The Discipline of Execution - Ram Charan

When companies fail to deliver on their promises, the most frequent explanation is that the strategy was wrong. But the strategy by itself is not often the cause. Strategies most often fail because they aren’t executed well — things that are supposed to happen don’t happen. Execution is the great unaddressed issue in the business world today. Its absence is the single biggest obstacle to success. As an adviser to senior leaders of large and small companies, I have observed that strategic plans often fail in practice. Many leaders place too much emphasis on intellectualizing and philosophizing about high-level strategy, and not enough on implementation.In fact, so much thinking has gone into strategy that it is no longer an intellectual challenge. You can rent any strategy you want from a consulting firm; However, most often, the difference between a company and its competitor is not its strategy, but its ability to execute. Execution helps business leaders choose a more robust strategy. You can’t craft a worthwhile strategy if you don’t at the same time make sure your organization has or can get what’s required to execute it, including the right resources and the right people. But far too often, execution is neglected, because it hasn’t yet been recognized or taught as a discipline. The real problem is that execution just doesn’t sound very sexy. People think of execution as the tactical side of business, something leaders delegate while they focus on the perceived “bigger” issue. This idea is completely wrong. Execution is not just tactics — it is a discipline and a system. It has to be built into a company’s strategy, its goals, and its culture. No worthwhile strategy can be planned without taking into account the organization’s ability to execute it. The heart of execution lies in three core processes: the people process, the strategy process, and the operations process. Every business and company uses these processes in one form or other. But more often than not, they stand apart from one another like silos. People perform them by rote and as quickly as possible, so they can get back to their perceived work. The key to successful execution is linking people, strategy, and operations together.

The People Process

The people process is the most important of the three processes. After all, it’s the people of an organization who make judgments about how markets are changing, create strategies based on those judgments, and translate the strategies into operational realities. To put it simply and starkly: If you don’t get the people process right, you will never fulfill the potential of your business.

A robust people process does three things:

1. It evaluates individuals accurately and in depth.
2. It provides a framework for identifying and developing the leadership talent needed to execute strategies down the road.
3. It fills the leadership pipeline that’s the basis of a strong succession plan.

The right people are in the right jobs when information about individuals is collected constantly and leaders know the people, how they work together, and whether they deliver results — or fail to.

The Strategy Process

Strategy is directly related to the people process, because strategy comes from the minds of people. If a company has the right people, in all likelihood its strategies will be in sync with the realities of the marketplace, the economy, and the competition.

The basic goal of any strategy is simple enough: to win the customer’s preference and create a sustainable competitive advantage, while leaving sufficient money on the table for shareholders. It defines a business’s direction and positions it to move in that direction. Why, then, do so many strategies fail?

Few understand that a good strategic-planning process also requires the utmost attention to the hows of executing the strategy. A contemporary strategic plan must be an action plan that business leaders can rely on to reach their business objectives. In creating it, you as a leader have to ask whether and how your organization can do the things that are needed to achieve its goals.

Developing such a plan starts with identifying and defining the critical issues behind the strategy. You don’t just put a plan together and then go back and see whether it can help you. Decide on the objectives at the beginning. What do you want to get done? What are the critical issues you need to understand better? Why is it going to be helpful to you? As you fill in the plan around those objectives, you have got a chance to accomplish something.

To be effective, a strategy has to be constructed and owned by those who will execute it. Staff people can help by collecting data and using analytical tools, but the business leaders must be in charge of developing the substance of the strategic plan.

Business leaders are in the best position to introduce new ideas, to know which ideas will work in their marketplace and which ones won’t, to understand what new organizational capabilities may be needed, to weight risks, to evaluate alternatives, and to resolve critical issues that planning should address but too often doesn’t.

When guided by a leader who has a comprehensive understanding of the business and its environment, all the members of the group can contribute something and benefit by being part of the robust dialogue that’s central to the execution culture. Discussing the strategy creates excitement and alignment, and the energy that these discussions build strengthens the process.

The strategy also has to include specific milestones to bring reality to the plan. If the business doesn’t meet milestones as it executes the plan, leaders have to reconsider whether they’ve got the right strategy after all. Periodic reviews can help you to understand what’s happening and what turns in the road are necessary.

The Operations Process

The strategy process defines where a business wants to go, and the people process defines who’s going to get it there. The operations process provides the path for those people. It breaks long-term output into short-term targets.

In the operating plan, the leader is primarily responsible for overseeing the seamless transition from strategy to operations. She has to set the goals, link the details of the operations process to the people and strategy processes, and lead the operating reviews that bring people together around the operating plan. She has to make timely, incisive judgements and trade-offs in the face of myriad possibilities and uncertainties. She has to conduct robust dialogue that surfaces truth. At the same time, the leader is learning — about her people, and how they behave when the rubber meets the road, and about the pitfalls that beset elegant strategies.

