A Book Report on
Six Disciplines Execution Revolution
(Solving the One Business Problem That Makes Solving All Other Problems Easier)
By Gary Harpst
(Book Report by Gary Tomlinson)
Preface:
With all of the pressures successful business leaders have today, none is more urgent or challenging than learning to execute strategy.
While larger businesses have always had the luxury of budgets and resources to meet this challenge, small and midsized businesses now have a tremendous opportunity to level the playing field and leapfrog past the expensive, outdated approaches of the past. Today, they can attack the challenge of execution in a revolutionary way.
Based on breakthrough research, field testing and proven best practices, the vision describe by Gary Harpst in Six Disciplines Execution Revolution sets a new course for how small and midsized businesses can finally confront the never-ending challenge of planning and executing strategy.
Introduction:
All revolutions are based on a core set of ideas. The ideas in this book emerged from my twenty-seven years of experience as CEO and founder of three businesses. Since that time, I’ve focused my attention on helping other businesses benefit from my many mistakes I made as a CEO, and the mistakes I see others make every day. This book describes the cumulative learning after investing $20 million and over 100 man-years of research and field experience.
The first premise of this book is that what most business leaders think is their greatest challenge really isn’t. All business leaders face new challenges each day and are tempted to think of their latest problem at hand as their “biggest.” No matter what the problems are today, however, they’ll be different tomorrow and they will be bigger. This leads to the next premise of this book.
There is one biggest problem that, if solved, makes solving all other problems easier. Knowing how to plan and execute, while overcoming “today’s surprises,” is the most foundational capability any organization can have.
The final premise of this book is that an opportunity exists for small and midsized businesses to leapfrog a whole generation of impractical, large-company approaches that have been used to attack this problem.
In this book, I’m suggesting that excellence is the enduring pursuit of balanced strategy and execution. Strategy requires choosing what promises to make to all stakeholders and a roadmap for delivering on those promises. Execution requires getting there, while overcoming unending surprises.
Planning and executing, while at the same time, managing the unknowns of the real world, is the biggest challenge in business. Overcoming this challenge is what we mean by solving the problem that will make solving all other problems easier. It’s the beginning of a revolution, an Execution Revolution.
Chapter 1 – Business Excellence:
The purpose of this chapter is to weave strategy and execution into a single model for understanding enduring business excellence.
What is Excellence? Whenever I meet business leaders, I take the opportunity to ask them two questions: (1) What does excellence mean to you? and (2) Do you think you’ve achieved it? Two truths emerge. First, no two people define excellence exactly the same way. Their definition evolves as they learn and as circumstances change. Second, nearly everyone agrees that excellence is a journey, not a destination. As a result, no one who’s serious about excellence believes he or she is “there” yet.
After many years, I’ve finally come to see that excellence requires on-going balance between strategy and execution. Strategy requires choosing what promises to make to all stakeholders and a roadmap for delivering on those promises. Execution requires getting there while overcoming an unending number of surprises. Of the two, execution is far more difficult to achieve, but it is impossible without solid strategy.
Introducing the Business Excellent Model:
Simply put, the focus and capability of an organization can be understood in two dimensions: strategy (deciding what to do) and execution (getting it done). Leaders who build organizations with strong execution over long periods of time achieve enduring excellence.
The combination of strategy (the choices of what we do versus what not to do) and execution (how well the choices are carried out) becomes the field upon which the Execution Revolution occurs in any given company.
The figure below shows a model of these dimensions using four quadrants of performance:
The Business Excellence Model
Weak Strategy Strong
I
Growth
“Wave”
II
Balanced &
Predictable
III
Fire-Fighting
IV
Profit
“Wave”
Weak Execution Strong
Quadrant I: Strong Strategy/Weak Execution: In this quadrant, a business has a strong strategy, which typically means a competitive advantage. This advantage can come from offering premium products or services, availability or price. It can be rooted in technology, distribution channels, manufacturing expertise or current customer base.
Regardless of whether a company is a start-up or a seasoned business, strong strategy usually leads to growth in sales. A key point to understand is that success and the results of growth start the journey – but this often leads an organization (and its leadership) into Quadrant IV.
Quadrant IV: Strong Execution/Weak Strategy: A company in Quadrant IV usually gets there because it is experiencing the pains of growth. Quite often, sales have outpaced capacity, so leadership becomes focused on strengthening internal operations to address quality, scheduling, hiring, training, customer service, order processing and other issues. In other words, the movement into Quadrant IV is a natural reaction to success in Quadrant I.
