The Six Disciplines Blog

CEOs of small businesses often appear to believe in myths surrounding the subject of strategic planning and execution - myths that can prove dangerous to the health of their organization.

1. Myth #1: “We don’t need a strategic plan!” The truth is that every organization needs some form of plan to guide its actions or it will simply “drift off course” in the chaos businesses often face in their daily operations.
2. Myth #2: Strategic planning can only be done at a resort. Strategic planning is serious and shouldn’t be equated with a vacation. Getting away from the distractions of the company environment is important, but all that is needed for a productive planning process is a meeting room at a local hotel, conference center
3. Myth #3: “It interferes with our real jobs.” Strategic planning is arguably the most important part of any management team’s real job because it can determine the effectiveness of all the rest of its efforts. Working hard to advance along the wrong path does not constitute progress.
4. Myth #4: “We can do it without any help.” It is extremely difficult to both participate in and facilitate the same meeting. For most executives, there is an almost irresistible urge to problem solve on detailed issues and therefore lose track of the big picture. An outside facilitator can manage the flow of the meeting to avoid uneven participation, shifting to problem solving, bogging down on one subject, accepting conventional wisdom as fact, etc.
5. Myth #5: Planning will predict the future. Planning can reduce risk, but not eliminate it. It is easy to forget that any plan is a set of actions based on an assumption of how the future will unfold. Using the planning process to explore alternative futures, and the actions needed under those conditions, improves a firm’s ability to respond to whatever happens.
6. Myth #6: Planning is done when the retreat is over. Planning is a process, not an event. If it is not a continued, integral component of the management of the firm, it is indeed a waste of time. It is best to check progress against the plan, and take corrective action for any deficiencies or changes --at least quarterly.
7. Myth #7: The plan is a binder on a shelf. Documentation is necessary but the real benefit of a good plan is the mental framework for problem solving that it provides to employees. A strategic plan is really a way of thinking about the business, and it should change to some degree the way everyone goes about their job.
8. Myth #8: The plan will automatically produce results. Without frequent, systematic oversight and review by the CEO and the management team, there will be little execution -- and the plan reduced to merely a set of words.
9. Myth #9: If the CEO says it, it will happen. Actual execution of any plan only takes place when employees change their behavior to comply with the requirements of that plan. To implement the plan, employees must understand it and be willing to make the necessary changes to how they go about their individual responsibilities.
10. Myth #10: “The plan is too confidential to be shared with regular employees.” See Myth #9. Even the best strategic plan will not produce the desired results if the people who have to execute it don’t know what it is. Your company will gain more competitive advantage from actually executing its plan, even if information about the plan falls into the hands of competitors, than it will from keeping the plan a perfect secret, and, as a result, not doing anything.

"The greatest strategy in the world is useless - if you cannot execute it."

Here are the seven critical elements of strategy execution:

1. People. Strategy formulation often gathers the "smartest people in the room." However, it's not the senior leadership team that executes strategy - it's everyone in your workforce. Get the right people in the right positions.
2. Communication. Strategy can only be executed if your employees know about it and really understands it. Most importantly, each person needs to understand how their daily activities fit with and support the strategy.
3. Direction. When your new business strategy is communicated, do your employees know what to do differently? Do they have the right tools and individual plans to execute the strategy?
4. Measurement. "You can't manage it, if you can't measure it." Do you have the right measures for monitoring the new strategy?
5. Alignment. Your organization needs to be aligned between what you say you are going to do (strategy) and what vital few objectives, initiatives and daily activities (execution) you are undertaking to effectively support the strategy.
6. Reward and Recognition. The introduction of a new strategy often introduces change in behavior. To ensure success, new behaviors need to be reinforced (rewarded for positive behaviors) so they are repeated.
7. Continual Review. The execution of strategy must be continually reviewed in order to make mid-course corrections and to understand measurement success. Finding errors early in the process and making corrections improves your ability to execute strategy successfully.

1. Problems create opportunities
2. The impossible is a paradigm - Change your mind to change your performance
3. Ask why five times to get to the real answer
4. Eliminate excuses - do it right the first time
5. Correct errors immediately
6. Involve everyone - we are smarter as a group than a single individual
7. Reconsider rigid thoughts, situations change
8. Think simple, not perfect solutions
9. Use your mind more than your money
10. The goal: continuous improvement over delayed perfection

The barriers that keep us from achieving the kind of business excellence that lasts are deeply rooted and wont be removed by "quick fixes."

