On Leadership

The Hall of Shame: Six Organizations That Couldn’t “Get It Done” in 2011

It’s that time of year when business owners and senior executives take stock of the past twelve months. What did 2011 look like for you and your company?  The questions you could ask during your year-end review are endless. But, there’s only one that really matters: Did your company effectively execute its business goals?  

If an organization can’t achieve results, nothing else matters—not the smartest strategy, not the most innovative business model, not even game-changing technology.  And for many companies, there is a clear gap between strategy and execution—we’ve seen plenty of evidence this year.  

Our research uncovered five characteristics, which we call “The Five Bridges,” that enable people to traverse this execution gap. It is these bridges that differentiate the companies that are consistently able to achieve results.  To learn from the “living laboratory” of real-world companies, here are six of this year’s headline makers and the lessons we can take away from their struggle.

Execution Gap Maker #1: The Japanese Government

Facing the possible meltdown of the Fukuskima Daiichi nuclear reactor, Prime Minister Naoto Kan asked a small circle of trusted advisors to weigh the risk of injecting seawater into the reactor to cool it down.  Unfortunately, because of Mr. Kan’s distrust of bureaucrats, he did not make use of Japan’s crisis management system which brought bureaucrats from various ministries under the direct command of the prime minister.  As a result, he did not involve members of Japan’s Nuclear Safety Commission or Tepco, the company that ran the power plant. 

Not involving these key stakeholders prevented him from quickly grasping the severity of the situation and adversely impacted the quality of Mr. Kan’s decisions and the speed with which he acted.  For example, he did not know that the plant manager had already started using seawater and continued to do so, despite being told to stop by his bosses at Tepco.  As it turns out, the plant manager’s act of defiance may have prevented many deaths.  In addition, Mr. Kan and his team were not aware of the resources they did have available like a national system of radiation detectors.  If they had been aware of this system, which predicts the direction radiation is moving, they would have been able to prevent residents who were evacuating from heading directly into the radioactive plumb.

The “BRIDGE” that failed: Involving Others in Decision Making.

THE LESSON:

In order for any organization to execute successfully, the right people have to be involved in the right decisions. The Prime Minister of Japan provides a devastating example of what can happen when this isn’t the case.

Obviously, this lesson is even more critical when there is as much at stake as there was in the Japanese disaster.  But really for any company trying to gain footing in a constantly changing business environment and tough economy, empowering the right people to make the right decisions can be the difference between landing that next great customer or account.

Execution Gap Makers #2 and #3: Connecticut Light and Power (CL&P) and the State of Connecticut

Few of the people who live in Connecticut would argue that CL&P was not prepared for October’s nor’easter.  It appears that CL&P’s emergency response plan was woefully inadequate.  The plan’s worst case scenario considered outages of 100,000 customers, or less than 10% of the customer base.  At its peak, the outage was over 800,000 customers, or about 66% of the company’s base.  Partly because of the original planning assumption, CL&P did not pre-stage adequate restoration resources in advance, which delayed the recovery effort in the first few days.

In addition, there appears to have been a lack of coordination among local and state government which contributed to shortcomings in preparedness, communication and private sector cooperation. Although there were plans at the state and municipal levels, there was not one centralized master plan that shows how state government should interact with its own agencies and how the state should coordinate its own activities with those of the utilities and municipal governments.

At the company level, the lack of coordination and collaboration is illustrated by CL&P’s promise to restore power to 99% of customers by November 6 without vetting it internally.  Not surprisingly, they missed this self-imposed deadline (as well as the one after that), which seriously undermined confidence in CL&P’s management team’s ability to deal with the crisis.

The “BRIDGES” that failed: Translating Strategy into Action and Coordination and Cooperation.

THE LESSON:

Execution starts with a plan. Although most organizations and leaders understand the value of developing a plan that outlines how a goal will be accomplished, the most effective leaders also ensure that plans are aligned and mutually supportive across organizational boundaries.  It’s also critical that organizations learn to coordinate decisions and actions across functions and levels.  But doing so requires more than faith and words alone.

Shared goals and clearly defined roles provide the foundation upon which cooperation and coordination can be built. In addition, people must be held accountable for results. This requires a combination of leader behavior and systems that reinforce the appropriate behavior among employees.

Execution Gap Maker #4: UBS

In September 2011, a “rogue trader” was arrested for a scheme that lost UBS $2.3 billion.  Although UBS hoped to show that this trader’s activities were an aberration, it appears that the unauthorized trading was just the latest in a series of ethical and legal lapses at UBS.  For example, in 2008 UBS settled charges brought by New York State that it misled customers when it sold them what it described as nearly risk free auction-rate securities even as its executives knew the market was collapsing.  In 2009, the Justice Department contended that UBS conspired to enable 17,000 wealthy Americans to engage in tax fraud.  In return for a deferred prosecution agreement, the bank agreed to pay a $781 million fine and divulge the names of the account holders.  In May of 2001, UBS paid $160 million and admitted that its employees had conspired to rig bids in the municipal bond derivative markets.

It appears that the most recent case of unauthorized trading is consistent with a culture at UBS that stressed individual advancement over team effort and personal achievement over ethical and legal considerations.

The “BRIDGE” that failed: Alignment Between Leader Actions and Company Values and Priorities.

THE LESSON:

A company’s culture is made up of the values and beliefs held by a majority of its employees.  Contrary to the common belief that values are “soft” and amorphous, they are quite concrete and drive behavior and systems.  Therefore, an organization’s culture is known or “recognized” by the behavior of its leaders and its work processes.

