“Seventy percent of strategic failures are due to poor execution of leaders.
It’s rarely for a lack of smarts or vision.”
– Ram Charan
Recently I read about the number of homicides in Chicago. As of mid-October, there have been 600 murders and 2,100 non-fatal shootings.[i] Political liberals see these numbers and call for new gun control laws, though Illinois has the 8th most stringent gun control laws in the nation according to the Law Center to Prevent Gun Violence.[ii] A dozen laws are broken with each shooting.
Conservatives, on the other hand, see the problem is a failure to enforce existing laws. It’s a failure of the city administration, the police, and in some cases the court system. In short, it is a failure of execution. Would adding an additional law really counter the lawlessness? Or, is the problem one of law enforcement?
Ram Charan and Larry Bossidy, wrote: “Execution is the great unaddressed issue in the business world today.”[iii] They are right. It is easy to create an organizational strategy (or, in the public sector, pass a law). It is much more difficult to take action.
In the 4 Disciplines of Execution, Chris McChesney, Sean Covey, and Jim Huling. Explained the problem. They wrote:
If you have an MBA or have taken business classes, what did you study more—execution or strategy?
When we ask leaders this question, the response, once again, his immediate: ‘Strategy!’ It’s perhaps not surprising that the area with which leaders struggle most is also the one which they have the least education.
After working with thousands of leaders and teams and every kind of industry, and in schools and government agencies worldwide, this is what we have learned: once you’ve decided what to do, your biggest challenge is getting people to executed at the level of excellence you need.[iv]
Their prescription is coherent and I will outline it below.
The 4 Disciplines of Execution
The authors begin by explaining why strategic initiatives fail. Management rolls out strategic initiatives on top of the current workload. From the employees’ perspective, the new strategic initiative is just one more thing that they have to do—and they already feel as if they do not have enough time to complete all of their work.
I saw this happen to my students a few years ago. I was teaching an organizational behavior class and I mentioned The Happiness Advantage by Shawn Achor. The basic message of the book is that when you are happier, you are likely to be more productive. The converse is also true. Unhappy employees are less productive, use more sick days, etc.[v]
Two of my MBA students worked for a large financial services organization in town that had gone through successive rounds of layoffs in recent months, and the additional work was spread among the remaining employees. Not long before they took my class, management had required each of their employees to read The Happiness Advantage in an ironic attempt to make their employees happier in order to make them more productive. But this strategy for greater profitability backfired because they were required to read, attend workshops, and work hard to be happy in addition to their enhanced workload.
This is the first problem with strategic initiatives. Often, it is just one more thing added to the current workload—what the authors call the whirlwind. The whirlwind competes with new strategic initiatives, and when push comes to shove, employees choose to do the real work and ignore the new initiative, and ultimately, it withers from inaction.
Day-to-day tasks are urgent. They demand attention. Often, the strategic initiative can wait. But if it is to get done, the strategic initiative must become an integral part of the process. It will never work as an add-on.[vi]
You must work on strategic goals in the midst of the whirlwind. This is hard to do. Sometimes we deceive ourselves into thinking that if work just let up, we would have time to work on the strategic initiative, but work never seems to let up.[vii]
I am guilty of this type of thinking myself. If I am not overwhelmed at work, I get distracted by the whirlwind at home. I reason that if I could just clear my plate, I could be so productive. I use it as an excuse not to do what needs to be done—but that is all that it is—an excuse. I take some comfort in knowing that even while Thomas Jefferson was in Philadelphia penning the Declaration of Independence, he was distracted. He was worried about his wife, Patty, who had recently had a miscarriage at home in Virginia.[viii] The ideal state, where we have unlimited time to think great thoughts, is a mirage that will keep us from getting down to the work that needs to get done.
- Determining Your Wildly Important Goal(s).
The first of the four disciplines is to identify your Wildly Important Goals or WIGs.[ix] Other authors have called these by different names. In Built to Last, Jim Collins and Jerry Porras called them BHAGs, which stood for big, hairy, audacious goals.[x] In Think and Grow Rich, Napoleon Hill called it a “Definite Major Purpose.”[xi] Whatever you call it, it is best if it is singular, not plural. If you have multiple WIGs, they must be limited to no more than two or three.
