Agility, High-Performing Leaders, and Embracing Change

A study from the Institute for Corporate Productivity i4cp shows correlation between leaders in high-performance organizations and agility, but fewer than half claim to be good at it.

Those companies that have consistently outperformed competitors in profitability, market share, revenue growth and customer satisfaction - dubbed high-performance companies by i4cp researchers - reported much greater agility than their lower-performance counterparts:

• Almost 60% of high-performance organizations are adept at identifying and making needed incremental changes, versus only 35% of lower performers.
• Nearly the same amount (58%) recognize and respond to strategic challenges in a timely manner, while only 30% of low performers do the same.
• A little under half (49%) of high-performance organizations are proactive in anticipating and initiating the changes needed for sustained high performance, compared to only 20% of low performers.

BOTTOMLINE:  "Most organizations understand the need for agility; what they don't understand is how to create a more agile culture. Our research and work with our member companies has uncovered some important findings about creating a corporate environment that doesn't just "manage" change well, but instead embraces change as a competitive advantage."

Strategic Thinking vs. Strategic Planning

Are strategic thinking and strategic planning - the same thing?

While they certainly related and complementary, thinking strategically and planning strategically are two different concepts.

Let's first consider strategic thinking, which involves viewing your organization from a holistic perspective.

Research has determined that strategic thinking can be explained through seven dimensions:

1. A vision of the future
2. Strategic formulation and implementation
3. Managerial role in making strategies
4. Control
5. Managerial role in implementation
6. Strategy making
7. Process and outcome

Strategic thinking is extremely effective and a valuable tool, and requires developing skills in creativity, problem solving, teamwork, and critical thinking. The good news?  It's a skill that can be learned.

Steps in building strategic thinking skills:

1. Critically examine and evaluate the existing situation. Understand what is being done, if it needs to be done that way, and fight hard against the "we've always done it that way" mentality.
2. Look at your business as a holistic system. Strategic thinkers view their businesses as a whole: its strengths, weaknesses, opportunities and threats.
3. Focus on the future. Strategic thinking is future-oriented. Before considering the viability of ideas, consider their potential contribution to the future of your organization.  
4. Continuously ask for feedback from your customers. Strategic thinking cannot be effective if done in a vacuum. 
5. Get realistic data for confirmation. Strategic thinking requires making predictions about the future and forecasts must be realistic. Gather reliable data to justify and confirm your predictions. 
6. Align your thoughts to your organization. Review your organizational structure to determine if the organization and key leaders are in place to fulfill your vision, otherwise it's a pipe dream.
7. Be ready to consider change and unexpected challenges.  Flexibility is a critical element of strategic thinking.

Strategic planning, on the other hand, is a continual planning process that relies on strong strategic thinking. When done correctly, strategic planning  is not a one-time or annual event.  It's an on-going process, reviewed quarterly, that affects the organization's initiatives, plans, and activities. 

BOTTOMLINE: Both strategic thinking and strategic planning are important - even vital to your organization - and neither can be ignored.

(TIP: For more on strategic planning, search this blog for "strategic planning" - you'll find dozens of related posts, hints and tips are available to you!)

Execution – The Fine Art of Getting It Done (Part II)

(The following post is authored by Eric Kurjan, President of Six Disciplines Ohio. Six Disciplines brings “big company” process improvement to organizations looking to jump beyond the status quo. For more information visit www.sixdnwo.com)

###

Execution – The Fine Art of Getting It Done

In last month’s newsletter, I shared the key processes for building the strategy (see the original post here) .  In this article I will share some of the finer points of bringing the strategy to life.

To start, the keys to a good strategy are found in the words, “Where”, “What” and “How”, which are an easy to remember summary of the Six Disciplines process for Disciplines I and Discipline II.  However, it is the next words of “Who” and “When” which turn the plan into action.  This is the crux of Disciplines IV – Work the Plan. This is where we need to engage the organization to do the “real work”.  If we can get our employees focused on what is most important and measure the activities then the results will follow.  The added benefit is that “who” and “when” are the cornerstones for creating a much higher level of accountability in the organization.  The concept we are trying to create is that the work which is assigned is a contract between the Team Member/Employee and the company.   In essence every quarter we are saying “I (name here) commit to do this work for Company X”.

