Why execution is so important for managers
22 February 2016
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Chris Gibbons: Welcome once again to Old Mutual Live Business and joining us for the second time is strategist and author, Tony Manning, who has just published a new book, What’s Wrong With Management, How To Get It Right. Which says, really there’s nothing new under the sun in the world of business, despite all of those fancy new books which clutter up the shelves in so many bookstores and in our big cities.
Eight critical strategy practices, we talked about those in a previous edition of Old Mutual Live Business. Tony, I want to start, if I can, with your 8th point, which is: Be highly effective at execution. That sounds obvious, but why is that so important?
Why execution is so important
Tony Manning: Chris, it’s quite interesting, over the last probably 10 or so years, there’s been a quite significant increase in the number of experts saying that execution matters and that’s strange. One would have thought that’s always been the case.
But for quite a long time, strategy was in a kind of golden era where this notion that you could cook up the perfect strategy and it would be your salvation, it’ll get you to wherever you want to go, prevailed. So, managers spent a lot of time talking about strategy and working on getting the perfect strategy right, assuming that if they did, they would be winners.
What they discovered, time and again, was that they could put the strategy on paper and two things happened. The one is that things seldom turned out as they expected. So, the future changed very quickly and the strategy became obsolete, extremely quickly.
The other was, that even if that didn’t happen, that the execution of the strategy was what hurt them in the end because they put these grand intentions down on paper; but then when they looked back in 3-6 months’ time, or a years’ time, they found that they were actually unable to do what they had said they were going to do.
CG: Why is that the case? Why are so many companies so bad at executing, what are generally quite good strategies?
Why do people battle with execution?
TM: I think the answer is that first of all, they don’t realise how difficult it is. They assume that because they’ve got a whole bunch of clever people in their organisations, that it’s going to happen. They assume that because they’ve got a few goals and that they have the odd exco meeting where they talk about these matters or they maybe have a balanced scorecard. That it’s kind of going to happen automatically and it doesn’t happen automatically. Stuff in an organisation falls through the cracks very quickly. People get busy with other things, they get distracted by other things. They don’t quite understand what the intention was in the beginning and so forth.
CG: Is part of this the old thing about a plan, a battle plan never surviving first contact with the enemy?
TM: It’s exactly that, so that’s the first part of what I touched on, which is that the future changes quickly and it makes the plan obsolete. But as I say, the second part is, the processes inside the organisation simply do not get the strategy done.
The point was that increasingly over the last dozen or so years experts have come to acknowledge that there’s a very fine line between the two things, if there’s a line at all. In fact, Roger Martin who ran the Rothman School in Canada, who is a very fine writer on management, has just published a piece in the Harvard Business Review which is titled Strategy Is Execution.
This is something I’ve been writing about for many years because it’s quite obvious, but the two things have been separated. You’ve had experts, and you still do have, experts in strategy, in other words, designing strategy and cooking up all these wonderful ideas. Then you have experts in execution and it’s ridiculous.
CG: How do you overcome that? How do you instil this culture of superb execution in the organisation?
How do business’ work on their execution?
TM: I think it’s easier than people think. Let me turn back to an interview I did with Edgar Schein in Boston about 5-6 years ago, maybe a bit longer than that. Edgar Schein is probably the premier expert in the world on culture, on corporate culture. He’s a really renown, he’s professor emeritus at MIT and has many fine books about this matter.
Schein makes the point that when he talks to a business about changing its culture, the first thing he asks them is: what are you actually trying to do? He goes on to say that if you focus on doing the thing that you need to do, on doing the right things, the hearts and minds will follow.
Assume that you can change the hearts and minds and then the writings will get done is a big mistake. So, the mistake companies make is that they don’t focus intensely enough on getting the right thing done. What I’ve done over the years is I’ve developed a process of 30 Day Strategy Making. Many people look at this and they say: look, this is ridiculous.
We work on 100 day cycles or six monthly cycles or whatever else it is and they think that’s very quick. The reason for compacting it is that it puts people under pressure. It forces you to define exactly what you are trying to do and not be flabby about the goals that you are setting down.
It puts enormous pressure into the system for things to get done. It gives you the opportunity to review very quickly whether they are really sensible or not and whether the people responsible for them can get them done or not. You can learn very quickly about what you might do next.
There’s a whole bunch of advantages from that process. What you need to do then, on a monthly basis, sit down and say: okay, what are we going to do in this next month? Some goals might be things that are going to take you a year. But the question is, what are you going to do in the next 30 days that will help you make significant progress towards that goal.
In 30 days’ time you sit down and say: okay, how did we do, what are we going to do in the next 30 days and this enables you to hold individuals absolutely accountable for important results. It’s a growth process for the people who are involved. It’s a learning process for the entire team and it actually gets results for the organisation. That’s what companies tend not to do, but it’s what they absolutely should do.
It’s not as difficult as it seems
CG: You make it sound very simply Tony, but if I can come back to your list of 8 critical practices, again, many of them sound quite simple. Learn from what’s happening in the world and adapt faster than rivals, you say, but actually it’s quite difficult to do that.
TM: Well, if I come back to that second principle you just talked about, it’s not difficult at all. The reason that companies can’t learn fast is that they don’t tap the hearts and minds or the brains of all their people. There’s a terrific book just come out, called Superforecasting by Philip Tetlock, who is an expert in how decisions are made in conditions of extreme uncertainty and turbulence.
He makes the point, after really extensive research over many years, that very often if you involve a lot of people, even amateurs, in understanding the environment; they are going to make much more accurate forecasts than the expert would because they’ve got a multiplicity of perspectives that can be added together.
In an organisation, it’s exactly the same. The CEO sits in his office and he speculates on what the future is going to look like and he tries to make some assumptions. Why doesn’t he use the sales people? Why doesn’t he use the marketing people or the production people or whoever else as the eyes and ears of the organisation? Because it dramatically magnifies your capabilities, your exposure to the world.
Sensing what’s going on outside can be made much easier than it is in most organisations, but we don’t involve everybody in doing that. We say: Chris, your job is to look after Machine X or your job is to do product management, so don’t think about this other stuff, that’s my job, I’m the strategist. That’s lunacy.
CG: You’re saying then, get back to the basics in every area of the business, get back to the basics and if you do, you’ll find that business is quite simple.
Getting down to basics
TM: Yes and just on that point, over the last period of this recession, from about 2008, one thing that I’ve noticed in company after company that I’ve worked with. Is that when I get called in initially, for some sort of help of a strategy; the brief from the CEO or one of the other senior people invariably asks me to help them think out of the box. Develop wonderful innovations, blue sky thinking and so forth.
But when I then dig into the organisation and ask them very simple questions about what’s going on in the organisation, what I invariably discover is that the problem is not the lack of innovation of blue sky thinking and so forth, the problem is that the basics are not being attended to.
To put it colloquially, the tyres are flat and the gas tank is empty and they wonder why this damn thing won’t take off. So there’s a very critical balance between getting the basics right and all that imperative blue sky stuff. Companies need to be very careful that they don’t forget about the first because they’re obsessed about the second. That is the kiss of death.
CG: Sound advice there from bestselling author and strategist, Tony Manning. Tony’s new book, once again, What’s Wrong With Management and How To Get It Right. Tony, thank you for joining us on Old Mutual Live Business.