Execution B I Z

You've got the bright ideas and the smart people, and the market isjust ready for you. But why hasn't your business taken off as youpredicted? Maybe the problem is in your . What does itreally take to get a business going? You need the right peoplecombined with realistic strategies to create effective operatingprocedures. Let Larry Bossidy and Ram Charan tell you how.

Abusiness leader's most important job is the execution of plans, the“detail work,” making sure that the staff is getting results. This is thesort of responsibility that cannot be delegated. It is the leader'sprimary duty to see that every member of the team is carrying outhis part of the big plan to ensure the whole company's success.There are no excuses for failure: the market will be tough.What spells the difference between successes and failures is theability to execute plans.

Too often, too much intellectualizing and philosophy occurs at theplanning level. The leaders are busy with their dreams and plansfor success but there is little focus on implementation, thus thepromised result is not delivered. The emphasis on execution asan integral part of the business process has not received enoughattention in terms of accumulated knowledge and literature.

execution

always

Execution

Author:Publisher:Date of Publication:ISBN:Number of Pages:

Larry Bossidy & Ram CharanCrown Publishing Group

2002

278 pages0609610570

About the AuthorAbout the Author

The Big IdeaThe Big IdeaLarry BossidyLarry Bossidy

Larry Bossidy

Execution: The Discipline of GettingThings Done

Ram Charan

draws upon his years ofexperience in various companies such as

and

Upon his second retirement, Mr. Bossidyco-wrote the best -se l l ing book,

, an international best-sellerwith more than 550,000 copies sold. Hism a n a g e m e n t p h i l o s o p h y i sstraightforward: “I am convinced thatnothing we do is more important thanhiring and developing people. At the end ofthe day you bet on people, not onstrategies.”

is coauthor of the landmarkarticle "Why CEOs Fail" and an

adviser on corporate governance, CEOsuccession, and strategy implementation.He was named as Best Teacher byNorthwestern's Kellogg School and as atop-rated executive educator by

. He is author of ,coauthor of

, and a frequent contributor to(6/2000).

General Electric, Allied SigmaHoneywell.

Fortune

BusinessWeek Boards at Work

Every Business Is a GrowthBusinessHarvard Business Review.

Published by BusinessSummaries, Building 3005 Unit 258, 4440 NW 73rd Ave, Miami, Florida 33166©2003 BusinessSummaries All rights reserved. No part of this summary may be reproduced or transmittedin any form or by any means, electronic, photocopying, or otherwise, without prior notice ofBusinessSummaries.com

The Discipline of Getting Things DoneThe Discipline of Getting Things Done

David BrandtDavid Brandt

Sometimes even good companies fail with catastrophic results, despite stellarqualities. The problem is usually not the strategy or the person in charge; it is thebetween strategy and execution.

1. : Execution is fundamental to strategy and mustshape it. It is the process of taking into account all factors that can affect yourend result. Too often plans are static, made by rote and taken for granted.Plans and processes need to be carefully thought out and performed givencurrent and possible future realities.

2. : Execution requires acomprehensive understanding of a business, its people and its environment.Leaders should be intimately and intensely involved with their people andoperations; in other words, is the key here. Dialoguemust be at the core: be candid and reality-based, ask questions and findrealistic solutions.

3. : Execution has to be embedded in therewards system and in the norms of behavior. Look for deviations fromdesired managerial tolerances. Execution only works as a widespreadcollective effort, not on an individual basis.

People assume that the statement of an idea instantly produces results. Or theyannounce the idea and expect other people to spell it out and do what needs to bedone. Results can only be obtained when you specify in detail how to arrive atdesired outcomes through persistent probing in the right direction. We are geared tothink that leaders are supposed to find new ways of thinking, new strategies, newideas. But the work of bringing these abstract thoughts to fruition is usually delegatedto someone else.

1. . A leader must be in touch with theday-to-day realities of the business. Get to know your organization down tothe smallest unit. Get to know the supervisor and her team, how theyproduce results for the organization and their level of awareness regardingthe situation elsewhere in the company.

