Creating a compelling strategy is absolutely necessary for long-term value creation and sustainability. However, by itself it is not sufficient. Strategic clarity is only half the battle. Sufficiency comes from the execution capability and commitment of everyone in the organization. At the end of the day, execution is the “Holy Grail” of strategic success and operational effectiveness. Both Larry Bossidy, who led AlliedSignal’s turnaround, and Lou Gerstner, who led IBM’s turnaround, give credit to the execution supporting their vision. Execution is the critical part of a successful strategy. Paraphrasing their words, execution is about getting it done, getting it done right, getting it done better than the competition.
Exceptional business performance requires extraordinary execution with a commitment to excellence. In the end, people take actions (execute) based on what they care about in terms of a sense of purpose, mission, strategy, strategic objectives and core values. Executive team members have to define what they care about, what really matters, and communicate this constantly and consistently throughout the organization.
Execution is about increasing the capacity to produce results consistent with a company’s strategy and strategic objectives. This requires the effective coordination of action throughout the organization by developing effective value creation processes, driven by extraordinary capabilities.
Outstanding execution requires building a high-performance, high-integrity culture where everyone makes sincere promises and fully commits to the promises they make. What does this mean? This means everyone honors their word. When people say “Yes” they mean “Yes” and do “Yes”. Their promises are sincere and failing to meet their promises is an exception, not the norm. They complete a high percentage of their promises. In a low performance culture, people either don’t give a clear “Yes”, or say “Yes”, but do “No” as a norm. They complete a much lower percentage of their promises.
But, how do you build execution muscle into the organization? How do you make execution operational? It starts with the recognition that everything that happens within an organization happens as a result of conversations between team members. Looked at this way, conversational competency becomes a core business process. Fernando Flores developed a model for conducting a conversation that focuses on building execution muscle called the “Conversation for Action (CfA)”. This conversation has four phases:
Let me provide an explanation of this conversation, interwoven with an illustration that happens with technology companies. A customer wants a special modification to a product they have been purchasing for several months. There is something missing that makes the product less effective for their application. The customer starts the conversation with the sales person by making a request for proposal. The customer states what they want to get done, including a time frame. We call this their Conditions of Satisfaction. In this model, the person making the request is considered the Customer.
The Customer makes the request of the sales person. In this case, the sales person is the Performer. The Request Preparation Phase ends when the request is made. The Promise Negotiation Phase begins when the Performer and Customer start to negotiate the Conditions of Satisfaction. The Performer can accept the request, make a counter offer, decline the request or take the request under advisement and commit to provide a response at a later time. For this illustration, the sales person accepts the request and promises a proposal within thirty days and the Customer agrees. The Promise Negotiation Phase ends when the Performer makes a Promise that is accepted by the Customer.
Once the Promise is made, the Promise Fulfillment Phase starts and the Performer takes the actions necessary to fulfill the Promise. The sales person cannot do the proposal without the help of engineering and manufacturing. So now the sales person becomes the Customer making requests of Engineering and Manufacturing to estimate the time, development and product cost and provide a specification for the proposal. Engineering and Manufacturing become the Performers and commit to fulfill the sales person’s request within 20 days. This will give the sales person enough time to integrate their information into the proposal and get the proposal approved.
During this phase, the Performers (Engineering and Manufacturing) have to be committed to resolve the inevitable breakdowns to fulfill the promise. In a high-performance culture, if the Performer cannot fulfill the Conditions of Satisfaction on time, the Performer will communicate with the Customer immediately. In this culture, the sales person doesn’t have to waste sales time following up. If a breakdown occurs, the sales person can trust that he/she will be notified. Then they can work out a remedy to minimize any damage. In a low-performance culture, the Customer will usually find out just before the due date or after the due date, giving them very little time for corrective action.
The Promise Fulfillment Phase ends when the Performers (Engineering and Manufacturing) fulfill the request and notify the Customer (Sales Person) that the request is complete. The Customer now takes the time to evaluate the deliverables and either accepts them and declares that they are satisfied, or requests changes, if they do not meet the agreed to Conditions of Satisfaction.
Now the sales person prepares the proposal and makes a request for approval and submits the approved proposal to the Customer who made the request. The Customer now takes the time to evaluate the proposal and closes the loop with the person by declaring the conversation complete.
The cycle started with the request for proposal and ended with the final declaration of satisfaction by the customer. High-performance organizations focus on continually increasing the percentage of their promises completed on time and also reducing this cycle time to increase performance and productivity.
Think about your organization. People are coordinating action daily through a network of Conversations for Action. The effective coordination of action throughout the organization requires mastery of this conversation. Breakdowns in any phase will likely result in a breakdown in the coordination of action, and a lower percent promise complete. Mastery of the Conversation for Action is a key to organizational excellence.
Physical muscles are built through the constant, repeated exercise and practice. Execution muscle can be built up over time by repeated exercise and practice of conversations that follow the CfA model.