Execution: The Discipline of Getting Things Done

by Larry Bossidy

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

mind: Do you have the right leaders in the right jobs? How well do they work together? Do you have enough of the kind of people you need? Do you have the production, financial, and technological resources to execute the strategy?

FOLLOWING THROUGH 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 bas...

The Operations Process: Making the Link with Strategy and People

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. It breaks long-term output into short-term targets. Meeting those here-and-now targets forces decisions to be made and integrated across the organization, both initially and in response to changes in business conditions. It puts reality behind the numbers. The operating plan is not budgeting for “We did better than last year.” Such budgeting looks into the rearview mirror to set its goals; an operating plan looks forward to the hows.

An operating plan includes the programs your business is going to complete within one year to reach the desired levels of such objectives as earnings, sales, margins, and cash flow.

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

You really want the operating plan to be owned by everybody. The more people you get involved in the plan, either through contingency plans or projects that have to be undertaken in the coming year—the more people who are aware of the expectations for them—the more you achieve.

These operating plans are typically based on a budget that has been previously prepared. 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.

HOW TO BUILD A BUDGET IN THREE DAYS Most sizable businesses spend weeks or months preparing their budgets. This is unnecessary, and a great waste of time. You probably recognize that it can and should be done much faster. But would you believe you can prepare your budget in three days? We know a number of companies that do it.

THE IMPORTANCE OF SYNCHRONIZATION

Synchronization is essential for excellence in execution and for energizing the corporation. Synchronization means that all the moving parts of the organization have common assumptions about the external environment over the operating year and a common understanding—the left hand knows what the right hand is doing.

Synchronizing includes matching the goals of the interdependent parts and linking their priorities with other parts of the organization. When conditions change, synchronization realigns...

SOUND ASSUMPTIONS: THE KEY TO SETTING REALISTIC GOALS

Debate on assumptions is one of the most critical parts of any operating review—not just the big-picture assumptions but assumptions specifically linked with their effects on the business, segment by segment, item by item.

BUILDING THE OPERATING PLAN

Once the assumptions are pinned down, the next step in the operations process is to build the operating plan itself, which takes place in the operating review.

It’s a three-part process that begins with setting the targets. In the second part, you develop the action plans, including making the necessary trade-offs between short-term objectives and long-term goals. You also try to identify areas where people can develop contingency plans. Finally, you get agreement and closure from all the participants, establishing follow-through measu...

OUTCOMES OF THE OPERATIONS PROCESS One outcome of the operations process is identifying targets that clearly and specifically reflect not only what a business wants to achieve but what it is likely to achieve—because they are based on the most realistic assumptions and on the hows of achieving them.

Finally, the operations process builds confidence. The team knows they can meet the targets. They have the flexibility to adapt to changes, and they’ve gone through the moves required to succeed in all but the most drastically altered circumstances. In effect, they’ve trained in a flight simulator.

AFTER THE MEETING: FOLLOW-THROUGH AND CONTINGENCIES

Any good review ends with closure and follow-through. Without them, you’re apt to get one of those meetings where people nod their heads in agreement, only to start wriggling out of the deals a few days later. The leader has to be sure that each person has carried away the ri...

One powerful technique is to send each person a memo outlining the deta...

Contingency Plans Companies that execute can put a contingency plan into effect on the turn of a dime—recall

Quarterly Reviews Quarterly reviews help keep plans up to date and reinforce synchronization. They also give a leader a good idea about which people are on top of their businesses, which ones aren’t, and what the latter need to do.

GOALS TO LIVE BY

This kind of review process lets you set meaningful stretch goals too. Such goals are a popular leadership technique (popular among leaders, anyhow) for getting people to exert maximum effort. But many leaders are far too casual about how they specify and use them.

The heart of the working of a business is how the three processes of people, strategy, and operations link together. Leaders need to master the individual processes and the way they work together as a whole. They are the foundation for the discipline of execution, at the center of conceiving and executing a strategy. They are the differentiation between you and your competitors.

The discipline of execution based on the three core processes is the new theory of leadership and organization distilled from practice and abbreviation.

CONCLUSION: LETTER TO A NEW LEADER

We know you believe that people are your organization’s most important assets, but your stewardship of the people process is what will convert that belief to reality. Make your people process second to none. Your success will be determined by the number of “A” players you have and the extent to which you can harmonize their efforts.

You need to know at least the top third of the people in your unit in terms of their performance and their growth potential. You need to be certain that appraisals are honest and direct, and that your people get the feedback, coaching, and training they need to grow. And because compensation is the ultimate driver of performance, you must ensure that your compensation system rewards the doers.