How do companies like GE, Wal-Mart and Honeywell succeed? What is the secret of Jack Welch, one of the most legendary CEO in the business world today?
The secret, according to Larry Bossidy and Ram Charan, is Execution. Subtitled The Discipline of Getting Things Done, the New York Times bestseller emphasises the importance of execution in business, how companies with an execution culture conduct their business affairs, and its three core processes: people, strategy and operations.
Laced liberally with stories from the warfront, the book is heavy on pragmatism and short on management theory. Written by former CEO and Chairman of Honeywell Larry Bossidy and academic Ram Charan, it drives home the point that a CEO must be wholly immersed in his business – from the topmost rung of corporate strategy to the nuts and bolts of operations.
In the section on the building blocks of execution, we’re taught that a leader needs to have 7 essential behaviours. These are:
1) Knowing one’s people and business;
2) Insisting on realism;
3) Setting clear goals and priorities;
4) Following through;
5) Rewarding the doers;
6) Expanding people’s capabilities through coaching; and
7) Knowing oneself.
A leader also needs to create a framework for cultural change. He/she needs to set the tone for the employees’ attitudes, beliefs and behaviours from the top down.
Getting the right people in and building an “A” team is highlighted repeatedly as a core tenet of execution. Leaders must spend their time understanding their staff’s strengths and weaknesses, coach and mentor them, and be unafraid to highlight sensitive issues when the time arises.
Once the building blocks are completed, a leader needs to institute three core processes which must all be closely inter-woven with each other, namely:
1) The People Process – The most important processes in any organisation, a robust people process evaluates individuals accurately and in depth, helps leaders to identify and develop talent, and creates the pipeline for a strong succession plan. Non-performers must be adequately dealt with while rewards must be closely linked to business results.
2) The Strategy Process – Here, the “Hows” are just as important as the “Whys” and “Whats”. An executional leader has an intimate understanding of his/her customers, competitors, environment, and critical issues. Good strategies must consider both short (1 to 3 years) and longer term (3 to 5 years) plans, and be realistic about an organisation’s ability to implement the strategy.
3) The Operations Process – Spread out over a year with quarterly reporting (in the case of public listed companies), the operating plan needs to closely align performance targets with resources and budgets. Execution savvy companies will develop action and contingency plans to accommodate various outcomes. They will also conduct quarterly reviews to reallocate resources according to varying market conditions.
Perhaps the most insightful lesson I’ve learned from the book is the need for business leaders to follow through while ensuring that their people meet their promises. Both Jack Welch and Larry Bossidy (who was also a former GE executive) write memos to key executives after review meetings. This habit helps them to communicate key points while ensuring that milestones are met. Such practices are almost non-existent in most organisations.
In a world inundated with numerous management theories, Execution provides a great reminder that winning companies are not built through brilliant strategies but a relentless focus on implementation. Its timeless lessons are relevant throughout all ages.