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March 1 - May 9, 2020
Execution done well makes a huge difference in a company’s performance, as we have seen with the way in which Richard T. Clark has changed Merck & Co. since becoming chairman and CEO of the giant pharmaceutical firm in 2005.
selecting the areas in which it would have the best chance of winning
The three processes—people, strategy, and operations— remain the building blocks and heart of good execution. But as the economic, political, and business environments change, the ways in which they are carried out also change.
It is imperative, too, that every strategy takes into account an analysis and understanding of the global financial and economic environment marked by slower growth, increased competition, altered consumer behavior, and more government intervention.
An environment of fast growth can cover a multitude of sins, but an era of slow growth will magnify every shortcoming of every person in the business, especially the leaders.
Leaders must be sensitive to when a strategy has run its course and needs to be changed and have the flexibility to act quickly to make the change. The consequences of not doing so can be fatal.
One way to ensure that you have the right people in the right jobs in this rapidly shifting environment is by writing job descriptions for the kind of people you need in each job as it will exist tomorrow, then match those descriptions against the talents and abilities of the peole holding those jobs today.
Operations To execute well there must be accountability, clear goals, accurate methods to measure performance, and the right rewards for people who perform.
Strategy no longer is set in stone. A good strategy will be under constant review or revision depending on what is happening in the business environment. And as the strategy changes, so, too, must the company’s people and operations. Leaders should not seek change for change’s sake, but they and everyone else in the company need to be prepared to change quickly when conditions dictate a change.
He established very clear profit-and-loss responsibilities for each division of the bank down to the lowest levels feasible. Each division was ordered to benchmark itself against the best of its competitors in the same business.
KNOW YOUR PEOPLE AND KNOW YOUR BUSINESS. In Execution we stress the need for domain knowledge, the kind of granular understanding of how the business makes money that goes beyond profit and loss statements.
Knowing your people is just as important as knowing your business in these perilous times.
But knowing your people is not enough. They need to know you. It is absolutely critical during trying times that you as a leader are accessible, that you project a sense of confidence tempered by concern, that you share as much undistorted and unfiltered information as you can, and that you act decisively.
INSIST ON REALISM. The business environment will never be the same again.
Living with uncertainty, though, doesn’t mean paralysis. You have to act on your strategy even as you recognize that the strategy will evolve as circumstances evolve.
IDENTIFY CLEAR GOALS AND PRIORITIES. The ability to identify clear goals and priorities is being tested as the world resets.
A fundamental component of setting any goal is understanding the risks inherent in trying to achieve it. There is no reward without risk, but the failure to understand and guard against those risks jeopardizes the ability to reap the reward.
REWARD THE DOERS. This is a critical part of achieving success that we stressed in Execution.
Leaders must take responsibility for setting the right rewards for doers.
Linked together as these behaviors are, rewarding the doers must be based on the correct metrics.
EXPAND PEOPLES’ CAPABILITIES. The fundamentals of this essential behavior don’t change. Even in tough times you can find ways to provide education and training as an investment in the company’s future.
be sure you are looking for the qualities that matter amid the current turmoil: energy, courage, honesty, integrity, and perseverance. You need people who can roll with the punches, not people who are whiners and naysayers.
KNOW YOURSELF. This seventh behavior is perhaps the most crucial and applies to every leader, but is especially important for CEOs.
Be particularly cautious about losing your ability to listen.
Not only do you need expertise from both within and outside the company to shore up your blind spots and weaknesses, but also a pipeline to people willing and able to bring you diverse views and bad news.
Above all, you need to be able to recognize when you’re p...
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Can we identify how we’re going to turn the plan into specific results for growth and productivity? Are we staffed with the right kinds of people to execute the plan? If not, what are we going to do about it? How do we make sure the operating plan has sufficiently specific programs to deliver the outcomes to which we’ve committed?
The processes were empty rituals, almost abstractions.
created a discipline of execution.
When a company executes well, its people are not victims of mistakes
And when a company executes well, its people are not brought to their knees by changes in the business environment.
Execution is the great unaddressed issue in the business world today. Its absence is the single biggest obstacle to success and the cause of most of the disappointments that are mistakenly attributed to other causes.
Execution is not just tactics—it is a discipline and a system.
Execution is not only the biggest issue facing business today; it is something nobody has explained satisfactorily.
We talk to many leaders who fall victim to the gap between promises they’ve made and results their organizations delivered.
Execution paces everything. It enables you to see what’s going on in your industry. It’s the best means for change and transition—better than culture, better than philosophy. Execution-oriented companies change faster than others because they’re closer to the situation.
Leading for execution is not rocket science. It’s very straightforward stuff. The main requirement is that you as a leader have to be deeply and passionately engaged in your organization and honest about its realities with others and yourself.
When companies fail to deliver on their promises, the most frequent explanation is that the CEO’s strategy was wrong. But the strategy by itself is not often the cause. Strategies most often fail because they aren’t executed well.
“Our issues are ones of execution and focus.”
To understand execution, you have to keep three key points in mind: Execution is a discipline, and integral to strategy. Execution is the major job of the business leader. Execution must be a core element of an organization’s culture.
Tactics are central to execution, but execution is not tactics. Execution is fundamental to strategy and has to shape it.
don’t confuse execution with tactics.
Execution is a systematic process of rigorously discussing hows and whats, questioning, tenaciously following through, and ensuring accountability. It includes making assumptions about the business environment, assessing the organization’s capabilities, linking strategy to operations and the people who are going to implement the strategy, synchronizing those people and their various disciplines, and linking rewards to outcomes.
In its most fundamental sense, execution is a systematic way of exposing reality and acting on it.
The heart of execution lies in the three core processes: the people process, the strategy process, and the operations process.
You need robust dialogue to surface the realities of the business.
You need accountability for results—discussed openly and agreed to by those responsible—to get things done and reward the best performers. You need follow-through to ensure the plans are on track.
Only a leader can ask the tough questions that everyone needs to answer, then manage the process of debating the information and making the right trade-offs.
Only the leader can set the tone of the dialogue in the organization. Dialogue is the core of culture and the basic unit of work.
Specifically, the leader has to run the three core processes and has to run them with intensity and rigor.