Again, as with the strategy process, it’s not just the leader alone who has to be present and involved. All of the people accountable for executing the plan need to help construct it.

Typically, operating plans are based on a budget that has been previously prepared. This is backward: the budget should be the financial expression of the operating plan, rather than the other way around.

Budgets often have little to do with the reality of execution because they’re numbers and gaming exercises; whereas, people spend months figuring out how to protect their interests instead of focusing on the company’s critical issues. The financial targets are often no more than the increases form the previous year’s results. The resulting rigid budget can lead to missed opportunities.

An operating plan addresses the critical issues in execution by building the budget on realities.

The first step in building an operations plan is to debate the assumptions behind your goals; for example, who is the customer? What’s the need? What is the competition doing? Is your value proposition good enough?

The next step is to build the operating plan itself. It’s a three-part process:

1. Set the targets.
2. Develop the action plans and make the necessary trade-offs between short- and long-term goals.
3. Secure agreement and closure from all the participants, establishing follow-through measures to make sure people are meeting their commitments.
4. Finally, follow through with the operating plan, making sure all parties take accountability for what they have agreed to do, establishing contingency plans, and conducting quarterly reviews.

To have realism in your strategy you have to link it to your people process. Do you have the right people in place to execute the strategy? If not, how are you going to get them?

Then you’ve got to link your strategic plan’s specifics to your operating plan, so that the multiple moving parts of the organization are aligned to get you where you want to go.

The result is successful execution, and, ultimately, a successful business.

The Power of Simplicity

In this post, I would highlight some of the key thoughts and learnings shared in the book titled "The Power of Simplicity" by Jack Trout.

Introduction

John Sculley (while still head of Apple Computer) ... “Everything we have learned in the industrial age has tended to create more and more complication. I think that more and more people are learning that you have to simplify, not complicate. Simplicity is the ultimate sophistication.” Business is not that complex. It’s just that there are too many people out there making it complex.

The Power of Simplicity - The Basics of Simplicity

Simplicity

Audiences “do not want complicated and emotionally complex stories that remind them of their own frustrations and powerlessness.” Columnist Richard Reeves. By oversimplifying a complex issue, you are making it easy for people to make a decision without too much thought. Consider the complex trial of O.J. Simpson and how Johnnie Cochran put the essence of his argument into one memorable line:

“If the glove doesn’t fit, you must acquit.” Simplicity requires that you narrow the options and return to a single path. In hair care alone, by slashing the number of items in half, the company increased its share by 5 points. (Proctor & Gamble). Our friends at P&G certainly weren’t afraid of simplicity.

A simple summation: Complexity is not to be admired. It’s to be avoided.

Common Sense

You must draw on language, logic and simple common sense to determine essential issues and establish a concrete course of action. – Abraham Lincoln

Henry Mintzberg, professor of management at McGill University said, “Management is a curious phenomenon. It is generously paid, enormously influential and significantly devoid of commonsense.”

Ross Perot, in a visit to the Harvard Business School, observed, “The trouble with you people is that what you call environmental scanning, I call looking out the window.” To think in simple, commonsense terms you must begin to follow these guidelines;

1. Get your ego out of the situation. Good judgment is based on reality.
2. You’ve got to avoid wishful thinking.
3. You’ve got to be better at listening.
4. You’ve got to be a little cynical. Things are sometimes the opposite of the way they really are. That’s often the case because someone is pursuing their own agenda.
   
   

A Simple Summation – Trust your common sense. It will tell you what to do.

Complex Language.

When Shakespeare wrote Hamlet, he had 20,000 words with which to work. When Lincoln scribbled the Gettysburg Address on the back of an envelope there were about 114,000 words at his disposal. Today there are more than 600,000 words in Webster’s Dictionary. Tom Clancy appears to have used all of them in his last thousand-page novel. Language is getting more complicated. As a result, people have to fight off the tendency to try out some of these new and rarely used words. What if some famous adages had been written with a heavier hand and some fancier words? Here’s a sampling of some simple ideas made complex: Pulchritude possesses profundity of a merely coetaneous nature. (Beauty is only skin deep.). It is not efficacious to indoctrinate a superannuated canine with innovative maneuvers. (You can’t teach old dog new tricks.)Visible vapors that issue from carbonaceous materials are a harbinger of imminent conflagration. (Where there’s smoke there’s fire.)

