If your organization is like so many others, it seems to have all the ingredients for success firmly in place. A well-thought-out vision? Check. A realistic strategy? Check. Skilled, highly engaged employees, quality products and services, strong customer relationships? Check, check, check. So why, in the face of everything you’re doing right, can’t you deliver consistent results? If an organization can’t execute, nothing else matters—not the smartest strategy, not the most innovative business model, not even game-changing technology. I like to sum this issue up with a concept I’ve been studying for years. I call it the “execution gap.” For many companies there is a clear gap between intent and execution.
I can back this with hard evidence. My consulting company, OnPoint Consulting, studied more than 400 companies and found that 49 percent of the leaders surveyed reported a gap between their organization’s ability to formulate and communicate a vision and strategy, and its ability to deliver results.
However, this finding wasn’t the surprising part. What really shocked me was that only 36 percent of leaders who thought their company had an execution gap responded positively to the statement, “I have confidence in my organization’s ability to close the gap between strategy and execution.” A staggering 64 percent of leaders who saw an execution problem didn’t believe their company could fix it.
For companies struggling to pull themselves out of the ditch the recession kicked them into, an inability to get things done is very bad news. If you can’t execute well, you’re not going to be successful—and you might not be around for long.
So here’s the question: If a clear and inspiring vision, a realistic strategy, skilled, committed employees, and high levels of quality and customer service don’t lead to successful execution, what does? My research uncovered five characteristics and competencies, which I call the “five bridges,” that enable people to traverse the execution gap. These bridges differentiate companies that are consistently able to get things done (i.e., gap closers) from those that aren’t (gap makers). Let’s look at these bridges more closely.
Change is inevitable; we all know that as individuals. However, despite their sincerest efforts, many companies can’t seem to assimilate that fact and turn it into positive action. That’s a dangerous shortcoming. You can’t run a successful business if you can’t adjust to changes in the marketplace.
Gap maker: Dell. Just as people can get stuck in a rut, so can businesses. Dell developed the “Dell Way,” and its reluctance to tread off of the beaten path cost it its customers. The company attracted customers to its website with low-cost computers that required buyers to purchase add-ons to build a custom machine—which meant the price would end up higher than the original low-cost offer). But when tons of affordable computers with all the bells and whistles that consumers wanted became readily available through other online outlets and retailers, consumers didn’t have to go to Dell to get a “custom-made” computer.
Here’s where Dell turned a problem into a huge problem. When its leaders realized they were losing business to competitors, they fell back on a practice that had always worked for them before: They cut costs to maintain market share. One area that suffered was customer service, originally one of the company’s biggest strengths. Dell created a customer-service nightmare. Recently it has made changes to get back on course, but once you’ve lost consumer confidence, it can be hard to get it back.
Successful organizations strike the right balance between centralization and decentralization. Many companies go to great lengths to develop an exciting vision, create a realistic strategy, and get employees engaged. But then they assume their current organizational structure and systems will support the new strategy. Often, that’s just not true.
Structure isn’t just about efficiency. A good structure enhances accountability, coordination, and communication. Plus, it ensures that decisions are being made as close to the action as possible. These are all key components of getting things done.
Gap closer: Hewlett-Packard. When Mark Hurd became CEO of Hewlett-Packard, he was constantly asked if he thought acquiring Compaq was a good idea. His answer? “The question is irrelevant.” Basically, Hurd said what’s done is done, and his job now was to find a way to make it work. He did just that when he reorganized the company into three divisions, each with its own sales force with the division heads responsible for sales. He also reorganized the IT function. Instead of having 85 data centers, he centralized them into three. This ensured the organizational structure would be better aligned with the business strategy.
Admittedly, this is a controversial notion. Some leaders view involving employees in decision making as a sign of weakness. Others fear giving up control. In reality, though, the world is too complex for any leader to go it alone. To make good decisions, you must seek out the perspectives of a wide range of people—and who knows better than employees what the closest-to-the-ground issues are? Involving employees in decisions gets them focused on generating solutions to problems rather than complaining or waiting to be told what to do. It creates a valuable sense of ownership.
Gap maker: The NBA. When the National Basketball Association (NBA) tried to introduce a new basketball, guess who they forgot to involve in the decision? That’s right, the players. The NBA came up with a new ball design and never once asked the players how they liked it while it was in development. There’s no reasonable explanation for this oversight. Asking the players would have increased the quality of the ball itself and the acceptance of the “new ball” decision.