The authors explained that if you have one or two goals, you are likely to achieve them. If you have ten to twenty goals, you will find that you are spread too thin and you may not achieve any of them competently. “Simply put, Discipline 1 is about applying more energy against fewer goals because, when it comes to setting goals, the law of diminishing returns is as real as the law of gravity.”[xii]
You must be careful to define the goal. The authors also added that for WIGs to have any force at all, you must be able to answer “From X to Y by when.”[xiii] It has been said that a goal is a dream with a deadline. Without a clear understanding of what will change and when it will change, you will not know when you have been successful.
- Act on Lead Measures
The second discipline is to act on lead measures. This is different from our customary approach. We are used to acting on lag measures that tell us after the fact whether we were or were not successful. Because this concept is so critical to the process, I will let the authors explain it in their own words:
Lag measures are the tracking measurements of the wildly important goal, and they are usually the ones you spend most of your time praying over. Revenue, profit, market share, and customer satisfaction are all lag measures, meaning that when you receive them, the performance that drove them is already in the past. That’s why you’re praying—by the time you get a lag measure, you can’t fix it. It’s history.
Lead measures are quite different in that they are the measures of the most high-impact things your team must do to reach the goal. In essence, they measure the new behaviors that will drive success on the lag measures, whether those behaviors are as simple as offering a sample to every customer in the bakery or as complex as adhering to standards in jet-engine design.
A good lead measure has two basic characteristics: It’s predictive of achieving the goal and it can be influenced by the team members. To understand these two characteristics, consider the simple goal of losing weight. While the lag measure is pounds lost, two lead measures might be a specific limit on calories per day and a specific number of hours of exercise per week. These lead measures are predictive because by performing to them, you can predict what the scale (the lag measure) will tell you next week. They are influenceable because both of these new behaviors are within your control.
Acting on the lead measures is one of the little-known secrets of execution.[xiv]
Allow me offer my own example. My students want to see ‘A’s on their report cards. Those are lag measures. They tell you after the fact how well they have done. Lead measures include reading the books, completing the assignments, and showing up for class.
Some lead measures may have their own lead measures. For instance, an assignment may be a lead measure for an ‘A’ in the class, but there are lead measures for getting an ‘A’ on the assignment as well. These include spending adequate time conducting research for the paper, using proper grammar and format, and taking the time to reread and edit the paper. In my experience, students often skip this last lead measure, and it costs them dearly. By the time they get their grade (the lag measure), it is too late to do anything about it.
While we recognize the value in monitoring lead measures, we rarely act on it because it is so much easier to measure lag measures. Lag measures virtually fall into our laps. Lead measures require thought, and as Henry Ford has said, “thinking is the hardest work there is, which is probably the reason so few engage in it.”[xv] Yet the benefit of acting on lead measures is beyond question.
- Create a Compelling Scoreboard
The third discipline is to create a compelling scoreboard. If you are trying to track your lead measures, you need a system that will help you know if you are achieving your goals at any given time. Placing it on a visible scoreboard will help you track your activities and this will help you adjust as necessary.
The authors provided a few key rules for the scoreboard. First, it must be simple. You are not using it to measure everything. You only measure the lead and lag measures. Next, it must be visible. If you work alone, you may be fine just keeping it on your computer, but if you work with others, they need to be able to see it too. The scoreboard should be visible to all who are working toward the WIGs. Finally, you should be able to tell how you are doing at a glance. It should not be too complicated.[xvi] The authors explained:
If the lead and lag measures are not captured on a visible scoreboard and updated regularly, they will disappear into the distraction of the whirlwind. Simply put, people disengage when they don’t know the score. When they can see at a glance whether or not they are winning, they become profoundly engaged.[xvii]
- Create a Cadence of Accountability.
The fourth discipline is a culture of accountability. Short weekly meetings will be necessary to create an environment where the new strategic initiative becomes part of the routine. At these meetings, each member will report on the previous week’s actions, review the scoreboard, and share up to three new commitments for the week. These new commitments must be actions intended to improve the scoreboard for the strategic plan. They must not be related to the whirlwind. Every week, they will repeat these steps at the accountability meeting.[xviii]
While keeping commitments is serious, the scoreboard and the process makes the execution of strategy into a game. If that concept sounds familiar, it should. Patterson, Grenny, Maxfield, McMillan, and Switzler discussed similar concepts in Change Anything.
By changing the incentive structure to make the process into a game, you gain leverage on the new initiative.[xix] The scoreboard allows you to recognize and reward small wins. Creating new weekly commitments and answering for the success or failure in achieving the past week’s lead measures creates commitment.
