Execution

The basic rules

1. TRUTH BEATS HARMONY. Be honest about realities with others and yourself. Identify, debate and resolve the critical issues, or business stalls. Try to see things as they are, not as you'd like them to be. You need to understand not only what's right but also what's wrong with your company and plans. What are your customers saying about you? How do you compare to other companies? Measure progress externally. When formulating strategy, be realistic about what the company actually can put into working operations. Keep optimism for the long run, believe you'll win eventually, but be real about the situation and problems. No execution culture is possible without robust dialogue that brings reality out through candor, openness, informality. People need to go in with open minds instead of fighting for a preset agenda. Candor helps wipe out silent vetos. Informality is critical for it because it encourages free unprepared discussion. Formal meetings become a sport for dominators, and a bore and humilation for quiet people.
2. LISTEN. Ask and listen a lot, talk litte. Detailed probing not just superficiality and nicities. Ask Why? What are you going to do about it? How? Good people like to be quizzed, they have their own ideas, they know a lot they want to share. Unsolicited advice undermines authorithy, so ask. Understand and listen and people will respect what you have to say.
3. IMMERSE. Be deeply engaged in your organization. Know yourself, your people, your business, your custimers and your competition. Be in touch with day-to-day reality. Get beyond the party line, be where the action is, don't just get filtered info from direct reports. Manage by walking around. Show up, conduct business reviews: have an in depth-discussion. Then meet staff, take questions for an hour. Understand the value of surprise. Every week, make unexpected visits, and go below your direct reports.
4. SET FEW GOALS. Set clear priorities. One or two, max three to four goals. This is especially needed in matrix organizations to enable people to make trade-offs. Strive for simplicity. Speak simply and directly. People are more committed to goals they helped to create.
5. FOLLOW UP. Follow up or follow through is the cornerstone of execution. It ensures that people honor their commitment on time, exposes lack of didcipline and execution, and forces essential specificity. Never finish a meeting without deciding who will do what till when, using which resources. And with whom and when the followup review will happen. Sum up the outcome of meetings in a commitment mail, which can be used for review reference. Never finish a conversation without summarizing the actions to be taken. Goals mean nothing if nobody takes them seriously. People respect what you inspect. Keep them accountable, and follow up. Make sure plans are on track. Establish mechanisms for this, like a monthly review meeting.
6. REWARD MERIT ALONE. Reward and promote doers. Replace nonperformers and windbags. You must make it transparent that people who do or do not make their commitents will both reap the consequences. Performance needs to be linked to business outcomes. First tell people clearly what the goal is, then discuss with them how to achieve it. Then reward them for achieving. Otherwise, coach, switch their job, or fire them. This will create a culture of getting things done. Be strong and honest enough to give negative feedback when needed. You need the courage to confront poor performers. Be open, fair and tough: You perform, or you're gone. Fast failure. There's tension in the rubber band.
7. HELP PEOPLE GROW. Always look to make your people better. As a manager, your main task is to grow others. Expand people's capabilities. Inspire by competence and example, not by 'visions' and speechmaking. You can only lead by example, people who have visions should go see a doctor. Use every opportunity to coach by guided questioning, so people get the idea themselves. If people make a mistake, do not scold. This is when they need your support most, and the best time to coach. Ultimately the values and behavior of the leader become that of the organisation.
8. DECIDE. Say yes. Say no. Do not say maybe. A lot of managers do, and decisions lay there like horses that no one wants to shoot. Decisiveness means to make unpopular, but neccessary decisions (so called "tough" decisions) swiftly, like layoffs, outsourcing etc. It means to make decisions where there are both pro's and con's. It means to make decisions where you only have fragmentary data. It means to stay firm, once you decided.