At Six Disciplines, our research shows that there are six fundamental barriers to enduring business excellence:

1. Poorly Understood Strategy. While most organizations have a strategy, most people do not understand it. One research report revelad that 85% of leadership teams spend less than 1 hour a month discussing strategy. The barrier isn't usually the strategy itself -- 90% of strategies fail due to execution. Write the strategy down (3-4 pages max), share it with all team members and give them an opportunity to react and engage.

2. Weak Strategy Execution. One of the major barriers to lasting excellence is how little formal effort organizations put into learning how to execute strategy. The most vital core competence of all is the ability to execute strategy. Understand that there is a big difference between working in the business, and working on the business.

3. Unchecked Organizational Entropy. Small businesses are "systems," and once a small business makes plans, the chaos of everything changing around it gradually erodes those plans. Be aware of change, apply forces to counteract it, make time for planning, set expectations and hold team members accountable.

4. Lack of a Systematic Approach. Thinking holistically about your business - how to make all of the components, people, processes, policies, key measures, assets and strategies work together to meet the promises made to your customers and other stakeholders -- in a repeatable and predicatable fashion -- is key to achieving lasting excellence.

5. Impractical Implementation Methods. Choose wisely when deciding to implement improvement methods and systems, and focus on "goodness of fit" - rather than form, or bells and whistles. Whatever choices you make, they must be practical and take a long-term view -not cumbersome, complex, and a "quick fix" that solves everything at once.

6. People Are Not Engaged. Your employees need to be personally committed to your company's goals - not just compliant. To engage them, connect their work to the purpose of the company. Set appropriate expectations, communicate your strategies, share short and long term thinking, and hire people who are aligned with your mission and values.

Strategy execution is the single hardest challenge in business.

What makes it so tough?

Here's a list of the primary execution challenges, based on surveys of organizational leaders:

• - Inability to manage change effectively or overcome internal resistance to change.
• - Strategy conflicts with the existing organizational structure.
• - Poor or inadequate information sharing among individuals or business units responsible for strategy execution.
• - Unclear communication of responsibility and/or accountability for execution decisions or actions.
• - Employees' lack of feeling of ownership of a strategy or execution plan.
• - Lack of guidelines or a model to guide strategy execution.
• - Lack of understanding of the role of organizational structure and design in the execution process.
• - Inability to generate buy-in or agreement on critical execution steps or actions.
• - Lack of incentives or inappropriate incentives to support execution objectives

BOTTOMLINE: "Poor or vague strategy" is also listed, but it's relatively low on the list.

Looking for a breakthrough vision for how to overcome these challenges? Read the best-seller: Six Disciplines® Execution Revolution: Solving The One Business Problem That Makes Solving All Other Problems Easier by Gary Harpst.

According to the consultants at Marakon, companies typically realize only about 60% of their strategies’ potential value because of defects and breakdowns in planning and execution. Yet, by following seven simple rules, you can get a lot more than that.

Marakon found that the processes companies use to develop plans and monitor performance make it difficult to discern whether the strategy-to-performance gap stems from poor planning, poor execution, both, or neither.

Here's what they found:

• Companies rarely track performance against long-term plans.
• Multi-year results rarely meet projections.
• A lot of value is lost in translation.
• Performance bottlenecks are frequently invisible to top management.
• The strategy-to-performance gap fosters a culture of underperformance.

To help close the strategy-to-execution gap, Marakon recommends the following seven steps:

1. Keep it simple, make it concrete.
2. Debate assumptions, not forecasts.
3. Use a rigorous framework, speak a common language.
4. Discuss resource deployments early.
5. Clearly identify priorities.
6. Continuously monitor performance.
7. Reward and develop execution capabilities.

The cumulative effects of misalignment are a significant constraint on the ability of an organization to execute its strategy.

In fact, research has shown that up to 50% of the resources of a typical organization are not being effectively applied to the mission and vision of the company.

There are two types of organizational alignment: creeping and strategic.

