Leadership Potential

Good To Great - Abstract

2008-07-04T21:11:00.000-07:00

GOOD TO GREAT
by Jim Collins
from FC issue 51, page 90

Jim Collins summarizes in this article the results of a five-year study in which he and his team scoured a list of 1,435 established companies to find every extraordinary case that made a leap from average results to great results. To qualify, a company had to generate cumulative stock returns that exceeded the general stock market by at least three times over 15 years. The 11 good-to-great companies that we found averaged returns 6.9 times greater than the market's.

The results of this comprehensive study amazingly point to the need for simple, sustained, broad-based focus and execution.

Two highlights of findings include:

- “There was no miracle moment. Instead, a down-to-earth, pragmatic, committed-to-excellence process -- a framework -- kept each company, its leaders, and its people on track for the long haul. In each case, it was victory of steadfast discipline over the quick fix. “
- “When people begin to feel the magic of momentum -- when they begin to see tangible results and can feel the flywheel start to build speed -- that's when they line up, throw their shoulders to the wheel, and push. And that's how change really happens. “

Jim closes by stating, “After five years of research, I'm absolutely convinced that if we just focus our attention on the right things -- and stop doing the senseless things that consume so much time and energy -- we can create a powerful Flywheel Effect without increasing the number of hours we work.

Creativity is Not Enough - Abstract

2008-06-30T16:59:00.000-07:00

CREATIVITY IS NOT ENOUGH
Theodore Levitt
Innovative Enterprise, August 2002

One of the biggest barriers to successful focus and execution is a culture that rewards “creative smart-talk” and not implementation. While creativity is critical, it needs to be put into the right perspective. This article takes aim at the assumption that creativity is superior to implementation. The author argues that creativity can be destructive to businesses. He states that big thinkers can inspire organizations to constantly chatter in the abstract, rather than to focus on purposeful action. In such organizations, innovation never happens because people are always talking about it but never doing it.

One of the worst things a company can do, the author says, is to put innovation into the hands of those who love just the creative, and have a “distaste for mundane realities.” This distaste renders them incapable of executing any real projects. Creative people often do not understand the operating executive’s day-to-day problems; and they underestimate the intricate complexity of business organizations. There is really little shortage of creative people in American business. There is a shortage of those who successfully implement.

Why Can't We Get Anything Done - Abstract

2008-06-30T16:58:00.000-07:00

WHY CAN’T WE GET ANYTHING DONE?
Alan M. Webber
Fast Company, June 2000.

This article identifies and addresses top barriers to successful execution within organizations. The author states that thousands of business books are published around the world each year. U.S. organizations alone spend more than $60 billion a year on training – mostly on management training. Companies spend billions of dollars a year on consulting. But with all of this state-of-the-art knowledge, the author asks, why can’t we get anything done? The author interviews Jeffrey Pfeffer – guru and co-author of “The Knowing-Doing Gap” and professor at the Stanford Graduate School of Business - to get answers.

Jeffrey Pfeffer drills in on 16 key points, that include a focus on: intellectual conversations verses implementation; placing too much confidence in talkers verses doers; the importance of mistakes, removing fear, and eliminating internal competition.

Jeffrey Pfeffer challenges companies to build a culture of action – where there is “no knowing-doing gap,” and where there is no difference between how companies think, who they are, and what they do.

Beware The Busy Manager - Abstract

2008-06-30T16:55:00.001-07:00

Abstract of "Beware of the Busy Manager" written by:
- Heike Bruch and Sumantra Shoshal
- Harvard Business Review, February 2002.

This seminal article contributes to creating a powerful “business case” for the need for focus and execution within organizations today. For ten years, Heike and Sumantra studied the behavior of busy managers. They found that, fully 90% of managers squander their time in all sorts of ineffective activities. This article helps in identifying which managers are making a real difference and which just look or sound busy.

In summary, the authors claim that today, 30% of managers lack focus, energy and procrastinate. Roughly, 20% of managers are disengaged. They exhibit high focus but have lower levels of energy. They have strong reservations about the jobs they are asked to do, and are often plagued by feelings of anxiety, uncertainty, anger, frustration, and alienation. More than 40% of managers are distracted. They are well intentioned, highly energetic but unfocused who confuse frenetic motion with construction action. They find themselves over-committed, and wind up constantly fighting fires or abandoning the projects.

A mere 10% of managers spend their time in a committed, purposeful, and reflective manner. Both focus and energy are critical traits. Together, they produce the kind of purposeful action organizations need most. Heike and Sumantra conclude in this article that when corporate leaders make a sincere effort to give managers both challenge and choice, most managers can learn to direct their energy and improve their focus – and ultimately find their way.

