Execution: Delivering Excellence

By Mike Hawkins

The keys to strategy and performance that deliver results. The final book in the “most comprehensive treatment of leadership I’ve ever seen by one author” (Jim Kouzes, coauthor of The Leadership Challenge).

Execution: Delivering Excellence describes the capabilities that leaders need to create competitive differentiation and deliver extraordinary value. Great leaders build a culture that achieves operational excellence as well as adapts to change and seizes new opportunities. By learning the competencies of making smart decisions, fostering innovation, enabling speed, and taking action, you are able to equip your team to sustain great performance for years to come.

The SCOPE of Leadership book series teaches the principles of a coaching approach to leadership and how to achieve exceptional results by working through people. You will learn a straightforward framework to guide you in developing, enabling, exhorting, inspiring, managing, and assimilating people. Benefit from the wisdom of many years of leadership, consulting, and executive coaching experience. Discover how to develop the competencies that align consistently with great leadership.

• Language: English
• Publisher: Open Road Integrated Media
• Release date: Jun 10, 2013
• ISBN: 9781612541242

Book preview

INTRODUCTION

Effective leadership is not about making speeches or being liked; leadership is defined by results, not attributes.

—Peter Drucker

Delivering Excellence: Achieving exceptional results and sustaining the organization’s intended operational outcomes.

There are two overarching themes embedded in the SCOPE of Leadership’s definition of great leadership:

Great leadership is the ability to achieve a desired result through the influence of people who follow and perform by choice.

The first theme is the ability to influence people. This has been the primary focus of the previous books in this series. The second theme is the ability to achieve desired results, which is the focus of this final book of the series. Leadership is about producing results. Results are the primary measure of great leadership. The ultimate reason great leaders strive to lead by example, communicate effectively, develop others, and leverage teamwork is to deliver results.

People are the channel through which results are achieved and therefore the primary focus of great leaders, but people are not a leader’s only focus. Great leaders who produce great results also focus on strategy and operational execution. They improve, align, and lead all the elements of their organizational ecosystem as were described in the section on the big picture in competency 8 of book 2 of this series.

From a strategic standpoint, great leaders are strategists who possess strategic attributes and focus on strategic activities such as those listed in Table 6.1. In their role as an organization’s strategist, they see the big picture and spot trends. They make the most out of their markets as well as develop new ones. They focus their operations on the needs of their customers and foster ongoing innovation that maintains their competitive advantage.

TABLE 6.1: STRATEGY—ATTRIBUTES AND RESPONSIBILITIES

Strategic Leadership Attributes:

•  Thinking strategically (book 2)

•  Fostering innovation (book 6)

•  Making great decisions (book 6)

•  Having an external perspective (book 5)

•  Seeing opportunities (book 6)

Strategic Leadership Responsibilities:

•  Setting and articulating a compelling vision, strategy, and roadmap (book 2)

•  Understanding, developing, and targeting customer needs (book 6)

•  Assessing and influencing markets, competitors, and industries (books 5 and 6)

•  Spotting and leveraging political, economic, social, and technological trends (books 2, 5, and 6)

•  Building partnerships and leveraging acquisitions (book 5)

•  Evaluating routes to market and utilizing varied channels (books 5 and 6)

•  Aligning and improving the elements of the organizational ecosystem (book 2)

•  Establishing and leading by principles (books 1 and 2)

From a tactical perspective, a leader’s job is to turn the organization’s strategy into results. It is to focus on operational execution and deliver excellence. It is to develop, produce, distribute, sell, and service the organization’s offerings, and receive compensation for doing so. It is to increase revenue, control costs, and limit risk. It is to execute the strategy and make progress toward the organization’s vision.

Leadership is not for the fainthearted for one overarching reason—it is not a spectator sport. Leadership isn’t just about casting a vision or conceiving new strategies. Strategies are important but only to the extent they are executed and deliver results. Organizations that are respected by analysts, stockholders, customers, and other stakeholders are lauded because they produce and sustain results. Organizational success and longevity are dependent on great execution.

Great execution depends on operational excellence. It requires maintaining quality and efficiency. It includes optimizing routes to market and delighting customers—whether internal or external. It involves not only leading people but also refining processes, implementing systems, and solving operational problems.

Operational execution and delivering excellent results are the focus of this final level of the SCOPE of Leadership. This level is akin to closing a sale. As with all the activities a salesperson performs leading up to a sale, the leadership competencies in the prior levels of the SCOPE of Leadership were provided for one purpose—to set the foundation for delivering operational results. If you have done well at learning and building the competencies in the previous books of this series, you will easily learn and develop the competencies in this final book and top level of the SCOPE of Leadership pyramid.

As you now turn your attention to delivering operational results, you will develop seven additional competencies that build on the competencies of setting the example, communicating effectively, developing others, and leveraging teamwork.