A revolving mass of lithic conglomerates does not accumulate a congery of small green bryophitic plants. (A rolling stone gathers no moss.)TV journalist Bill Moyers had this good advice for good writing: “Empty your knapsack of all adjectives, adverbs and causes that slow your stride and weaken your pace. Travel light. Remember the most memorable sentences in the English language are also the shortest: ‘The King is dead’ and ‘Jesus wept.’” Jack Welch, the highly successful chairman of General Electric, put it well when he said in an interview in the Harvard Business Review: “Insecure managers create complexity. Frightened, nervous managers use thick, convoluted planning books and busy slides filled with everything they’ve known since childhood. Real leaders don’t need clutter. People must have the self-confidence to be clear, precise, to be sure that every person in their organization – highest to lowest – understands what the business is trying to achieve. But it’s not easy. You can’t believe how hard it is for people to be simple, how much they fear being simple. They worry that if they’re simple, people will think they’re simple-minded. In reality, of course, it’s just the reverse. Clear, tough-minded people are the most simple.”

1. You can win the fight against fog by adhering to 10 principles of clear writing.
2. Keep sentences short.
3. Pick the simple word over the complex word.
4. Choose the familiar word.
5. Avoid unnecessary words.
6. Put action in your verbs.
7. Write like you talk.
8. Use terms your readers can picture.
9. Tie in with your reader’s experience. (The essence of positioning.)
10. Make full use of variety.
11. Write to express, not impress.
    
    

Studies show that people recall only 20 percent of what they heard in the past few days. In a July 10, 1997 article, The Wall Street Journal reported that we’ve become a nation of blabbermouths who aren’t listening at all. We’re just waiting for our chance to talk. Never be afraid to say, “I don’t get it.” You have to be intolerant of intellectual arrogance.

Don’t be suspicious of your first impressions. Your first impressions are often the most accurate.

A Simple Summation – Big ideas almost always come in small words.

Management Issues

Information

There’s no escaping what David Shenk described in his book Data Smog, the “noxious muck and druck of the information age.” The first challenge is to acknowledge that you can’t absorb everything you think you need to know. And when you’re the one doing the communicating, be more economical in everything you write, publish, broadcast, or post online. You’re supposed to be a decision maker, not an information expert. “Once complexity is reduced, uncertainty is minimized, and decision makers can start to take charge of their jobs and their lives.” Dean Anderson, founder of COR Healthcare Resources. Demand that any report that reaches you have a one-paragraph or one-page summary. If it doesn’t, send it back. Send brief responses. When you’re presenting information on a screen, keep it simple. Seven lines of text is the limit. One visual per slide is the ideal. Professor Hugh Heclo of George Mason University observes: “In the long run, excesses of technology mean that the comparative advantage shifts from those with information glut to those with ordered knowledge, from those who can process vast amounts of throughput to those who can explain what is worth knowing, and why.” A

Simple Summation – If you uncluttered your mind, you’ll think more clearly.

Consultants

Jack Welch’s management mantras are pretty simple. First, you tell your people that you believe in being number one or number two in a field. If not, they run the risk of being sold ... next it was the “boundary less” sharing of ideas, a process that breaks down corporate hierarchies to make sure that information flows up and down ... As Forbes magazine wrote, “the secret of Jack Welch’s success is not a series of brilliant insights or bold gambles but a fanatical attention to detail.”

Competitors

Business today is not about reengineering or continuous improvement. Business is about war. The world’s 100 largest economies, 51 are not countries but corporations. The 500 largest accounts for a stunning 70 percent of world trade. In simplest terms, to be successful today a company must become competitor-oriented. It must look for weak points in the positions of its competitors and then launch marketing attacks against those weak points. Four types of marketing warfare...

1. Defensive Warfare Is What Market Leaders Wage. Leadership is reserved for those companies whose customers perceive them as the leader ... A rolling company gather no competitors.
2. Offensive Warfare Is the Strategy for the Number Two or Three in a Category. Papa John’s attacked Pizza Hut at its weak point, ingredients. John Schnatter, the founder, got his hands on the best tomato sauce in the country. It was a sauce that the other chains couldn’t buy. This became the cornerstone of his concept, “Better Ingredients. Better Pizza.”
3. Smaller or New Players That Are Trying to Get a Foothold in a Category by Avoiding the Main Battle Pursue Flanking Warfare.
4. Guerrilla Warfare Is Often the Land of the Smaller Companies. If you’re at war, it’s important that you adopt the qualities of a good general. You must be flexible. You must have mental courage. You must be bold. You must know the facts. You need to be lucky.
   