 Without a doubt, execution is the tougher, more critical side of the strategy/execution equation - getting it done, measuring progress along the way, and finding what doesn’t work early enough to make course corrections, are the steps to insure individual activities support the Vital Few Objectives (VFOs).

The best way to drive the execution of the strategy is to create a plan for the specific assigned work for each quarter of the year.  We call this an Individual Plan or IP.   The IP consists of two key components.  First, the normal everyday tasks as described in your job description are called sustaining or “Run the Business” activities. Second are the tasks or activities which are intended to “Change the Business”.  These are the date-driven tasks that are supporting the initiatives/projects which we have chosen to implement to truly change the direction of the company and support the key objectives (VFOs).

Here is an example of a simple Individual Plan:

This example of an “Individual Plan” breaks the work into the two key components of “Change the Business” and “Run the Business” activities. It also sets due dates, defines priorities and approximates the hours it will take to complete the tasks assigned.  The “IP” also takes into account other activities like “Personal Development” and “Administrative Activities”.  We include one more segment called the “Parking Lot” which is a staging area for tasks that you are not committing to complete this quarter but if time permits you might put some work into them.

The tendency for most people and organizations is to over-commit.  Somehow everyone thinks they can achieve much more in a given timeframe.  A critical component is to place a “Weight” or priority on the key tasks.  The weighting allows you to be sure you are focused on those key items first.  The weighting is not intended to represent the item with the most hours but the items that must get done.  If trying to make a judgment on where to spend your time, the weight should dictate that decision.  A second critical component is time or the “Hours”.  This is the estimate of the hours required to complete the tasks in the IP.  These hours may not be exact but they at least give a range of the required time.  To gauge the workload we suggest you start with 520 hours per quarter (40 hours per week x 13 weeks).  The hours may vary by role in the organization but it is a good spot to start.

In my example, Susan is carrying 632 hours for her Quarter 2 IP.  That works out to be a little less than 50 hours per week which may be fine for Susan’s role.  What we are looking for are unrealistic hours – both total hours and individual tasks that would cause Susan to be unable to fulfill her commitment, her “contract” for the quarter. Even the best plans need to have room for adjustment.  Another important consideration is that since it is a “contract” between the employee and organization, the manager needs to sign-off on this contract too. To sign-off on the contract, the manager needs to agree with the tasks Susan plans to work on and that the hours are realistic.  This also means the manager cannot add more work on Susan’s plan after the quarter has started.  Although placing more work on employees is a very common occurrence it generally means that the original IP has little value and the “contracted” work will not be completed on time.

So how do we adjust for the changes that are likely to occur?  First, we always recommend including a “catch-all” bucket called “Unplanned Time” to account for the unexpected.  The second is that there is a trade-off.  If there is work/tasks that are truly more important than what has already been assigned then something needs to be reprioritized, the date pushed out or the current task replaced/removed.  This will be difficult for managers and leaders who are used to just coming up with “brilliant’ ideas and then dropping them on someone in the organization.  Unfortunately, many of these “brilliant” ideas do not even fit within the objectives set in the strategy.  So the IP actually helps prevent “brilliant” ideas from distracting the organization.

It is this lack of focus and commitment to the execution phase that kills most strategies.  It is like cheating on your diet.  If you remain true to the plan you will lose weight, if you cheat, you won’t. Living up to the contract by each person with an IP makes the strategy succeed.  Execution is a simple concept, but hard to live by.

Six Disciplines Business Coach Offers Advice To PGA Golf Professionals

Eric Kurjan is president and owner of Six Disciplines Ohio/Indiana, with licensed Six Disciplines business coaches operating in both states. He's also the president of a private golf club (Findlay Country Club).

In this article, recently published in PGA Magazine, Kurjan offers his advice and explanation of the Six Disciplines methodology to PGA professionals.

The Top CEO Concern Three Years Running: Excellence In Execution

According to the latest results from the CEO Challenge 2010 Survey produced by The Conference Board, the critical issues of excellence in execution and consistent execution of strategy by top management once again remained at the top of the list.

In addition, this latest survey (which was fielded October-December 2009) revealed such growth-oriented challenges as sustained and steady top-line growth, customer loyalty/retention, and profit growth received higher ratings as "greatest concerns."

Also moving up were corporate reputation for quality products/services, and stimulating innovation/creativity/enabling entrepreneurship.

