Scaling Up Execution

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Execution might not seem like the sexiest part of scaling up your business, but in my opinion, it can be the most exciting when it’s done correctly. A beautifully executed plan is what allows the Davids of this world to slay the Goliaths. It’s how an underdog team becomes the winning team. And it’s your best offense for growing your bottom line in the long term.

Execution is really about driving fat, bottom-line net profits through efficiency. The problem is that while the method of crafting a strategy and hammering it out flawlessly sounds simple enough, it is much more easily said than done. Many leaders struggle with execution because they lack a process for troubleshooting their team’s performance and they don’t understand how their own actions (and omissions) can promulgate problems.

In helping my clients, I’ve watched many CEOs and their teams shoot themselves in the foot time and again through faulty execution. This list of ten diagnostic questions was developed to help you and your team examine blind spots and turn things around quickly. Using the ten tests, you will see how to nail execution and exterminate the silent killers of sustained, bottom-line profitability.

1. How committed are you to executing your plan for results (or do you deviate immediately)?

It’s a common human failing to create a plan, outwardly commit to it, but then get nervous and deviate from it. However, that is a leadership sin! In my experience, having the ability to stay committed to your plan is an excellent litmus test for confidence—both in your strategy and your own leadership. Unless you are fully congruent with your plan, you will have a hard time holding your team to it, and quite frankly, you will drive them bats**t crazy! Driving your team crazy is a bad move as you will either dumb good people down, lose A Players, or both.

When you cheat on your plan with these little deviations, you tend to self-justify your behavior and become completely blind to it. It’s like going a little over the speed limit or being just a few extra pounds overweight—since you can get away with it, you think nothing of it. But when you do this consistently with a plan you have communicated with your team, they receive the message, “Do as I say, not as I do.” You subtly teach them how not to execute. When this happens, you create a culture with little to poor accountability. Without realizing it, you have relinquished the ability to hold others accountable because you are not holding yourself accountable to your own plan.

That’s why this question is worth seriously reflecting on. Invest real time in self-reflection on your own leadership actions and steadfastness to executing a plan once it’s drafted. I often see good teams driven nuts by a lack of commitment from leaders who block great execution unconsciously, and I’d go as far as to say that it’s the number one CEO leadership issue I run into. As we say in the Scaling Up framework, the bottleneck is always at the top of the bottle!

2. How consistent are the results you are getting from your team?

You can’t dodge the answer to this one because simple math doesn’t lie. How consistently is your team hitting your goals? What percentage of the time is the goal met? How about what percentage of the time are the actions delivered on time? Whether you are measuring sales figures, budgets, or something else, are most of your team members hitting the mark you have set for them? Achieving results is something you can investigate both on a person-to-person level and across a range of people to stay on top of your overall efficiency of execution.

For a moment, think of your team as a basketball team. Would each of your players be averaging 75% at the free-throw line? Demand this same consistency in your business. Let’s equate that to sales, for example. If you have a team of six salespeople who you challenged to drive $5 million dollars last quarter, did they hit that mark? Was the actual revenue they earned $4 million, or $6 million? Who was responsible for achieving more or less? These expectations need to be set and placed out in the open.

3. How hard do you need to lean on your managers to get results?

In my book The A Player, I talk about the kind of energy that you would ideally want from your team. This is the key takeaway: The energy you invest in managing a team member should yield a multiple of that energy back in terms of their contribution to the business. When you have to lean hard on them, constantly holding their feet to the fire—which I call the “sauna session”—your execution needs improvement. I’m not saying that sauna sessions are never necessary. Learn to get comfortable applying legitimate pressure.

But an employee who only yields great results in the short term, like when someone is on their back, is what I refer to as an “Inflatable A” Player. Having one is like continually pumping up a tire with a slow leak. In other words, they only perform well with your adult supervision. You put in more energy than you get out of it and the results do not last. Allowing that in your business is an execution blunder you want to avoid.

4. How good are your managers at developing plans to hit goals?

You should always have very concrete plans to meet your goals. Ask yourself who on your team is good at building those recipe-level plans to consistently achieve goals. Who can make plans that you can take straight to the bank? Are they committed enough to see plans through? There should be managers on your team who can develop plans to hit goals naturally and quickly.

Can your managers develop a detailed, step-by-step plan to achieve a goal like this?

Scaling Up Execution

When it comes to mastering execution, the devil is always in the details. As you can see from the example above (done in the strategic execution platform my clients use), an ideal plan should be detailed enough so that if the executive who drafted it went out sick for a week or two, someone else could pick it up and continue that progress.