Creeping misalignment occurs gradually every day, often in very small ways as the organization changes. In every day processes, as the organization changes, the "current" approach to doing things becomes less aligned with the goals of the company. As a result, it becomes an increasing drag on the success of the company until corrected.

Strategic misalignment occurs suddenly, when the leadership sets a strategic VFO (vital few objective) -- but the systems and resources of the organization are not deployed to support it. This type of misalignment surfaces suddenly as a barrier to implementing new strategies.

BOTTOMLINE: If your leadership does not learn how to align resources with goals, the free market will.

Although always important, communication is absolutely critical when deciding to adopt a strategy execution program like Six Disciplines.

It’s challenging to manage the transition ("if nothing changes, nothing changes...") if people have no sense of where the changes are headed. Painting a picture for them can be difficult.

The truth is that many organizations head into a transition state with nothing more than some basic ideas, some lofty goals and cherished values to guide them on their journey.

It’s crucial for leaders to develop and widely communicate a compelling “case for change.” The end product–a well-articulated and persuasive argument for change–becomes, in effect, the mantra of the upcoming change for the organization.

When communicating organizational change to your employees, include:

• Reason for the change ("if nothing changes, nothing changes...")
• Vision of the future (renewing your organization's mission, vision)
• Plan for getting there (persistent, consistent and repeatable plan)
• Belief that change is achievable (so that people can understand how they contribute)
• Expectations (of where we're headed, how it's going to be while we journey there)

BOTTOMLINE: The reasons for change need to be communicated early, clearly, often and in delivered in many different ways.

The primary role of the execution system component is to help organizations get the right things done. To do this requires identifying execution problems as early as possible and addressing them.

Think of an organization as a system for deciding what to do (a strategy, a plan) and the managing the execution of that plan. When the system (the business) makes an error, choosing to do the wrong thing or forgetting to do something that is required, the problem must be corrected. The longer it takes to detect the problem, the more it costs to fix. If the business has no system in place to set, manage and monitor strategy execution, the process is not only error-prone, it’s a huge disaster just waiting to happen.

Without such an execution software system, an organization becomes unpredictable at best and eventually declines in its ability to execute, especially as it grows. That is why it’s important that an execution software system enables an organization to focus on learning as early as possible.

BOTTOMLINE: 

• An execution software system enables an organization to focus on learning to identify
  execution problems as early as possible.


• There are five primary types of organizational errors or causes for execution failure
  within an organization: change, clarity, dependency, estimation and availability.


• An execution software system needs to include the following elements: methodology
  automation, time management, real-time activity alignment, weekly external review
  cycle, total organizational engagement and execution management.

(Excerpted from Chapter 9, Six Disciplines Execution Revolution, by Gary Harpst)

A complete strategy execution program depends upon the power of a shared community learning. First, the power of community is required to change the economics for implementing such a program within small and midsized organizations. Second,learning is required to overcome the natural tendency of individuals and organizations to wander from the very disciplines that can deliver them from the status quo.

It’s a tall order to build a community that agrees to share these attributes. Even though it’s difficult, it’s worth the effort, because well-formed communities accelerate learning.

BOTTOMLINE:

The Execution Revolution will be built around communities with the following characteristics:

• A belief that their ultimate core competence is the ability to execute their strategy.
• A shared repeatable methodology that organizes their efforts to execute better.
• Strategy execution coaches who are experts in the repeatable methodology they share.
• Shared technology (an execution software system) to help integrate planning and
  activity alignment at all levels of the organization.
• Active communities in the Execution Revolution consist of communities with these titles: coaches, leadership teams, initiative teams, team leader and team members and cross-company roles.
• Among adult learners, the biggest barrier to fostering a learning community is pride. For senior leadership, the only way to remove this barrier is to display a passion for learning how to execute strategy effectively.
• Of all the four components of a complete program – a repeatable methodology, strategy execution coaching, an execution software system and a shared learning community – the learning community has the most transforming power.

(Excerpted from Chapter 10, Six Disciplines Execution Revolution, by Gary Harpst)

An organization that learns a systematic way of setting its priorities, that learns how to build detailed plans, that learns how to proactively manage those plans and communicate in an organized way is in a much better position.

In such an environment, goals are clearer and new employees can understand their role sooner. They learn how to communicate more effectively. Overall, the efficiency and effectiveness of the organization will be higher; it will have better capacity to respond to the demands of growth.