Quadrant III: Weak Strategy/Weak Execution: It’s easy for a company to operate in Quadrant III for quite a while before leadership really accepts they are there. The shift into this state of weakness results from gradual decline in growth and profitability, caused by decisions made (or not made) a year or two earlier. In Quadrant III businesses are usually overworked, confused and eventually have a feeling of hopelessness if the issues are not addressed. Typically, the best exit plan for moving out of Quadrant III is to aggressively reallocate resources from low-profitability areas to the growth areas. This sounds easy, but most organizations don’t have the framework, the will or the persistence to make the hard choices it requires.
Quadrant II: Strong Strategy/Strong Execution: Quadrant II is all about balancing growth with profitability and performing predictably. This requires a disciplined organization, one that’s able to execute well enough to address the needs of today and build for tomorrow at the same time.
Admittedly, Quadrant II performance is difficult to sustain. Few companies are able to achieve this kind of performance for long periods of time. But this is what the Execution Revolution is all about: the process of changing the game with regard to enduring excellence by focusing on how to plan and execute strategy more effectively while successfully managing the surprises along the way.
In the real world, there’s no clear line between these quadrants. Also, businesses don’t usually stay in one quadrant but move between them on an on-going basis
Where Are You Now? The business excellence model we’re describing is not about company size. Every successful company once started small. This model, however, is very useful in helping leaders of businesses of any size understand where they are now. It offers insights into some of the forces that got them there, and it helps the organization anticipate what could happen next.
We encourage business leaders to think of the business excellence model as a map that provides guidance about where to go next. Any company that’s been around for awhile has traveled through all of the quadrants. The ultimate objective is to grow the capability of your organization to stay in Quadrant II for longer and longer periods of time.
Chapter 1 Summary:
< >No two people define excellence in exactly the same way and nearly everyone agrees that excellence is a journey – not a destination.A business excellence model can be used that plots how organizations operate relative to the two dimensions of strategy and execution.Organizations in Quadrant I exhibit strong strategy, which typically translates into a competitive advantage. They are characterized by periods or waves of growth and market share gains.Organizations in Quadrant IV exhibit strong operational execution, focused on doing things “better, faster, cheaper.” They are characterized by periods or waves of profitability.Organizations in Quadrant III are typically weak in both strategy and execution and frequently find themselves firefighting with daily issues.Organizations in Quadrant II exhibit an appropriate balance between strategy and execution and are characterized by predictable growth.Quadrant II performance is difficult to sustain. Very few companies are able to achieve this kind of performance for long periods of time, but the time is right for a new way to approach strategy and execution in order to do so.Back in 18th Century England, a thirteen-year-old boy watched two men working at opposite ends of a ship that was under construction; both were big strong men wielding axes. He approached the first man and asked him, “What are you doing?” The worker looked up surprised and said, “Are ya daft?! I’m hewing a log!” The boy then walked to the other end of the ship and asked the second man the same question, “What are you doing?” The second man stopped and looked out across the ocean to the horizon, and said, “I’m building a mighty seagoing schooner that will carry the treasures of the world back to England.”
Which of the two shipbuilders would you want to have working for you? While both answers are correct, they demonstrate different ways we have to think about what we’re doing. In other words, “What’s the challenge?” is another way to ask, “What’s the opportunity?” How we formulate the question determines the way we think and the way we think changes everything.
To achieve a revolution in their execution, business leaders need to reframe their thinking from cutting logs to building ships. In other words, quit thinking only about solving the current problem, but, instead think about how to build an organization that’s good at solving problems in general – building the capability that’s certain to help overcome an uncertain future.