Work towards a climate of open, honest dialogue on all levels, up and down

gap

active involvement

Execution is a discipline

Execution is the Job of the Business Leader

Execution Has to Be in the Culture

Know Your People and Your Business

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Execution by Larry Cassidy and Ram CharanExecution by Larry Cassidy and Ram Charan

Part One: Why Execution is NeededPart One: Why Execution is Needed

The Gap Nobody KnowsThe Gap Nobody Knows

Execution Comes of AgeExecution Comes of Age

Why People Don’t Get ItWhy People Don’t Get It

Part Two: The Building Blocks of ExecutionPart Two: The Building Blocks of Execution

Building Block One: The Leader’s Seven Essential BehaviorsBuilding Block One: The Leader’s Seven Essential Behaviors

the hierarchy and across various departments. The best ideas and theearliest warning bells can reach you if your ears are open to all. Use dialogueas a tool for educating and guiding your subordinates and showing sincereorganizational support from the top level of the administration. Use thispersonal connection to make new ideas work, and explain theories,concepts, purposes and implementation. Help the staff accept the newdirections the company wishes to take.

2. . Identify your weaknesses, and don't mince your words. Beaware of your organization's capabilities and shortcomings. Try to look at thesituation from all sides, especially from the points of view of the consumerand of the competitor.

3. . Focus on very specific, defined priorities tomaximize the resources you have at hand. Simplify. Choose which goals areimportant and manageable for you, and work on those.

4. . Make sure the plans you make are carried out and check onall subordinates to whom responsibilities have been delegated. Provideincentives for those who provide exemplary results and deliver ultimatumsto those who don't meet their requirements.

5. . Reward your top performers. They will reward you in thefuture with more good work.

6. . Don't just give orders;teach your staff how to get things done. Observe your people in action thenprovide feedback. Compliment and encourage good behavior, note the badand makes suggestions for improvement. Help others find a better way ofdoing their job for your company by asking them questions that lead to theanswer. They figure out ways to improve by themselves, and the lesson ismore easily absorbed. This applies not only to business practices anddecisions but personal attitudes and behavior as well, especially those thataffect co-workers and work results.

Provide opportunities for learning to those who will benefit the most fromthem, especially those who might be promoted to key positions later on.These opportunities might be different projects that will hone their talents,short courses, or even additional responsibilities.

7. . Do you have the strength and the courage to do what'snecessary? If you hesitate to act, you bring risk to the whole organization. Ifyou are determined and resolute, others will follow your example. All of thisrequires emotional fortitude, which is comprised of authenticity, self-awareness, self-mastery and humility.

You can't just institute changes for the sake of shaking things up at your company.Your changes must be geared towards getting results. Be specific: what sort ofbehavior is acceptable in your company? What's acceptable? Change must beginat the top-level, to set an example down the line. Don't just expect it to happen either.Reward successful implementation of your plans to instigate change.

Insist on Realism

Set Clear Goals and Priorities

Follow Through

Reward the Doers

Expand People's Capabilities Through Coaching

Know Yourself

un

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Building Block Two: Creating the Framework for Cultural ChangeBuilding Block Two: Creating the Framework for Cultural Change


Operationalizing Culture

Linking Rewards to Performance

The Social Software of Execution

The Importance of Robust Dialogue

The problem is usually not the organization's values but in its practice on all levels.Identify the beliefs and attitudes that influence behavior, particularly those that aredetrimental to the company's and other employees' growth.

Make obvious the fact that certain actions will be rewarded and that negativebehavior gets you nowhere. Use a rating and rewards system to encourage not onlypositive behavior, but also to encourage the half-hearted to push harder. Use thissystem to convince those who are already results-oriented to improve theirperformance.

To ensure your employees know what you want of them, reiterate what goals youhave set for them and make sure that they agree to deliver on mutually agreed-uponterms. Offer different financial and non-financial rewards for different results andprovide different motivations. In the end, your employees' ultimate goal should bequality work that benefits the whole unit and the whole organization, not just thecompensation for good work done.

Sometimes the problem isn't people heading in the wrong directions. Sometimes,the problem is people aren't going anywhere: inaction. People are constrained byformality, lack of trust and hesitation. You're going to need to work on your company's

then. Social software refers to the factors outside organized rules,structure and norms, such as values, beliefs and motivation.An organization's socialsoftware is defined in concrete terms by its social operating mechanisms, which referto any opportunity for dialogue within the organization.