Leader behavior must be aligned with company objectives and values. While I admit this phrase has been said so often it’s become a cliché, companies can’t afford to ignore it.  You don’t really understand how important value alignment is or the impact it has on effective execution until you see what happens when it’s not there. That’s why stories like the UBS one are so important. They remind us not to take it for granted or assume it’s a ‘no-brainer.’

Execution Gap Makers #5 and #6: Netflix and Research in Motion (RIM)

Ironically, Netflix was on our 2010 list as a Gap Closer and an example of the same Bridge – Managing Change – that failed in 2011.  Partly because of the dramatic change in what was regarded as an almost flawless track record, Netflix’s missteps caught the media’s attention and were very well documented this year.  From its attempt to change its pricing structure to the announcement that they would rebrand the DVD service as Qwikster (which they quickly cancelled in the face of customer outrage).  In both cases, it was apparent that Netflix misread its customers and their expectations.

As CEO Reed Hastings admitted, Netflix had become overconfident, which was a contributing factor in the mismanagement of these key changes.

RIM gets an “un-honorable” mention in this category.  It appears that the Canadian company is having difficulty responding to the change created by the entry of Apple’s iPhone and iPad and Google’s Android technology.  Unlike when RIM dominated the market, their traditional customer, corporate IT, is starting to look at these new technologies more favorably and relaxing the distinction they had made between personal and business use.  This shift in perspective and the performance and features of their competitor’s products is forcing RIM to step up their game and rethink how they will compete in both the enterprise and consumer markets.

However, RIM has been unable to launch new products with the same appeal as its rivals (or even with its previous products) and it has suffered a number of significant service interruptions that have angered customers.  This has caused customers and potential customers to lose confidence in the company and encourage them to look at competing products.  RIM’s poor execution may actually end up being the antidote to the “crackberry” addiction they created.

The “BRIDGE” that failed: The Ability to Manage Change.

THE LESSON:

Effective execution requires vigilance.  Just because you’ve got it right today doesn’t mean you’ll get it right tomorrow.  As the Netflix example illustrates, the Bridges are quite fragile and require constant attention.  Arrogance and complacency are the beginning of the downward spiral into the execution gap.

It’s also important to remember that, despite all the effort and resources that have been devoted to helping leaders and companies manage change, they still often get poor marks in this area. That said, yet another change management process or program is not the solution, emphasizes Lepsinger.

 Our research, as well as the research of others, indicates that successful change is connected more to the individual and collective mindsets of employees and customers than any process. People change when they are ready—not just when they understand the need for change. The most successful companies facilitate change-readiness and don’t just rely on making the business case to drive people’s motivation to change.

As these stories illustrate, execution is the real bottom line and it’s what every business needs to focus on as they seek to improve organizational performance—and it’s the lens all leaders should look through as they review 2011 and make their “business resolutions” for 2012. 

Execution is not a single-point event. It’s an ongoing process. But since your ability to execute well and consistently is the very fabric of success, I can think of no better place to focus your time and energy.

 

Virtual Collaboration is Not For Everyone: The Characteristics of Top Performing Virtual Leaders and Team Members

Many organizations have migrated toward telecommuting and virtual work due to rising travel costs, a global customer base, and the dispersion of talent.  While numerous organizations have made significant investments in virtual teams and the technology to support them, a surprising number of virtual teams are not successful. 

OnPoint Consulting surveyed 48 virtual teams across industries and found that specific characteristics are required to lead and work effectively on virtual teams.  Unfortunately, many organizations do not put as much thought as they should into their team leader decisions. In fact, we often hear stories about team leaders who were selected based on availability or simply because they volunteered. Remember, leading a virtual team is a challenging task and requires a different skill set than leading a traditional co-located team.  

What are the characteristics that make top performing virtual leaders and virtual team members successful?  Our research identified several characteristics and behaviors that enable leaders and team members to work effectively in a virtual setting.

The most effective virtual team leaders are able to balance both the execution-oriented practices and the interpersonal, communication, and cultural factors that define virtual teams. Organizations should take time to select the individual with the appropriate skills—and not just go with the first person to volunteer or someone who already happens to lead a team. In addition, they should periodically assess their leaders’ effectiveness and provide them with targeted feedback about how they can enhance their performance. Great leaders will be happy to learn what they can do to keep improving.  

Organizations should also ensure that their virtual team members have the skills necessary to effectively collaborate from a distance. People who are motivated and are able to work in a self-directed manner, have a tolerance for ambiguity, are strong communicators, and are collaborative will be more effective on virtual teams.

An article in the June 2009 edition of BusinessWeek presented findings on what personality traits make for good virtual workers. While one might assume that introverted people would be more likely to thrive in a virtual setting, the study found that it was actually extroverts who fared best. Extroverted employees were more adept at finding ways to stay connected to others, despite their location. The study also showed that being structured and organized is essential for successfully working virtually.

Organizations generally need to make sure team members have the appropriate skills for tackling particular tasks. Laszlo Bock of Google says, “It is important to compose the team differently based on the problem the team needs to solve or address.” For example, the people chosen to help solve a detailed financial problem would most likely not be selected for a virtual team that’s created to tackle a customer satisfaction issue.

According to our study, the most important characteristics for virtual team members include strong communication and interpersonal skills, initiative, and flexibility.

As organizations begin to increase the use of virtual teams it’s important to understand that virtual teaming is not for everyone.  Understanding the characteristics necessary for succeeding in a virtual environment is very important.  Organizations and virtual team leaders would benefit from considering who needs to be on virtual teams to ensure that high quality decisions are made and across-the-board buy-in is achieved.

