Execution Book Review

Execution is the missing link between a company's strategy and results. As such, it is the major job of every business leader. If you don't know how to execute, the best strategy in the world is rendered impotent and your business suffers through endless cycles of failed strategies and poor results.

Execution talks about how important it is to business success to get things done. Although large amounts of time and money are dedicated to developing strategic thinking, few executives realize the importance of being able to execute on the strategy they develop. Larry Bossidy and Ram Charan have identified the discipline of execution as the way to link the three core processes of any business: the people process, the strategy, and the operating plan.

Key points on execution:

Execution is a discipline. "Don't confuse execution with tactics. No worthwhile strategy can be planned without taking into account the organization's ability to execute it" (p.21)

Execution is the major job of the business leader. "Organizations don't execute unless the right people, individually and collectively, focus on the right details at the right time"(p.33)

Execution must be a core element of an organization's culture. Execution should begin with the senior leaders and drive the behavior of everyone in the organization.

The Three Building Blocks of Execution

Building Block One: The leader's seven essential behaviors

Know your people and your business. Thoroughly understand the people and the business environment you're working with.

Insist on realism. People usually want to hide mistakes and avoid confrontations. You start by being realistic yourself.

Set clear goals and priorities. Focus on 3-4 priorities that everyone can grasp. "Without carefully thought-out and clear priorities, people can get bogged down in warfare over who gets what and why." (p.69)

Follow through. Explore conflicts that stand in the way of results and create mechanisms such as regular reviews to ensure people do what is expected.

Reward the doers. Measure, reward and promote people who get things done.

Expand people's capabilities. Coaching is the single most important part of expanding others' capabilities.

Know yourself. In execution, emotional fortitude is absolutely critical. You need to be open to information whether it's what you like to hear or not. Emotional fortitude comes from authenticity, self-awareness, self-mastery and humility.

"Most efforts at cultural change fail because they are not linked to improving the business's outcomes." (p. 85) To deliver better results, start with examining whether your organization's ingrained beliefs are helping the business perfect its execution.

If a company rewards and promotes people for execution as well as for desirable behaviors, its culture will change. "Linking rewards to performance is necessary to creating an execution culture, but it's not enough. Leaders must also help people to master the new behaviors by coaching." (p. 96)

You cannot have an execution culture without robust dialogue, which makes an organization effective in gathering information and reshaping it to produce decisions. Robust dialogue starts when people have open minds. They listen to all sides of the debate without preconceptions or private agendas. They want to hear new information and choose the best alternative. Adopting norms such as "truth over harmony" can help a company move in this direction.

Building Block Three: Having the right people in the right place

"If you look at any business that is consistently successful, you'll find that its leaders focus intensely and relentlessly on people selection" (p. 110)

Define jobs in terms of the three or four non-negotiable criteria - things the person must be able to do to succeed. Fill the job based on these criteria rather than personal opinions.

Leaders must develop the emotional fortitude to confront people who are in the wrong job and make a change. Failure to do this can cause untold damage to a company.

Fill jobs with people who fit the criteria, not ones that the leader is personally comfortable with.

Three core processes of Execution

1. People process: linking strategy and operations.
A strong people process will:

Evaluate people accurately and in depth

Provide a framework to identify and develop leaders at all levels and of all kinds

Fill the leadership pipeline that is the basis of a strong succession plan

"One of the biggest shortcomings of the traditional people process is that it is backward-looking, focused on evaluating what people are doing today. Far more important is whether people can handle the jobs of tomorrow" (p. 142)

The four building blocks of this process are:

link people to strategy and operations: make sure you have the right kinds and numbers of people to execute your strategy.

develop the leadership pipeline through continuous improvement, increasing succession depth and reducing retention risk

deal with non-performers by moving people to a better fit job or letting them go

link human resources to business results by integrating HR into the business process.

2) Strategy process: linking people and operations

A good strategy requires attention to the "hows" of execution. Strategies cannot exist solely at a conceptual level. A strategy "must be an action plan that business leaders can rely on to reach their business objectives."(p 178)

To be effective a strategy must be built by those who will execute it, namely the line people. Questions for a strategic plan:

what is the assessment of the external environment from a political, technological, competitive, social, and economic perspective?

How well do you understand the existing customers and markets?

What is the best way to grow the business profitably and what are the obstacles?

Who is the competition?

Can the business execute the strategy? What are the important milestones in execution?

Are the short and long term balanced?

What are the critical issues facing the business?

How will the business make money on a sustainable basis?

3. Operations process: linking strategy and people

The strategy process defines where a business wants to go, and the people process defines who is going to get it there. The operating plan provides the path for those people. It 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. You cannot set realistic goals until you've debated the assumptions behind them. Everyone involved in delivering the plan should participate in the creation of it. In this way a realistic plan is built with a synchronized understanding of what it means across the entire company. Equally critical to building an operating plan is to monitor its progress diligently through quarterly reviews.

As a final note, the authors are enthusiastic about the degree of learning that happens as a company engages these processes, and emphasize the importance of understanding that they are linked together to execute well. Throughout the book Bossidy and Charan provide engaging and thought-provoking stories of how to turn strategy into action, and action into success. This book is well worth reading.

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