Execution Larry Bossidy Quotes

The hardware of a computer is useless without the right software. Similarly, in an organization the hardware (strategy and structure) is inert without the software (beliefs and behaviors).

But if you have to choose between someone with a staggering IQ and an elite education who’s gliding along, and someone with a lower IQ but who is absolutely determined to succeed, you’ll always do better with the second person.

The foundation of changing behavior is linking rewards to performance and making the linkages transparent.

The behavior of a business’s leaders is, ultimately, the behavior of the organization. As such, it’s the foundation of the culture.

We don’t think ourselves into a new way of acting, we act ourselves into a new way of thinking.

If you can’t describe your strategy in twenty minutes, simply and in plain language, you haven’t got a plan.

While understanding reality is crucial, equally important is communicating it to your people. In part that means, as noted earlier, knowing your people and listening to their concerns.

You must be in charge from the start of each cycle, to the reviews, and to the follow-up steps you take to make sure the things that are supposed to happen do, in fact, happen. This is how you acquire both the knowledge and the authority to run the business as an integrated, reality-based whole. It is how you ultimately assure that all three processes are linked.

Execution has to be a part of a company’s strategy and its goals. It is the missing link between aspirations and results. As such, it is a major—indeed, the major—job of a business leader. If you don’t know how to execute, the whole of your effort as a leader will always be less than the sum of its parts.

people think of execution as the tactical side of business, something leaders delegate while they focus on the perceived “bigger” issues. 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. And the leader of the organization must be deeply engaged in it. He cannot delegate its substance. Many business leaders spend vast amounts of time learning and promulgating the latest management techniques. But their failure to understand and practice execution negates the value of almost all they learn and preach. Such leaders are building houses without foundations.

At a meeting in a formal, hierarchical setting, a powerful player can get away with killing a good idea. But informality encourages people to test their thinking, to experiment, and to cross-check.

The gap between promises and results is widespread and clear. The gap nobody knows is the gap between what a company’s leaders want to achieve and the ability of their organization to achieve it.

Without execution, the breakthrough thinking breaks down, learning adds no value, people don’t meet their stretch goals, and the revolution stops dead in its tracks. What you get is change for the worse, because failure drains the energy from your organization. Repeated failure destroys it.

Execution is a systematic process of rigorously discussing hows and whats, questioning, tenaciously following through, and ensuring accountability. It includes making assumptions about the business environment, assessing the organization’s capabilities, linking strategy to operations and the people who are going to implement the strategy, synchronizing those people and their various disciplines, and linking rewards to outcomes. It also includes mechanisms for changing assumptions as the environment changes and upgrading the company’s capabilities to meet the challenges of an ambitious strategy.

There’s a saying we recently heard: We don’t think ourselves into a new way of acting, we act ourselves into a new way of thinking.

An environment of fast growth can cover a multitude of sins, but an era of slow growth will magnify every shortcoming of every person in the business, especially the leaders.

Many people strategize themselves into the wrong businesses.

To understand execution, you have to keep three key points in mind: Execution is a discipline, and integral to strategy. Execution is the major job of the business leader. Execution must be a core element of an organization’s culture.

Salary increases in terms of percentage are too close between the top performers and those who are not. There’s not enough differentiation in bonus, or in stock options, or in stock grants. Leaders need the confidence to explain to a direct report why he got a lower than expected reward. A good leader ensures that the organization makes these distinctions and that they become a way of life, down throughout the organization. Otherwise people think they’re involved in socialism. That isn’t what you want when you strive for a culture of execution. You have to make it clear to everybody that rewards and respect are based on performance. In chapter 4, we’ll explain why so many companies don’t reward the doers, and how those that execute do.

That person is primarily operational and doesn’t seem to have the strategic perspective.

There are seven essential behaviors that form the first building block of execution: Know your people and your business. Insist on realism. Set clear goals and priorities. Follow through. Reward the doers. Expand people’s capabilities. Know yourself.