LINKING

This section gives the framework to link the people process to strategy, operations, and financial targets. People are the most important. You need the right people to execute a strategy.
No matter how good the strategy in concept, if you cannot translate it into action it will fail. The HOW is important. People development and process improvements like six sigma, digitization improve the ability to implement any strategy.
When visiting a unit, sit down with the manager and HR, discuss his people. Then discuss business in detail, performance against the plan. Then have a group meeting with all, take questions. Get below the party line. Find out what people think about the company, what's right or wrong, what concerns them. Write an email summing up agreements made afterwards to the unit leader.
Plans need more detail the closer their scope is. For the close future or environment good estimates and information are available and help you make the right move. Regarding the far future, things are uncertain and a rough sketch or estimate will suffice to get a general direction. For only one thing about the future is certain, that it will be different from what we expect, and detailed planning now would be a waste of time.
The difference between operations, strategy and mission is time. Operations deal with the next one year. Strategy deals with the next two to five years. Values and mission, what you try to achieve in the long run, deal with everything afterwards. Values and mission do not change, but strategies on how to achive them do, as do operational tactics. Make sure the operating plans reflect the strategic goals, which fit the mission.
Meaningful change depends on execution: you need to translate big ideas from your mission into concrete operating actions or they are pointless.

Process meetings

Establish operating mechanisms for glueing people, strategy and ops together. The best way to do so is regular meetings and reviews, as these force you to revisit these items in spite of the day-to-day work. They including typically the following (most of this stems from GE):

• Best Practices and Initiatives, annual. At this meeting unit leaders get together to share best practices and show off the gains that can be achieved by them. Also, new initiatives from top management are launched here, so it may be good to hold this at the beginning of year. There needs to be a follow up survey a quarter later to check how much initiatives took hold, and a review at the year's end.
• People Review, annual or biannual, for each unit. This is the formal mechanism for people development. The review serves to check the talent pool, identify succession, determine promotions, need to coach, switch or fire, and to communicate organizational priorities. After the review write a memo, spelling out what was agreed to be done for each person. Be specific, and follow up.
• Strategy Review and Plan, annual. At this meeting top management and unit leaders get together to revise strategy, fit between staff and strategy, with input from operation meetings. Follow up with a commitment and action item memo.
• Operations Plan, annual. This longer session develops the operating plan and budget for the following year. People need to prepare plans and ideas, so that a healthy discussion can take place how to allocate ressources.
• Operations Review, quarterly and short. The workhorse of meetings. Top leaders review all aspects of business and environment, compare how things are going against the plan. Also can include risk asessment for liquidity, market, debt, events. An opportunity to share best practices, and to set the agenda for best practice meeting.

BEST PRACTICES & INITIATIVES

Understanding customers is the base of business success. But an enduring wellspring of resources is the constant drive to improve productivity. Initiatives such as quality or digitization help.
Confide to somebody wise and straight outside the business, who can help you to keep your head level. Take care of your self, lead a balanced life. Some people grow in their jobs, others swell. The ones that grow are the ones who are passionate about their business. They are never too busy being big honchos to pay attention, too high and mighty to listen and learn.
Delegate right: neither micromanage, nor give no guidance. You need to set milestones and follow up. "What did you get done, and is everybody else in the game?". Don't put in long hours, sixty per week is enough. Focus on the important stuff and delegate. You can't do it all yourself, you'll burn out or fail.

Initiatives

Put yourself behind new initiatives and do not let up. Otherwise, people will learn to think "This too will pass. Just another fad."
You can't will things to happen, nor can you simply communicate with a few people at the top and expect change to occur. So he doggedly repeat the key messages over and over again, reinforcing them at every opportunity.

PEOPLE

Care about your people.
Get one total, global system to clean up people process over all sites. Compensation and role record, CV, career interests, development plans, pictures.

Appraisal criteria

You get what you measure. Measure performance, productivity, and productivity growth. Rank people. Be result oriented, not process oriented. Put agreed goals in writing. Differentiation is the name of the game. Do not promote people just because you know them, are comfortable with them, like them or they know how to put you at ease.
Evaluate how people met targets, not just if. Were they helped by a favourable environment, or did they overcome adversity? Did they strenghten the organization in the process, or leave people burnt out? Who delivers consistently? Who is enterprising and resourceful in the face of adversity? Who had easy wins and failed to push for more? Who met goals by sacrifycing morale or the future?
Everyone has unforseen events that come along, and the ones that ultimately succeed are the ones that overcome them. Don't take excuses without an explanation you can follow. [Night flight. But also ... the ones that were favoured by luck, at least in the short run. how much in sucess is skill, how much luck, how much perserverance?]