 

 

 

The 2011 Execution Round-Up: Six Organizations That Couldn’t “Get It Done” This Year

It’s that time of year when business owners and senior executives take stock of the past twelve months. What did 2011 look like for you and your company?  The questions you could ask during your year-end assessment are endless. But there’s only one that really matters: Did your company effectively execute its plans and initiatives?  

If an organization can’t get things done, nothing else matters—not the smartest strategy, not the most innovative business model, not even game-changing technology.  And for many companies, there is a clear gap between strategy and execution—we’ve seen plenty of evidence this year.  

Our research uncovered five characteristics, which we call “The Five Bridges,” that enable people to traverse this execution gap. It is these bridges that differentiate the companies that are consistently able to achieve results.  To learn from the “living laboratory” of real-world companies, here are six of this year’s headline makers and the lessons we can take away from their struggle.

Execution Gap Maker #1: The Japanese Government

Facing the possible meltdown of the Fukuskima Daiichi nuclear reactor, Prime Minister Naoto Kan asked a small circle of trusted advisors to weigh the risk of injecting seawater into the reactor to cool it down.  Unfortunately, because of Mr. Kan’s distrust of bureaucrats, he did not make use of Japan’s crisis management system which brought bureaucrats from various ministries under the direct command of the prime minister.  As a result, he did not involve members of Japan’s Nuclear Safety Commission or Tepco, the company that ran the power plant. 

Not involving these key stakeholders prevented him from quickly grasping the severity of the situation and adversely impacted the quality of Mr. Kan’s decisions and the speed with which he acted.  For example, he did not know that the plant manager had already started using seawater and continued to do so, despite being told to stop by his bosses at Tepco.  As it turns out, the plant manager’s act of defiance may have prevented many deaths.  In addition, Mr. Kan and his team were not aware of the resources they did have available like a national system of radiation detectors.  If they had been aware of this system, which predicts the direction radiation is moving, they would have been able to prevent residents who were evacuating from heading directly into the radioactive plumb.

The “BRIDGE” that failed: Involving Others in Decision Making.

THE LESSON:

In order for any organization to execute successfully, the right people have to be involved in the right decisions. The Prime Minister of Japan provides a devastating example of what can happen when this isn’t the case.

Obviously, this lesson is even more critical when there is as much at stake as there was in the Japanese disaster.  But really for any company trying to gain footing in a constantly changing business environment and tough economy, empowering the right people to make the right decisions can be the difference between landing that next great customer or account.

Execution Gap Makers #2 and #3: Connecticut Light and Power (CL&P) and the State of Connecticut

Few of the people who live in Connecticut would argue that CL&P was not prepared for October’s nor’easter.  It appears that CL&P’s emergency response plan was woefully inadequate.  The plan’s worst case scenario considered outages of 100,000 customers, or less than 10% of the customer base.  At its peak, the outage was over 800,000 customers, or about 66% of the company’s base.  Partly because of the original planning assumption, CL&P did not pre-stage adequate restoration resources in advance, which delayed the recovery effort in the first few days.

In addition, there appears to have been a lack of coordination among local and state government which contributed to shortcomings in preparedness, communication and private sector cooperation. Although there were plans at the state and municipal levels, there was not one centralized master plan that shows how state government should interact with its own agencies and how the state should coordinate its own activities with those of the utilities and municipal governments.

At the company level, the lack of coordination and collaboration is illustrated by CL&P’s promise to restore power to 99% of customers by November 6 without vetting it internally.  Not surprisingly, they missed this self-imposed deadline (as well as the one after that), which seriously undermined confidence in CL&P’s management team’s ability to deal with the crisis.

The “BRIDGES” that failed: Translating Strategy into Action and Coordination and Cooperation.

THE LESSON:

Execution starts with a plan. Although most organizations and leaders understand the value of developing a plan that outlines how a goal will be accomplished, the most effective leaders also ensure that plans are aligned and mutually supportive across organizational boundaries.  It’s also critical that organizations learn to coordinate decisions and actions across organizational boundaries.  But doing so requires more than faith and words alone.

Shared goals and clearly defined roles provide the foundation upon which cooperation and coordination can be built. In addition, people must be held accountable for results. This requires a combination of direct leader behavior and systems that encourage and reinforce the appropriate behavior among employees.

Execution Gap Maker #4: UBS

In September 2011, a “rogue trader” was arrested for a scheme that lost UBS $2.3 billion.  Although UBS hoped to show that this trader’s activities were an aberration, it appears that the unauthorized trading was just the latest in a series of ethical and legal lapses at UBS.  For example, in 2008 UBS settled charges brought by New York State that it misled customers when it sold them what it described as nearly risk free auction-rate securities even as its executives knew the market was collapsing.  In 2009, the Justice Department contended that UBS conspired to enable 17,000 wealthy Americans to engage in tax fraud.  In return for a deferred prosecution agreement, the bank agreed to pay a $781 million fine and divulge the names of the account holders.  In May of 2001, UBS paid $160 million and admitted that its employees had conspired to rig bids in the municipal bond derivative markets.

It appears that the most recent case of unauthorized trading is consistent with a culture at UBS that stressed individual advancement over team effort and personal achievement over ethical and legal considerations.

The “BRIDGE” that failed: Alignment Between Leader Actions and Company Values and Priorities.

THE LESSON:

A company’s culture is made up of the values and beliefs held by a majority of its employees.  Contrary to the common belief that values are “soft” and amorphous, they are quite concrete and drive behavior and systems.  Therefore, an organization’s culture is known or “recognized” by the behavior of its leaders and its work processes.