Instead, the NBA ended up with a ball that players refused to use because they felt it was difficult to handle when it was damp, and it would actually cut their fingers. Because of the players’ negative response, the NBA had to scrap its “improved” model and go back to the ball the players preferred—the one they have been using for decades. This anecdote is a glaring example of why it is important to involve people whose support you need to execute decisions that affect them.
No company should ever have two sets of values and expectations: one for the leader(s) and one for the employees. When leaders say one thing and do another, business suffers. Of course, we all know that leader behavior is relevant. Still, it might surprise you to learn exactly how much execution depends on how consistent your behavior is with organizational values and priorities.
If you’re a leader, employees pattern their behavior after yours. If how you behave signals that “we are all in this together,” people are more likely to be motivated. When you expect employees to behave a certain way, such as serving customers better or minimizing waste, or ask employees to focus on certain priorities, like cost containment or innovation, you’d better do the same. A do-as-I-say-not-as-I-do attitude sends mixed messages and breeds resentment.
Gap makers: TARP bailout-seeking auto executives. The CEOs of General Motors, Ford, and Chrysler shocked members of Congress and the American public when they used private jets to travel to Washington, D.C. for a hearing. This got them to their destination in speed and comfort, but it sent a very wrong message. The purpose of the trip was to ask for government assistance to help their companies get through the worst recession in U.S. history and the worst market for car sales in the history of their industry.
Behavior so inconsistent with what was described as a crisis is an example of how the automotive executives helped create the problem in which they have found themselves. It aimed a 10,000-megawatt spotlight on their lack of awareness of the connection between their behavior and the situation at hand.
Most employees have good intentions. They want to cooperate with colleagues and co-workers. (Who is going to consciously sabotage their own livelihood?) Yet, ensuring that decisions and actions are coordinated across organizational boundaries requires more than faith and words alone. It takes shared goals, clear communication, and well-defined roles.
In addition, people must be held accountable for doing what they’re supposed to do. That takes two things: clear performance expectations, and systems that encourage and reinforce appropriate employee behavior.
Gap maker: Toyota. Many people were surprised when Toyota Motor Corp., a brand known for its quality and reliability, recalled more than 6 million cars due to a faulty accelerator pedal. How did this once mighty brand end up with such a PR disaster on its hands?
Toyota used to work with one supplier for each part. But when a fire at a supplier’s facility caused 20 plants to shut down for five days, the company decided it needed a second source as a back-up. For the accelerator, Toyota failed to ensure the parts it was receiving from the two suppliers were identical.
Analysts chalk this failure up to a bureaucracy that could not accommodate the company’s rapid growth. They also point to an overly aggressive focus on profits—one that led executives to ignore principles that had contributed to its previously untarnished reputation.
These five execution bridges are critical. Without them, you’ll have a tough time achieving your company’s goals. The more bridges you have in place, the more likely you are to reach those goals. Conversely, the lack of any one of them could potentially derail your efforts. Also, as the Toyota breakdown aptly illustrates, these bridges are not permanent. They are in fact quite fragile. Once you’ve built them, you must keep vigilant watch over them and work hard to maintain them.
It’s quite possible for a company to have a bridge in place one year only to discover that, over time, it’s weakened or even crumbled and no longer able to help people traverse the gap. Execution is not a single-point event; it’s an ongoing process. But since your ability to execute well and consistently is the very fabric of success, I can think of no better place to focus your time and energy.
Richard Lepsinger, president of OnPoint Consulting in the Greater New York City Area, has founded and led consulting firms in human capital and human resources for more than 20 years. The focus of his work has been helping organizations close the gap between strategy and execution. Aside from consulting leaders of major corporations including Bayer Pharmaceuticals, Citibank, Coca-Cola Co., ConocoPhillips, KPMG, Lehman Bros., the New York Stock Exchange, Northwestern Mutual Life, PeopleSoft, Pitney Bowes, Subaru of America, and more, Lepsinger has presented at conferences and authored/co-authored books on formulating/implementing strategic plans, managing change, decision making, 360° feedback and its uses, talent management, developing and using competency models, and integrating leader/management roles for organizational effectiveness.
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