On Leadership

Get What You Need From Your Matrix Partners: Five Guidelines for Influencing in a Matrix Structure

Whatever your experience has been – for better or worse – the matrix has become a necessary organizational structure in today’s business environment.  Companies that have multiple product lines, conduct business in different countries, and serve a variety of customers through several channels know that the matrix structure is here to stay.

In a matrix organization—where people rely on getting work done through others over whom they have no direct authority—maintaining high levels of cooperation and coordination can be a challenge.  The findings of OnPoint’s 2011 Execution Gap study helps clarify the extent to which organizations struggle with this:

• 40% of managers surveyed do not believe that people cooperate across functions and departments to achieve their organization’s strategic objectives.
• 44% of managers surveyed do not believe that people in different divisions readily share information, ideas, and best practices.

What can leaders do to encourage and sustain cooperation? Working effectively in a matrix requires trust, cooperation, and coordination built upon a foundation of shared goals, clear roles and decision authority, and transparent and timely communication.  While these behaviors provide a foundation to encourage collaboration, they won’t eliminate disagreements about what, when, and how to do things.  In order to sustain cooperation and collaboration in a global matrix structure, leaders must gain others’ support for their ideas and constructively resolve differences across organizational boundaries.  Therefore, it is essential for today’s leaders to hone their influence skills. 

The key to influencing in a matrix is to build the foundation for the effective use of the influence tactics well in advance.  If you wait until the moment when you need to change the perspective, behavior or attitude of your matrix partners, it’s too late.  The most effective leaders use the following behaviors in all their daily interactions:

•  Demonstrate credibility – Being seen as someone who “knows what they’re talking about” is an important determinant of whether people give your ideas and proposals appropriate consideration.

Quick Tip: Don’t exaggerate and admit when you don’t know something. It may seem counterintuitive but admitting when you don’t know something increases the likelihood people will take what you say seriously when you do express an opinion or preference.

• Identify shared goals or common ground – Even a well thought out proposal will not result in a change in the other person’s behavior or attitude if goals are not aligned. Despite the potential power of an argument and the strength of supporting data, if leaders are focused on an outcome that the other person is not interested in, they will not be successful.  Rather than repeating their position more forcefully when they realize their rational argument is not having the intended effect, they take a moment to ensure goals are aligned. 

Quick Tip: Meet with matrix partners to complete a Goal Alignment Grid which clarifies goals that are shared by the matrix partners and provides an opportunity to discuss how matrix partners can help each other achieve their work unit’s goals.

• Build positive work relationships – Positive work relationships and trust are a prerequisite for the effective use of the influence tactics of inspiration and consultation.  Trust and relationships take time to establish and must be in place if you want to increase your style flexibility and decrease your dependence on rational arguments.

Quick Tip: Demonstrate reliability by consistently meeting your commitments and keeping your promises.  One way to do this is to commit to more manageable, but more frequent, milestones rather than to a single final deliverable that is often more challenging and the outcome of which more difficult to manage and predict.

• Get to know the needs and values of others – The key to effective influence is to see the issue from the other person’s point of view rather than your own. Using facts and focusing on values and benefits you think are desirable, or that would generally be attractive, is not as effective as clarifying the specific benefits complying with your proposal would have for the other person or how your proposal is consistent with the specific values and beliefs that are important to them.

Quick Tip: Make time for “small talk” with matrix partners. For example, during a call, build in time to discuss non-work topics before moving to the formal agenda.

• Clarify what resources you control that others need or would like – One core tactic for gaining the support of others is providing resources or help that would make it less difficult for the other person to comply with the request or proposal. To do this well, you need to know what resources you control and what they need.

Quick Tip: Learn about your matrix partner’s business and their customer’s business.  The more you understand the issues and challenges they face, the easier it will be to identify the resources you have that your matrix partners would value.

Organizations are complex structures with many interdependencies.  We rely on others to help achieve results, and that means cooperation and collaboration are often the key to our success.  Ensuring the conditions that create and sustain cooperation and collaboration are in place is even more challenging in a matrix structure. Leaders who are able to effectively use influence to gain the support of their matrix partners will have much greater success in creating a culture of cooperation and achieving their business objectives in today’s matrix organizations.