Here's links to their two previous surveys in which execution was named the top priority:

Executing Strategy - Once Again The Top Priority for CEOs

Excellence of Execution is Top Concern for CEOs Worldwide

CEOs are Priming for a Return to Growth

According to results from the CEO Challenge Survey produced by The Conference Board, CEOs appear to be emerging from recession mode and priming for a return to growth.

Other key results from the survey:

• The critical issues of excellence in execution and consistent execution of strategy by top management have consistently remained at the top of the list. 
• Participants in the survey place such challenges as sustained and steady top-line growth, customer loyalty/retention, and profit growth among their top 10 challenges. 
• Also moving up the list of concerns were corporate reputation for quality products/services, and stimulating innovation/creativity/enabling entrepreneurship.

Too Many Strategic Initiatives?

Is your organization "drowning" in too many strategic initiatives?

If you're evaluating far more opportunities than your team can realistically handle, it's time to do a serious screening of those initiatives.

According to Robert W. Bradford, President/CEO of the Center for Simplified Strategic Planning, your organization should only take on between 3 - 10 strategic opportunities, depending on the size, breadth of your team and its resources. (We've found the fewer, the better.)

Bradford recommends a senior team exercise in which you simply ask the team to rate each opportunity on two dimensions – resource requirements and strategic impact on the organization.

• For resource requirements, you may want to anchor the rating on a one to five scale.  In a medium sized company, a one might indicate resources commensurate with an individual employee’s initiative – requiring little management of either manpower or money.  A two could correspond with departmental level resources, a three with two or more departments, and a five would indicate a need for co-ordination of resources across the entire company. 

• For strategic impact, we used one for “nice to do”, three for “important” and five for “critical to our future”.  Note that we do NOT rate on a purely financial basis, and in practice, opportunities with a strictly financial payoff were generally given a three impact rating – that is, a simple boost to profit is not enough to earn an opportunity high marks on strategic impact.

BOTTOMLINE: "If your organization is plagued by a surplus of incremental projects or “just do it” items that are overwhelming mid-level management, this approach to opportunity screening may give you one more way to rationally say “no” to things that will impede your strategic progress."

The Benefits Of A Formal Strategy Execution Process

Scott Cleveland reported that a managing director of the Palladium Group (think: balanced scorecard) conducted a survey that compared two groups, one with and one without a formal strategy execution process in place.

A formal process in their terminology means "strategy maps, derived projects and process improvements from it, and associated key performance indicators (KPIs) with targets reported in scorecard dashboards and cascaded down into the organization."

The results?

• 70% of organizations WITH a formal process were exceeding the performance of their peers in their industry, while in contrast only 27% of those without a formal process were.

BOTTOMLINE: The overwhelming majority of businesses (and particularly, small and midsized organizations) do not have a formal process for strategy execution. They do not have strategy maps, derived projects, process improvements and associated key performance indicators (KPIs) with targets reported in scorecard dashboards and cascaded down into the organization.

What kind of strategy execution process is your organization using?

Welcome Business Strategy Execution!

Welcome Business Strategy Execution, Inc. to the growing network of licensed Six Disciplines business coaches.

If you're in Rhode Island or Massachusetts, and want to find out more about the services offered locally by Six Disciplines, contact Jim Crisafulli at 401-356-0030 or visit them on the web.

Top Companies for Leadership Reveals Differentiators

HR consulting firm Hewitt has released their "Top Companies for Leaders 2009" study, which reveals that leadership is more important than ever before.

Their research has found that the Top Companies for Leaders are never satisfied, and use a number of tools in their leadership and talent planning efforts. In short, they bring a "measurement mind-set" to the often inexact process of developing the next generation of leaders.

Click here to view the highlights of the report.

Creativity and Purposeful Innovation

"Creativity, a quality more traditionally associated with artistic endeavors, has been slow to find its acknowledged place in the business world. "

So begins an article from the Harvard Business School's Working Knowledge site called "Getting Down to the Business of Creativity."

Key points:

• Business leaders must manage and support creativity just as they would any other asset.
• People have their best days and do their best work when they are allowed to make progress.
• Their research suggests that most managers are not in tune with the inner work lives of their employees.
• For the longest time, creativity was considered the work of a genius operating on their own, however, there's a construction of creativity that involves many other actors.

BOTTOMLINE: Creativity, when sought after and encouraged, MUST be done purposefully.

