pas. Asking the players would have increased the quality of the ball itself and the acceptance of the “new ball” decision.
Instead, the NBA ended up with a ball that players refused to use because they felt it was difficult to handle when it was damp and it would actually cut their fingers. Because of the player backlash, the NBA had to scrap its “improved” model and go back to the ball the players preferred – the one they have been using for decades.
“This anecdote is a glaring example of why it is important to involve people whose support you need to execute decisions that affect them,” says Lepsinger.
BRIDGE #4: Alignment Between Leader Actions and Company Values and Priorities
No company should ever have two sets of values and expectations: one for the leader(s) and one for the employees. When leaders say one thing and do another, business suffers. Of course, we all know that leader behavior is relevant. Still, it might surprise you to learn exactly how much execution depends on how consistent your behavior is with organizational values and priorities.
One, if you’re a leader, employees pattern their behavior after yours. Two, if how you behave signifies that “we are all in this together,” people are more likely to be motivated and go the proverbial extra mile. When you expect employees to behave a certain way (such as better serving the customer or minimizing waste) or ask employees to focus on certain priorities (like cost containment or innovation), you’d better do the same.
“A do-as-I-say-not-as-I-do attitude sends mixed messages and breeds resentment,” says Lepsinger.
Gap Makers: TARP Bailout-Seeking Auto Executives.The CEOs of General Motors, Ford, and Chrysler shocked members of Congress and the American people when they used private jets to travel to Washington, DC, for a hearing. After all, the purpose of the trip was to ask for government assistance to help their companies get through the worst recession in U.S. history and the worst market for car sales in the history of their industry.
“Behavior so inconsistent with what was being described as a crisis is an example of how the automotive executives helped create the problem they now found themselves in,” notes Lepsinger. “It aimed a 10,000-megawatt spotlight on their lack of awareness of the connection between their behavior and the situation at hand.”
BRIDGE #5: Company-wide Coordination and Cooperation
Most employees have good intentions. They want to cooperate with colleagues and coworkers. (Who is going to consciously sabotage their own livelihood?) Yet, ensuring that decisions and actions are coordinated across organizational boundaries requires more than faith and words alone. It takes shared goals, clear communication, and well-defined roles.
“In addition, people must be held accountable for doing what they’re supposed to do,” says Lepsinger. “That takes two things: clear performance expectations and systems that encourage and reinforce appropriate employee behavior.”
A Gap Maker: Toyota. Many people were surprised when Toyota, a brand known for its quality and reliability, recalled over six million cars due to a faulty accelerator pedal. How did this once mighty brand end up with such a PR disaster on its hands?
Toyota used to work with one supplier for each part, explains Lepsinger. But when a fire at a supplier’s facility caused twenty plants to shut down for five days, the company decided it needed a second source as a back-up. For the accelerator, Toyota failed to ensure the parts it was receiving from the two suppliers were identical.
“Analysts chalk this failure up to a bureaucracy that could not accommodate the company’s rapid growth,” says Lepsinger. “They also point to an overly aggressive focus on profits – one that led executives to ignore principles that had contributed to its previously untarnished reputation.”
These five execution bridges are critical, says Lepsinger. Without them, you’ll have a tough time achieving your company’s goals. The more bridges you have in place, the more likely you are to do so – and the lack of any one of them could potentially derail your efforts. (NOTE: See “Bridge Builder” tipsheet.)
Also, as the Toyota breakdown aptly illustrates, these bridges are not permanent. They are quite fragile. Once you’ve built them, you must keep vigilant watch over them and work hard to maintain them over time.
“It’s quite possible for a company to have a bridge in place one year, only to discover that over time it’s weakened or even crumbled and is no longer able to help your people traverse the gap,” Lepsinger notes. “Execution is not a single-point event; it’s an ongoing process. But since your ability to execute well and consistently is the very fabric of success, I can think of no better place to focus your time and energy.”