How many meetings have you attended where everyone seemed to agree at the end about what actions would be taken but nothing much actually happened as a result? These are the meetings where there’s no robust debate and therefore nobody states their misgivings. Instead, they simply let the project they didn’t like die a quiet death over time.

Follow-through is the cornerstone of execution, and every leader who’s good at executing follows through religiously. Following through ensures that people are doing the things they committed to do, according to the agreed timetable.

is more process- than results-oriented. We haven’t seen the ability to pull through results. He is more knowledgeable than others but doesn’t perform. His people standards are not high enough, and he isn’t demanding. His leadership skills are underdeveloped. Make sure he gets some help.

is responsive, not proactive. Give him candid feedback. He doesn’t show the passion for the role we need.

performing at the level that is essential for the company’s success.

Sometimes there’s no way around it—you have to let people go. But again you do it as constructively as you can.

Competition for the best leaders will be intense. One way to ensure that you have the right people in the right jobs in this rapidly shifting environment is by writing job descriptions for the kind of people you need in each job as it will exist tomorrow, then match those descriptions against the talents and abilities of the peole holding those jobs today. If you don’t have the right leaders for the environment, then it is incumbent to move quickly and make the necessary changes. You must also begin now to cultivate the leaders of the future, testing and evaluating people for their ability to execute in the face of new challenges and circumstances. Operations

Operations To execute well there must be accountability, clear goals, accurate methods to measure performance, and the right rewards for people who perform. But now, more than ever before, leaders need to design flexible operating plans. In the past a company might make one or perhaps two profound changes in its operations each year.

KNOW YOUR PEOPLE AND KNOW YOUR BUSINESS. In Execution we stress the need for domain knowledge, the kind of granular understanding of how the business makes money that goes beyond profit and loss statements.

But knowing your people is not enough. They need to know you. It is absolutely critical during trying times that you as a leader are accessible, that you project a sense of confidence tempered by concern, that you share as much undistorted and unfiltered information as you can, and that you act decisively. Remember that people are constantly searching for indications about their leader’s ability to carry them through a raging storm and they will interpret or misinterpret the slightest signals, whether those signals are sent intentionally or mistakenly. INSIST

IDENTIFY CLEAR GOALS AND PRIORITIES.

Identifying goals requires a level of savvy and expertise to achieve the right balance. That, in turn, requires the realism and the knowledge of the business and the people that constitute the first two of our seven essential behaviors. Choosing the wrong goals can be disastrous. All too often the wrong goals are set because the leader isn’t realistic about the ability of the people to achieve them. Articulating the right goals is the first step. The people in the organization then have to execute and that means setting priorities and benchmarks.

FOLLOW-THROUGH. Follow-through is a constant and sequential part of execution. It ensures that you have established closure in the dialogue about who will be responsible for what and the specific milestones for measurement. The failure to establish this closure leaves the people who execute a decision or strategy without a clear picture of their role. As events unfold rapidly amid much uncertainty, follow-through becomes a much more intense process. Milestones need to be placed closer together so there is less room for slippage, and information needs to flow faster and in more detail so that everyone knows how the strategy is evolving. Follow-through

Of course, to properly reward the “doers” you must correctly define what a doer is. This is central to the idea of execution. Simply put, a doer is a person who gets things done. Doing is meeting goals. Some goals are legitimately short-term goals that yield short-term results and are properly compensated on a short-term basis. But other goals are long-term and by definition we will not know if we have achieved those goals for some time. Consequently the people striving to meet those goals should be compensated on a long-term basis, with some portion of that long- term compensation based on achieving critical milestones toward the goal. And there are some goals that are so long- term that compensation should only be awarded when a person retires and his or her contributions to meeting those extremely long-term goals can be assessed. Leaders must take responsibility for setting the right rewards for doers. This is particularly true of boards of directors, many of which made egregiously bad calls in rewarding poor performance by the CEOs of their companies. Linked together as these behaviors are, rewarding the doers must be based on the correct metrics. For too long companies—and this often involved boards of directors— set “shareholder value” as one of the goals to be measured and rewarded in compensation plans. But the directors and CEOs who set shareholder value as a goal missed an essential point. Increasing shareholder value is an outcome, not a goal. If you set the right strategy with the right goals and execute well to implement the strategy and achieve the goals—growth in earnings per share, good cash flow, improved market share, for example—then shareholder value is the result. Get everything else right and shareholder value will take care of itself. EXPAND