   

Strategy

In real estate it’s location, location, location. In business it’s differentiate, differentiate, and differentiate. – Robert Goizueta, former Coca-Cola CEO. In a world where everyone is after your business you must supply your customers with a reason to buy you instead of your competitor. If you don’t offer that reason, then you had better offer a very good price ... That reason is then packaged into a simple word or set of words that is positioned in the ultimate battleground, the minds of your customers and prospects. We call that “positioning.” Unfortunately, what many companies end up with is not differentiating ideas, but meaningless slogans. Differentiating yourself comes in three parts:
Having a simple idea that separates you from your competition.
Having the credentials or the product that makes this concept real and believable.
Building a program to make your customers and prospects aware of this difference.

Rosser Reeves wrote a landmark book called Reality in Advertising. In it he coined the term” unique selling proposition or USP. This was something you looked for in your efforts to differentiate your product. A Simple Summation – If you’re not different, you’d better have a low price.

Customer orientation

Many marketing people live in a dream world. They believe in the fantasy of the virgin market ... There are times when customer orientation can make a difference ... when you make “service” your differentiating idea ... in many ways Nordstrom is a brilliant example of taking a simple differentiating idea – “Better customer service – and elevating it to a coherent marketing direction. Consider the “company structure,” which is an upside down pyramid with you know whom on top:

We especially like the employee handbook, which consists of a single five-by-eight card that reads:

WELCOME TO NORSDTROM
We’re glad to have you with our Company.
Our number one goal is to provide
Outstanding customer service.
Set both your personal and professional goals high.
We have great confidence in your ability to achieve them.
NORDSTORM RULES
Rule #1: Use your good judgment in all situations.
There will be no additional rules.
Please feel free to ask your department manager,
Store manager or division general manager
Any questions at any time.

One aspect of a marketing program that is often overlooked is that of reinforcing the perceptions of your existing customers. Make them feel smart about being your customers. Chapter 9 – Annual Budgets ... here’s an untraditional approach that maximizes that annual pot of money – one that can get a certain number of jobs done properly.
Step 1. Prepare Marketing Plans.
Step 2. Rank Product Opportunities.
Step 3. Assign Advertising Tasks.
Step 4. Stop When You’re out of Money.

A Simple Summation – Put your money where your opportunities are, not where they were.

Prices

There are some practical pricing considerations that have been proven over and over in the marketplace. You’ve Got to Stay in the Ballpark. People Will Pay a Little More for Perceived Value. High-Quality Products Should Be More Expensive. High-Priced Products Should Offer Prestige. Late Entrants Usually Enter on Price. High Prices and High Profits Attract Competitors. Don’t Train Your Customers to Buy on Price. The commandments of discounting: Thou shalt not offer discounts because everyone else does. Thou should be creative with your discounting. Thou should use discounts to clear stocks or generate extra business. Thou should put time limits on the deal. Thou should make sure the ultimate customer gets the deal. Thou should discount only to survive in a mature market. Thou should stop discounting as soon as you can. It’s Hard to win with a Low Price. Low prices only work where you have a structured, low-cost advantage over your competition. Southwest Airlines has cost advantages over the major airlines (no unions, one kind of airplane, no reservation system, etc.) Make Sure You Build Some Promotional Dollars into Your Price. Leadership Issues

Mission Statements

It’s current thinking that a mission statement helps define what a company wants to be when it grows up. After all, if a CEO needs a committee to figure out what the basic business is about, then that company needs a new CEO, not a mission statement.

A Simple Summation – A mushy mission statement is an indication that a company doesn’t know where it’s going.

Leadership

How to be an effective leader isn’t worth a whole book. Drucker gets it into a few sentences. “The foundation of effective leadership is thinking through the organization’s mission, defining it and establishing it, clearly and visibly. The leader sets the goals, sets the priorities, and sets and maintains the standards.” It’s no secret that most of the world’s greatest military strategists started at the bottom. Karl von Clausewitz learned his military strategy the best way and the hardest way – by serving in the front line at some of the bloodiest and most famous battles of military history. The unpretentious Sam Walton traveled to the front lines of every one of his Wal-Mart stores throughout his life. He even spent time in the middle of the night on the loading docks, talking with the crews. How do you get the bad news as well as the good? Once the word gets around that a CEO prizes honesty and reality, a lot of good information will be forthcoming. The best leaders share their wisdom with the next generation. Noel Tichy, professor at the U of Michigan Business School, says, “Great leaders have to be great teachers.” He estimates that Jack Welch, GE’s revered chairman and CEO, devotes 30 percent of his time to leadership development. (Welch even teaches once a week at GE’s executive training institute.) “That’s where he gets his leverage,” claims Professor Tichy. The best leaders know that direction alone is no longer enough. The best leaders are storytellers, cheerleaders, and facilitators. They reinforce their sense of direction or vision with words and action. A visible leader is a very powerful weapon with customers and prospects. This kind of leader offers unique credentials for a company. A Simple Summation – Good leaders know where they are going.