Social operating mechanisms create new relationships and communication lines,creating links where there normally are none, fostering transparency andknowledge-sharing. These provide opportunities for business leaders to put intopractice the beliefs and behaviors that should be the norm, thus setting an examplefor the whole company. Social operating mechanisms can be used to make changesin behaviors. Use these opportunities to observe various units in your company, tofollow up on previously agreed-upon plans of action, to update and evaluate, to planahead, and to reinforce the good and weed out the bad.

Only through the incorporation of social operating mechanisms into theorganization's routine can desirable behaviors be integrated into the collectiveconsciousness. Ensure that these mechanisms occur at given frequencies, toreiterate the value of each occurrence, to include the repetitions into the worktimetable and to constantly remind people of the desired behaviors and beliefs.

Robust dialogue is necessary for gathering information, processing it and putting it togood use. Robust dialogue is characterized by candor, informality and closure. Itspurpose is to see multiple viewpoints, see the pros and cons of each opinion and tochoose the most practical, sensible option. Robust dialogue encourages all peopleinvolved to speak their minds and to gear their thinking towards solutions and results.

social software

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Leaders Get the Behavior They Exhibit and Tolerate

Why the Right PeopleAren't in the Right Jobs

What Kind of People are You Looking For?

You get what you give.Aleader shows his people what sort of behavior he should getfrom them by giving them that behavior. Thus, you can change the culture of acompany by changing the behavior of its leaders. The business leader must be aconstant presence in the lives of those whose behavior he wishes to influence. Themore she gets involved, the better the whole team works and produces results.Executing cultural change depends first and foremost on having the right people.

Hiring the right people is as important as planning ahead; you need people who arenot only capable, but also full of potential for growth as your business expands. Taketime to focus on your staff, because in effect your business is in hands. Take timeto develop your staff's leadership capabilities so that they can bring results toplans and visions. Assess individual capabilities and determine if you can furtherdevelop your employee through training, coaching and exposure, or if he's better offelsewhere. If you can properly develop your people, you should be able to fill topadministrative posts from within. Hire a talented person and will hire a talentedperson.

1. . Sometimes, the people in HR don't really know theirpeople's specific qualities or a job's requirements. Job requirements mustspecify the level of personal experience and professional know-hownecessary, and match all these with what a candidate has to offer.

2. . If someone screws up, fire them if they're beyond help. Youwill save your company the trouble and the employee will be relieved of aduty he can't perform.

3. . Some leaders hire or promote people for thewrong reasons like friendship, personal loyalty or personality compatibility.This poses a great threat to the whole company because the decision wasnot based on acquiring the skills and traits necessary for the job.

4. . If you don't sincerely care about yourcompany and your people, you won't do much - if at all - to fix a problem thatyou know is there.

While vision, philosophy and intellect are always important, it is still more important tofind determination and resolution, someone who's a doer, a winner with drive andstrong decision-making skills. Your people should:

Energize people

Be decisive on tough issues

Get things done through others

Follow through

theiryour

she

Lack of Knowledge

Lack of Courage

Psychological Comfort Factor

Lack of Personal Commitment

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Building Block Three: The Job No Leader Should Delegate - Having the Right Peoplein the Right JobsBuilding Block Three: The Job No Leader Should Delegate - Having the Right Peoplein the Right Jobs


How to Get the Right People in the Right Jobs

The Unvarnished Truth

During an interview, examine not only the list of your candidate's achievements butalso the manner in which those achievements were made. Call references to find outhis track record. Probe deeply so that you can get the unadulterated truth. Know howto listen for eagerness and determination to get things done. Most importantly, don'tleave this job to the HR department. These are the people in whose hands the fate ofyour business lies and this is a critical process which needs your personal attention.

When evaluating people, should go both ways. Inasmuch as youshould know the truth about a person's strengths and weaknesses, it is yourresponsibility to discuss these things with the employee concerned, to find solutionsand to help him help himself.

The people process does three things:

1. It evaluates people accurately and in an in-depth manner.

2. It provides a framework for identifying and developing the leadership talentthe organizations will need to execute its strategies down the road.

3. It fills the leadership pipeline that is the basis of a strong succession plan.

Your people should be able to grow along with the company and the work. Evaluatepeople not only for their capability to produce results today, but for their potential totake on other responsibilities tomorrow. Sometimes strategy requires replacing anexcellent performer with someone who can foster further growth for the company.Constant and accurate evaluation processes that examine not only a person'sprofessional capabilities but also his capacity to be a leader and a team player cankeep the wrong person from being assigned a key role in the first place.