Execution in the Real World
This approach is not just academic. Alan Mulally used it when he took over Ford. He was appointed CEO on September 5th, 2006. When he came to the helm, Ford was hemorrhaging. That year, Ford had lost $12.7 billion and “Ford’s stock price had plummeted by more than half from more than $16 a share to less than $7.”[xx] The New York Times declared, “Ford’s full-year loss, equivalent to $6.79 per share, far exceeded the $7.39 billion it lost in 1992, the worst previous year in its 103-year history.” In fact, Ford lost $5.8 billion in the fourth quarter alone.”[xxi]
Alan Mulally set out to turn the automaker around. In December, 2006 the Wall Street Journal Reported his method:
DEARBORN, Mich. — At a board meeting at Ford Motor Co.’s headquarters last week, new chief executive Alan Mulally surprised directors by asking them to follow him from the boardroom, down a flight of stairs to his secret “war room.” Unlocking the door, Mr. Mulally gave them a few minutes to review papers mounted on all four walls. “This is ‘The Plan,’” he told them, according to people familiar with the situation.
The posted pages contain charts, graphs and lists of Ford products and markets — his road map to turn around the troubled auto maker. There are also photos of Ford executives in charge of various divisions, to show who is accountable. Pages are coded in red, yellow and green, indicating the severity of the problems.
Red-coded charts show Ford’s plunging U.S. market share, its North American financial forecast and its material-cost disadvantage. Yellow charts show Americans’ move away from SUVs and trucks. Green charts show Ford’s effort to cut nearly half its 82,000 North American factory workers through buyouts….
His first Thursday gathering at Ford went badly, underscoring the challenges he would face. After Mr. Mulally asked each business head to present his results and forecasts, he complained that the numbers didn’t make sense. ‘Why don’t all the pieces add up for the total corporate financials?’ he recalls asking.
‘We don’t share everything,’ he says one manager replied, explaining that Ford executives ran their units without meshing with other divisions, occasionally holding back some information. Mr. Mulally was floored. The next week, executives came back with complete figures.
‘Data can set you free,’ Mr. Mulally tells associates. He prodded executives embarrassed of their results to bring them to the table — and post them on the war-room wall. “You can’t manage a secret,” Mr. Mulally says he tells them.
When one manager offered up the poor performance of his unit, some Ford executives were stunned by Mr. Mulally’s reaction. He applauded, saying: ‘Great visibility.’ Mr. Mulally coached his team on using the colored graphs and lists. ‘We got to the yellows and the reds pretty quickly…within a month,’ the CEO says.
When a color improves, ‘it’s a chance to celebrate,’ he adds. Executives began clapping as many as a dozen times per gathering.[xxii]
Mulally demanded regular accountability, but he did more than that. He created a safe environment in which top executives could work together. Bryce Hoffman, author of American Icon: Alan Mulally and the Fight to Save Ford Motor Company, explained that the atmosphere at Ford was toxic before Mulally was brought in as CEO. “Executives were too focused on preserving their own fiefdoms to worry much about the overall success of the company. Before he arrived in Dearborn, high-level meetings were arenas for mortal combat.”[xxiii]
At Mulally’s weekly Business Plan Review, the color-coded charts became lead measures on the scoreboard that everyone discussed. Mulally worked to instill a sense of ownership for the whole operation. He did not allow executives to focus exclusively on their own silos. When a problem arose, the issue would move to a Special Attention Review meeting where he focused on the system, not the people. It was an open forum to discuss issues “but not recriminations or personal attacks. Mulally would say, ‘So-and-so has a problem, but he isn’t the problem. Who can help him fix it?’ But this weekly return to the numbers also allowed him to enforce accountability.”[xxiv]
Mulally was successful in turning Ford around. When he retired in 2014, the company was healthy in spite of the 2008 recession, and the stock price was back to $15.91.[xxv] Mark Fields, the first executive who spoke up to declare his business was in the red in the 2006 Business Plan Review meetings succeeded Mulally as CEO.