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A Bridge Builders “Cheat Sheet”: Tips & Tricks to Help You Traverse the Execution Gap
Excerpted fromClosing the Execution Gap: How Great Leaders and Their Companies Get Results (Jossey-Bass/A Wiley Imprint, June 2010, ISBN: 978-0-4705313-0-3, $45.00), by Rick Lepsinger
So now you’re familiar with “The Five Bridges” that enable a company to execute well. But how do you go about building them? First, you get comfortable with the fact that it’s a never-ending process. Then, you put certain time-tested tools and techniques in place and implement them relentlessly. Here, excerpted from Closing the Execution Gap,are some of Lepsinger’s favorite tricks of the trade for getting these bridges underway.
Bridge Builder #1: Create and Use Action Plans
Action plans are the cornerstone of effective execution. They are the way you translate broad strategic objectives into specific, more easily monitored activities for teams and individuals. In short, they help you manage the work and bridge the gap between strategy and results. There are three steps to creating and using action plans:
• Step 1: Clarify your goals and standards. This step provides direction for the work, gives you something on which to base individual action steps, and helps determine when a project is complete. A good goal statement is specific, measurable, and time bound. Here’s an example of one from an insurance company: Double the rate of organic growth to two thousand policies a month in the personal auto line of business.
Standards are statements of quality, quantity, and timing required for success. They drive action steps and answer the question: What actions must be taken to meet these standards? A standard supporting the aforementioned “organic growth” goal statement might be “Maintain current retention ratio of 97 percent.” Another one might be “Maintain safe driver criteria and keep underwriting standards uncompromised.”
• Step 2: Develop your action plan. An action plan helps you manage the workload, review and appraise project progress, and communicate about the work to be done. Its basic components include action steps that break down the work to be done into tasks and activities, accountabilities identifying the party/parties responsible for doing each step, a schedule with start and completion dates for each action, and resource requirements such as equipment, people, money, or anything else needed to complete action steps.
• Step 3: Minimize risk. You can do a bang-up job on the first two steps, but if you don’t pay attention to this one, you are likely to fail. A truly well-thought-out plan must include an assessment of the potential problems that could derail it, safeguards to stave off these “what ifs,” and the determination of what will be done if problems occur despite your best efforts.
Bridge Builder #2: Expect and Get Top Performance
In today’s competitive business environment, you need every member of your team working at his or her full potential. The evidence is overwhelming: when we believe people are capable, we treat them like they are capable, and they come to believe they are capable. Unfortunately, the converse is true as well. This powerful dynamic starts when your expectations (high or low) are translated into behavior.
• Break your own “low expectations” mindset. One way to do this is by focusing on what low performers do well. Find the thing your marginal employee currently does well, no matter how small, and focus on that. Start where you and she have confidence in her ability to deliver results and move out from there. Set a modest stretch goal that is easily attainable and provide the appropriate coaching and support as she takes the risk and tries something new.
• Beware of (seemingly benign) self-esteem eroders. Even if you pride yourself on being a “straight shooter,” there is a right way and a wrong way to give feedback to your employees.
DON’T say: “I want you to realize that this is the second time we’ve discussed your department’s lack of productivity. I don’t intend to discuss it again.”
DO say: “Last time we spoke, you said you felt an 8 percent increase in productivity was reasonable. However, the department is at 2 percent. What has happened since we last reviewed this issue?”
See the difference? By focusing on the problem and not the person, the manager is able to address the issue without eroding her direct report’s self-esteem. And by asking the person how he would handle the situation and involving him in determining the solution, she both signals that she has confidence in his ability and uses the interaction as a coachable moment.
• Catch people doing something right. Providing recognition for a job well done has a powerful effect on people’s performance. It reinforces good work and shapes future behavior. It motivates, builds trust, and builds self-esteem and confidence. It makes people more receptive to feedback for improving performance.
When done well, recognition is more than just a “psychic hug” that makes a person feel good about herself. It’s a way of helping her understand what “good” looks like. The message is, “This is what it looks like when it’s done well, so keep on doing it.” Second, you’re saying, “You can do this.” Recognizing calls the person’s attention to the fact that she has accomplished something important or made meaningful progress.