The appraisal process

Appraise not only your direct reports. To evaluate people accurately and in depth, talk not only to the managers to learn if they are good, talk to their people as well. Assess people not just once or twice a year but all the time. Write down everything. Do a yearly rigorous appraisal:
In an appraisal form, people are assessing their own rating in important attributes and values, their accomplishments, strengths, development needs and career aspirations, followed by manager assessments and review. To prepare for these meetings, assessments have to be submitted a week prior. Unspecific ones are sent back. Ones without development needs are sent back. Leadership assessment can add a summary performance/behavior nine-block, identifying promotables and high-potentials.
Sit down with unit leader and HR manager in a larger group to discuss people and get multiple viewpoints. Include the assesment author, previous managers, and others who know the person. Agree that the person will hear anything said in the room anyways, no matter who the source, so be candid, but professional. Go through all the direct people and their reports, high potentials, trouble cases, look at the extremes and decide what to do. This discussion yields a development plan and potential moves, identifies retention risk and succession depth.
Retention risk is peoples marketability, potential for mobility, risk the business faces if they leave. It increases with time spent in the current role. Counteract by raises and new measured challenges and promotions.
Succession depth are the people to potentially fill the position. Are they in the wrong job? Will they be lost if a job is not unblocked for them? (It;s like a competitive RPG - everyone can be kept in the race by the carrot of level-up. Those who fail, eventually leave. Scarcity at work.)
Then have the appraisal talk with the individuals. Be honest about issues in appraisals, so people have a chance to realize them, and fix them. Talk about things they do well, and things they must do better. Get their input, too. Finally, put the points and agreement in writing, and have them sign it off.
Then half a year later, check what happened.

Developing

Give people Profit & Loss assignments.
Provide a pipeline to find and develop people for leadership positions on all levels, succession planning. Develop the leadership pipeline through increasing succession depth and retention.
People should grow, not stick in the same job forever, at most three to four years. You need some amount of fresh people for fresh ideas.
If you sit down with your boss and he has not said anything about your weaknesses, go back! Otherwise you are not going to learn anything.
Reviews and meetings are also a good place for the leader to learn about and develop his people.

Hiring

Do hands on hiring, not just overseeing finalists. Try to interview as many new hires as possible. Some people who are good do not interview well, some phonies do.
Rule one: get supplemental data. Talk directly to references. Do it yourself. Talk to two or three. Ask about the qualities below.
There are windbags, who spend all their time pontificating, and doers, who spend it getting things done. How to spot the doers, people who get things done?
Look for energy, enthusiasm for getting things done: does he get excited about stuff he did, instead of talking about strategy and philosophy? Does he detail obstacles he had to overcome? Explain the roles people assigned to him played? Has he brought intensity to whatever he did, starting from school? Did he energize others? Did he get things done through others, set goals and follow-up? Does he make clear cut decisions or waver? How well did he do -- is his life full of achievement and accomplishment?
Look for a well-studied, incisive mind.
Look for desire to win. Determination to succeed beats intelligence and ability to conceptualize. Street smarts beat education. Drive beats both intelligence and education.
Do not hire people just because they are smart, know to talk, or exhibit a "leadership" aura. They have to be able to do the specific work required, need the technical know how. That means of course that you have to be clear about what the job requires. Spend time on that, too.
Avoid ticket punchers, moving every two years from one job to the next.

STRATEGY

Strategy should be kept simple. It should only have a couple of building blocks, and fit on one page, so everyone in the business has time understand it. [Well, Nearly everything fits on one page if you simplify sufficiently].
Allocate ressources in proportion to opportunities, or every opportunity will get some, and none will get enough. You will need to not do some profitable things.