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.

 

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.

 

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 2010 Execution Round-Up

It’s that time of year again: time for business owners and senior executives to take stock of the past twelve months. What did 2010 look like for you and your company? Did you struggle to regain your post-recession footing? Were employees engaged and focused? Are financials on track? 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?

Our research uncovered five characteristics and competencies, which we call “The Five Bridges,” that enable people to traverse the execution gap. It is these bridges that differentiate the companies that are consistently able to get things done from those that aren’t. (the former are called “Gap Closers” and the latter “Gap Makers”—and some well-known examples of each are profiled in my book, Closing the Execution Gap: How Great Leaders and their Companies Get Results)

Of course, time has marched on since the book was written, and plenty of other well-known companies have dropped the execution ball in the meantime (BP in the most spectacular fashion). To help the rest of us learn from what we call the “living laboratory” of real-world companies, we present the following execution gap maker list.

OnPoint Consulting’s 2010 Execution Gap Maker Round-Up…

Execution Gap Maker #1: BP (Need we say more?)

It’s obvious from recent events that BP experienced an enormous execution gap. (More like a chasm, really.) Had the company focused on recognizing and closing that gap, it would have prevented this year’s unprecedented disaster. While the oil spill is a complex and tragic event, the cause can be traced back to BP’s failure to build the critical bridges. Leading up to and after the oil spill BP violated almost all the guidelines of effective execution, including lacking an effective structure and lacking clear accountability. These gaps created another problem for them: In the critical stages following the spill, BP was unable to get input from those who had the knowledge and experience to make the best decisions about how to handle it. What’s more, BP failed to empower people to use their best judgment and take appropriate action. Consider that hours before the explosion the rig crew was arguing about the best way to finish the oil well and move the rig to the next site. A Transocean mechanic testified that he overheard a “company man” telling rig workers “how it’s going to be,” and that although the rig workers felt the plan was too risky, they reluctantly agreed. And just after the explosion, as workers were scrambling for safety, a worker was yelled at by the captain (who worked for the rig’s owner, Transocean) for pressing the distress button without authorization, and when another worker was asked if he had called to shore for help, he said he had not because he did not have permission to do so.

The “BRIDGE” that failed: Employee Involvement in Decision Making…among others.

THE LESSON: In order for any company to execute successfully, the right people have to be involved with the right decisions. BP 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 BP 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 or not.

Execution Gap Maker #2: Nokia

Nokia’s share of the worldwide market for mobile phones continued to slip in 2010. It may surprise you to learn that about five years before Apple introduced the iPhone and three years before it launched an online applications store, Nokia was ready to introduce its own Internet-ready touch screen handset with a large display and had an early design of an online applications store.

So what happened? Why was this once-dominant player unable to execute and maintain its market position? It appears Nokia was not able to coordinate decisions and activities across departments or levels of management. Many innovative ideas became the victims of in-fighting among managers who had competing objectives. Plus, as a result of a lack of cross-organizational coordination and cooperation, Nokia wasn’t able to improve its proprietary operating system, Symbian, which would have allowed it to support a more sophisticated smartphone.

Execution Gap Makers #s 3 and 4: The Federal Drug Administration (FDA) and the Agriculture Department

In August of this year, thousands of consumers became ill after eating eggs that were contaminated with salmonella. The discovery of the contamination resulted in over half a billion eggs being pulled from store shelves. How could something like this, and on this scale, have happened? Much of the blame has been attributed to poor federal oversight,. and the cause appears to be a significant lack of coordination across federal agencies. You see, the responsibility for food safety is split between two agencies: The Agriculture Department is responsible for chickens, the grading of eggs for quality, and regulating liquid eggs that are used in industrial food production. But the FDA oversees the safety of eggs still in their shells. So who inspected the Iowa farms to make sure the eggs were safe for human consumption? It turns out that no one did, it just fell through the cracks. The lack of coordination between these two agencies is one reason why so many consumer advocates believe we suffer from a dysfunctional food safety system.