Long-term Planning

In the early 1960s General Electric emerged as the pioneer in strategic planning. GE created a large, centralized staff of planners to ponder the future. Consultant McKinsey & Co. helped GE view its products in terms of strategic business units, identify competitors for each, and evaluate its position against them. History is filled with bold forecasts that didn’t pan out. Here’s a sampling of predictions that flopped: “Airplanes are interesting but of no military value.” Marshal Ferdinand Foch, French military strategist, 1911. “The horse is here to stay, but the automobile is only a novelty, a fad.” President of Michigan Savings Bank, 1903, advising Henry Ford’s lawyer not to invest in the Ford Motor Co. “What use could this company make of an electrical toy?” Western Union president William Orton, rejecting Alexander Graham Bell’s offer to sell his struggling telephone company to Western Union for $100,000. “Who the hell wants to hear actors talk?” Harry Warner, Warner Brothers, 1927.

“We don’t like their sound. Groups of guitars are on the way out.” Decca Records’ statement on rejecting the Beatles, 1962. “There’s no reason for any individual to have a computer in their home.” Kenneth Olsen, founder and president of Digital Equipment Corp., 1977. It might shock you to know that GE is out of long-term planning. Jack Welch nuked GE’s central planning department and pushed the responsibility for strategy down to the 12 operating units. They meet with top management over a four-day period. The focus is on strategy both near term and a four-year look into the future.

Organization...

Some words about decentralization. Continuing the orchestra analogy, this is where a company gives control of different parts of the orchestra to different conductors. Conventional wisdom says that decentralization is good. It gets you closer to the market. Our view is that decentralization is bad. It dissipates your forces, adds to complication, and makes it difficult to keep things focused. Al Ries ... in his book Focus, puts decentralization in a clear focus.” If nothing ever changed, a decentralized company would be more efficient and effective than a centralized company. There’s no question that decentralization contributes to a sense of responsibility on the part of both the operating unit’s management and employees. But how does a decentralized company develop a focus? It doesn’t. Decentralization removes top management’s ability to point the company in one specific direction. And then to change that direction when conditions in the marketplace change. Decentralization is efficient, but inflexible.” Almost by definition, a decentralized company cannot have a focus on a correct strategic behavior or strategy. It can only serve as a center for accumulating financial results ... There’s no music, just sounds (i.e. in a too complicated company). A Simple Summation – The future belongs to a well-organized and well-focused company.

Marketing

Marketing, in the fullest sense, is the name of the game. So it better is handled by the boss and his line. Not staff hecklers. – Robert Townsend Up the Organization A differentiating idea is a competitive mental angle. The idea must be competitive in the total marketing arena, not just competitive in relation to one or two other products or services. Second, a differentiating idea must have a competitive mental angle. In other words, the battle takes place in the mind of the prospect. In our definition, a strategy is not a goal. It’s a coherent marketing direction. A strategy is coherent in the sense that it is focused on the idea that has been selected. Second, a strategy encompasses coherent marketing activities. Product, pricing distribution, advertising – all the activities that make up the marketing mix must be coherently focused on the idea.

Great ideas,” said Albert Camus, “come into the world as gently as doves. Perhaps then, if we listen attentively, we shall hear amid the uproar of empires and nations a faint flutter of wings, the gentle stirring of life and hope.” Opportunities are hard to spot because they don’t look like opportunities. A Simple Summation – Show me the idea.

New Ideas

Your idea needs to be original only in its adaptation to the problem you are currently working on. – Thomas Edison Innovation has very little to do with genius. It has very little to do with inspiration. Let’s take an honest look at how the mind gets a new idea. It happens in three steps.

Preparation. You immerse yourself in the problem. You collect information, data, and opinions. You tell your brain to get to work.
Incubation. While you are busy doing other things, a part of your unconscious mind is swirling. Your brain juxtaposes ideas, blends characteristics, funnels ideas together.
Illumination. A new and reasonably complete idea surfaces (seemingly out of nowhere). Voila! You’ve done it.

The simplest way to solve a problem is to borrow an existing idea. Military designers borrowed from Picasso’s art to create better camouflage patterns for tanks. The simplest way to invent a new product is to adapt an existing idea. The pop singer and composer Paul Simon was asked where he got the inspiration for “Bridge over Troubled Waters.” He was brutally honest. He said he was carrying around two melodies in his head – a Bach chorale and a gospel tune from the Swan Silvertones – “and I just pieced them together.” Some smart folks in Florida capitalized on the fact that some people really didn’t want the bother of attending a big charity dinner, and would rather stay at home, so they invented the “non-invitation” invitation ... The annual Goodwill Industries dinner will not be held this year at the Americana Hotel. No cocktails will be served at 7 p.m. No dinner will be served at 8 p.m. The master of ceremonies will not be Art Linkletter. The Rev. Norman Vincent Peale will not read the invocation. The guest speaker will not be Dear Abby. Stay home and have a restful evening. But please send $50 per person or $100 per couple. Did this scheme work? Like gangbusters. In the years since, it has been adopted by other Goodwill chapters and by hospital charities. (Would it work for your favorite foundation? Go ahead. Borrow it.)