Chapter 2 Summary:
< >The biggest problem in business is not what most business leaders think it is.The biggest challenge is not the issue at hand. Planning and execution while at the same time dealing with the unknowns of the real world, is the biggest challenge in business.Focus on solving the problem that makes all the other problems soluble.Developing and executing a strategy that’s balance in growth and profitability is extremely difficult and is therefore rare.Execution is considered by most business leaders and researchers as a universal challenge.Inability to manage change effectively or to overcome internal resistance to change.Trying to execute a strategy that conflicts with the existing power structure.Poor or inadequate information sharing between individuals or business units responsible for strategy execution.Unclear communication of responsibility and/or accountability for execution decisions or actions.Poor or vague strategy.Lack of feelings of “ownership” of a strategy or execution plans among key employees.Not having guidelines or a matrix to guide strategy-execution efforts.Lack of understanding of the role of organizational structure and design in the execution process.Inability to generate “buy-in” or agreement on critical execution steps or actions.Lack of incentives or inappropriate incentives to support execution objectives.Insufficient financial resources to execute the strategy.Lack of upper-management support of strategy execution.Strategy execution is hard for a variety of reasons, but it’s not rocket science.The majority of us don’t know how to put together all the key steps of strategy, planning, organizational alignment, execution management, innovation and measurement.Often, we fall into the trap of outside-in thinking, and need to focus on internal things rather than worrying about issues outside of our control.We need to keep in mind the control factor: regardless of how well we perform as a business, there are many factors to success we cannot control.Sometimes, it’s easier not to do what we know we should do.As ironic as it may seem, there is a growth paradox, the organization that’s good at solving today’s challenges will create a new and bigger set of challenges for itself tomorrow.It’s critical that organizations continually work on increasing their capacity to execute.Conditions are currently right to approach strategy execution in a radical new way.Seven key areas of business improvement advancements are fueling the Execution Revolution:Quality ProgramsBusiness Process Best PracticesPersonal Productivity ToolsBusiness IntelligenceStrategy FormulationVirtual Community DevelopmentBusiness CoachingIn order to build a sustainable strategy execution program in small and midsized businesses, three major barriers or hurdles need to be overcome: insufficient expertise, prohibitive economics and simple human nature.While larger companies have knowledgeable people with the necessary expertise in business improvement disciplines, small and midsized organizations don’t have equal access to such a wide array of expertise.Developing mastery in even just one business improvement discipline requires a substantial investment. None of this comes cheap, and there are no shortcuts.Any strategy execution program developed for small and midsized businesses must consider how to deliver the expertise and technology required in a way that makes sense economically for these enterprises. The only way this kind of change in economics can be achieved is by integrating the essential components of such a program into a complete solution and delivering them using an innovative distribution model.One of the most persistent challenges we face as humans is to narrow the gap between knowing what needs to be done and actually doing what needs to be done.Other human nature hurdles to overcome include our resistance to change, our unique differences, our need to communicate effectively and our need for purpose in our lives, including meaningful work.A Repeatable Methodology to drive organizational learning and understanding.Accountability Coaching to nurture and nudge to stay the course.An Execution System to engage everyone, everyday in real-time alignment.Community Learning to share and reinforce best practices and accelerate learning.Spending the maximum amount of time in Quadrant II of The Business Excellence Model takes a complete strategy execution program. Piece-meal approaches simply don’t last.Sustainability, the capacity of an organization to maintain the necessary balance between strategy and execution and doing so while overcoming the hurdles requires a complete program consisting of four tightly-integrated elements: a repeatable methodology, accountability coaching, an execution system and community learning.The Repeatable Methodology is a blueprint of which best-practices are to be adopted in the organization. The other three elements (accountability coaching, execution system and community learning) are how the organization implements and sustains practice of the methodology.Discipline I: Decide What’s Important
- Renew Mission
- Renew Values
- Renew Strategic Position
- Renew Vision
- Define VFOs
- Agree What to Stop
Discipline II: Set Goals That Lead
- Define Measure
- Define Targets
- Define Initiatives
- Engage the Team
Discipline III: Align Systems
- Identify Misalignments
- Align Processes
- Align Policies
- Align Measures
- Align Technologies
- Align People
Discipline IV: Work the Plan
- Define IPs Quarterly
- Review IP Status Report Weekly
- Rate IPs Quarterly
- Prioritize Daily
- Monitor Measures Regularly
Discipline V: Innovate Purposefully
- Brainstorm
- 100-Point Exercise
- Quick-ROI Analysis
- 5-Step Problem Solving
- Champion Your Ideas
- Recognize Contribution
Discipline VI: Step Back
- Review Externals – competitive, industry, technology, etc.
- Review Internals – goals, measures, stakeholders, etc.
- Recap SWOT – Strengths, Weaknesses, Opportunities, Threats.