Leader behavior must be aligned with company objectives and values. While I admit this phrase has been said so often it’s become a cliché, companies can’t afford to ignore it.  You don’t really understand how important value alignment is or the impact it has on effective execution until you see what happens when it’s not there. That’s why stories like the UBS one are so important. They remind us not to take it for granted or assume it’s a ‘no-brainer.’

Execution Gap Makers #5 and #6: Netflix and Research in Motion (RIM)

Ironically, Netflix was on our 2010 list as a Gap Closer and an example of the same Bridge – Managing Change – that failed in 2011.  Partly because of the dramatic change in what was regarded as an almost flawless track record, Netflix’s missteps caught the media’s attention and were very well documented this year.  From its attempt to change its pricing structure to the announcement that they would rebrand the DVD service as Qwikster (which they quickly cancelled in the face of customer outrage).  In both cases, it was apparent that Netflix misread its customers and their expectations.

As CEO Reed Hastings admitted, Netflix had become overconfident, which was a contributing factor in the mismanagement of these key changes.

RIM gets an “un-honorable” mention in this category.  It appears that the Canadian company is having difficulty responding to the change created by the entry of Apple’s iPhone and iPad and Google’s Android technology.  Unlike when RIM dominated the market, their traditional customer, corporate IT, is starting to look at these new technologies more favorably and relaxing the distinction they had made between personal and business use.  This shift in perspective and the performance and features of their competitor’s products is forcing RIM to step up their game and rethink how they will compete in both the enterprise and consumer markets.

However, RIM has been unable to launch new products with the same appeal as its rivals (or even with its previous products) and it has suffered a number of significant service interruptions that have angered customers.  This has caused customers and potential customers to lose confidence in the company and encourage them to look at competing products.  RIM’s poor execution may actually end up being the antidote to the “crackberry” addiction they created.

The “BRIDGE” that failed: The Ability to Manage Change.

THE LESSON:

Effective execution requires vigilance.  Just because you’ve got it right today doesn’t mean you’ll get it right tomorrow.  As the Netflix example illustrates, the Bridges are quite fragile and require constant attention.  Arrogance and complacency are the beginning of the downward spiral into the execution gap.

It’s also important to remember that, despite all the effort and resources that have been devoted to helping leaders and companies manage change, they still often get poor marks in this area. That said, yet another change management process or program is not the solution, emphasizes Lepsinger.

Our research, as well as the research of others, indicates that successful change is connected more to the individual and collective mindsets of employees and customers than any process. People change when they are ready—not just when they understand the need for change. The most successful companies facilitate change-readiness and don’t just rely on making the business case to drive people’s motivation to change.

As these stories illustrate, execution is the real bottom line and it’s what every business needs to focus on as they seek to improve organizational performance—and it’s the lens all leaders should look through as they review 2011 and make their “business resolutions” for 2012. 

Execution is not a single-point event. It’s an ongoing process. But since your ability to execute well and consistently is the very fabric of success, I can think of no better place to focus your time and energy.

 

Bridging the Virtual Gap: It’s All About Developing New Habits

“We have modified our environment so radically that we must modify ourselves in order to exist in this new environment.”

-- Norbert Wiener, The Human Use of Human Beings

 “If there is an office in the future,” wrote Charles Handy in a 1995 Harvard Business Review article on virtual work, “it will be more like a clubhouse: a place for meeting, eating, and greeting, with rooms reserved for activities, not for particular people.” Admittedly, most organizations haven’t reached that point yet, but the way we work has certainly changed dramatically since Handy’s mid-1990s predictions. 

Many of the world’s major corporations are choosing to go virtual.  According to a study from Communications of the ACM conducted by Intel Corporation in April 2009, approximately two-thirds of the company’s employees were on virtual teams.

So, what has contributed to this dramatic shift in the way people work, and more specifically, the growing popularity of virtual workplaces? There are three important reasons.

First, organizations are looking for the best available talent, regardless of their geographic location, which has led them to use virtual collaboration. Today when forming teams, rather than rely on a group of people who are geographically closer but may not have the right expertise many companies strategically select talented individuals who have the appropriate skill set even though they may live thousands of miles apart.

The second reason for the prevalence of virtual teams is that that the emergence of a global economy has made it particularly challenging for organizations to quickly capitalize on shifts in the marketplace and bring new products to market, effectively innovate, and respond to customers’ needs. Having team members in various locations around the world enables organizations to better meet these challenges. 

What’s the third reason for the growing popularity of virtual workplaces?  Technology. There’s no denying that advances in technology now allow organizations to achieve greater levels of efficiency and cost savings. And every year, new technologies are introduced to make it even easier and more efficient for globally dispersed teams to work together no matter how far they are physically from one another. 

But it should be said that while new technologies certainly enable virtual team collaboration, technology should be viewed as one piece of a larger puzzle, rather than the “be all, end all” solution. Despite the optimism that improved technologies will continue to emerge over time, organizations will always need to balance their use of these technologies with the interpersonal and collaborative processes necessary to support virtual teamwork.

The Virtual Challenge

In a study conducted by our company, OnPoint Consulting, we found that many companies that had made significant investments in technology and virtual teams were not performing to their full potential.  In fact, the study found that more than 25 percent of the virtual teams were not fully performing.

The cause, we believe, is that organizations are approaching working on and leading virtual teams as if the dynamics are the same as those of team members who are working in the same location. By and large, companies do not take the steps necessary to ensure their virtual teams and their virtual team leaders are set up for success. 

