Execution tops CEO’s List of Concerns
According to Reputation Notebook, Mark Shadle’s blog on corporate public relations, research from The Conference Board showed that “execution” is the top concern of US CEO’s. “This year’s overall top challenge shows that CEOs from around the world are realizing that strong execution is a critical factor in driving profits and revenues,” says Jonathan Spector, President and CEO of The Conference Board. “These executives are also becoming increasingly aware of the crucial role that people play in growing their companies.”
The Conference Board’s study distinguished “Excellence in Execution” from “Consistent execution of strategy by top management” (See statistics below). This made me pause to consider the difference between these concerns in the mind of a CEO.
Conference Board Research on CEO Concerns
(% citing challenge as of “greatest concern”)
1. Sustained & steady top-line growth 41.3%
2. Excellence in execution 39.6%
3. Consistent execution of strategy by top management 38.5%
4. Profit growth 29.9%
5. Customer loyalty/retention 25.6%
6. Finding managerial talent 20.9%
7. Top management succession 20.1%
8. Corporate reputation 19.7%
9. Stimulating innovation/creativity 19.2%
10. Speed, flexibility, adaptability to change 18.2%
The distinction between “Excellence in Execution” and “Consistent execution by top management” strikes me because it shows that CEO’s understand that their challenges include at least two components: process discipline and alignment. The former takes years to put in place. The absence of the latter takes seconds to undermine the former. Good alignment at the top promotes the development and maintenance of good operational processes. Bad alignment results in confusion and leads people to bypass operational processes.
For CEO’s of larger companies, the issue of execution must feel like trying to drive a car with a 10 second delay between turning the wheel and the car’s response. Only the delay is more like weeks or months and the car is more like an aircraft carrier and the steering wheel is really a network of conversations. No wonder CEO’s worry about execution!
Senior leaders can get misaligned when they don’t fully comprehend the overall strategy and what it requires from the various functions and departments of a company. This is easier to have happen than one might think. Large corporations are very complex and strategies can often be expressed in very general terms. The processes for operationalizing a strategy can be quite fragmented and misalignment can easily creep into the details when functional heads don’t have the time, or don’t feel they have the standing to question each other’s plans.
Senior leaders can also get misaligned when they pursue self-centered tactics that place higher priority on functional goals than on the organization’s as a whole. Senior management teams face two types of competition: market and spotlight. Market competition effects them all, and their collective response to market competition can determine their compensation and their reputations quite directly. Spotlight competition is the internal competition for glory, promotion and turf. This competition is unhealthy, but common. And it can have a devastating impact on execution. The reason, of course, is that Spotlight competition is based on goals that are not aligned with the business goals. They are personal goals of the individuals leading the organization.
So, what is a CEO to do? It sounds cliche to say it, but I think that the work of execution starts at the top and the unit of work is rigorous dialogue. By rigorous, I mean that each participant, and especially the CEO, pays exquisitely close attention to the process of the conversations that formulate strategy and the commitments that each participant makes, ensuring candor, mutual understanding and agreement on the details. Being good at this kind of rigorous dialogue takes discipline in the processes of interaction. It requires balancing advocacy for your own view with a willingness to be influenced by the views of the others. And it requires a shared value for dialogue within the team, so that when individual members slip into old habits of steamrolling or silent veto, the rest of the members call the process and restore the conditions for dialogue. It has been rare for me in my 20 years of consulting to find a senior leadership team that practiced this kind of rigor.
A CEO can start the process rolling by making the connection between alignment and execution, and between dialogue and alignment. When this connection gets made, it becomes pretty clear that the quality of interaction of the senior team influences the quality of execution of the organization. Then the CEO can make quality of interaction a process metric for senior leadership team work. Quality of interaction could have three components: candor, balance of input from the members, and decisions reached. The first could be measured on a scale of one to ten, with one being outright lying, five meaning hidden agendas and ten meaning full disclosure of all relevant facts, assumptions and feelings. The second could be measured by percentage of time each participant spoke or by the percentage of participants who contributed during the meeting. The last could be simply the number of decisions reached, with deductions taken for decisions that were reopened due to previous failures of candor or participation.
This kind of attention to the quality of interaction can be propagated throughout an organization to raise the quality of alignment and execution at functional, departmental and project levels too. Imagine an organization in which everyone was fully candid about their understanding and support for the strategy and tactics the CEO want to execute. It could leave you free to worry about other things. Like customers and competitors.