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When the Clock is Ticking – 5 Tips For Executing a "Must Do" Plan
Talking to a group of senior managers, the new CEO of a global business said that the company’s operational performance was at its lowest ebb since the early 90’s. He predicted a “dreadful” third quarter.
Weeks later, in what management pundits term “the pacifying explanation,” he said, “the company had been brilliant at grand strategy but had lost its grip on operational details. There is nothing wrong with our strategy; our strategy has been dramatically successful. Our problem is that we are not running our businesses well. The company’s performance has materially lagged our peer group in the last 3 years. It has been poor because we suffer from a glaring lack of consistency and our organisation has grown too complex. There is massive duplication and lack of clarity on who does what.”
These comments follow 2 years of shocking operational performance that has been the subject of widespread media comment.
Following a company-wide review, the pressure for better results is now intense. The new CEO has prepared a “recovery plan,” focused on a drive for efficiency – better execution, not more strategy. He said that the “recovery plan” (which will take 18-24 months to complete) had not been cooked up in a smoke-filled room by half a dozen people. It incorporates many ideas from frontline people who have recently been telling him that “it’s really tough to get stuff done”.
The planning phase is the most critical. Many execution initiatives have failure “built-in” during a sloppy planning phase. The doers will not own a plan littered with quick and simple answers to everything. The London Olympics is a classic example of this. After the initial fanfare, major revisions to expectations were made.
Of course, press comment can lay it on a bit thick for effect, so reports may not be entirely accurate. But given the speed at which the recovery plan emerged, it is probable that a handful of senior people did indeed develop it, notwithstanding the CEO’s assurances.
The creative apartheid that this sets up between the planners and the doers just about guarantees the execution phase will exceed the 18-24 month period. The pressure for attractive, eye-catching plans – accentuating simplicity, speed and cheapness – at the expense of a proper understanding of complex situations is considerable.
The company has clearly lost the knack of executing flawlessly. This has not happened overnight but has been a gradual decline over time. A few errors in judgement, repeated every day for several years, eventually leading to today’s execution debacle. After a period in which the company’s focus was on growth through acquisition, a “back to basics” approach, with tough new goals for profits, margins and costs is the new recipe of the day.
Few would argue that this company’s recovery initiative is a response to a crisis. Many people believe that it takes a crisis to change a large organisation, and the evidence seems to confirm this.
The power to set strategy is highly concentrated at the top of most companies and, as a result, a handful of senior executives dictate the pace of the recovery plan by their own enthusiasm to embrace a new direction.
Most recovery plans start with senior management wanting to change other people’s behaviour. The most repeated question is “how do we get people to buy-in to this” – as if we are on the bus and they are not. People resist coercion more than they resist change. The doers will sit and watch the strength of senior managements’ commitment before anything of note happens.
The characteristics of this “recovery plan” make it a sizeable execution risk for the business. It is a performance “crisis” – the CEO must execute this plan.
The schedule is unreliable – timescales are probably too aggressive. The plan will (almost certainly) assume a management competence in execution that the company does not have in sufficient depth. The plan will demand process changes that have not been tested before.
People’s attitudes and behaviours will have to change – and the doers may see the plan as unrealistic. Worse, people will need to operate in top gear for a long time, which is possibly unsustainable.
Little has changed on execution over the last 30 years. Over 70% of new initiatives fail against their original objectives – some would say the number is actually much higher. In part, this is because failure is “built-in” from the start. The main reasons for these failures seldom vary. They are:
– Unclear objectives
– The eye catching (but incomplete) plan
– Ineffective Performance Measurement
– Unsuitable Organisation structure
– Selection of the wrong people for key roles
Time is not on the CEO’s side and this challenging plan has to be executed against a background of “business as usual.” Customers still need to be serviced and the business must meet its quarterly targets.
This challenge looks similar to golf’s hole-in-one challenge, where one insurance company puts a PGA Tour Pro’s chances at 1 in 3,756 and an amateur’s at 1 in 12,750. So, it is not going to be easy.
With the odds of success stacked against the CEO, how can he escape the shackles of past execution history and be confident of a positive result? The “recovery plan” must work within a disciplined execution framework to have any chance of success.
Looking back on similar successful ventures, there are 5 tips that will dramatically boost the CEO’s chances of success. They should be treated as mutually interdependent – because each element will only deliver a fraction of the total benefit.
1. Get the message across clearly
2. Build confidence in the Plan
3. Organise for results
4. Select “proven” managers to inspire
5. Face FACTS
1. Get the message across clearly
The first step in making the plan concrete is to explain the facts, without spin. This means being brutally frank about the “why’s” of this particular plan, what is known and what planning remains to be done. The present plan should be recognised for what it is – an outline. Like a cartographer’s map of 15th century Europe, it is a rough representation.
If a Powerpoint-style presentation is used to communicate the message, it must be specific and use reasoned arguments, rather than carefully chosen summaries to stimulate emotional responses. Even if the plan is seen as abstractly correct, there may be widespread scepticism about its practicality. According to the CEO, “senior management has been too directive and not listened sufficiently well to the people below.”
Where presentation content is open to interpretation, people will read between the lines and dismiss some aspects as unimportant and, instead, do what they think is right. Part of the charm of the English language is its flexibility – the downside is that this flexibility can also lead to vague interpretation and confusion.
The foundation for good execution is based on being VERY CLEAR about what is required. Go through presentations and strike out every abstraction. Communicate changes clearly, face-to-face, showing executive backing. The benefits will only come if the strategy is implemented. Half measures will not work.
2. Build confidence in the plan
In this case, there will not be enough time to do things the traditional way. The clock is ticking and execution will have to start before the perfect plan is ready. There is no magic formula for creating the perfect plan.