Rudy Giuliani used a similar method to reduce crime as Mayor of New York City. When Giuliani was elected, crime was high, and the citizens of New York felt it. This affected tourism. Mayor Dinkins appeared impotent. According to the FBI Uniform Crime report, “In 1993, the year before Mayor Giuliani took office, there were 1,946 murders in New York City and 11,555 major crimes per week.”[xxvi]
During Giuliani’s tenure, “murders dropped 66% and major crimes per week were cut in half.” That is not all. His methods had a profound effect on “other crime reductions between 1993 and 2001: Rape-45.7%; Robbery-67.2%; Aggravated Assault- 39.6%; Burglary-68.2%; Larceny-43%; Motor Vehicle Theft- 73.3%.”[xxvii]
How did he reduce crime? He did not pass another law. He focused on execution. “He hired William Bratton, a Broken Windows disciple who cracked down on graffiti, fare-jumping and other minor offenses in the city’s transit system. Crime in the subways dropped about 27 percent.”
James Q. Wilson and George Kelling introduced the Broken Windows theory in 1982.[xxviii] The idea is that small crime (e.g., a broken window, graffiti, or pan-handling) is an invitation to larger crime. Get the prostitute off the street and the pimp, the drugs, and the related violence go too.
This theory underscored Compstat. In Leadership, Giuliani wrote:
Using Compstat, the goal of preventing crime rather than reacting to it was fulfilled. With patterns identified early, the commander deploys officers to probable targets and arrests the criminals before they have robbed their garage, instead of hoping the 911 call arrives in time to catch the fleeing villains.[xxix]
Compstat provided lead measures and a scoreboard with nearly instantaneous information about crimes so that police could be re-deployed to where they were most needed. “CompStat was not just an analytical tool – it was a new way to think about crime.”[xxx]
Giuliani later called [Compstat] the crown jewel of his administration….
Before Bratton, crime statistics were compiled downtown, and then largely shelved. Bratton invested in new computers that allowed the department to track crimes weekly. Precinct commanders, on the hook for crime rates in their sectors, had the latitude to try new tactics. [xxxi]
Note the similarities between Giuliani’s approach and the method discussed in this lesson. The WIG was a significant reduction in crime. Recent crime data provided new lead measures—the precincts where crime was likely to occur. Daily analysis and twice-weekly Compstat meeting held the commanders’ accountable. The result was measurable a reduction in crime. While some dispute the amount of credit due to Guiliani’s methods[xxxii], even Giuliani’s political enemies confirm the FBI statistics even as they attempt to minimize the cause.[xxxiii]
What could you do with this approach to execution? Even if you are not running a major corporation or America’s largest city, the same strategies for execution will work for you. You have the tools to execute your plan. Now it is up to you to execute.
Actionable items:
What are your WIGs?
1.
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2.
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3.
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What are your Lead Measures?
1.
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2.
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3.
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Describe your scoreboard. What does it look like.
____________________________________________________________________________________________________________________________________________________________________________________________________________________
Explain how you will achieve a “cadence of accountability.”
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End Notes
[i] Miserable milestone: Chicago surpasses 600 homicides this year. (2016, Oct 19). CBS Chicago. Retrieve from http://chicago.cbslocal.com/2016/10/19/miserable-milestone-chicago-surpasses-600-homicides-this-year/
[ii] Illinois (n.d.). 2015 Gun Law State Scorecard. Law Center to Prevent Gun Violence. Retrieved from http://gunlawscorecard.org/
[iii] Bossidy, L., Charan, R., & Burck, C. (2002). Execution: The discipline of getting things done. New York: Crown Business. (p. 5).
[iv] McChesney, C., Covey, S., & Huling, J. (2012). The 4 disciplines of execution: Achieving your wildly important goals. New York: Free Press. (p. xxiii).
[v] Achor, S. (2010). The happiness advantage: The seven principles of positive psychology that fuel success and performance at work. New York: Broadway Books.
[vi] McChesney, C., Covey, S., & Huling, J. (2012). The 4 disciplines of execution: Achieving your wildly important goals. New York: Free Press.
[vii] McChesney, C., Covey, S., & Huling, J. (2012). The 4 disciplines of execution: Achieving your wildly important goals. New York: Free Press.
[viii] Meacham, J. (2012). Thomas Jefferson: The art of power. New York: Random House. (p. 109).
[ix] McChesney, C., Covey, S., & Huling, J. (2012). The 4 disciplines of execution: Achieving your wildly important goals. New York: Free Press.
[x] Collins, J. C., & Porras, J. I. (1994). Built to last: Successful habits of visionary companies.
[xi] Hill, N. ( ).Think and grow rich
[xii] McChesney, C., Covey, S., & Huling, J. (2012). The 4 disciplines of execution: Achieving your wildly important goals. New York: Free Press. (p. 40).