Innovation, which is really just another name for creative problem-solving, must be done in such a way as to support the overall strategy of the organization. Discipline V - Innovate Purposefully is a discipline that is detailed in the award-winning handbook Six Disciplines for Excellence. It is not an isolated event in an annual or quarterly cycle; it's a mindset that permeates the culture of an excellent organization.

How To Build Accountability Into Your Organization

Many of the top-performing organizations we work with every day - have expressed a real need to build accountability into their organization.

Take a quick minute – and consider the following key questions:

• Does each of your team members understand exactly what they are responsible for?
• Does your leadership team set consistent expectations for accountability?
• Do your new team members know exactly what’s expected of them – Day 1?
• Are all of your team members self-managing?
• Do you have a standardized way of monitoring progress? Weekly? Monthly? Quarterly
• Does your hiring process focus on attracting individuals who can be self-managing?

BOTTOMLINE: Here are some steps to consider when considering organization-wide accountability:

• Understand your company's core competencies
• Validate your team members
• Create a culture that grows and develops its people
• Identify the systems and processes that are now in place throughout your company and rely on your team members to make the systems and processes more efficient and more effective
• Get the right people in the right place
• Get all team members to understand that what they do affects everyone else in the company
• Build a strong second-tier management team that can take the company to the next level
• Hold everyone, including yourself, accountable
• Raise the bar by bringing in top talent

Top Five Reasons Why Strategic Initiatives Fail

Next time you consider embarking on a strategic initiative, be aware of the following five factors that are common elements of failed initiatives (from IndustryWeek's article: "Top Five Reasons Why Strategic Initiatives Fail")

1. Strategy is Not Clearly Communicated to the Stakeholders
2. Lack of Support by Key Leaders in the Organization
3. Decision-Makers Do Not Understand the Relevance or are Unable to Measure Progress
4. Lack of Impact on Employee Compensation
5. Technology Needed for Implementation is Not Available

Achieving Sustained Growth - Take Two

As reported in the Harvard Business Review's Daily Stat, the consulting group Bain's updated global database of Sustained Value Creators found only 12% of companies worldwide managed to grow profits and revenues more than 5.5% over the 10 years and earn back their cost of capital. 

Here's another take on the same issue: 

As reported in the best-selling book Six Disciplines Execution Revolution, (How Big Is The Challenge, page 29), a recent McKinsey study concluded that few large global companies outperform their competitors on both revenue growth and profitability over a decade. The consulting firm analyzed 1,077 companies according to revenue growth, profitability, and both measures. This study concluded that thirty of these companies were superior, based on growth over this period. Ninety-nine were superior performers by profitability. And only nine (.008 percent) out of 1,077 companies were superior in both categories.

BOTTOMLINE: Achieving sustained, profitable growth is very challenging, and the odds of success are low.  Achieving such balance and predictability is extremely difficult, and therefore, extremely rare. While this fact may be viewed as a deterrent to some, it provides insight into an enormous opportunity for building a business that executes more predictably than most. 

Trends Affecting Leadership Development in 2010

The most significant emerging trends affecting leadership development, as identified in a Human Resources Executive recap of the 2009/2010 Trends in Executive Development: A Benchmark Report, are: 

1. Impact of the Economy. It means that there is more pressure now than before to prepare leaders who can weather the storm and navigate their companies successfully through the turbulence.
2. Bench Strength is No. 1. "Lack of bench strength" was identified as the second most influential factor impacting executive development and "Increasing bench strength" was the top key objective in executive development.
3. Accelerate the Development of High Potentials. Respondents placed much greater emphasis on the identification and development of high potentials in the 2009 survey than in any of the prior surveys.
4. Strategic Thinkers and Those Who Can Inspire. Areas in which the next generation of executive leaders are weak are the ability to think strategically, lead change, create a vision and rally others around that vision.
5. Better Metrics. A standard for measuring participant outcome has become more universal. This is a notable shift from just four years ago, when evaluation metrics was a much more fragmented practice.
6. Leader-as-Teacher Model. The use of leaders as teachers has become a best practice that is growing in popularity. Respondents noted that it is a particularly effective component in their executive-leadership programs.

Read a lengthy excerpt of the study here. 

Do You Need a Consultant, or a Business Coach?

What is the difference between a business coach and a consultant?