Great leaders who deliver excellence and exceptional results

1. Focus on value.

2. Foster a climate of innovation.

3. Enable speed and quality.

4. Make great decisions.

5. Shape the culture.

6. Take action.

7. Make the sacrifice.

These competencies enable not just results but sustainable results. They are not about short-term actions that any manager can take to achieve the coming quarter’s objectives. Great leaders don’t achieve consistent results by stuffing finished goods into the distribution channel, temporarily eliminating people from the payroll, or selling assets. They don’t cut research and development, reduce training budgets, and slash discretionary expenses just to make their short-term numbers look good. They don’t operate a yo-yo organization with results that constantly go up and down. They embed practices and philosophies that deliver positive results quarter after quarter and year after year. They run an operation that executes with excellence. They build great organizations that deliver results on a sustainable basis.

EXECUTION:

DELIVERING EXCELLENCE

Competency 32: Focusing on Value

Operational Focus

Customer Perspective

Roadmaps

Effective Time Allocation

Activity Linkage to Results

Meeting Effectiveness

Organizational Alignment

Knowing the Details

Competency 33: Fostering a Climate of Innovation

Competency 34: Enabling Speed and Quality

Competency 35: Making Great Decisions

Competency 36: Shaping the Culture

Competency 37: Taking Action

Competency 38: Making the Sacrifice

COMPETENCY THIRTY-TWO

FOCUSING ON VALUE

You don’t get paid for the hour. You get paid for the value you bring to the hour.

—Jim Rohn

Focusing on Value: Directing effort, time, expenditures, and resources to activity that directly contributes value to the organization and achieves desired outcomes.

Managers develop market strategies that are based on either price or value. Managers who choose to compete on price often do so because it’s the path of least resistance. Lowering the price of an offering is easier than improving its quality or adding functionality—at least, until the lower price requires lowering costs. The problem, however, with decreasing price is that it is easy to imitate. The result of a manager’s price cutting is usually a corresponding price cut from the competition, making the company’s competitive advantage short-lived. Worse, the overall market price resets to the new lower price point.

When a market becomes primarily focused on price, everyone loses—both suppliers and customers. Suppliers lose because they must lower costs to offset the market’s reduced margins. They must reduce headcount and use fewer resources. Customers lose because they receive less value. They may continue to receive a good price, but over time they also receive fewer features and less value.

As a consumer, you experience decreasing value in many of the products you purchase. As products based on price evolve, they become less durable. What lasted many years in the past becomes disposable. Household products that historically lasted decades become products that need replacing every few years. Products that once included customer support are provided without any support. Packaged food portions shrink as do other products. If you’ve ever said, They just don’t make things like they used to, you’ve experienced the decreasing value of products in a market based on price.

Reducing costs continually becomes an economic necessity when a company relies on price to compete. To survive and maintain the required profitability, managers must continually look for opportunities to lower expenses. The result is often smaller, cheaper, and less reliable products. Competing on price is a difficult model to sustain for all but the largest organizations. Large organizations that have high transaction volumes are the ones best able to spread out their fixed costs and expenses over many products, markets, and customers.

In contrast, organizations that compete based on increasing features, quality, and service rely more on creating value for their customers than on reducing costs. They maintain their profitability by maintaining prices or raising them as they find ways to increase the function and quality of their offerings. They have a competitive advantage that is harder to imitate. As long as their customers appraise their offering’s value high enough to justify the price, these companies command a higher margin per transaction.

This same principle of focusing on value applies to an organization’s internal operations. Managers focus people on activity that either adds value or reduces costs. Great leaders primarily focus people on adding value. They focus on reducing costs, but only to the extent that it removes waste. They don’t lower costs that remove value—unless the value isn’t truly valued or isn’t as great as the cost to produce it.

Some managers don’t understand the concept of value. They neither add value nor reduce costs to improve the value they offer. They don’t focus on the needs of their customers or follow the moves of their competitors. They simply keep doing what they perceive they do well and are comfortable with. That was the case with Daniel. He was the owner of a boutique professional services company. His company developed custom software and provided consulting services. To his credit, he was an expert in his field. He had over twenty-five years’ experience in his industry and running his specialty business.

Unfortunately, Daniel didn’t focus his expertise on what his customers valued. He felt his knowledge was so superior to everyone else’s, including his customers’, that he promoted his way as the only way. Even though elements of his offering created little value for his clients, he stuck with what he thought was the best solution. He viewed his products and approaches as too magnificent to modify. Maintaining his way was more important than accommodating his clients’ interests and needs.

Rather than focusing on value, Daniel focused on being brilliant. Because he was too attached to his products, approaches, and knowledge, he regularly lost business opportunities to less capable competitors. His business was constantly on the brink of insolvency. About the only sales he made were when he lowered his prices.

Had Daniel been willing to customize his offerings to what his clients most valued, he would have been much more successful. Ironically, he would have delivered more of the value that his products and services were intended to produce. He would have better differentiated his company and earned more money.

You can generally spot managers like Daniel who don’t focus on value by how they operate. They often try every alternative to solving a problem except the one that truly solves it and creates lasting value. They try price reductions, reorganizations, acquisitions, and layoffs before accepting that they need to increase their organization’s value add. They have people on their team who work diligently but not necessarily on the optimal activities. These managers and their people default to doing what is quick and convenient rather than what is most sustainable and valuable.