[xiii] McChesney, C., Covey, S., & Huling, J. (2012). The 4 disciplines of execution: Achieving your wildly important goals. New York: Free Press. (p. 37).
[xiv] McChesney, C., Covey, S., & Huling, J. (2012). The 4 disciplines of execution: Achieving your wildly important goals. New York: Free Press. (pp. 11-12).
[xv] Anderson, E. (2013, May 13). 21 quotes from Henry Ford on business, leadership and life. Forbes. Retrieved from http://www.forbes.com/sites/erikaandersen/2013/05/31/21-quotes-from-henry-ford-on-business-leadership-and-life/#3c3b3c8e3700
[xvi] McChesney, C., Covey, S., & Huling, J. (2012). The 4 disciplines of execution: Achieving your wildly important goals. New York: Free Press. (pp. 66-67).
[xvii] McChesney, C., Covey, S., & Huling, J. (2012). The 4 disciplines of execution: Achieving your wildly important goals. New York: Free Press. (p. 66).
[xviii] McChesney, C., Covey, S., & Huling, J. (2012). The 4 disciplines of execution: Achieving your wildly important goals. New York: Free Press.
[xix] Patterson, K., Grenny, J., Maxfield, D., McMillan, R., & Switzler, A. (2011). Change anything: The new science of personal success. New York: Business Plus.
[xx] Collins, R. (n.d.). Alan Mulally’s management secret: Peer accountability. Optimityadvisors.com Retrieved from http://www.optimityadvisors.com/insights/blog/alan-mulallys-management-secret-peer-accountability
[xxi] Bunkley, N. (2007, Jan 25). Ford loses record 12.7 billion in ’06. New York Times. Retrieved from http://www.nytimes.com/2007/01/25/business/25cnd-ford.html?_r=0
[xxii] Langley, M. (2006, Dec 22). Inside Mulally’s ‘war room’: A radical overhaul of Ford. The Wall Street Journal. Retrieved from http://www.wsj.com/articles/SB116675864434457508
[xxiii] Hoffman, B. (n.d.). Nine things I learned from Alan Mulally. Changethis.com. Retrieved from http://changethis.com/manifesto/93.01.AmericanIcon/pdf/93.01.AmericanIcon.pdf (p. 9).
[xxiv] Hoffman, B. (n.d.). Nine things I learned from Alan Mulally. Changethis.com. Retrieved from http://changethis.com/manifesto/93.01.AmericanIcon/pdf/93.01.AmericanIcon.pdf (p. 14).
[xxv] Ford Motor Co. (n.d.). Marketwatch.com. Retrieved from http://www.marketwatch.com/investing/stock/F/historical?siteid=mktw&date=may%201%2C%202014&x=0&y=0
[xxvi] Rudi Giuliani: 2008 Republican Presidential Candidate: Mayor-NY City. (2007). The American Presidency Project. Retrieved from http://www.presidency.ucsb.edu/ws/?pid=94811
[xxvii] Rudi Giuliani: 2008 Republican Presidential Candidate: Mayor-NY City. (2007). The American Presidency Project. Retrieved from http://www.presidency.ucsb.edu/ws/?pid=94811
[xxviii] Kelling, G. L., & Wilson, J. Q. (1984). Broken Windows. The Atlantic. Retrieved from http://www.theatlantic.com/magazine/archive/1982/03/broken-windows/304465/
[xxix] Giuliani, Rudolph W., and Ken Kurson. 2002. Leadership. New York: Hyperion. (p. 75).
[xxx] Lhota, J. (2007). Rudy Giuliani: Leadership through results-driven government. TownHall.com Retrieved from http://townhall.com/columnists/joelhota/2007/06/08/rudy_giuliani_leadership_through_results-driven_government
[xxxi] Allison, W. (2007). How much credit does Giuliani deserve for fighting crime? Politifact. Retrieved from http://www.politifact.com/truth-o-meter/article/2007/sep/01/how-much-credit-giuliani-due-fighting-crime/
[xxxii] Notably Levitt, S. D., & Dubner, S. J. (2005). Freakonomics: A rogue economist explores the hidden side of everything. New York: William Morrow. And pretty much everything the New York Times reported about Giuliani—ever.
[xxxiii] Allison, W. (2007). How much credit does Giuliani deserve for fighting crime? Politifact. Retrieved from http://www.politifact.com/truth-o-meter/article/2007/sep/01/how-much-credit-giuliani-due-fighting-crime/