Execution As Attitude - Abstract

2008-06-30T16:52:00.000-07:00

EXECUTION AS ATTITUDE
Lawrence A. Bossidy
The Leigh Advisor, Summer 2002.

Larry Bossidy, a highly regarded and proven CEO, shares how he turned Honeywell (now AlliedSignal) around, from the midst of chaos to a $24 billion, customer-oriented powerhouse. The key was successful focus and execution, starting from the top.

Larry says, there is a lot of talk about organizational change. However, the only way to implement fundamental change in an organization is to instill an “execution discipline.”

Larry and his team set out to transform the company's culture. They focused on executing the plans as flawlessly as possible, instilling accountability at every level of the organization and establishing metrics to measure our progress.

It is about getting the job done, to be sure, but with a broad systematic view - one that integrates the mission objective with the tools, the metrics, the people, and the processes that will get you there.

Poor Execution of Strategy - Top Leadership Challenge

2008-06-30T16:49:00.000-07:00

by David Willden

THE CHALLENGE

We are seeing the revolving door for CEOs spin faster and faster. “Two-thirds of all major companies worldwide have replaced their CEO at least once since 1995.” “More than 1,000 CEOs have left office over the past 12 months.” “In the year 2000 alone, forty CEOs of the top two hundred companies on Fortune’s 500 list were removed. When 20 percent of the most powerful business leaders in America lose their jobs, something is clearly wrong!”

So, what has brought down these capable executives? What is the biggest underlying issue? Is it: corporate dishonesty, the economic downturn, poor planning, the post-dotcom realignment, or unrealistic pressures for short-term gains? In a Fortune article titled, “What CEOs Fail,” the question was posed, “suppose what brought down all these powerful and undeniable talented executives was just one common failing?”

Let’s turn to the thoughts of BusinessWeek’s top two rated management gurus – Ram Charan and David Ulrich to explore the answer. Ram Charan concludes that the big issue is bad execution of corporate strategy. He states, it is “as simple as that: not getting things done, being indecisive, not delivering on commitments. …The results are beyond doubt.” In the book “The HR Scorecard” David Ulrich and other gurus refer to trends in the U.S. equity market “reflecting a growing shift from a focus on just tangible assets to intangible assets.” The authors refer to a study, conducted by Ernst & Young of financial analysts, to ascertain “measures that matter.” The most important nonfinancial variable that determines a company’s success or failure, is its “ability (or inability) to implement strategy.”

Other top management gurus seem to also be screaming for corporate America to better focus and execute. Moreover, workers are pleading for focus, clear expectations, and the opportunity to contribute to that focus.

A FranklinCovey study evaluated the characteristics of 52,000 managers across hundreds of organizations. More than 400,000 of the managers’ associates were asked to rank the managers. The areas where managers scored the lowest included:

- Prioritizing work so time is spent on most important issues (related to strategy)
- Setting clear expectations with employees (related to strategy)
- Providing feedback on how to improve
- Building teamwork by maximizing the talents of the workgroup

Gallup conducted a study of more than 80,000 managers in 400 companies to determine the most successful managerial behaviors. From that study, they drilled in on 12 key focus areas or traits - that best correlate with business success. These include:

- aligning each employee with the mission
- letting employees know what is expected
- tapping into the talents of employee
- talking with the employee about their progress

Any good CEO would ask the question, “how pervasive is the focus and execute problem, and what is potential payback?” The following data begins to open a vision of how deep and broad the opportunity might be:

- A Harvard Business Review article in February 2002, “Beware the Busy Manager” summarizes a ten-year management study. The findings were that fully 90% of managers squander their time in all sorts of ineffective activities. In other words, a mere 10% of managers spend their time in a committed, purposeful, and reflective manner.
- FranklinCovey conducted a study of 850 workers from many different companies and found that these (knowledge) workers typically spend 40% of their time on tasks related to the organization’s mission-critical objectives. “Imagine the impact on the organization if people were giving 80% or even 60% of their best efforts to your top priorities – instead of only 40%?”
- Knowledge workers make up 60% of the work force and are by far the organization’s largest investment. Knowledge workers typically give only around 40% of their time on organizational priorities.
- One estimate of the cost of productivity within the U.S. of “actively disengaged workers” is $300 billion.
- In a survey of management consultants reported that fewer than 10 percent of effectively formulated strategies were successfully implement.
- Fortune cover story of prominent CEO failures concluded that the emphasis placed on strategy and vision created a mistaken belief that the right strategy was all that was needed to succeed. “In a majority of cases – we estimate 70 percent – the real problem isn’t [bad strategy but]…bad execution.

So, we believe the biggest leadership challenge today centers around the substantive need for better focus and execution.