BOTTOMLINE:

• Building an organization that can learn how to execute strategy and deal with the daily surprises of the business world is solving the one problem that makes solving all other problems easier.


• Solving this one problem yields substantial long-term benefits for your business, including predictability, balance, managed growth and substantially increased market value. All of this promotes a better night’s sleep for you.


• Solving this one problem also leads to the creation of an organization that is trusted both internally and externally. It enables an organization that learns how to develop its people to their fullest potential. It empowers an organization that can be successfully transitioned to the next generation, and so on.


• The value of your business will be significantly higher if it has a predictable strategy
  execution history.


• Any business that would adopt a systematic program for strategy execution two years before selling the business would get 30–40 percent more for the business when sold. Why? Because having an organization that knows how to plan and execute is rare. Those who achieve it set themselves apart and are worth more.

(Excerpted from Chapter 11, Six Disciplines Execution Revolution, by Gary Harpst)

With all the bad news bombarding us daily, it's time to get control over the things we can do, and do everything we can during times of uncertainty, to avoid the epic fail.

To wit, here's a short refresher on why companies fail:

Failure to understand the customer
• Why they buy, what they want (real need for the product/service)

Failure to understand the resources, time required to execute the strategy
• Can the staff, equipment, and processes handle the stated strategy?
• Failure to develop new employee and leadership skills

Failure to obtain senior leader commitment
• Failure to get management involved right from the start
• Failure to obtain sufficient company resources to accomplish task

Failure to obtain team member commitment
• The strategy is not well explained to employees
• No incentives given to workers to embrace the strategy

Failure to manage change
• Inadequate understanding of the internal resistance to change
• Lack of vision on the relationships between processes, technology and organization

Failure to focus
• Inability or unwillingness to make choices which are true to the strategic mission (i.e. to do fewer things, better), leads to mediocrity, inability to compete

Failure to execute the plan
• No follow-through after initial planning
• No tracking of progress against the plan
• No accountability / consequences for the above

BOTTOMLINE: Start today...resolve to focus and act on the things you DO have control over (internal issues), on the highest priority activities you can - you'll find they all revolve around executing your strategy.

W. Edwards Deming was a supreme practitioner of quality management.

He summarized his ideas in these Fourteen Points of Quality Management:

1. Create constancy of purpose towards improvement. That means short-term out, long-term in.
2. Adopt the new philosophy. From top to bottom
3. Cease dependence on inspection. You don’t inspect quality into products and services - you design it in.
4. Move towards a single supplier for any one item. Playing many suppliers off against each other is wasteful.
5. Improve constantly and forever. However good you are, you can always do better.
6. Institute training on the job. The best place to learn.
7. Institute leadership. Go well beyond supervision and its quotas and targets.
8. Drive out fear. Makes for bad work - and bad management.
9. Break down barriers between departments. No more “silos."
10. Eliminate slogans. Non-meaningful slogans are counter-productive substitute for real management.
11. Eliminate management by objectives. Relying on production and other targets is also counter-productive.
12. Remove barriers to pride of workmanship. The key to superior quality lies here - and in the Fourteen Points, which all encourage performance.
13. Institute education and self-improvement. Organizational learning.
14. Transformation is everyone’s job. Everyone, from the bottom - and including the top.

BOTTOMLINE: Simple, straightforward, not easy, but absolutely worth the effort.

If you want to improve performance, or likewise increase capacity or capability, you need to track the one thing that you'll never get back: time.

In order to improve effectiveness and efficiency, you must understand how your time is being used. With all of the technological advances over the past two decades, we're continually forced to do things "better, faster, cheaper." In other words, all of these advances have taught us how to be more   efficient. 

But - have any of these advances (spreadsheets, email, cell phones, IM, etc.) made us more   effective?

The difference between the two?

• Being efficient is essentially doing things right.
• Being effective is essentially doing the right things.

It's not enough to just do things right - we also need to balance it with doing the right things, doing the right things based on their priority.

As Dr. Stephen Covey once said: "The key is not to prioritize what's on your schedule, but to schedule your priorities.”

BOTTOMLINE: Take a good look at your calendar: Are you spending time on the most important things? Are you spending the appropriate amount of time on those activities that are the highest priority? How do you know?

