Plans or strategies don’t get results. Execution does.
At a recent meeting with a board member, we were discussing their company’s issues. The non-executive director was lamenting that whilst the CEO was talented, with plans that looked good in theory and that the board of directors approved, the plans were rarely put into practice.
In my career as a turn-around specialist manager, CEO/leader and now management consultant, my experience is that failure to execute is very common. In working with CEO/leaders that have built strong businesses or successfully turned around struggling businesses, I have found that they have clear strategies that they execute relentlessly as an active leader with their team strongly aligned to ‘make it happen’.
Why don’t CEOs and managers execute?
There is no simple answer to this question. Here are a few reasons that I have observed:
- Inexperience. I am not referring to newly hired CEO’s or senior managers. Provided the hiring/promotion process has been well managed, these people will have a demonstrated successful background of dealing with the issues confronting the organisation. Inexperience does become a factor where a person is promoted internally based on their tenure or if they are ‘the politically correct’ appointment.The outstanding issue that I see now is where business situations change and the incumbent CEO/leader does not have the current experience to deal with it because they have been operating for too long in ways that are no longer relevant.The issue may be a rapid disruption in the business or the market or it may be that the organisation has been slowly overtaken incrementally without the leader noticing the change until it is completely obvious, if not too late. The CEO/leader can find themselves in a situation that they have never experienced before and they do not have the skills or the knowledge to deal with the new situation.
- Lack of Authority. The CEO/leader may appear to have the authority required to implement the strategy however when it comes time to execute, they may not have the necessary delegation required. On the one hand they may have been given the authority to set the strategy in motion, only to find that on the other, there is regulation in the organisation that will not allow it to happen. For example, it is common for ‘Country Managers’ of multinational organisations to gain approval from their manager for bold sales strategies to increase business in their geography only to find that the HQ Finance department will not allocate the necessary funds or that the Marketing department does not agree with the strategy. Often these CEO/leaders carry the title of “VP”, “MD”, “CEO” or similar but in reality they are the Sales Manager that is held accountable for their sales results having no ability to fully execute the strategy in their market.
- Insecurity. This is as much about the organisation’s culture as it is about the personal inclination of the CEO/leader.The culture of an organisation may not support Leaders but tolerate Managers. Leaders have a vision, share it and marshal their teams to execute strategies that will achieve results in line with the vision, even if that means changing the status quo and taking calculated risks. Managers follow the process, dividing the tasks and allocating the available resources toward achieving their allocated budgets.I have witnessed many examples of Leaders that have worked relentlessly to achieve outstanding results only to be removed (or quit) because they have upset others in the organisation or the board by challenging the status quo or missing some arbitrary target that is set along the way. Often the Manager that takes over the Leader’s patch gains the glory for the work that they have inherited because the new Manager is more adept at managing the upward politics.Where this ‘don’t rock the boat’ culture exists, lip service will be paid to creating strategies. The astute Managers will ensure that they are secure by only committing to incremental improvement or setting very low expectations so that they do not set bold strategies that require precise execution.
- Fear of failure. This is the domain of the personality of the CEO/leader. Whilst they may have the experience and skills, they may deem it too risky to execute a strategy that will create a significant impact on the business. Whilst the culture of the business to support them is a factor, it is more likely that a leader will not execute a bold strategy if they fear failure due to the organisation’s lack of resources to effectively execute it. They fear failure will lead to a “black mark” on their CV.
- Managing by being a ‘Friend’. Bold strategies often involve changing organisation structures, re-allocating resources to new target pursuits, cutting product lines or service offerings, introducing new talent that has the required skill/expertise to execute the strategies etc. Where the CEO/leader has relied on ‘leading by being a friend’ or being liked by everyone (in Australian terms ‘being a mate’) it is very difficult to implement the necessary organisational changes that decisive execution demands because it will be taken personally by the affected people.I have seen CEOs ‘shelve’ perfectly good strategies because they could not bring themselves to alter the employment of people that they had developed friendships with over the years. By so doing, they not only jeopardized their own position, they put the jobs of their friends and the entire company at significant risk.
- Lack of vision. Driving a strategy requires the CEO/leader to have a clear vision of what they are leading their organisation to achieve. If the vision is not compelling, the day to day ‘busyness’ of life at the top of an organisation makes it easy to lapse into a sense of lethargy regarding the strategy because too many other matters absorb valuable time and mindshare.The lack or softness of a vision will be apparent to the organisation so there will be no ‘bottom up’ momentum to develop plans or fulfil any plans that may have been formulated in support of the strategy. The organisation falls into ‘business as usual’ which will mean it loses competitive advantage to any competitor(s) with a highly motivated CEO/leader that is executing their strategy relentlessly toward a compelling vision.