Use the following blueprint to make the most of an existing idea. (The blueprint itself is adapted from a checklist by Alex Osborn, author of Applied Imagination.)

1. Substitute.
2. Combine. What could you blend with an existing idea? What ingredients, appeals, colors, flavors? Lipton combined fruits and flavors with its tea to develop new iced teas.
3. Adapt.
4. Magnify or Minimize.
5. Put it to other uses.
6. Eliminate.
7. Reverse or rearrange.
   
   

Dale Carnegie, of Win Friends and Influence People fame, was a famous borrower. He once wrote: “The ideas I stand for are not mine. I borrowed them from Socrates. I swiped them from Chesterfield. I stole them from Jesus. And I put them in a book. If you don’t like their rules, whose would you use?”

A Simple Summation – Show me someone else’s idea.

Goals

Built to Last, James Collins and Jerry Porras talk glowingly about “Big Hairy Audacious Goals.” But if you look closely at their thesis, “goals” are mixed up with “bold moves.”

Growth

To us a simpler and more powerful objective is to shoot for share, not profits. As a market emerges, your number one objective should be to establish a dominant market share. Too many companies want to take profits before they have consolidated their position. A survey of 25 leading brands from the year 1923 proves this point. Today, 20 of those brands are still in first place. Four are in second place, and one is in fifth place. When you do get on top, make sure the marketplace knows it. Too many companies take their leadership for granted and never exploit it. Never finance the company’s losers with the earnings from the company’s winners, which is a typical accounting trick in a multi-product company. This dampens your ability to pour on the resources to your winners. In the effort to pursue “endless growth” Nike has fallen into what we call the line-extension trap. ... in business it’s differentiate, differentiate, differentiate. The more things you try to become and the more you lose focus, the more difficult it is to differentiate your product ... the sooner that Nike realizes that it’s not about logos but about differentiated products, the sooner its game will improve. In our experience, less is more.

People Issues

Motivation

The fragile bond between organization and employee has snapped. The attitude of many workers is, “We’re all essentially temps.” As Will Rogers once said in his understated way: “Even if you’re on the right track, you’ll get run over if you just sit there.” We were once in the audience when the CEO of a $100 billion global bank took the stage. Hundreds of crisply pressed suits leaned forward, awaiting the word. The CEO cleared his throat and said: “Our overriding objective is to provide quality products to quality clients in quality markets around the world.” Is there a competitive idea there? Is there a mental angle there? Platitudes do not a difference make. In fact, they do damage to today’s skeptical and suspicious workers by raising false expectations. What that CEO should be delivering is a platform of ideas on “how we’re going to kick butt,” followed by “here are the tools to do it with.”

Self-improvement

Here is some simple advice to deal with self-improvement issues.

Understand what’s going on here. In their book We’ve Had a Hundred Years of Psychotherapy and the World’s Getting Worse, James Hillman and Michael Venture explain the feebleness of new age enlightenment. “It’s the cultivation of the inner landscape at the expense of the outer world,” they say. “What you learn is mainly feeling skills. But you don’t find out anything about the way the world works.”
Leave personal growth to the person.
Start by improving the basics. Take an honest look at your workforce. Chances are, you’ve got people who don’t read well, don’t speak well, can’t compose a coherent memo, can’t read a balance sheet, and can’t turn on a computer. That’s where to start the training. “People have to be trained for exactly what they really do.” FedEx workforce focuses on the single, primary vision that created the company in the first place: overnight delivery. FedEx has trained its workers to ship and track packages so efficiently that the U.S. Army, in designing the supply system for the Gulf War, copied the training techniques of FedEx.
After the basics, work on skill building. “You never send a changed person back to an unchanged environment,” says the director of GE’s training programs. “That’s Organizational Development”
Remember, it’s called training, not recreation.

Success

To be successful today, there is only one simple approach: View yourself as a product rather than as an employee. In other words, success is finding a horse to ride. And you only find that horse when you shrug off your preoccupation with your inner self – when you open your mind to the outside world, when you search for success outside of yourself.