The people process framework is based on the following business blocks:

1. Linkage to the strategic plan and its near-, medium- and long-term milestonesand the operating plan target, including specific financial targets

2. Developing the leadership pipeline through continuous improvement,succession depth, and reducing retention risk

3. Deciding what to do about non-performers

4. Transforming the mission and operations of HR

Break your strategy down into manageable near-, medium- and long-term goals.

transparency

[ 6 ][ 6 ]

Part Three: The Three Core Processes of ExecutionPart Three: The Three Core Processes of Execution

The People Process: Making the Link with Strategy and OperationsThe People Process: Making the Link with Strategy and Operations

Building Block One: Linking People to Strategy and OperationsBuilding Block One: Linking People to Strategy and Operations


Determine kinds of skills you need for the upcoming goals and start laying thefoundations early. Then design an action plan for each step of your big plan.

Meeting your goals depends on the quality of the people you have. Assess todaythose who can be leaders in the future with the following aids:

: Examine behavior vis-à-visperformance.

: It captures key performancehighlights and determines what further development the person needs. Thishelps provide the foundations for succession, creating early on tomorrow'sdivision presidents and vice-presidents, even CEOs.

: What is aperson's marketability and potential for upward mobility? What risks will thebusiness face if she leaves, fails, is promoted, or retires? Succession depthensures that you have capable, qualified people who will fill the position aswell as the domino effect of related promotions. Retain your valuable staffby offering incentives, opening the possibility of upward mobility, andincorporating them in the company's future plans.

How does the people process work at Honeywell International? Larry Bossidy'sefforts at getting Honeywell back on track as the company's CEO are held in highregard and the Management Resource Reviews (MRRs) are no small part of thissuccess. The MRRs evaluate people in their current jobs, their potential for transferor promotion, the people who can succeed them and what to do about those who fallshort. Leaders have to prepare their reports for the MRRs beforehand, to bediscussed at the meeting. The review will even discuss all the factors that may beaffecting a person's performance, including his superior's behavior and efforts atdeveloping him.

The reports are required to be descriptive, detailed, honest and thorough and musthave been discussed with the person under review. The report is discussed by acommittee, which will determine a person's potential, behavior, capability, etc. Thegroup dynamic ensures fairness and freedom from bias.

Non-performers are people who aren't meeting their established goals. This doesnot mean that they're unqualified or incapable. It just means they aren't performing atthe level required for your company's success. Sometimes you just need to coach aperson to get them better acquainted with a job. Sometimes they just need to betransferred to another division or responsibility that's better suited to theircapabilities. Other times there's no choice but to let him go. However, do so in amanner that allows the person to keep his dignity.

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The Leadership Assessment Summary

The Continuous Improvement Summary

Succession Depth, and Reducing Retention Risk Analysis

Talent Review at Honeywell

[ 7 ][ 7 ]

Building Block Two: Developing the Leadership Pipeline Through ContinuousImprovement, Succession Depth and Reducing Retention RiskBuilding Block Two: Developing the Leadership Pipeline Through ContinuousImprovement, Succession Depth and Reducing Retention Risk

Building Block Three: Dealing with Non-PerformersBuilding Block Three: Dealing with Non-Performers


The role of the HR department in a company is different now. The HR function mustset out to fill the positions that are and will be important as projects and plansprogress over the upcoming months - even years. Use the HR division to keep trackof your company's top people across the whole organization, to see who can begroomed, or even promoted already, for key positions. HR should not only be able toassess people in their current jobs but also the people below them - if one person isto be promoted, someone should be adequately qualified to fill the upcoming void.

Examine all your strategies and determine the sorts of skills you need for theseplans. If you can't develop the right people in time, determine if you need to hire fromoutside. Identify which jobs are critical, and which ones critical down the line.Are they filled with the right people? Monitor also the top positions in the companyand spell out criteria for filling them. If there is a sudden vacancy, is there someoneyou haven't considered who might be more than qualified? If you know your peopleand their capabilities, filling the vacancy should be a small problem, especially ifyou've done your job in developing them for leadership.

