When we first published our research into Executive Teams we reported that 85% of senior managers interviewed are not confident that they are executing strategy effectively. A cause for serious concern, and yet it will not surprise many seasoned Executives. For as long as we can remember, this problem has been there. Much of our consulting work is designed to address this shortcoming.
So why is this the case? Why is it so hard to implement a strategy? In our experience, as both senior managers and consultants, it is not that companies lack some kind of strategic intent. They frequently know, broadly speaking, what they are trying to do. It is the doing itself that confounds them.
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The late, great Peter Drucker once said: “People often overestimate what they can accomplish in one year. But they greatly underestimate what they could accomplish in five years.” This resonates strongly with our experience of working with Executive Teams. There is a temptation to take on way too much (and maybe avoid making difficult choices) in year 1 and by the end of that, the hard work of seeing significant changes through has become readily apparent. The inconvenient truth is that anything important happens rather slowly.
In the age of ‘Unicorn’ companies, transforming the possibilities in an industry in double-quick time, it is becoming unfashionable to look at the hard yards of progressive transformation and continuous improvement. Hilton took about 100 years to create a business that has a capacity of 700,000 rooms. Airbnb has a capacity of 1 million rooms, a feat that has taken less than 6 years. Remember however, that the Airbnb’s of this world are set up for ‘new’.
It matters greatly to the majority of businesses to master more progressive change. If you can get 10% better every year, then you will be about twice as good in less than 8 years. This is the mathematics of sustainable organisational change. Not quite as exciting as the world of Unicorns is it? It’s real though, and over time it makes a massive difference. It takes deep, repeated study and a gestation period to successfully change. It takes applying ideas to the world, feeling them out, re-doubling yourself, and trying again. Not giving up when you forget or fail. It is through the process of refinement that we learn new habits and ideas.
As we look back on the 8 Foundations from our research what strikes us is that there is a common thread. That thread is what it takes for the successful leadership of change. It requires forming strong relationships that can survive and benefit from challenging conversations. It requires building a diverse and talented team. Creating a positive culture. Being aware of, understanding and responding to external influences. It may require being prepared to stop doing something when it is not having the results we wanted, admitting that we got it wrong and changing course. Change leadership requires very human traits.
Unfortunately, too often we see short-term performance pressure from investors that drive short term or unrealistic decision making by Executives. The Executive Team needs to muster enough confidence and clarity to avoid over-promising and consequently under-delivering. To create the breathing space within which they can deliver real change, leaders need a credible strategic story and a reputation for delivering on promises that is hard won. It comes from an assertive confidence not just a desire to please. You need to earn the right to be trusted to deliver over time and to operate strategically.
The strategy needs to be translated into a compelling roadmap that is simple, visible to everyone involved, shows the lead measures and tells us at a glance where we stand. Compelling means that those people who have to deliver it believe in it, they know why it is worth going the extra mile for it. Getting the lead measures right is an essential precondition for managing the progress of strategy execution as a team. Profitability matters, but the best way of delivering it is by focusing on the drivers of profitability, which means understanding the market, the customer delivery required and the organisation that will make it happen. With this, the team can decide when and how to ‘correct course’ as it steers the organisation through changing market conditions.
The 8 Foundations set out what is required for an Executive Team to provide the organisational leadership that will sustain business competitiveness. Work at all the Foundations and successful strategy execution will be more likely to follow. They do not represent a quick fix, or a ‘silver bullet’. But they will serve you well if you care about the future, not just the present, of your organisation.
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