How often have you said or heard, “I don’t know what went wrong, we did everything right and we failed to deliver the results, we did not reach our goals.” Small businesses are not alone in living that scenario: Kodak, Lucent Technologies, Xerox and many other large companies have also lived that experience, and for some more than once. “In the year 2000 alone, forty CEOs of the top two hundred companies on Fortune’s 500 list were removed –not retired but fired or made to resign” (Bossidy & Charan, p. 14, 2002) because they did not deliver their stated goals.
Why is it that even with the brightest and best, goals are not reached, strategic plans become ashes and, in some cases the corporate Phoenix cannot rise again, they are taken over or merged with other companies and small companies disappear. Many CEOs of top companies, e.g. Dell Computer Corp., Johnson & Johnson and others, believe the answer is failure to execute. Broadly defined, execution is the systematic way of exposing the reality of the business and acting on it.
Execution emerges at the intersection of the people process, operations and the strategic plan. While every business uses all three functions, often they stand apart from one another like silos. However, execution is contingent on the integration of all three while they retain their specific functions.
The people process refers to who in the organization can implement the strategic plan. It is the software of running a business. Fundamental to getting a business off the ground, operating an ongoing business and taking a business to the next level is having the right people on the bus, the wrong people off the bus, and the right people on the bus in the right seats (Collins, 2001). Jack Welch of GE was branded as the people guru because he was the first to recognize and act on the business reality that people do the work and, therefore, spent time with them to determine who could and could not perform, who could and could not be developed. He recognized, more than the cliché “people are our best assets”, that people had to be developed and that, therefore, that development process had to begin the very first day on the job. Developing people is Jack Welch’s legacy to the world of business. Consequently, GE is known as one of the most successful businesses in business history, and members of his management team are among the most sought after by executive recruiters.
Operations refers to having in place processes by which strategic plans can be implemented. Operations is half of the business hardware. It is useless to plan on selling a million dollars in socks if you do not have to the capacity to make, acquire and deliver the socks to market. Many small businesses operate without having the operational wherewithal to deliver. Consequently, failure and not success is built in to their strategic plan. By facing the reality of where the business is, solutions to problems of this nature can be identified and installed.
The strategic plan refers to the specifics whereby goods and/or services get to market, are sold, after-market care and how this fits within 3-5 year strategic plans. The strategic plan is the other half of the business hardware. It is the link between people and process and begins with questions like, “Can this idea work within the reality of the marketplace? What is the cash required to deliver.” Questions of this nature are the outcome of hard-hitting, business reality dialogue in key management meetings, which may last a day or a week and occur throughout the year so that changes within markets can be factored into the plan.
Operations and the people process may require that strategists’ trade-off some parts of the plan. These trade-offs are directly linked to the strategic dialogue. Moreover, operations requires that strategists be specific, clear and relevant; that action is the outcome with resources allocated and sources of those resources made explicit. Then, accountability is assigned, with follow through as the centerpiece in subsequent strategic meetings.
Execution is a discipline. Organizations that succeed become a culture of discipline because they execute consistently.
Author is Joanna Campbell, PhD, with Sterling Information Partners, Inc. who can be reached at 757-320-1155 or SJWCampbell@gmail.com