- Exhaustion. I recently wrote an article “The Loneliness of a CEO” which received thousands of hits and many comments. [See: https://lseconsulting.net.au/2018/05/01/the-loneliness-of-a-ceo/ ] Exhaustion is another major issue as a CEO/leader. The organisation is relying on them for its direction and the ‘passion from the top’ to keep it performing at its best. I have seen very competent CEO/leaders move from being highly driven and competent to being overworked, stressed and struggling to keep up with the relentless evolution of their respective markets. Loneliness is a constant reality for CEO/leaders as is exhaustion of both energy and ideas.Just as an athlete becomes exhausted at the end of a long endurance event, CEO/leaders become exhausted after long periods in the same role. As the exhaustion sets in, the ability to execute diminishes. They are no less talented and have ample experience but they lack the energy to effectively execute the strategy.
What can the CEO/leader do to execute their strategies and lead their organisations to complete the plans that will gain the required results?
- Stay current. Markets move. Competitors innovate. New competitors enter markets and others fall by the way side. Business management methods and technology evolve. It is the duty of the CEO/leader to devote time and energy to ensuring that they are aware of new trends, have expert advice across the many facets of the business and, most importantly, that they are enabling their teams to keep themselves and their respective organisations current.
- Have authority. There is no point developing and committing to a course of action if you do not have the authority to execute it. The astute CEO/leader assesses their role and where they identify that they do not have the authority to properly execute, they achieve the necessary authority or leave. If you are a talented CEO/leader but the organisation you are working for will not enable you to perform at your best, you are wasting your talents, their money and worst of all, you are letting down the stakeholders of that organisation.
- Develop your own security. Be very clear about the culture of the organisation where you are being appointed CEO/leader. If your role is one that requires the execution of a bold strategy, ensure that you have the support of the most senior sponsors whether they are the owners or the board. Execution requires a significant amount of fearlessness. You have to decide whether you are going to assume the risk of driving for strong results that will see the business prosper or being satisfied as head of an average organisation that will eventually be overshadowed by more agile competition. Either way, your position is at risk. The upside of being fearless is that you may end up leading a superior organisation as opposed to managing a shrinking business that is continually struggling for its survival.
- Lead by example not being friends. As the name suggests, organisations are organic. They evolve, change, adapt or die. No one has a job for life any more – that is a quaint concept from the mid-20th century that was championed by the Japanese who no longer support it. Honest working relationships mean that everyone in the business, from top to bottom, knows that their role is only as secure as their performance and that of the company.I am reminded of Lee Iococca who turned Chrysler around after commencing as CEO of the foundering company in 1979. As a key part of his rescue strategy, along with many bold actions that included the near impossible task of securing a loan from the U.S. Government, he had to get the Unions to agree for a significant staff reduction and wage cut for all of the workers. He told them: “I’ve got thousands of jobs at 17 bucks an hour. I’ve got none at twenty. So you better come to your senses.” (Iococca, 1984). Failing to make the difficult decisions that are part of executing a strategy because it will upset your ‘friends’ in the business means, similar to Iococca’s ultimatum to the unions, that you are jeopardizing the company and all of the jobs of the people it employs.
- Demonstrate a shared Vision. People are motivated for their own reasons, not yours. To work hard toward executing a strategy, people must see a purpose for themselves and the organisation. Provided that you have a clear, shared vision for the organisation with a well-defined strategy that will enable it to continually move toward the vision, you will be able to lead the team effectively toward success. Regular updates from the CEO/leader to communicate the progress of the organisation, share results and gain feedback will ensure that execution of the strategy is a key part of the culture.
- Stay fresh. The CEO/leader owes it to their organisation and its stakeholders to be highly self-aware, always working toward keeping themselves healthy in mind and body. This means taking the time to care for their health and fitness, pay attention to their personal life, keep up with current trends and taking the necessary recreation breaks. A fatigued mind cannot be creative. A fatigued body cannot withstand the stresses of the pressure cooker that is a CEO/leader role.Part of staying fresh is ensuring that the organisation’s leadership structure is fresh. Delegation of critical functions to others is an essential part of the leadership role. The CEO/leader must have the time and mental ‘bandwidth’ to think. Enabling others to assume critical roles then to add their creativity, skills and knowledge to them is an essential part of keeping the CEO/leader and the organisation fresh. The mark of a good leader is that they ‘know when to go’. A time will come when they know that they have done their job, executed effectively and built a resilient organisation so that they can elegantly exit, most likely with their successor in place.
The CEO that makes it happen is highly adept at developing winning strategies and even more artful at leading the organisation to execute with alacrity.
© Philip Belcher, LSE Consulting Pty Ltd.
Please contact LSE Consulting to find out how we can assist you to execute your strategy and related plans or any other strategic business issues.