Bridge Builder #3: Hold People Accountable
We all know accountability is important, yet many of us don’t hold others accountable for their actions. In the heat of the moment it seems faster and less of a hassle to just “let it go” – though, obviously, this approach does not work in the long-term. The good news is leaders can create an environment that enables others to operate at a higher level of responsibility. For example:
• Boost accountability on the front end by setting people up for success. Threesimple actions will help get things off to a good start:
1. Clarify expectations. Here’s where you explain “what good looks like.”
2. Establish unambiguous due dates. Saying things like “as soon as possible” and “by next week” lay the foundation for misunderstandings. (Does “by next week” mean before next week? Does it mean Monday of next week or Friday of next week?)
3. Schedule periodic check-ins. Agree to these upfront with the employee and you won’t be viewed as a micromanager. These progress checks will be seen as a mutually endorsed activity.
• When an employee misses a target, ask him these three accountability questions:
1. What can you do right now to get back on track?
2. How did you contribute to this situation?
3. What can you do in the future to ensure this will not happen again?
These questions allow you to help the employee solve the problem, rather than trying to pinpoint blame. They also protect his self-image and help minimize excuse making.
Bridge Builder #4: Involve the Right People in the Right Decisions
Decision making is a complex activity that uses a variety of mental processes. Many of these processes compete for dominance, and the quality of our decisions is determined by which ones win out. (For instance, your emotional processes can overrule your logical, deliberative ones.) But there are things you can do to improve the quality of decisions made by you and your team members.
• Understand what “delegate” truly means. Managers must walk a fine line between the “dump and run” approach to delegation and the “over-engineered” (a.k.a. “micromanaging”) approach. When you practice effective delegation, you:
* Provide enough lead time for tasks to be done right
* Share relevant facts and the big picture
* Assign jobs to people who are competent to do them
* Build confidence and competence with sincere feedback
• Realize that sometimes it’s OK to be an autocrat. Other times you need to build consensus. There are three very different (yet equally valid) ways of involving people in decision making: autocratic decisions, consultation decisions, and group decisions.
All three types of decisions are valid. The one you choose depends on three more factors: decision quality, decision acceptance, and the amount of time needed to make the decision. Yes, it’s complicated – which leads us to the next point:
• Outsmart your brain with a systematic decision-making process. That’s right. Rather than relying on instinct or going with your gut, you should use an objective, systematic process for making decisions. This helps you avoid letting emotion or bias cloud the issues or simply defaulting to the kinds of decisions you’ve made in the past. This will also force you to incorporate risk assessment in your decision making.
Bridge Builder #5: Facilitate Change Readiness
Execution frequently requires a change in behavior on the part of those you depend on to successfully deliver the expected results. Some of the most powerful tools and models for creating behavior change come from work being done with people trying to change addictive behaviors like smoking, overeating, and drug abuse.
• Don’t preach or lecture. Research shows that when leaders expect people to be resistant, they treat them that way. When leaders “push” too hard and “tell” people why they need to change, employees tend to react by becoming more entrenched in their own position. Consequently, leaders get the behavior they expected (without realizing that they helped cause it) and continue to push for change – which just perpetuates the situation.
• Help employees “talk themselves into” wanting to change. To diminish change resistance, ask these two important questions:
1. On a scale from one to ten, how important do you think this change is?
2. On a scale from one to ten, how confident are you that you can make this change successfully?
When the other person gives you her “importance number,” instead of asking, “Why is the number not higher?” ask, “Why is the number not lower?” (“Why did you give it a six instead of a four?”) The idea is to use the person’s answer and expand on it to emphasize and reinforce her awareness of the need for change.
• Reinforce “change-talk.” Your instinct will be to try to convince the person that the importance number should be higher. Instead, encourage her to say more about her thoughts and feelings about the change and reinforce change-talk by:
* Pressing for specifics by asking her to elaborate
* Reinforcing the positive change statements by agreeing with the person’s insights and comments that support the change
Bridge Builder #6: Enhance Cooperation and Collaboration
Organizations are complex structures with many interdependencies. We must rely on others to help get things done and meet our objectives, and that means cooperation and collaboration are often the key to our success. Here are a few ways to ensure the conditions that create and sustain cooperation and collaboration are in place:
• Make sure they really understand what you’re saying. When you demonstrate you want to cooperate, people will usually respond in kind. But first you must be sure your communication is clear and transparent. Two simple actions – not assuming people know what you are thinking and paraphrasing to check for understanding – can go a long way toward meeting this goal.