A consultant completes projects for you based on their own technical expertise. Often, a consultant will provide suggestions and direction for what needs to be fixed, however, rarely will they help the business leader actually implement the fix.

A business coach guides you in growing your business:

• Business coaches provide business leaders with awareness, education, and accountability through regularly scheduled coaching sessions and other proven, best-practices business performance tools.
• Instead of getting paid for billable hours or project work like consultants, business coaches get paid for the value they deliver to clients.
• Business coaches help business owners become aware of their blind spots, and leads them to discover the possibilities in their business. 
• Business coaches provide information to help build business best practices and close the gaps and accountability to meet performance objectives.

BOTTOMLINE: Not every business needs a consultant, but EVERY business needs a business coach.

New Leaders Need Coaching Too!

Only 23 percent of new leaders — or employees who have advanced from being individual contributors to supervising or managing others — receive the coaching they need to reach their full development potential, according to a survey conducted by Right Management, a provider of integrated human capital consulting services and solutions.

Key findings from the survey:

• While organizations see value in providing coaching to strategic and developing leaders, coaching is not offered as frequently to new leaders.
• Most new leaders advance in their careers due to their proficiency with technical skills, but they don’t necessarily have the leadership abilities needed for success in their higher-level positions.
• New leaders would benefit most from coaching in emotional intelligence skills. “Coaching in emotional intelligence provides self-awareness, builds management and social skills, and assists one to become more empathetic toward others and more understanding of oneself.
• New leaders don’t need coaching in technical skills as much as they need guidance in how to treat others.”

BOTTOMLINE: “New leaders need as much development as strategic and developing leaders. They are the future leaders of the organization. Smart organizations focus their resources to develop these individuals and ensure they deliver on their much-anticipated success.”

Identifying Growth Leaders In Your Organization

According to a Wall Street Journal article, "Growth leaders - most companies have managers who can turbocharge results. The trick is finding -- and nurturing -- them."

"Indeed, powerful catalysts for organic growth often exist deep within an organization, hidden and untapped. We're talking about a special breed of midlevel managers -- men and women who possess the vision, leadership and entrepreneurial talents that together make up what we refer to as a growth leader."

Find them, recognize them, and support them - or your competition - WILL!

How to Make Organizational Change Enduring

Here's a real shocker:

In a survey of 3,300 senior managers and human resource professionals reported by Rob Lebow in his Washington CEO magazine

• 75% of all organizational change programs fail

Why is change so hard?

Most organizations say their most important assets are their people, but few behave as if this were true. Change initiatives typically devote most budgets to structural issues such as technology and processes, not staff issues. There is still a whole notion of focusing on tangible assets and their impact on the bottom line, rather than the intangible assets, which are people. Organizations don't adapt to change; their people do.

Constant change in the organizational environment mean that leaders must not only learn about change and its impact on people and systems, leaders must be able to master the process of implementing change, just as their employees must learn to accommodate change.

Why do most change efforts fail?  Here's an analogy: As with a transplanted flower, it initially wilts after the transfer. However, in time with proper care, it stands upright again. With continued good care, it blossoms. The same holds true with the introduction (transplant or transfer) of a new system (a new idea, business-building method, best-practices, business improvement processes), the productivity curve drops (wilts) - but given proper support and care, the productivity curve loops upward on a continuous positive trend.


Transition trauma is little understood by business leaders, but it is a fact of organizational change.

Some misread the downward curve (wilt) as failure, often triggering inappropriate actions; rather then understanding it as transition trauma that is a normal readjustment, realignment and adaptive phase of change that requires trust, patience and on-going support.

Replace Annual Performance Reviews? Where Ya' Been?

In his book, Just Ask Leadership: Why Great Managers Always Ask the Right Questions, author Gary B. Cohen proposes a "radical practice": 

......replacing annual performance reviews with monthly ones. Monthly! The heart stops at the thought. And yet...take a look at the process the author describes. The reviews are conversations about the best way forward, not critiques of the past. Look in particular at the issue of timing. Might not this approach, if practiced regularly, lead to a whole different way — a much more mutually appreciative way — of looking at the job and the task at hand?

Sorry - but from my standpoint, regular reviews of performance need to be conducted even more frequently than monthly.  How about weekly (just a progress/synch meeting - but it's still better than monthly!)

An excerpt of chapter 2 of this book is pushed here at Strategy + Business magazine.