The “BRIDGE” that failed for Gap Makers #2, 3, and 4: Company-Wide Coordination and Cooperation.

THE LESSON: It’s critical that organizations learn to coordinate and collaborate decisions 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 #5: Johnson & Johnson

It’s been a bad year for J&J. Since 2009 McNeil Consumer Healthcare, the J&J division that makes over-the-counter drugs, has had eight recalls, including popular children’s versions of Tylenol, Motrin, Benadryl, and Zyrtec. Most disturbingly was what has been called the “phantom recall,” in which contractors hired by J&J carried out a scheme to buy every package of Motrin by going store to store without informing the FDA. Poor execution doesn’t happen overnight, it can often be traced back to a pattern of behavior that gradually erodes a company’s ability to deliver consistent high-quality results. At J&J it may go back to 2005 when employees reported a lack of alignment between manager behavior and company values and policies. When one million bottles of St. Joseph aspirin failed a quality test after a sample did not dissolve properly, quality workers who blocked the distribution of the bottles claimed their supervisor ordered them to retest the drugs and then average the scores to get a passing grade. Fortunately, there was not a problem with the batch that was released, but it appears that the misalignment of leader behavior with company values in this situation laid the foundation for poor execution, and a potentially dangerous situation, in the future.

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

THE LESSON: Leader behavior must be aligned with company objectives and values. While I admit this phrase has been said so often that 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 Johnson & Johnson one are so important. They remind us not to take it for granted or assume it’s a ‘no-brainer.’

Execution Gap Maker #6: Toyota

During 2010 Toyota recalled millions of cars due to a variety of defects. This was an extraordinary number for a company once recognized for the quality of its vehicles. What went wrong? It appears Toyota’s decentralized structure, which served it well for many years, turned into a liability as the company continued to grow and dominate worldwide markets. For example, some of Toyota’s former U.S. senior executives believe that keeping the U.S. operations separated in a functional structure—rather than reporting to a single headquarters—forced each to report back to Japan. This required customer complaints to first make their way through the U.S. operation and then over to Japan where they were reviewed by a special committee—which would then have to communicate back to the U.S. All this had to happen before a recall could be issued.

The “BRIDGE” that failed: A Structure That Supports Execution.

THE LESSON: Make sure you have a structure that supports execution. A good structure enhances accountability, coordination, and communication. Plus, it ensures that decisions are being made as close to the action as possible. Toyota’s structure slowed down decision making and the company’s ability to effectively respond to the recall crisis. The Toyota breakdown also illustrates that the five execution bridges are not permanent. In fact, they are quite fragile. Once you’ve built them, you must keep vigilant watch over them and work hard to maintain them over time. It’s quite possible for a company to have a bridge in place one year, only to discover that over time it has weakened or even crumbled and is no longer able to help your people traverse the gap.

As these stories illustrate, execution is the real bottom line and our constant battle cry. It’s what I push our clients to focus on as they seek to improve organizational performance—and it’s the lens we urge all leaders to look through as they review 2010 and make their “business resolutions” for 2011. 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.

Execution All-Stars: Five Famous Companies That Bridged the Execution Gap (and How They Did It)

Ever wonder why some companies consistently meet their goals and others don’t? So did I.  And when my consulting firm conducted a study of 400 companies, we found some answers.

 

We discovered that there are five factors that set apart the organizations with the best performance results and those more effective at execution.  I think of them as ‘The Five Bridges’ because they help companies close the gap between strategy and execution.”

 

To see what the bridges look like in action, let’s look at a handful of well-known companies that execute exceptionally well:

 

EXECUTION SUPERSTAR: Procter & Gamble

Bridge #1: The Ability to Manage Change

 

A few years back, P&G hit a home run with its Mr. Clean Magic Eraser. But what makes it relevant to Bridge #1 lies in how the product came to fruition. The organization had a track record of developing new products in-house. With the Magic Eraser, it broke from that model.  An employee discovered the prototype in Japan, and rather than limiting itself to internal ideas, P&G saw an opportunity to license a product that already existed and tap into its own organizational competence to add value. Its plan to use ideas that had been developed outside the company worked due to P&G’s openness to change and its ability to execute flawlessly. 