Great leaders who focus on value have an acute awareness of what adds value and what doesn’t. They develop sustainable results because they focus their organization on activity that creates value. They understand that activity does not equal productivity. They ensure that effort expended is effort that is valued. They differentiate between what is necessary and what is wanted. They focus on activity that produces tangible results.

People’s activity has one of three effects: it adds, maintains, or erodes value. Activity that adds value includes creating quality products and delivering quality services. It includes reducing product costs and expenses where the costs add no value. Value-adding activity is anything that increases an organization’s value. It is activity that is directly in the critical path of achieving the organization’s desired outcomes.

Activity that maintains value includes retaining employees, collecting accounts receivable, and maintaining accurate forecasts. Activity that maintains value is necessary activity that supports an organization but neither incrementally increases or decreases an organization’s value. It is support activity that is directly in the critical path of achieving the organization’s desired outcomes.

Activity that erodes value includes producing faulty products, implementing organizational initiatives that waste people’s time, and providing unsatisfactory customer service. It includes any activity that isn’t in the critical path of achieving the organization’s desired outcomes. Value-eroding activity takes away value from an organization. It might be activity that helps somebody, somewhere, and in some way, but it takes away value from the organization.

Many people unknowingly erode value. They spend time creating unnecessary internal presentations and programs that distract people from doing more valuable work. They send out verbose e-mails with ambiguous information that require time-consuming clarification. They request unnecessary, redundant, or excessively detailed survey input. They ignore problems and allow issues to become more serious instead of putting permanent solutions in place.

Managers in particular erode value when they give confusing guidance and host unproductive meetings. They erode value when they ask for reports, updates, and forecasts too frequently. They erode value when they don’t manage poor performers and are not available when their top performers need them. They erode value when they waste time controlling their people instead of empowering them and leading them.

If you perform an objective assessment of what your people do and how much value it adds, what will you find? As obvious as it seems that maintaining and creating value is what people need to do, many don’t. Many people, particularly in large bureaucratic organizations, spend a significant amount of their time eroding value.

Great leaders work to eliminate activity that erodes value. They focus their teams on activity that adds and maintains value. They focus on what their customers need and are willing to pay for.

Great leaders focus on value through these core attributes:

Operational Focus

Customer Perspective

Roadmaps

Effective Time Allocation

Activity Linkage to Results

Meeting Effectiveness

Organizational Alignment

Knowing the Details

OPERATIONAL FOCUS

Top-performing organizations are proficient in both strategy and operational execution. In comparison to their mediocre counterparts, they are adept at developing an optimal strategy as well as executing it with excellence. They give equal attention to both. I once worked with a company that put so much focus on strategy that they performed miserably in their operations. They talked about improving operational results to shareholders, but the senior executives knew very little about how to actually generate operational results.

The senior executives in this company focused on strategy to the exclusion of operational execution. They spent much of their time in their corner offices, rather than in the field with their employees. They generally focused on three areas. First, they regularly replaced their division managers. Because they gave no attention to developing their managers or enabling their operations, their division managers always struggled. As a result, their divisions’ financial results often missed expectations. The senior executives’ solution was to constantly churn their division managers in and out of the company.

Second, the senior executives focused on accretive acquisitions. They frequently acquired companies to give themselves a temporary earnings boost. Unfortunately, the acquired organizations became equally mediocre after they were integrated. The senior executives’ lack of operational focus and attention to detail quickly ruined what were previously good companies.

Third, the senior executives focused on organizational restructuring. They regularly reorganized their divisions in hopes it would boost their operating results. Unfortunately, it didn’t help either. The net result: their company maintained a stock price for many years at one of the lowest price-to-earnings multiples in their industry.

Strategic management changes, acquisitions, and reorganizations can create tremendous sources of value, but they don’t make up for an organization’s operational illiteracy. Long-term sustainable value comes from being able to implement and execute strategy. It comes from being able to create and add value organically.

Focusing on value starts with focusing on operational execution. It requires appreciating the activity that truly creates value. It is focusing on the detailed work that needs to be done, not merely tending to high-level planning, restructuring, and market maneuvering. As the cliché goes, it is being willing to get your hands dirty.

To be operationally focused, appreciate the organization’s individual contributors and the activity they perform. Understand the difference between what adds, maintains, and erodes value from an operational perspective. Spend time in the details of what is being done and how it is being done. Spend time in the field, meet with customers, and get involved in operational issues. Make time to examine processes, systems, skills, and the organization’s enabling resources. Regularly explore new approaches, better systems, and different techniques. Appreciate and give attention to your organization’s operational needs.

CUSTOMER PERSPECTIVE

Great companies rarely sustain their greatness over a prolonged period. At some point, they eventually stumble. When they do, analysts and journalists are quick to share their opinions as to why. Company failures provide considerable fodder for case studies, lectures, and business articles. Experts cite reasons like delayed product launches, lack of innovation, and incompetent managers. As these are areas always in need of improvement, there is generally a degree of truth in most of their explanations, but the experts often miss the real root cause.

The fundamental cause of most