But why is that the case?  Why don’t the practices and behaviors used effectively by managers for decades with co-located teams work just as well in a virtual environment?

To start with, managing virtually is less “forgiving” than managing teams that are co-located.  Because it’s harder to work in a virtual setting it’s more difficult to “get away with things” and managerial weaknesses can become more pronounced.  We believe there are three characteristics of managing in a virtual setting that impact the ability of managers to “just do what they’ve always done.”

The Lack of Face-to-Face Contact

While communication among members of co-located teams can be difficult, imagine the problems when people don’t have any visual cues.  Although management and communication experts have known about the impact eye contact and body language has on our understanding of what another person is saying, we don’t fully appreciate it until those elements are missing.  It turns out that “words” and “tone of voice” is only two-thirds of the communication.  The other critical element is visual cues.

This lack of contact also makes it more difficult to build personal relationships and establish trust.  A great deal of the knowledge we have about people and their interests and values is gained through spontaneous, informal interactions at the coffee break, during lunch, or during informal breaks when we “visit” with people to chat.  That type of spontaneous informal interaction is absent in a virtual setting and can be difficult to replicate.

The Reliance on Technology

Although technology has been a significant catalyst for virtual teams it also creates challenges of its own.  No matter how “rich” the technology is, it is not as “rich” or “natural” as face-to-face communication since there is still a lot of information that’s not getting through.

In addition, using technology requires more “cognitive effort.”  An example that illustrates this idea is learning to drive a car with a standard transmission.  When you are just learning to drive using a “stick shift” it feels very unnatural and you have to think about every move – when to release the gas pedal , when to step on the clutch, when to shift the gears, when to release the clutch, and when to step on the gas.  With practice the task becomes more automatic and the driver does not have to consciously think about each step. 

When it comes to using technology to work and collaborate virtually, many of us are still in the early stages of learning.

Time Zone Differences

As we’ve noted, one advantage of virtual teams is that organizations can source personnel where ever they may be.  This also presents a challenge for virtual leaders and teams.  Having team members in different time zone makes it difficult to collaborate and to involve people in decisions that affect them.  It also makes scheduling team v-meetings (virtual meetings) difficult (someone has to get up early or stay up late) and inhibits spontaneous interactions.

The challenge for virtual leaders and teams then is to bridge this “virtual gap” and diminish the impact distance has on collaboration and communication.

So What’s the Answer?

The good news is that there is no “secret sauce.”  There are no undiscovered skills being used by effective virtual team leaders and team members. But it’s not that simple. Our study found that although many of the skills are the same as with co-located teams, leading and working from a distance does require a significant change in behavior and habit.

Here are two examples of what we mean.  Most interactions among virtual team members are business related.  We’re not able to “bump into” people in a virtual setting to have the kind of informal conversations that help build relationships and trust.  One technique used by effective team leaders and members to bridge the “virtual gap” is to initiate a call or an instant message just to “chat.”  These calls or IMs are focused on topics that would be discussed in the coffee room or over lunch – family events, sports, weather, and current events.

The second is a significant increase in the use of active listening.  In co-located situations people have the advantage of visual cues and misunderstandings still occur even when active listening is being used.  Working without visual cues requires a dramatic increase in the use of these basic, yet powerful, communication skills.

The Bottom Line

Although many companies have made significant investments in virtual teams and the technology to support them, a surprising number of these teams do not reach their full potential. 

The real secret, however, is that there is not secret.  It’s not about a new management skill that makes working virtually possible. The best virtual leaders and team members understand this and have bridged the “virtual gap” by adjusting their behavior and work habits to accommodate the unique characteristics of their virtual environment.

 

What’s On the Minds of Leaders Today?

In today’s economic climate, executives are focused on regaining their post-recession footing, keeping employees engaged, and enhancing customer relationships.   Although all of these issues are critical, in order to address them, there is really only one question that warrants attention: Did the company effectively execute its plans and initiatives? 

If an organization can’t get things done, nothing else matters—not the smartest strategy, not the most innovative business model, not even game-changing technology. This assertion is backed by hard evidence. My company, OnPoint Consulting—which specializes in helping clients close the gap between strategy and execution and create a culture of getting things done—conducted a study of over 400 companies. We found that 49 percent of the leaders surveyed in the study reported a gap between their organization’s ability to formulate and communicate a vision and strategy and its ability to deliver results.  

This wasn’t the surprising part, though. What was really shocking was that only 36 percent of leaders who thought their company had an execution gap had confidence in their organization’s ability to close the gap between strategy and execution. That means a staggering 64 percent of leaders who saw an execution problem didn’t believe their company could fix it. But what contributes to this lack of confidence? 

OnPoint’s Annual Pulse Survey, which asked 935 leaders what they viewed as the greatest challenges to executing strategic initiatives, has shed some light on that question.  OnPoint’s survey results found that although senior managers were confident in their ability to create a clear and inspiring vision, they indicated that “employees at all levels delivering top performance” was the biggest challenge to executing plans and initiatives. The second biggest challenge was facilitating and managing change.  This was followed by “translating strategy into action” and “developing a realistic strategy.”

OnPoint’s research also examined the extent to which perception of business challenges varied at different management levels (see Table 1).  The greatest alignment of top challenges at all levels was on employees delivering top performance, which was considered a significant challenge to strategy execution by all management levels.  

What were leaders consistently more confident in?   Leaders at all levels generally agreed that creating a clear and inspiring vision and maintaining high levels of quality and customer service were not significant  challenges. Mid-level and front line leaders were predominantly concerned with “involving the right people in decision making” and “holding people accountable”, which were not perceived to be top challenges by senior executives.