If you're not tracking how you spend your time, how will you ever know?

The best way is to have an individual plan (we recommend quarterly) - of daily activities that you're responsible for, which support the organization's goals, initiatives and projects. Track your time against these projects daily, and review weekly. The goal is to spend the most time on the most important activities that get you closer to achieving the organization's goals..

Now, consider this: multiply this daily/weekly time-tracking activity times the number of people in your organization. You'll be amazed at how much more productivity and results you'll begin to see (or, very frustrated, by how much time is actually wasted on non-productive, non-essential activities...)

So.... if you're looking to improve your performance (or the performance of your organization) - how can you possibly improve, if you don't track your time!

In a survey of 163 CEOs by Forbes Insights in conjunction with the Association for Strategic Planning and the Council of Public Relations Firms, chief executives report that one-third of corporate strategies fail, and they fail for five reasons.

The five reasons why strategies fail are:

1. Unforeseen external circumstances (24 percent).
2. A lack of understanding among those involved in developing the strategy and what they need to do to make it successful (19 percent).
3. The strategy itself is flawed (18 percent).
4. There is a poor match between the strategy and the core competencies of the organization (16 percent).
5. There is a lack of accountability or of holding the team responsible (13 percent).

The whitepaper, "The Powerful Convergence of Strategy, Leadership and Communications" can be downloaded here.

Tough times require tough decisions.

During times of economic uncertainty, strategy refinement and execution need to become the top priority for business leaders.

How to start?

Begin by doing a SWOT Analysis. SWOT is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in your business.

The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving your strategy. SWOT analysis groups key pieces of information into two main categories:

Internal factors - The strengths and weaknesses internal to the organization. The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organizations objectives. The factors may include all of the 4Ps (product, price, place, promotion) as well as personnel, finance, manufacturing capabilities, and so on.

External factors - The opportunities and threats presented by the external environment. The external factors may include the economy, technological change, legislation, and socio-cultural changes, as well as changes in your marketplace or competitive position.

BOTTOMLINE: While it's important to regularly conduct a SWOT analysis on your business, it's critical to revisit SWOT during times of economic uncertainty. In particular, it's essential that you focus on the internal factors that you can control; not the external factors you can't control. By focusing on internal factors, you'll be better able to unearth new opportunities for innovation.

Occasionally, circumstance and progress in seemingly unrelated areas combine to create an opportunity for solving old problems in new and exciting ways.

One of those breakthrough periods is upon us now, with regard to strategy execution.

This inflection point has developed primarily because large corporations have made huge investments developing best practices for effective management, strong leadership and strategy execution.

Built upon the results of these efforts, we believe the coming Execution Revolution will result in an order-of-magnitude change in cost that will allow small to midsized businesses not only to catch up, but to actually leapfrog, larger organizations in their execution management capabilities.

This is what the Execution Revolution is all about.

Leaders of small and mid-sized businesses now have an opportunity to go from almost no system to a new category in the excellence industry – a complete strategy execution program that puts everything needed for a balanced strategy execution together in one affordable combination.

The business excellence methodology component of this program is detailed in Gary Harpst's first book, Six Disciplines for Excellence: Building Small Businesses That Learn, Lead and Last.

BOTTOMLINE:

• Conditions are currently right to approach strategy execution in a radical new way.
• Seven key areas of business improvement advancements are fueling the Execution
  Revolution:
  1. Quality Programs
  2. Business Process Best Practices
  3. Personal Productivity Tools
  4. Business Intelligence
  5. Strategy Formulation
  6. Virtual Community Development
  7. Business Coaching

(Excerpted from Chapter 4, Six Disciplines Execution Revolution, by Gary Harpst)

Most leaders fail to understand the implication of the human nature barriers. Our natural tendency is to do what we like doing, not necessarily what we should. The topic of coaching offers the most insight into what it takes to deliver a complete strategy execution program.

Strategy execution coaching implies that an accountability model exists. Employees in organizations will learn to be accountable – that is, they’ll do what is needed and expected – proportionate to the extent in which three factors are present:

• Expectations are clear.
• These expectations are perceived as credible and reasonable because the employees
  were involved in setting them.
• Employees understand the impact of success, or lack thereof, on the organization.