- Review Individuals
Chapter 7 Summary:
< >The goal of a complete strategy execution program is to enable organizations to spend an increasing amount of time in Quadrant II. Here, their performance is more predictable and sustainable and execution of strategy becomes balanced.Achieving this goal requires thinking holistically about the business – how to make all the components, people, processes, policies, key measures, assets and strategies work together to meet the promises made to customers and other stakeholders and to repeat these in a predictable fashion.Be aware that reading about each discipline separately doesn’t make your business perform better instantly any more than taking five golf lessons makes you a good golfer. In the end, you have to learn how to use all of the disciplines together and the only way to truly learn is by doing.We are absolutely advocating this: every organization that is serious about excellence and execution must practice some defined methodology as the foundation of its efforts. The absolute foundation of building an organization that is increasing its ability to execute is a repeatable methodology.In addition, the disciplines must be used in conjunction with the other three required elements of a complete strategy execution program: accountability coaching, an execution system and the benefits of community learning.Expectations are clear.These expectations are perceived as credible and reasonable because the employees were involved in setting them.Employees understand the impact of success, or lack thereof, on the organization.Any complete strategy execution program must address our tendency to do what we like to do, rather than do what we know we should. Accountability coaching is a key component of a complete program that directly addresses this tendency.A more positive and useful definition of accountability is needed in order for us to execute strategy more effectively.Accountability coaching is methodology-focused and enduring; it is not therapy or consulting.Total organizational engagement with the strategy execution program is necessary in order for the changes in work behavior to endure.A relevant roadmap of the organizational change process exists for companies that enroll in such a company-wide strategy execution program. Change – The requirement for what is to be delivered has changed.Clarity – The requirements do not change but are misunderstood (not clear).Dependency – The outcome depended on some other result (or person’s activities or deliverables) that did not get delivered on time.Estimation – Requirements are clear, but the estimate for completion is not correct.Availability – The expected number of resources assumed in the plan was not available.Methodology Automation – The business-building approach embodied in the repeatable methodology needs to be automated.Time Management – Everyone in the organization needs to better understand how they’re spending their time and learn to manage all time that is under their control.Real-Time Activity Alignment – Every employee sits down with their team leader and agrees on what is the best use of their time, given the company’s goal. Then on a routine basis (possibly quarterly) they evaluate the inevitable demands of daily activities for time and attention. The possible responses to these demands are:It’s in my plan, so I’ll do it.It’s not in my plan, so I won’t do it (perhaps it can be scheduled later).It’s not in my plan, but it’s important, so I’ll change the plan and do it.Weekly External Review Cycle – A fifteen-to-thirty minute status review meeting once a week between the team member and team leader helps create a culture of accountability for everyone.Total Organizational Engagement – Everyone is engaged in understanding company priorities and learning to more effectively align their daily activities.Execution Measurement – We found that organizational learning occurs much faster when leading measures are used. This approach allows individuals, departments and the company leadership to understand what barriers interfere with execution and what to work on next.An execution system enables an organization to focus on learning to identify execution problems as early as possible.There are five primary types of organizational errors or causes for execution failure within an organization: change, clarity, dependency, estimation and availability.An execution system needs to include the following elements: methodology automation, time management, real-time activity alignment, weekly external review cycle, total organizational engagement and execution management.A belief that their ultimate core competence is the ability to execute their strategy.Use of a shared repeatable methodology that helps them organize their efforts so they can learn to execute better and speak the same language.Accountability coaches who are experts in the same repeatable methodology they share.The daily use of shared technology to integrate planning and activity alignment throughout the organization.The Coach Community – The accountability coaching community is essential to overcoming the barriers of inadequate expertise and our sometimes weak human nature. We all need encouragement and accountability to stay on the right path. The strength of the strategy execution program is built upon the strength of its coaching community.The Leadership Team Community – An organization’s leadership team is the small group of senior leaders who are ultimately responsible for the overall direction of the company. This group makes the critical choices that determine strategy, including mission, values, strategic position, vision and the goals statement. This group has to make the tough decisions about how to allocate resources and what things to “stop” doing to free up resources to be used for executing their strategy. The group’s decisions, leadership and management skills have a huge impact on the success of the organization. Part of the coach’s role is to figure out how to better support and develop the company’s leadership team.The Initiative Team Community – Early in our fieldwork, we didn’t give nearly enough attention to the importance of initiatives and the teams that lead them. We were trying to have the leadership team community solve too many of the problems and build too many of the plans. This