The rough-cut schedule will be optimistic – filled with made-up numbers and speculations – and will almost certainly assume everything will work perfectly. But hundreds of decisions that may affect the schedule have yet to be made. For these reasons, it is wise to expect that completion will take place within a range of dates, rather than on a specific day.
One of the most common errors is over-analysis when time does not permit. At some point, the research must stop and the plan must go. There are 2 years, or less, to complete this plan and the teams will have to work backward from the expected result to meet the objectives. There are risks – but there is no such thing as a risk-free plan.
To reduce the creative apartheid between the two groups, the planners and the doers must work together to hammer out an acceptable plan. It is not sensible to adopt a serial approach. The activities must overlap. Designing the strategy with implementation in mind (which is rarely the case) will substantially improve the execution process.
Activating the plan before planning is finished means it will be essential to run incremental confidence-building trials and then adjust planning assumptions and probable completion dates, based on experience and feedback. With such a demanding plan, it is important to walk before attempting to run. Small steps first, then acceleration.
3. Organise for results
The key to accountability is structure. If there is limited structure, a mob mentality quickly develops (dominated by the robber baron’s) scattering the organisations’ energy. The organisational style chosen here will have a major influence on the success, or otherwise, of the recovery plan. It is amazing how quickly progress moves when there is clear accountability, with enough budget and resources.
Several organisational options exist, ranging from simple coordination through to a more formal matrix structure. This plan demands focus, a clear chain of command and rapid decision-making.
Coordination is similar to the role of a reporter in a war zone. He is there observing the conflict, reporting on what has already happened but he has no influence on the outcome.
The matrix structure ensures there is a “General” directing operations, setting priorities, making pre-emptive moves, judgements and adjustments in response to unfolding events. This plan calls for a strong cross-functional organisation to build momentum quickly – a matrix structure.
Matrix structures emerged in the 1960’s to force managers to collaborate. Some companies have allowed matrix structures to multiply in the mistaken belief that it will increase collaboration. This has caused confused and weak management reporting relationships that has given matrix management a bad reputation.
Matrix structures were never meant for extensive use. Used sparingly, they are extremely successful for managing complex business initiatives that require massive cross-company action, as in this case.
4. Select “proven” managers to inspire
This is one occasion where the key execution jobs must be given to experienced “heavyweight” people – people who have managed this type of venture before. Without experienced execution managers, all the tools and techniques on the planet will have no effect.
In many businesses, the barriers to becoming a key execution manager are so low that a turtle could jump them. This is not the time to test a manager with a suspected case of “ready-aim-aim-aim-aim syndrome” or to test whether some Young Turk has what it takes. This is not to say that these candidates are not smart or do not work hard. They just may not be ready to execute a challenge like this.
The CEO must field his best team. He must ask the crucial question – how good is this person at getting things done? He cannot delegate this job. He must make sure that he has the right people in the right place.
There is not much linkage between a manager who talks a good game and a doer who gets results, whatever the pressure. Often, the doer is brushed aside in favour of a crowd pleaser, to the detriment of the execution task. Real doing skills are fundamental to lasting execution success.
By any standard, this execution task (in terms of scale, risk and cost) is one of the most challenging ever undertaken in the business and must be driven by people with an enormous obsession for winning.
5. Face FACTS
Realism is at the heart of execution and the performance management system is pivotal to control. It asks four basic questions.
– What has happened?
– Why has it happened?
– Is it going to continue?
– What are we going to do about it?
There is nothing more important than getting the absolute facts on the table. On critical execution tasks, many businesses do not know what they do not know. Weak control (and reporting) can mask detailed implementation difficulties for many months and while individual mistakes may not be catastrophic, collectively they can be.
Managers tend to offer “canned” rationalisations for what has happened, normally attributable to events outside their control. Symptoms of an underlying mess are often dismissed as “indigestion”.
The reluctance to face facts, particularly when the news is bad, is rife in business and a major cause of poor execution. The level of abuse, cynicism and self-interest connected with performance management should not be underrated. People want to look good at the expense of reality.
The basic purpose of any control system is to provide feedback relative to the plan. People need to understand why events are being measured. The purpose of measuring is not just to judge progress but also to find ways to do it better. In this case, control must be part of an integrated system and focus on the key drivers of the plan.
But measurement causes fragmentation and it is easy to lose sight of the big picture. It takes time for the full picture to develop and, often, the true costs of early failures are hidden.
Traditional functional management encourages a distorted view of performance – there is little point in achieving departmental targets if the execution task is behind schedule. This means that there must be an extraordinary level of intensity in the review process – a willingness to have an open and robust exchange – and to focus on the truly significant drivers of the task.
Faced with this challenge, it is not a time for being timid. The CEO must take fundamental and radical steps to reverse the decline in operational performance.
This is an exceptional test for the business. Blunt, hard-nosed action is required. Traditional recipes (based on archaic notions) for executing the many, time-critical projects in this turnaround programme simply will not work.
The 5 cornerstones of execution described here, increase the company’s chances of success considerably. In the past, companies have learned disappointingly little from bad experiences and executives can be seduced into believing that a partial implementation will be enough. But each cornerstone delivers only a fraction of the total benefit. For this reason, they should all be handled at the same time.
They are simple disciplines, but like all simple disciplines, they are easy not to do.
After 2 years, we are unlikely to know if the recovery plan has been successful in an absolute sense. It is relatively easy to hide cost overruns – and many companies do – in overhead costs, but as long as “the story” feels right, the CEO will be judged on normal business measures, like quarterly results. If the strategy is correct and he can execute with precision, the CEO may well succeed.
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