EXPAND PEOPLES’ CAPABILITIES. The fundamentals of this essential behavior don’t change. Even in tough times you can find ways to provide education and training as an investment in the company’s future. Even though promotions may be few and far between in this toxic environment, you can still find ways to stretch and test your people. It goes without saying that you need to do precise, accurate, and candid appraisals, but be sure you are looking for the qualities that matter amid the current turmoil: energy, courage, honesty, integrity, and perseverance. You need people who can roll with the punches, not people who are whiners and naysayers. You also need to rethink which people are more likely to rise to the top in the new environment as your organization’s strategy evolves.

Thus you have to rely on yourself to contain your own ego and recognize your inevitable blind spots. Be particularly cautious about losing your ability to listen. Not only do you need expertise from both within and outside the company to shore up your blind spots and weaknesses, but also a pipeline to people willing and able to bring you diverse views and bad news. Above all, you need to be able to recognize when you’re part of the problem.

If you have leaders with the right behavior, a culture that rewards execution, and a consistent system for getting the right people in the right jobs, the foundation is in place for operating and managing each of the core processes effectively.

The Duke team identified four basic groups of competencies: functional skills, business skills, management skills, and leadership skills.

The general environment is the same for every player. What differentiates the successful ones are their insights, perceptions, and abilities to detect patterns of change and relate them to their landscape, industries, competition, and business.

Execution not only ensures efficient use of resources in a credit and cash-starved world, but also provides the feedback loop needed for the business to adjust to changes—big or small—in the external world.

Competition for the best leaders will be intense. One way to ensure that you have the right people in the right jobs in this rapidly shifting environment is by writing job descriptions for the kind of people you need in each job as it will exist tomorrow, then match those descriptions against the talents and abilities of the peole holding those jobs today.

Much has been written about Jack Welch’s style of management—especially his toughness and bluntness, which some people call ruthlessness. We would argue that the core of his management legacy is that he forced realism into all of GE’s management processes, making it a model of an execution culture.

While understanding reality is crucial, equally important is communicating it to your people.

IDENTIFY CLEAR GOALS AND PRIORITIES. The ability to identify clear goals and priorities is being tested as the world resets. In 2008, for example, the primary goal for many companies became safety and managing for cash. But within that goal was the related one of managing for risk and a shift from previous years in the balance between the short-term and the long-term. Identifying goals requires a level of savvy and expertise to achieve the right balance. That, in turn, requires the realism and the knowledge of the business and the people that constitute the first two of our seven essential behaviors. Choosing the wrong goals can be disastrous. All too often the wrong goals are set because the leader isn’t realistic about the ability of the people to achieve them. Articulating the right goals is the first step. The people in the organization then have to execute and that means setting priorities and benchmarks. It isn’t enough to say “we need to generate $10 billion in cash.” You have to know what parts of the business will generate how much cash, how they will do it (by better managing inventories and receivables, for example), who is accountable, and how to follow through to be sure everyone is doing what they are supposed to be doing.

One way to ensure that you have the right people in the right jobs in this rapidly shifting environment is by writing job descriptions for the kind of people you need in each job as it will exist tomorrow, then match those descriptions against the talents and abilities of the peole holding those jobs today. If you don’t have the right leaders for the environment, then it is incumbent to move quickly and make the necessary changes. You must also begin now to cultivate the leaders of the future, testing and evaluating people for their ability to execute in the face of new challenges and circumstances.