resulted in a shortage of the engagement necessary at the mid and lower levels of the organization. Groups at this level are called initiative teams. Senior leadership depends on the initiative team to translate strategy into action plans and to set realistic expectations of what can be done, when and with how much resource.The Departmental Team Community – In most organizations, departments are formed around a particular area of expertise, such as sales, marketing, services, engineering, manufacturing, purchasing, accounting or human resources. Corporate Initiatives do not account for all the planning that needs to happen in order to run the business. Corporate initiatives are focused on a few strategic changes in the capability of the organization. Each department, however, needs specific plans that support the various sustaining activities of the company including employee training, routine process improvements and allocation of resource to on-going measure-driven activities (e.g., sales prospecting and customer service calls). The strength of these communities and how well they do their jobs determine the strength of the initiative teams, since all initiative participants come from one or more departmental teams.The Team Leader-Team Member Community – The team leader-team member community is by far the smallest of organizational communities. Eventually all work is performed at the individual level, but in concert with others. This community shares a common interest in maximizing the performance and potential of individuals as part of its contribution to company goals. The team leader mentors, encourages and holds the individual accountable.The Company Community – The company community shares the mission, values, strategic position and vision. Sharing a common purpose helps people stay engaged and contribute more. The complete program for the pursuit of excellence depends on building a sense of common purpose and the realization that this pursuit is a journey.Cross-Company Roles Community – Another community, one external to the company, consists of individuals sharing with others in the same roles in other companies. The establishment of a complete strategy execution program opens the door for accelerated learning among such groups because they share a common purpose, a common set of terminology and a common approach to pursue that purpose.The Execution Revolution will be built around communities with the following characteristics:A belief that their ultimate core competence is the ability to execute their strategy.A shared repeatable methodology that organizes their efforts to execute better. Accountability coaches who are experts in the repeatable methodology they share.Shared technology (an execution system) to help integrate planning and activity alignment at all levels of the organization.Active communities in the Execution Revolution consist of communities with these titles: coaches, leadership teams, initiative teams, team leader and team members and cross-company roles.Among adult learners, the biggest barrier to fostering a learning community is pride. For senior leadership, the only way to remove this barrier is to display a passion for learning how to execute strategy effectively.Of all the four components of a complete program – a repeatable methodology, accountability coaching, an executive system and a learning community – learning community has the most transforming power.Every business regularly faces new, often large challenges that it has no control over. Among these are competitors, the economy, the weather, government regulations and technology. And whatever their challenges are today, they will be different tomorrow.All organizations, large or small, struggle to execute strategy and deal with unexpected challenges. It’s similar to fighting a war on two fronts. This is the biggest problem in business.Large businesses continue to piece together many separate best practices, such as strategic planning, quality management, ERP, knowledge management and performance management, to help fight this war.Such best practices, in combination with the Internet, have become the foundation for a complete strategy execution program. For small to midsized businesses, a strategy execution program provides a leapfrog opportunity to go from almost no tools at all to a next-generation approach, skipping the current impractical and unaffordable approaches typically used by larger businesses.Although building an organization capable of executing its strategy is not easy (nor ever finished), it’s one of the few things that an organization can control. Executing strategy requires commitment, discipline and investment. It also requires an enduring approach.Building and maintaining an aggressive execution-capable organization pays off by making it easier (not easy) to handle the many unknown problems and challenges that a company will face in the future.Building an organization that can learn how to execute strategy and deal with the daily surprises of the business world is solving the one problem that makes solving all other problems easier.Solving this one problem yields substantial long-term benefits for your business, including predictability, balance, managed growth and substantially increased market value. All of this promotes a better night’s sleep for you.Solving this one problem also leads to the creation of an organization that is trusted both internally and externally. It enables an organization that learns how to develop its people to their fullest potential. It empowers an organization that can be successfully transitioned to the next generation, and so on. There’s just not enough room in this book to list all of the benefits of pursuing the ongoing journey of strategy execution excellence!The value of your business will be significantly higher if it has a predictable strategy execution history.“Any business that would adopt a systematic program for strategy execution two years before selling the business would get 30–40 percent more for the business when sold.” Why? Because having an organization that knows how to plan and execute is rare. Those who achieve it set themselves apart and are worth more.You can engage Gary at gary@garyetomlinson.com. To read his other book reports
or book reviews visit his website at www.garyetomlinson.com.