In the past, the chasm between what’s proudly proclaimed on your company website and reality might have been seen (and written off) as the standard “mission, vision, and values” statement that all companies feel obligated to produce.

But we’re living in unforgiving times. The combination of frozen commercial credit, tight-fisted customers, and general economic malaise has serious implications for businesses. They must be able to keep their promises to customers/shareholders and meet their goals. Execution has always been important, but when margins (and the margin for error) are paper thin, it’s everything.

Table 1.Rankings of challenges to strategy execution across levels

Challenge to Strategy Execution	CEOs, Presidents, Business Owners	Senior Leaders	Mid-Level Leaders	Front Line Leaders
Employees at all levels delivering top performance	1	1	3	2
Facilitating and managing change	2	8	7	5
Translating strategy into action	3	6	10	9
Developing a realistic strategy	4	9	9	10
Holding people accountable	5	4	1	3
Ensuring high levels of employee commitment	6	3	4	7
Involving the right people in the right decisions	7	2	2	1
Encouraging and sustaining cooperation and coordination	8	7	6	6
Ensuring that employees have the appropriate skills and experience to do their jobs effectively	9	5	5	4
Maintaining high levels of quality and customer service	10	10	8	8
Creating a clear and inspiring vision	11	11	11	11

 

 

The Profile of Success: Building High Performing Virtual Teams

Although many companies have made significant investments in virtual teams and the technology to support them, a surprising number of these teams do not reach their full potential.  A recent study conducted by OnPoint Consulting, and described in more detail in Virtual Team Success: A Practical Guide to Working and Leading From a Distance, surveyed 48 virtual teams across industries to identify specific practices associated with the most successful teams.

Eleven Virtual Team Success Factors

What is the profile of high performing virtual teams?  The factors that differentiate top virtual teams and recommendations for organizations that want to enhance the performance of their virtual teams are outlined below.

• Stable and consistent team membership. Less frequent changes in team membership provide greater stability and more time for members to focus on building lasting relationships.     
• Fewer team members. Teams that were less effective were disproportionately larger.
• Members are from the same function.  Cross-functional teams appear to face unique challenges and greater levels of complexity that inhibit performance in a virtual environment.
• Members are on fewer teams.  A greater number of team members on low performing teams reported participating on too many virtual teams, which hindered their overall effectiveness.
• Members have longer tenure.  Teams with more than three years tenure performed better, which suggests that they have had time to improve their communication and execution practices.  
• Face-to-face kick off meeting.  Teams who held an initial face-to-face meeting within the first 90 days achieved better performance than those who never met face-to-face.
• More frequent meetings. Sixty-three percent of high performing teams “met” at least once a week, compared to 29% of the less effective teams. 
• Leverage technology. Members of higher performing teams were more likely to report that they had the proper technology to facilitate working together.  Higher performing teams also used video conferencing more often.
• Provide skill training.  Teams who had more than four development sessions performed significantly better than those who had one or fewer sessions.
• Team leaders who are better able to lead from a distance.  Leaders of high performing teams appear to struggle less with building collaboration virtually, which was a key challenge reported by the lower performing team leaders. 
• Have more members reporting directly to the team leader. Direct reporting relationships with their team members facilitates communication, increases the likelihood of team members having shared goals and clear roles, and enhances the ability of the leader to follow through and hold people accountable. 

 Implications for Building High Performing Virtual Teams

There are five key actions organizations can take to enhance the performance of their virtual teams.

ORGANIZATIONS

• Ensure the right fit of skill to task when selecting virtual team leaders. The most effective virtual team leaders are able to balance the execution-oriented, interpersonal practices, and the cultural factors that are prevalent in virtual teaming.  Organizations should select team leaders based on the characteristics required to manage from a distance and periodically assess their effectiveness.

 

• Don’t take the team launch for granted—set teams up for success.  Organizations need to be thoughtful about team membership, team size, and ensure that teams have the appropriate resources to work together virtually.  For example, use criteria for virtual team member selection and consider who needs to be on the team to make high quality decisions and ensure buy-in.  If the team size becomes too large, have sub-teams work on specific issues and report back to the larger team.  When possible, conduct a face-to-face start-up meeting to discuss team purpose and goals, individual roles, learn more about each other, develop team norms, plan a communication strategy, and conduct team development activities.

 

• Develop reward strategies.  Organizations should implement programs that reward and recognize virtual teams for their collective performance (e.g., “spotlight” team members or celebrate successes virtually as a team).

 

• Foster accountability.  Team leaders and members should incorporate one or more virtual team responsibilities into their goals or personal development plan.  

 

• Assess team progress.  Regularly review virtual team communication and work processes to assess what things are working well and what might be improved.  Periodically collect feedback from stakeholders to assess the team’s performance, identify barriers to high performance, and steps to overcome these barriers. 

It’s important to remember that the factors that contribute to the success of a virtual team are not the same as those for a co-located team.  Organizations that incorporate the eleven success factors when forming virtual teams and follow the five recommendations for their ongoing development will find that their investment will pay off handsomely.

 

 

 

 

Developing Future Leaders At All Levels: What Does Good Look Like?

It is generally accepted that a lack of focus on cultivating future leaders negatively impacts organizational performance.  The findings of OnPoint’s 2011 Execution Gap Survey support that view.  The study found that implementing succession management programs and leadership development programs is strongly correlated with job satisfaction, employee engagement/retention, and effective strategy execution, which are all key predictors of organizational success. 