THE SOLUTION

Before jumping to conclusions about the solution, let’s take a look at how Stephen Cooper focuses and executes. Why Stephen Cooper? He is the interim chief executive & restructuring officer of the fallen energy giant Enron Corporation. He has one of the toughest jobs in America. Why was he selected? He is widely regarded as one of the top experts in reorganization. His job for over 30 years has been to take companies that are struggling and turn them around. An example of his success includes his work with Etec.

In January 1993, when Stephen Cooper arrived at Etec Systems Inc., the company was generating revenues at a rate of $56 million a year -- and red ink at the rate of $1 million a month. Worse, it had become an emblem of national decline. Stephen Cooper, the company’s new president, didn’t say much. Instead, he set an audacious goal by summer and generate revenues of $500 million by the year 2000 – and began creating a step-by-step plan to get there. Four years later (1997) Etec represented one of the most remarkable comebacks in Silicon Valley. The company is growing fast and making money. In 1996, revenues increased by more than 75%, to nearly $150 million. In 1998, revenue hit $288 million, with net income of $46.8 million.

So what did Stephen Cooper do to turn Etec around? Two simple disciplines are at the core of Etec's back-to-basics approach. First, there is a commitment to in-depth performance plans. All of Etec's 800 people have written personal plans that guide their decisions about what to work on when. The power of these plans is their ubiquity and uniformity. Each person identifies five to seven goals, creates metrics to track progress, and ranks each goal's importance relative to the others. And each person's plan -- from factory managers to the CEO -- must fit on one sheet of paper.

Phil Arnold, a precision-optics manager at Etec, runs a 40-person department in the company's Hayward factory. Like all factory managers, Arnold spends most of his time reacting to short-term crises. But amid the daily frenzy, he always knows what matters. Arnold has six specific goals that include increasing his department's production volumes by 30% and reducing cycle times by 10%. His most important goal has a 50% priority rating; his least important gets 5%. The 6 managers who report to Arnold have their own goals -- assignments to help the department achieve these main objectives. And the 34 shop-floor employees who report to these junior managers have daily checklists with tasks that relate to the managers' subgoals.
The value of this specificity, says consultant Daniels, is that it creates order in times of chaos: "It's not easy to maintain clarity when so much change is taking place. You need people to manage themselves on very short feedback horizons."

The second discipline at Etec is weekly reviews. Plans don't count for much unless people track their progress, and even the best plans need to be modified. Etec uses three rules to keep work reviews fast and focused. People should limit their status reports to a total of four minutes. For each goal, people should cover four elements: objectives, status, issues, recommendations. Finally, the reviews themselves should encourage joint problem-solving rather than just reporting.

….The end result is an organization where every person, every week, knows what they should be doing, how much weight it deserves relative to their other assignments, and how their goals relate to the goals of the people around them -- in short, an open system that's always running in high gear.

INFORMATION SOURCES
- Beware the Busy Manager. Harvard Business Review. February 2000.
- Closing the Personal Productivity Gap: Putting First Things First. (FranklinCovey, 2001)
- What your disaffected workers cost. Gallup Management Journal, 1:1 [15 Mar 2001]
- Walter Kiechel, “Corporate Strategists under Fire,” Fortune, 27 December 1982, 38
- R. Charan and G. Colvin, “Why CEO’s Fail,” Fortune, 21 June 1999
- Drake Beam Morin Inc.
- The CEO Trap Looking for superheroes to delivery sky-high growth ensures disappointment. Business Week. December 11, 2000,
- Why CEOs Fail? Fortune. June 21, 1999.
- Rating the Management Gurus. BusinessWeek. October 15, 2001.
- Why CEOs Fail? Fortune. June 21, 1999.
- J. Low and T. Siesfield, Measures That Matter (Boston: Ernst & Young, 1998).

Why CEO's Fail - Abstract

2008-06-30T16:47:00.000-07:00

Abstract of "Why CEO's Fail" - Ram Charan
Fortune. June 21, 1999

Successful focus and execution starts at the top and is vital to the success of CEOs today. The article addresses why so many talented CEOs are failing and losing their jobs. Ram Charan states, in approximately 70% of the cases, CEOs fail because of bad execution of the corporate strategy. Bad execution entails not getting things done, being indecisive, not delivering on commitments.

So, how do CEOs blow it? Ram claims, more than any other way, it’s by failure to put the right people in the right jobs—and to fix people problems in time. Also, these failed CEOs found no reward in continually improving operations.

Effective CEOs start by focusing on initiatives that are clear, specific, and few, and they don’t launch a new one until those in progress are embedded in the company’s DNA. For instance, Jack Welch has introduced just five major initiatives in 18 years as CEO. Additionally, great CEOs hold people accountable. With their initiatives firm, effective CEOs implement them through a process that seems simple, even obvious, but has profound effects