Strategy simply means an action plan designed to meet business objectives, but canyour organization do what is necessary? And can your leaders determine how toreach those objectives?

Even brilliant strategies are bound to fail if not grounded in realities - regarding thecompetition, the capabilities of the company's own people, the market, the productofferings. When creating strategies, consider not only the current realities of allrelevant factors, but also unexpected - if unlikely - turns of events. There mustalways be backup plans, or at least people who can quickly think up alternative plansto make the best of a botched situation. Adaptability to change should always be aconsideration: constantly review your plan to see if it is being executed properly, ifcurrent and future steps are still feasible, and if the people in charge are still gettingresults.

Determine the key concepts actions and base your strategy on these. Keeping thesein mind will also make it easy to decide on alternatives if necessary, as well as findingthe right people for special parts of your strategy.

Corporate level strategy determines the business it wants to be in and thegeneral arena of play. It analyzes the various businesses in the companyand determines whether the mix is still profitable. It also integrates strategiesbuilt at business unit level to work in unison toward a common goal.

Business unit strategy lays out in specific terms the direction of the unit, plansaround costs, resources, risks and new possibilities, works within the contextof the whole organization's scheme, and studies the competition.

will be

The Strategy Process: Making the Link with People and Operations

The Importance of Hows

The Building Blocks of Strategy

The Difference Between Business Unit Strategy and Corporate Level Strategy

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Building Block Four: Linking HR to Business ResultsBuilding Block Four: Linking HR to Business Results


Building the Strategic Plan

How to Conduct a Strategy Review

Making the Link with Strategy and People

How to Build a Budget in Three Days

SoundAssumptions: The Key to Setting Realistic Goals

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Who Builds the Plan? - The strategic plan should be authored by the peoplewho will execute it, the business leaders who live with the realities of the fieldand the organization's capabilities. More often than, not this is a teaminstead of an individual. But that's even better: the group dynamic can ironout flaws in a plan and be a sounding board for each idea.

Questions for the Strategic Plan Are your expectations realistic? How is yourcompany doing in the market and what will your strategy do to change this?Who are your competitors and what are their strengths and weaknesses?How did the current top companies reach their success? Can your businessat its current state and your rate of development execute your strategy? Isyour projected growth sustainable? How dose the proposed strategy affectthe end user, the consumer?

What is the Assessment of the External Environment? Examine all factorsthat will have bearing on your business in any way. Monitor trends andevents in politics, economy, society, etc., and act swiftly but carefully onpotential pitfalls.

The review should be a creative exercise: discuss how previous strategies wereexecuted, but don't dwell too long on the past. Use them as a springboard for newstrategies. These questions can help determine the feasibility of a strategy:

How well-versed is each business unit team about the competition?

How strong is the organizational capability to execute the strategy?

Is the plan scattered or sharply focused?

Are the linkages with people and operations clear?

The operating plan specifies how the various moving parts of the business will besynchronized to achieve the targets. The budget should be based on the operations,not vice-versa. Translate your strategy into manageable steps.

Discuss the whole corporate picture. Determine each business unit's action plansand how this fits into the tentative budget. Bring together all the units' action plansand proposed budgets to see if they amount to a realistic whole. Fine tune this overand over by reviewing the action plan and the budget until you come up with the mostfeasible plan.

To make a plan based on your experiences today, you will necessarily make someassumptions about the market, your product's chances against the competition, etc.Debate with a team about these assumptions. What realities do you face today?How could this change over the course of the next few months or years? Review the

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assumptions upon which proposals are made and weigh their feasibilities. Examineall possibilities of factors affecting your business.

1. : Keep your targets realistic. Base them on track records andhistories.

2. : Study the possible outcomes thatmight leave the company most vulnerable and base your contingency planon that. In other words, plan for the worst.

3. : Communicate agreed-upon goals to the people concerned after the meeting, to reiterate yourexpectations and what they promised to deliver.

Think carefully: what does your business want to achieve? Think of this vis-à-viswhat your company is to achieve. Watch how the operations affect yourcompany, especially for the need to reallocate resources. Conduct quarterly reviewsto see if you're still on track, who's keeping you there, and if you should even be therein the first place.

Building the Operating Plan

Outcomes of the Operations Process

Set the targets

Develop action and contingency plans

Get agreement and closure from all participants

likely

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