When these three factors aren’t in place, employees can’t achieve their potential, no matter what kind of people they are. A critical element for creating company-wide accountability is to put appropriate focus on results, not activities. For most employees, it’s more motivating to be told what needs to be done and why, but not how.

BOTTOMLINE: Being accountable to ourselves is not enough. We clearly need others, preferably outside of our organization, to hold us accountable and to help us accelerate our learning. We need others to help us fight the continual battles against our own human nature and our tendency to do what we want to do, rather than what we need to do. We need others to challenge our way of thinking and acting. We need others to help us increase our capability to manage the next challenge. We need others to learn how to do this faster than we can do it on our own. Finally, we need others to help make change last within our organizations, to make the new way of working “stick.” That’s what strategy execution coaching is all about.

(Excerpted from Chapter 8, Six Disciplines Execution Revolution, by Gary Harpst)

In business, "if you can't measure it, you can't manage it."

When it comes to executing your business strategy, you must first translate the strategic plan into short-term operating objectives or metrics - and progress must be monitored and measured regularly.

To achieve strategic objectives, your organization must develop short-term measurable objectives that logically relate to the company's strategy, as well as a plan for how your organization plans to compete: how you will be different from your competition.

Unfortunately, this is where most strategic planning sessions end; in a 3-inch binder sitting on a dusty shelf.

What needs to occur next is translating your organization's strategy into actionable plans and initiatives, and perhaps most importantly, translate these plans into measurable gradecards or scorecards which are continually monitored.

BOTTOMLINE: Continual monitoring progress toward organizational goals (both short-term and long-term) helps to keep you focused on what's important, which is an integral and vital part of the execution process. The earlier that course corrections can be made, the better.

For better or worse, why do so many companies veer off their strategic plan?

Look for a disconnect between strategy and how resources are allocated, say Harvard Business School's Joseph L. Bower and Clark G. Gilbert, in their article "What Really Drives Strategy?"

Their assertion?

"Organizations of any size are built around a series of building blocks, and the bigger the company the more responsibility in those building blocks. Today they are called SBUs—Strategic Business Units—or they are country organizations. If you add up what those people actually do, which ideas they choose to bring forward, and which of those get funded, the consequences of that activity is what adds up to the strategy of the company, not words on paper. And once you see that, you begin to ask questions such as: What determines which ideas get sponsored and funded? If I'm the top management, how can I shape that process, manage it, and give it direction?"

That's what their book, From Resource Allocation to Strategy, is about.

BOTTOMLINE: Interestingly enough, the "disconnect" between strategy and how resources are allocated, as identified in this HBR article, is precisely why it's critical to align your resources and systems. Since up to 90% of effectively formulated strategies fail due to execution, it's critcal to understand that it's after the goals are set that companies run into one of their greatest challenges - their own internal systems - processes, policies, technologies, measures and people.

What would be your dream job? If money were not a consideration, what would you do?
A recent Harris Interactive survey among almost 8,000 employees over the age of 18 found the following:

• 45% of workers said they were satisfied or very satisfied with their jobs
• 55% of workers said they were not satisfied

Furthermore...

• 20% were passionate about their jobs
• 33% believed they had reached a dead end
• 21% were eager to change to something different

The above statistics paint a vivid picture of how elusive passion can be in careers.

Here are some more observations about dream jobs:

• Dream jobs are absolutely personal. Everyone has a different dream.
• Dream jobs are aligned with a person's core passion. Your passion is what you care most about in life. It is what attracts you and gives you energy. It is what inspires you, and what you can not live without doing.
• Dream jobs consistently leverage your core strengths and skills, draw on what you do best and most naturally, let you do what you are really good at doing.
• Dream jobs minimize the down sides, the things you don't like to do or don't do well. They accentuate the positive allowing you to focus your work time on activities you love to do.
• Dream jobs offer enough compensation to sufficiently support a life style that is acceptable and feels good. If a minimum level of income is not there, even an otherwise ideal fit may not be the dream job.
• Finally, dream jobs are not perfect jobs. Even when the fit is right, every job has some drawbacks

BOTTOMLINE: Stop "dreaming" - start doing. Take stock in yourself, identify your core skills, research the market - and go back to your passion.

"A brilliant strategy, blockbuster product, or breakthrough technology can put you on the competitive map, but only solid execution can keep you there. "