The Critics

Humans admire complexity even though they don’t understand it ... your critics’ comments will come in a number of different forms, so you should stand ready to defend yourself. Here are their favorite critiques:
You will be called “simplistic.” How could something that simple work? Here you look them in the eye and quote Thomas Hazlitt, the British essayist: “Simplicity of character is the natural result of profound thought.”
You will be accused of “not understanding.” You just don’t understand all the nuances. Here you quote Winston Churchill: “Out of intense complexities, intense simplicities emerge.”
You will be told “we know all that.” Henri Deterding, director general of Royal Dutch Oil: “Whenever I have met a business proposition which, after taking thought, I could not reduce to simplicity, I have left it alone.”
You will be charged with being “lazy.” Tell your critics what Edward Teller, the famous physicist, advised: “To pursue simplicity in life, in the world, in the future, is a most valuable enterprise.”

In Conclusion

Simplicity

Papa John’s Pizza ... founder, John Schnatter ... It’s all about better ingredients and quality and good old-fashioned hard work ... thirteen years ago we simply decided to make a better traditional pizza. We now make that product better than anybody does in the world. Chick-fil-A ... “We didn’t invent the chicken,” the ads say, “Just the chicken sandwich.” Southwest Airlines. Herb Kelleher has built what has turned out to be one of America’s most profitable and successful airlines. The airline was founded on the premise of keeping things simple. First there was only one kind of airplane, the Boeing 737. That made things simpler for the pilots and the maintenance people. Then there were no assigned seats ... no food at all ... no hubs ... easy on, easy off is the airline’s philosophy. The Palm Pilot Organizer. The Palm’s formula for success?

It was designed for just a few functions so that it’s a companion to PCs – not a replacement. The Kohl’s Department Stores. “We do 20 simple things that have impact taken together,” says CEO John Herma. “The key is the consistency of the execution.”

Strategic Planning – How to make it Effective and more Relevant?

I have been in the role of Strategic Planning for the last two-and-a-half years now. The first time I came to know that a function called Strategic Planning exists was during this time. Since then and till now, I have been involved only in the process of institutionalizing the Strategic Planning function in place in the two organizations I have worked for (including the current one). I have researched some of the literature available on the Strategic Planning function identifying some of the best practices available in contemporary business world. Though the research is still on, as part of my continuous learning process, I am yet to arrive at a consensus within me and amongst various other people on the whole philosophy behind the Strategic Planning Function and its processes.

Strategic Planning – An Oxymoron

There are innumerable amount of knowledge shared and written in this field, but all of those represents conflicting viewpoints on the whole philosophy of Strategic Planning. Management thinker Henry Mintzberg has labeled the term - Strategic Planning as an oxymoron. Business Strategies are never planned. Real business strategies are made informally – in hallway conversations, in working groups, and in quiet moments of reflection on long plane flights – and rarely in the paneled conference rooms where formal strategy meetings are held. Subsequent research in the field of strategic planning substantiates the point made by Mintzberg. Mintzberg’s views on the whole concept of strategic planning compliments the thought shared by Keinchi Ohme in his bestseller book ‘The Mind of the Strategist’ that the development of business strategies is as much a state of mind rather than a programmed thought process. Strategies are developed based on insights one has on the surrounding business environment which are based on one’s experience and knowledge.

Strategic Planning – Creating prepared minds through Learning

Sarah Kaplan and Eric D. Beinhocker in their article titled ‘The real value of Strategic Planning’ say “The goal of Strategic Planning process should not be to make strategy but to build prepared minds that are capable of making sound strategic decisions”.

As one of the former Senior Executive at GE Capital puts it – ‘Real Strategy is made in Real Time’. He saw the point of strategic planning not as predicting the future but as a learning exercise to prepare people for a future that is inherently uncertain. He also noted that, most processes are focused on creating plans and making decisions rather than learning.

Strategic Planning – the crucial link between Strategy and Operations

Kaplan and Norton in their seminal work on Balanced Scorecard provided for the first time a new dimension to Strategic planning process. They brought in the vital link between Planning and Execution. From ‘Thought to Action’; how successful companies implement strategies and achieve desired results on a continuous basis. They saw the role of Strategic Planning function as an orchestrate of Strategy Development and Deployment process. Their whole argument is based on this crucial link between Strategy and Operations. They call the Strategic Planning Function as the “Office of Strategy Management (OSM)”.

They argue that the typical planning function facilitates the annual strategic planning process but takes little or no leadership role in seeing that the strategy gets executed. This is where they find the usefulness of their tool – The Balanced Scorecard. This point is further substantiated by a recent survey by a renowned global management consulting firm, which revealed that “Greater satisfaction could come from improving company’s ability to align their people with their strategic plan and from monitoring progress against the plan”.