 

EXECUTION SUPERSTAR: IBM

Bridge #2: A Structure That Supports Execution

 

IBM set out to become a “globally integrated enterprise.” The key? It put in place a structure that best supports this strategy. Historically, IBM created mini versions of itself in each country where it operated. As it turned out, this was inefficient and expensive. Now the company sets up shop wherever it finds the right talent at the right price: for example, global IT service delivery in India, global supply chain in China, and global financing back office in Brazil. IBM also redesigned business processes and automated work with software to help coordinate these activities. 

 

EXECUTION SUPERSTAR: Google

Bridge #3: Employee Involvement in Decision Making

 

 

When Google started out, it was easy to keep all of its employees involved—primarily because there were so few of them. But now that the company has expanded to thousands of employees, leaders have had to find ways to ensure that everyone has a voice. One way they keep their ears open to grassroots ideas is by allowing engineers to spend at least one day a week working on their own pet projects. The company also uses smaller teams to develop new concepts—sometimes assigning only three or four people to a team. 

 

 

EXECUTION SUPERSTAR: Costco

Bridge #4: Alignment Between Leader Actions and Company Values and Priorities

 

James D. Sinegal, president and CEO of Costco, is one of the best and most consistent examples of a leader whose behavior is aligned with the organization’s values and priorities. Costco operates with razor-thin margins yet manages to maintain solid earnings through its membership fee and its Spartan approach to costs. The fact that the CEO “walks the talk” is at least partially responsible for Costco’s success.

 

In an environment of razor-thin margins, store managers need to be obsessively focused on details. Sinegal models that behavior every time he visits a warehouse store. He quizzes store managers about the sales of each department, what they are doing to move merchandise, and the process of individual items. Here’s another way Sinegal signals the importance of keeping costs low:  his office overlooks the parking lot of the Costco across the street and he has folding chairs for visitors. He answers his own phone and does not have an entourage like many successful senior executives. His salary and bonus total about $450,000. Now there is someone who lives the values and keeps the organization’s priorities front and center every day.

 

EXECUTION SUPERSTAR: Cisco

Bridge #5: Company-wide Coordination and Cooperation

 

To help ensure cross-organizational cooperation, Cisco, led by John Chambers, changed the compensation system so that people were paid not only for hitting their targets, but also for how effectively they collaborated with their peers. Technology has also played an important role in facilitating teamwork. Cisco has installed 120 telepresence centers (a new high-end video conferencing system) across the company and uses social networking to bring together employees from around the world. 

Start an Execution Revolution: Five Ways Leaders Get Results

If an organization can’t execute, nothing else matters. A survey conducted by OnPoint Consulting found that companies and leaders that consistently deliver results use five actions to close the execution gap.

Develop and use action plans. Action plans are the cornerstone of execution. Rather than being seen as a waste of time, leaders need to appreciated action plans for what they can do: clarify expectations and accountability, align and coordinate individuals and teams, ensure adequate resource allocation, and help leaders take action on problems before they derail an initiative.

Expect top performance and hold people accountable. Although leaders know it’s important, many still hesitate to hold others accountable. One reason is lack of clarity around what the person is accountable for in the first place. Potential conflicts can be minimized when everyone knows what is expected. Plus, being clear about expectations reduces the likelihood of having to have the discussions in the first place.

Increase cooperation and collaboration. We rely on others to get things done, which means cooperation and collaboration are key to success. The challenge is ensuring the conditions that motivate people to focus on the group’s best interest, without trading off their own interests, are in place: clear communication, shared goals, and clearly defined roles.

Enhance judgment and decision making. Two factors improve decision quality. One, involve the right people to include their perspectives and fill in information you may not have. Two, use a systematic process to prevent emotions or biases from clouding the issues or to avoid defaulting to past decisions.

Facilitate change readiness. Modeling behaviors is the primary differentiator of the most effective change managers. This goes beyond verbally endorsing a change. Employees want to see words backed up with behavior--this is how they judge how effectively someone leads change.

When these elements are in place leaders will see improvement in their ability to execute plans and initiatives, and most importantly, ensure that their mission statement actually rings true.