Strategic Plan

The strategic plan lays out how you want to win in the mid term. The leader must make strategy plan himself, drawing on discussion and input of line people, who also review draft. They must be involved, because they only can understand what can be put into action.
You can build an overall strategic plan based on strategic plans for the individual units.
Inputs for the strategic plan are the current situation and trends. From there you identify growth opportunities: Look at your business units from the outside in, get input from sales and marketing. Use market segment mapping. Profit by customer, product, channel. Should you build new products or new channels for existing products? Aquire other businesses? Close businesses down? This part is the one that needs most insight, business sense and creativity.
You need to balance short term and long term. You can't grow long-term if you can't eat short-term. New projects and activities cost money before they earn it. Don't give people an earnings holiday to get their project going. Can you get the resouces by selling less profitable ops, cutting expenses, harvesting a product without long term survival chances?
Once you have a feeling where you should move, develop the plan how to achieve it. It should include the current status, the assumptions, the desired status and how to get there. Numbers and projections are needed, but find the ones that count.
The plan has cover the following points. Get input on them while building it, from people who help building the plan. Review them regularly at the strategy review.
1. Environment and assumptions. This covers the external environment, markets, customers, competitors, suppliers, new entrants, substitutes, regulations and demographic or social changes.

• What is the reality of the market?: What are market shares (the ultimate score)? Is it a growth market or not? What is the growth rate? If the average industry, or even GDP, is projected at 3% growth, you need to be able to justify why you think your plan will allow you to grow at 15%.
• [What do customers want?: What are they asking for? Which business or project was a surprise success? Which was a failure? Why?]
• What has the competition done, what is it up to? What are the strengths and weaknesses of each major competitor? What separates the successful ones from the losers -- low cost? innovative tech? good distro? How well knows each team about their competition? What will the competition be up to next? How good is their sales force? How do they respond to our actions and offerings? What do we know about the background of their leadership? What acquisition could they do to hurt us? Whom could they team up with? Did they gain a new star in their team?
• What is the reality in the company?: What are opportunities and threats? What are the strengths and weaknesses? How are costs compared to competitors? What are productivity programs to improve cost/output balance? What are obstacles to growth? What drives cash, margin, revenue growth, market share? What are competitive advantages? Discuss entire business with focus on customer opinion, make sure everyone kows about trends, competition, issues, roadblocks.

2. The plan itself

• Will the plan make money? What capital investment will it need? When can we expect it to recoup the layout? What will be the return on investment? Do we have better options? How will we get the cash in the short term that will allow us to finance the plan?
• Is the plan consistent with our abilities?. Is the plan operable? How strong is the organizational ability to execute the strategy? It is no use to adopt a smart strategy if you don't have the ability to make it work, or buying that ability would be too expensive. Don't think: "we have not been in this business, but some that looks somewhat like it, we think we can assimilate the right capabilities to do it". This is gambling. Good ideas aren't the same for everybody. Ask if you have enough people with the required skills. If not, and you have enough time, get them.
• Are we pursuing more ideas than we can handle? Is the plan focused enough? Watch out for taking on too many projects. Do a few, and do them right. In most companies, the appetite for new projects is bigger than the ability to digest. Too much is taken on that doesn't come to fruitition. [Think comparative advantage and opportunity cost.]
• What are critical issues, threats and roadblocks? Ask managers what THEY think the critical issues are, then explain what you think they are. E.g. for markets: size, share, growth; productivity programs. Then go over them, and make them work out how to address them for the review.
• Do we have milestones? Milestones bring reality to a plan. What are important milestones, not just annually? Break it down into long, medium and short term.

Strategy Review

Think about businesses you want to be in, don't want to be in, want to invest in and want to harvest. You use it to review new ideas and revistit old ones and ask yourself, is the plan still realistic? Is it still good?
Recheck it often, several times per year, for example in operatuons reviews, and revise if needed.
Don't bring the big fat slide presentation, and bore everyone through an presentation session with no room for questions or ideas. Nobody learns anything. Discuss. Get people to think and talk about reality. Numbers help, but cannot replace candid discussion. Bring in creativity, new ideas. Strategy review is the main driver of the strategy process -- the last chance to catch mistakes in the plan before the real world will do.
Discuss how things went last period, where goals achieved, or is it just another day in the life of things that don't happen? Go over the same critical issues you examined when you built the strategic plan. Put issues where you failed on the table. Why did that happen? Then focus on the future.
Discuss changes to the plan, new directions, going over the points listed above. One additional point to coem out of the review is:
Are linkages with people and operations clear? The strategic goals need to be translated into quarterly operations plans, and assignments to people. Everybody needs to leave with clear accountability for their part in the plan that results from this.
After the meeting follow up by writing a memo summarizing the goals and commitments to each group leader. It should be usabele as a basis for review later on.