Most companies do realize that effective strategy execution requires communicating corporate strategy; ensuring that enterprise level plans are translated in to the plans of the various units and departments; executing strategic initiatives to deliver on the grand plan; and aligning employee’s competency development plans, and their personal goals and incentives, with strategic objectives. The OSM becomes the central point for coordinating all these tasks. The OSM might not do all the tasks but would definitely facilitate the entire process and ensures that strategies are executed.

Strategic Planning – Execution is the Key

While we are talking about the importance of Strategy Execution and the crucial linkage between strategy and operations; the other management thinker who comes to mind is Ram Charan. In his book titled ‘The Execution’ co-authored by Gary Bossidy, they provide some great case studies on the failure to execute some of the greatest strategies by some of the greatest companies around the world. He then goes on to provide a framework for ensuring execution of business strategies and get desired results. In one of the interviews to the Journal of Business Strategy, Ram Charan says ‘I wouldn’t say that strategic planning is dead, but it is now required to be more of an action plan. The most brilliant strategy in the world won’t work if your assumptions are wrong, especially in relation to whether you have the right people in place to make it happen. A strategy is not even worth writing down unless you can see how your company is going to make it happen. Once that road map is in place, you must have the people and mechanisms in place to continually adapt to a changing climate”.
In the same interview, he goes on to share his thoughts on the role of leadership in the whole strategic planning process and execution. He says – “Leaders don’t focus nearly enough on follow-through, on actually getting things done. Leading for execution is not rocket science, but it does require you as a leader to be deeply and passionately involved in your organization and have an honest feel for your capabilities and potential. Walk into any large bookstore and you’ll find dozens of books on strategy and leadership development. There is an endless supply of material on business tools and processes. Execution, however, is a specific set of behaviors and techniques that companies need to master in order to win. It is not a single “concept” or million-dollar idea. It is a discipline of its own, and the critical one for ongoing success, quarter after quarter.

According to a survey by a renowned global consulting firm – A significant number of respondents express concern about Executing strategy. 28% of the sample respondents say that their company produces a strategic plan that reflects the company’s goals and challenges but is not effective. Another 14% say the strategy and plans for executing it are not necessarily aligned with each other. Among the executives whose companies have a formal strategic planning process and who are satisfied with the results, 67% of them say aligning management with the strategy is an element of the strategic planning process and 78% of them say that their process leads to explicit objectives that are communicated through out the company.

Strategic Planning – Making it more Relevant and Effective

Though I cannot claim that the above research is complete in all respects and has been done to the minutest detail, it does give a fair idea on the thoughts that are floating around on the concepts and practice of Strategic Planning. This gives us good base for us to debate and build further thoughts on the issue under discussion.

Based on the above debate and thoughts put forth by many a people, I would like to make an attempt in bringing about some sort of a consensus and share my thoughts on how to make the strategic planning process more relevant and effective as a function and as process:

• All said and done, Strategic Planning is not dead. It is very much alive and its importance cannot be underestimated. However the challenge still remains as to what is the mandate for the function? What role does the function play in the context of an Organization’s overall objective?
• Strategic Planning function will always be a support function rather than a line function. It basically dons the role of a facilitator. It acts as a bridge between the Leadership/Senior Management and the Operational layer of the Organization.
• Strategic Planning is both intuitive/creative and analytical. You cannot have a polarized approach. Achieving the right balance is the key to success.
• While designing the Strategic Planning function and its processes, you cannot have a very narrow view of the organization and its business. The design has to be robust and holistic so that it encompasses the Organization issues in totality. More importantly, it should give enough room for a participative approach rather than an autocratic approach (52% the sample respondents in a global survey say that at their company, the important strategic decisions are made by a small group of senior managers including the CEO – Survey by a renowned global consulting firm). At the end of the day, success or the failure of any organization depends on its people. This statement though may sound clichéd, it’s a fact nobody can ignore. The more inclusive and participative you are in your approach in building consensus and decision making, the chances of success is also high.
  
  Conclusion
  
  Amongst all these diverse thoughts and philosophies put forward by the experts, nobody can claim to have a sure shot formula to a world-class, strategic planning process contributing to the organization’s goals. It entirely depends on the circumstances and situations in which the organization is that determines the mandate and structure of strategic planning function. However, the need for it as a concept and as a function is definitely there and cannot be underestimated. A world-class, relevant, structure and process for strategic planning could indeed be a source of competitive advantage.
  
  Also in the whole world of management jargons and the desire to sensationalize and popularize the issue, it is easy for any professional to be misled in to the world where form matters more than substance. One has to constantly keep re-visiting the fundamentals of Businesses and the Organization. It still is the source of answers to most of the challenges businesses face.
  

A. S. Raghavendra