Firms with a more strategic focus continue to invest in succession and leadership development despite changes in the economic or competitive environment.  As such, they are well-positioned to address planned and unplanned leadership changes.  To support this effort, an organization needs to understand which competencies make a difference in a leader’s effectiveness and the extent to which this varies by level.  To help answer these questions, OnPoint Consulting, in partnership with the American Management Association, collected data on the managerial effectiveness of 622 managers across organizations including government agencies, non-profits, multi-nationals, Fortune 500, and Fortune 1000 organizations.

Four key findings about the competencies that drive leader effectiveness came out of our study:

1. Exceptional managers, regardless of level, demonstrate competence in four key areas.

Our study found that Action Orientation, Building Teams, Building Trust & Personal Accountability, and Critical & Analytical Thinking differentiate top performers at all three levels: first-line manager, manager of managers, and functional manager. 

Implications for Talent Management—Because these competencies appear to be essential for top performance at higher levels as well as for managers of individual contributors, both formal and on-the-job training that help develop these competencies should be targeted to first-line managers to ensure they develop these skills early in their careers.  Allocating resources to this area will help build a strong pipeline of internal managers who are prepared to make the transitions to the next level of management and take on additional responsibility.

2. In addition to the four core competencies mentioned above, it is important to master specific competencies that are critical for success at each level.

In addition to the four core competencies described above, exceptional managers master specific competencies required for success at their level.  We found that exceptional managers received substantially higher ratings than average performers in the following key areas:

• First-line managers: Self Development and Resilience & Stress Tolerance
• Managers of managers: Influencing, Interpersonal Savvy, Creative Thinking, Emotional Intelligence, and Strategic Planning
• Functional managers: Action Orientation, Customer Focus, and Managing Conflict 

Implications for Talent Management—These findings provide guidance for making selection decisions and for the timing and content of training and development.  For example, since the most successful first-line managers are learners and have a high tolerance for stress, organizations should assess leaders for these competencies as part of the selection process.  On the job support for developing these competencies would also be important.  In addition, preparing people to take a broader organizational perspective and building strong interpersonal skills before they are promoted to a manager of managers role would increase the probability of success in that position.

3. The ability to effectively execute plans and initiatives is the hallmark of an exceptional manager.

The managers in our study who were considered exceptional received higher ratings in the areas related to execution and getting things done: Action Orientation, Problem Solving, Decision Making, and Results Orientation.  Competence in these areas appears to set the best apart from the rest.

Implications for Talent Management—Most organizations understand the need to develop an exciting vision and a realistic strategy.  The key issue for organizations today is fulfilling the promise of that vision.  In a recent OnPoint survey, 49% of respondents reported a gap between their organization’s ability to formulate a vision and strategy and deliver business results.  Sixty-four percent of those people lack confidence in their organization’s ability to close the gap.  Ensuring managers have the skills required to deliver consistent results and get things done day-to-day should be a top focus of an organization’s management development activities.

4. Practice is required to build competence and expertise—managers don’t need to be born with it.

Our study suggests that managers who are in a position for five to ten or more years are more likely to be seen as exceptional.  Exceptional managers gain competence and enhance their performance over time, while the average managers reach a performance plateau.  This supports the idea that expertise and effectiveness are the result of experience and practice. 

Implications for Talent Management—Moving managers to the next assignment too quickly does not provide enough time for them to learn from the experience.  Managers need to see the impact of their actions to truly develop competence.  In addition, expertise results when managers are required to tackle problems and situations they have not faced before and that take them out of their comfort zone.  This finding emphasizes the importance of providing on-the-job learning opportunities such as action learning projects where leaders work on solving real business problems. 

 

                                                

How Great Leaders and Their Companies Get Results Every Time

If an organization cannot effectively execute, nothing else matters.  Despite the importance of execution to business success, OnPoint Consulting’s Annual Pulse Survey found that 37% of leaders believe there is a gap between their organization’s ability to develop a strategy and its ability to execute that strategy.   And, even more surprising, 62% lack confidence that the gap can be closed.  

So, what can organizations do to help close the strategy execution gap?   OnPoint’s survey found that the consistent and effective use of three leader behaviors helps predict an organization’s ability to execute initiatives:

1. Facilitate change readiness.  Managing change, especially during a business climate where there’s ambiguity and tremendous change, is essential.    Surprisingly, 41% of leaders indicated that their organizations don’t have a good track record of managing change.  What can organizations learn about the effective change management? Top performing companies are more effective at seven practices that are critical to successful change:

• Providing frequent updates
• Sharing accurate and honest information
• Providing opportunities for employees to express their opinions
• Involving middle managers and keeping them engaged
• Making sure management actions are consistent with the objectives of the change initiative
• Identifying obstacles to implementation and actions to address these obstacles
• Ensuring that adequate resources are available
• Aligning the performance management system with the change

The best companies understand that the direct interaction of a manager and his or her direct reports is important for successful change and that this interaction focuses on practical fundamental management activities.

2. Recognize the contributions of others.  Employee recognition is a fundamental management practice, but apparently, many leaders are neglecting the basics.  Almost a third of leaders in OnPoint’s study reported that their contributions are not being recognized.

Although it’s a simple act, providing recognition for a job well done has a powerful effect on people’s performance.  It reinforces good work and shapes future behavior.  It motivates, builds trust and builds confidence.  When leaders provide recognition, they are sending two important messages.  First, they help the person understand what “good” looks like.  The message is, “This is what it looks like when it’s done well, so keep on doing it.”  The second message is, “You can do this.”  Recognizing calls the person’s attention to the fact that he/she has accomplished something important or made meaningful progress.

