Execution: The Discipline of Getting Things Done

by Larry Bossidy

A good strategic plan has to be translatable into the operating plan.

I want the first three pages of the document to be a summary of the strategic plan.

seamless transition into the operating plan.

When a business decides on a new strategy, it needs to have a dialogue about the quality and aptitude of the people involved.

Honeywell we decided

electronic packaging ...

But we did not ha...

We got into the business and ...

we ...

demonstrate that we had the right ...

At the end of the strategy review, write a letter to each of the leaders to solidify and confirm the agreements you made so that later you can use them as the basis for reviewing progress.

most firms whose substantial market position gets eroded are beaten either on cost or on technology.

wheel portfolio chart

competing on cost, quality, and technology.

Your boss has asked you to drive from Chicago to Oskaloosa, Iowa, a journey of 317 miles. He’s prepared a budget for you with clear metrics. You can spend no more than $16 on gas, you must arrive in 5 hours and 37 minutes, and you can’t drive over 60 miles per hour. But no one has a map with a route to Oskaloosa, and you don’t know whether you’ll run into a snowstorm on the way.

the way many companies translate their strategic plans into operations.

you can get the results, so it is disconnected from reality.

The strategy process defines where a business wants to go, and the people process defines who’s going to get it there. The operating plan provides the path for those people.

three core processes

In the operating plan, the leader is primarily responsible for overseeing the seamless transition from strategy to operations.

three major flaws in the budgeting or operations process

First, the process doesn’t provide for robust dialogue on the plan’s assumptions.

Second, the budget is built around the results that top management wants, but it doesn’t discuss or specify the action programs that will make those outcomes a reality. Third, the process doesn’t provide coaching opportunities for people to learn the totality of the business...

This is backward: the budget should be the financial expression of the operating plan and the underlying plans generated by the business’s components, rather than the other way around.

Budgets often have little to do

people spend...

how to protect their ...

instead of focusing on the...

And the resulting rigid budget can lead to missed opportunities over the course of the year.

budget can also force people to make poor decisions

common practice,

is loading inventory into the pipeline just before the end...

system designed by accounting people.

“organically,” meaning from business that the organization already has,

But ask these leaders how they’re going to achieve these goals, and what assumptions the goals are based on, and they’ll have no idea.

This kind of budget process defeats the very purpose of planning.

Most sizable businesses spend weeks or months preparing their budgets.

This is unnecessary,

Almost all budget or operating plan exercises are done sequentially, bottom up and top down:

Among these, for example, are revenues by product mix, operating margins, marketing expenses, manufacturing costs, engineering and development expenses,

Don’t bother to try this if you can’t handle dialogue that reveals conflict or negotiate trade-offs persuasively—or

or if you’re the kind of insecure individual

Synchronization is essential for excellence in execution

the left hand knows what the right hand is doing.

For example, take an automobile company with ten brands and some three million combinations of options and colors, more than a hundred plants around the globe, hundreds of suppliers, thousands of dealers, and half a dozen ad agencies. Each of these components makes decisions every day, and they are in motion, always changing. When interest rates go down, not all market segments grow equally, not all brands are required to expand output equally, and not all dealers will sell equally more cars. So they have to be synchronized to take advantage of the differential market segments by geography, dealer, and the like.

large company it’s a complex task.

GE, Wal-Mart, Dell, and Colgate-Palmolive, synchronize these things faster and better than others.

operating plan addresses the critical issues in execution by building the budget on realities.

Debate on assumptions is one of the most critical parts of any operating review—not

In budget and operating plan negotiations, there’s an inherent conflict of interests.