OPERATIONS

Keep the big picture in mind, but get immersed in the specifics. Generalism gets you nowhere. The difference between success and failure is getting the little details right. (Think iPod.)
Operation plans are the roadmap for the running year. They link strategy to the people that execute. Strategy defines where the business wants to go, people who is going to get it there, and the operation plan defines how to get it there.
Make sure setting targets for operations is not a political game, where top managment declares some arbitratry numbers. Involve people to come up with goals they can subscribe to. The operating plan should be owned by the people who have to carry it out, so that everybody sees their own goals within.
Some people try to set wimpy goals, so they can beat them. Others agree to goals that they can never meet, to impress you. The only way to find out what is realistic is by asking incisively, comparing with past and with others. Challenge the plan, try to stretch it as much as possible, but not to the point where it can noit be achieved.
To achieve this, give every group leader and all their direct reports the general information about their environment, and let them come up together with realistic goals.
Then develop the plan in the operating reviews by discussing with everybody involved. Debating and making trade off between various stakeholders (finance, production, sales/marketing) is important to get people to a common understanding and a realistic assessment of what is possible. It also is an excellent coaching opportunity and opportunity to observe people. Ask incisive questions, get all the viewpoints out. You need this debate to get realistic commitments, because the worst thing is someone who says he can make it, but then doesn't.

Operating Plan

Build the plan as late as possible, so the numbers are fresh (but start thinking about it earlier). This can be done in a number of sessions, where people can prepare the homework up front.
First, bring out the detailed assumptions. The operating should be in line with and adressing the same issues as the strategy, on a more detailed, short term, per unit scale. Debate on assumptions is one of the critical parts. Examine both positive and negative assumptions:

• Customers: Who are they? Why do they buy? How do they buy? What is their need? How long will it last?
• Competitors: What have they done recently? What are they up to? How will they react?
• Suppliers: Will they be able to deliver -- enough, on time at cost? Is there currency exchange risk?
• Distributors: what new channels are there? Are they on time an billing correctly? Are they the best ones? Are they working for competitors?
• Economy: what's the outlook, overall, for segments, for regions?

Second, set the targets. In practice operation plans often boil down to quartely budgets and productivity targets. Key targets include: revenues, cost of sales, cost of R&D, operating margin, cash flow, productivity, market share, capital expenditure, ROI (in a one page overview, and showing trends by comparing to previous years). Other graphs show volume changes through price, mix, cost, inflation.
Don't just mark up targets from the previous year. You need robust ideas about how to get this improvement on things like pricing, customer mix, product and channel mix, advertising and promotion, quality, quantity and turnover of sales staff, economic assumptions, copetition and competitice reactions.
Third, develop action plans that give milestones and deliverables, tarding off between short term and long term needs. Also develop contingency plans for areas where possible. Action plans include

• product launches
• marketing plan
• sales plan
• manufacturing plan
• productivity plan
• functional operations
• capital allocation

Finally, get agreement and buy-in from all participants, make accountabilities clear. The best way to do this is to send each person a memo that lists the details of the agreement. Establish follow-up measures to make sure people are meeting their commitments or work out corrective steps if they arent.

Operations Review

Have a quarterly review of progress, that uses this memo as a reference. The review gives opportunity to fix deviations, and evaluate people.
Review: people and organization development plans with the manager and HR. Then go over operating plans for the last quarter with a larger group to get more impressions and more complete feedback: sales, market growth, external factors, expenses, margins. Then hold a public forum, talk about what the company is trying to do and take questions. Afterwards write a followup memo about the outcome of the review.
If targets were missed, don't take warm words that people will try harder to be back on plan the next quarter or the one after that. Why would that ever happen? If they have no concrete idea about the issue and how to address it, things will not get better by themselves. This is about operating plans, not about hopes and dreams. Ask: What are you going to do about it now? If people are right with their promises, all the better, then they'll be ahead of target later on.
Performance against targets must be measured against external conditions. Nearly making them if the market tanked is an achievement, just making them when everybody else made 10% more is a failure.

References

Nearly all information is from Execution. Some is from an article in business week 1998, about how Jack Welch ran GE. Stuff in brackets is from me, probably based on Drucker.