3. Enhance the quality of decisions.   Thirty-five percent of leaders said that careful thought does not go into the decision-making process in their organizations. Effective execution and the delivery of consistent results depend on getting the right people talking about the right things at the right time.  But that’s only part of the equation. Leaders also need to increase the likelihood that the “right people” are using good judgment and making sound decisions.

There are three things leaders can do to improve the quality of the decisions they and their people make:

• Make sure that people closest to the action are making the decisions.  This can require a change in organizational structure and, when this is not possible, empower people and hold them accountable for taking initiative to address issues. 
• Involve the right people in decisions. This helps ensure that leaders include perspectives and experiences other than their own and also helps fill in relevant information.
• Use an objective systematic process so that emotion or bias does not cloud the issues or that people do not simply default to the kinds of decisions they have made in the past. 

We’re living in unforgiving times.  Execution has always been important, but when margins (and the margin for error) are paper thin, it becomes even more critical.  Execution is challenging and requires constant attention. However, if leaders focus on these three elements, organizations will soon see improvement in their ability to execute plans.   

Five Ingredients For Virtual Success

"Globally linked virtual teams will transform every government and company in the world.  Any of our peers who don’t do it won’t survive."

-John Chambers, CEO, Cisco

Rising travel costs, coupled with the global dispersion of talent, are just some of the reasons that organizations have migrated toward telecommuting and virtual work.  While numerous organizations have made significant investments in virtual teams and the technology to support them, a surprising number of virtual teams are not reaching their full potential. 

OnPoint Consulting surveyed 48 virtual teams across industries and found that there are specific practices associated with successful virtual teams.  We were surprised to find that many of the virtual teams in our study struggled with fundamental issues such as not having clear roles and responsibilities or not having a shared process for decision making.  

What makes top performing virtual teams successful?  Our research identified five key ingredients for optimal virtual team performance:

Trust one another to get things done.  Trust is a top factor for virtual team success but task-based trust (a belief that team members will do their job) is especially difficult to develop when interactions among team members are infrequent and difficult to arrange.  Trust builds when people follow through on commitments and hold one another accountable for results.

Processes for communicating, decision making and problem solving.   Communication challenges are more pronounced in a virtual setting, especially when there is a lack of face-to-face contact and time zone barriers.  However, high performing virtual teams find ways overcome these challenges. Effective team leaders ensure that communication processes are established early on and revisited over time.  In addition, low performing virtual teams did not establish processes to facilitate problem solving and decision making.  

Leveraging others to get work done.   Successful virtual teams have figured out how to effectively collaborate from a distance.  For example. they involve team members and help one another achieve team goals rather than independently executing tasks and objectives.  If organizations invest time and resources in virtual teams, then it is important to capitalize on this and ensure that team members understand how to work together to achieve their goals.  Successful teams develop operating guidelines to help structure team communication.

Understand how their work aligns with the strategy of their organization. High performing virtual teams are clear about how their work contributes to the success of the organization. This is extremely important in a virtual environment where team members may feel isolated and it is common for team members to become disengaged.

Demonstrate a high level of initiative. Members of high performing teams are more proactive and engaged, and they demonstrate higher levels of initiative.  One way to do this is by creating a team charter to enhance commitment and accountability.  In addition, even though the majority of teams had dedicated team leaders, team members on high performing teams proactively took on leadership responsibilities as required. 

If organizations want to maximize their return on investment, they should ensure that these core practices are in place and continually evaluate the performance of their virtual teams against these factors to assess progress over time.   

 

 

 

No Trust, No Team: Building Trust in a Virtual Setting

OnPoint Consulting’s global study on virtual collaboration found that top performing virtual teams reported higher levels of trust than teams that were less successful, which means that trust is an essential ingredient for virtual team success. 

Despite the importance of trust to virtual collaboration it can take much longer to build trust when working from a distance because team members rarely see one another and, quite often, have never met in person.

While we typically rely on interpersonal trust, which is based on personal relationships, virtual teams must rely more heavily on task-based trust, which is the belief that team members will do their job.  Of course, task-based trust doesn’t happen on its own.  It has to be developed and that occurs when virtual team members are responsive, follow through on commitments, and take responsibility for results. 

The following warning signs to look for to determine whether your virtual team suffers from low levels of trust:

• Team members do not refer to themselves as “we”
• Silos develop among sub-groups
• Lack of information sharing
• Micromanagement by the team leader or team members
• Conflicts are not resolved
• Team members are openly negative
• Team members do not regard the commitments of others as credible
• Low levels of productivity or missed deadlines

So, what can virtual leaders do to build trust?  The following guidelines are a good foundation for success:

• Encourage team members to communicate openly and honestly, model positive behaviors, implement a communication plan for team interactions, and ensure you are accessible and responsive
• Leverage online tools such as videoconferencing, Web-based video, instant messaging, and Facebook-like Web pages with personal profiles and pictures so that team members can become acquainted and learn about each other’s backgrounds and experiences
• Meet face-to-face at least once early on in the team’s formation or use a series of virtual meetings to build relationships and establish credibility
• Encourage spontaneous and informal interaction among team members
• Empower team members to make and act on decisions
• Help people manage conflicts
• Partner team members at different locations and rotate these over time

As virtual teamwork becomes more prevalent, organizations need to take a close look at how they can best ensure the success of these teams. To maximize their return on investment, organizations should ensure that high levels of trust are in place and continually assess the performance of their virtual teams over time.