• Align interests and establish common ground. It just makes sense: when everyone is working toward the same goals and outcomes, they’re more likely to cooperate. On the other hand, when the objectives of one person or group are at odds with the objectives of another, efficiency and reliability suffer.
Picture the potential conflicts and inefficiencies that would result if one group in your unit was working toward reducing costs, while another group was focused on bringing state-of-the-art products and services to market. These objectives can coexist, but it most likely won’t happen on its own. You need to develop compatible and mutually supportive objectives in a thoughtful and explicit manner.
• Avoid these seven conflict management mistakes:
1. Minimizing or ignoring others’ concerns
2. Pulling power plays
3. Attacking the legitimacy of others’ positions or priorities
4. Suppressing differences
5. Imposing own goals/priorities
6. Refusing to temporarily remove constraints
7. Going through the motions of managing the difference, but refusing to carry it through
Once in place, cooperation is a delicate state. People will still have disagreements and different points of view about how and when things should happen. Your ability to effectively and constructively influence others and gain their support is critical to maintaining cooperation.
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Execution All-Stars: Five Famous Companies That Bridged the Execution Gap (and How They Did It)
Excerpted fromClosing the Execution Gap: How Great Leaders and Their Companies Get Results (Jossey-Bass/A Wiley Imprint, June 2010, ISBN: 978-0-4705313-0-3, $45.00), by Rick Lepsinger
Ever wonder why some companies consistently meet their goals and others don’t? So did Rick Lepsinger, author of Closing the Execution Gap. And when his consulting firm, OnPoint, conducted a study of 400 companies, he found some answers.
“We discovered that there are five factors that set apart the organizations with the best performance results and those more effective at execution,” he says. “I think of them as ‘The Five Bridges’ because they help companies close the gap between strategy and execution.”
To see what the bridges look like in action, Lepsinger lists a handful of well-known companies that execute exceptionally well:
EXECUTION SUPERSTAR: Procter & Gamble
Bridge #1: The Ability to Manage Change
A few years back, P&G hit a home run with its Mr. Clean Magic Eraser. But what makes it relevant to Bridge #1 lies in how the product 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 product that already existed and tap 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.
EXECUTION SUPERSTAR: IBM
Bridge #2: A Structure That Supports Execution
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 mini versions of itself in each country where it operated. As it turned out, this was inefficient and expensive. Now the company sets up shop wherever it finds the right talent at the right price: for example, 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. But now that the company has expanded to thousands of employees, 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. The fact that the CEO “walks the talk” is at leastpartially responsible for Costco’s success.
In an environment of razor-thin margins, 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 process 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. Now there 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 the compensation system so that people were paid not only for hitting their targets, but also for how effectively they collaborated 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.
About the author:
Richard Lepsinger is president of OnPoint Consulting and has a 25-year track record of success as an organizational consultant and executive. His client list includes Bayer Pharmaceuticals, Citibank, Coca-Cola Company, ConocoPhillips, Goldman Sachs, Johnson & Johnson, NYSE Euronext, PeopleSoft, Prudential, and Subaru of America, among many others. In addition to writing Closing the Execution Gap, he has coauthored four books on leadership including Flexible Leadership: Creating Value by Balancing Multiple Challenges and Choices, The Art and Science of 360° Feedback, The Art and Science of Competency Models: Pinpointing Critical Success Factors in Organizations, and Virtual Team Success: A Practical Guide for Working and Leading from a Distance, all published by Jossey-Bass/Pfeiffer. For more information, visit www.onpointconsultingllc.com.
About the book:
Closing the Execution Gap: How Great Leaders and Their Companies Get Results (Jossey-Bass/A Wiley Imprint, June 2010, ISBN: 978-0-4705313-0-3, $45.00) is available at bookstores nationwide and from major online booksellers.