The mantra I highly recommend you adopt in strategic execution planning is this: Can you prove your plan? Your proof has two parts:

1. Can your executives prove their plan will achieve the results towards your quarterly priority?

2. Can your executives prove they did the actions when they said they would?

This assessment of your executives’ plans is a critical part of execution that is largely only given lip service. Remember—few people are ever trained in strategic execution planning, and on the teams I coach, it’s often the MBAs and PhDs that struggle the most with developing crisp, executable plans. Since strategic execution planning is not taught in schools, it is a competitive advantage that you need to get good at as an internal competency. A great coach can help you immensely here.

Bottom line: We’re not talking the proverbial smoke-and-mirrors, “100-day plan” here that no one is truly held accountable to. (By the way, never buy into that junk in an interview—nobody ever holds the new hire to the hypothetical plan they proffer in an interview!) Plans should be clear, concrete, and executable, and it is your job to hold your executives accountable to them. Better plans and execution will drive your bottom line with a smoother ride along the way.

5. How often do you have to follow up and repeat yourself?

If you need to nag your team for results, they might accuse you of micromanaging. Let’s be clear though. Micromanaging has more to do with failing to delegate and the lack of clear, documented systems and processes in your business. What I’m referring to here is a different problem: You find yourself continually chasing down your team because you are not seeing the results you expect from them.

If you were getting the results you needed from your team and you were hitting all your collective goals, you wouldn’t have to follow up so often. While you don’t want to treat your team like your children, notice the parallel between yourself and the parent of a teenager in these situations. “Kevin, how many times do I have to tell you to make your bed. Make your bed!” This is usually answered with, “I know, I know, Dad!” The reality is, everyone knows what needs to be done but saying it and getting it done are two different things!

If you allow your managers to get away with saying but not doing, you are teaching them how not to execute. You teach what you tolerate.

6. Is your business more reactionary or a crisp execution of your written business plans?

Agility is a 21st-century catchword in business, but don’t let it deceive you. When the issue du jour comes in, it is tempting to deviate from your plan. It may even feel clever to pivot—giving you a false sense of outsmarting the competition. However, most competitive actions (like pricing, for example), should be strategic rather than reactionary. If you are distinctly differentiated—which is the hallmark of a truly strong strategy—you should be coming into your meetings playing offense, not defense. You don’t want to be like a football team that is getting run against. Then you are playing your competitor’s game, not your own. As a football coach will tell you, it’s time to “dictate and dominate!”

To help your thinking here, keep in mind that business strategy is derived from both the military and sport stratagems of putting yourself in a better position so you can decisively win on the battle or playing field. To take two of many strategic axioms, where can you either mass superior forces or outflank your competition? My point is to take the necessary time to build a winning strategy upfront and then focus on flawless execution of it. Literally, wargame business scenarios to plan your pivots in advance. As General George S. Patton famously said, “A good plan, violently executed now, is better than a perfect plan next week.”

Take this as one cautionary tale as you execute: Don’t get greedy and outrun your own supply lines. You are better to keep up a disciplined 20-mile march than to try to sprint to 30 and run out of food and water. This happens all the time to nervous leaders who take a “take all we can get now” approach. If you are not disciplined in your execution and bite off more than you can chew, you can end up like Napoleon (and the Germans) when exposed to the harsh Russian winter. Don’t outrun your resources with illusions of grandeur. “Growing broke” is the leading cause of failure in otherwise decent businesses.

Whether it be warfare, sports, or business, the essence of strategy dictates that it is easier to play offense than defense. Think about it: In almost every situation, the defensive force gets worn down both physically and psychologically and they have to constantly react to the offensive force’s attacks. In the same vein, you don’t want to be wasting your team’s energy holding emergency meetings to react to your competitors’ latest moves. Your strategy should be so good that they are the ones holding emergency meetings reacting to you. Rent space in their heads; don’t let them take up residence in yours!

As you apply this “take no prisoners” approach to your strategic execution, your competition may paradoxically see their employees waiving the white flag and wanting to join your winning ranks. Such are the spoils of war.

7. What percentage of the time are timing, results, or outcomes missed?

Again, you teach what you tolerate, so it is important to get ruthlessly self-reflective about your misses, and those of your team. Ask yourself:

1) How often are your plans executed on time? When you miss your deadlines, what holds you up? Or who holds you up?

2) How often are you achieving or exceeding your KPIs? Is it 50% of the time? Or is it 90% of the time? What or who do you need to get that closer to 100%?

These are simple but powerful metrics that you should commit to paper so you can study them empirically. The answers will tell you if your execution is healthy, and if you are on track to meet your 1-year, 5-year, or even 10- and 20-year goals.

One of my favorite quotes to lock in this point comes from a friend of Scaling Up, Jeff Hoffman, who marvelously scaled He says, “Ideas are welcomed, execution is worshipped!”

If you want to create a culture in which precise execution is fostered and revered, run all of your meetings as 360-degree accountability sessions in which all team members verbally articulate both their wins and their misses. Social pressure is a very powerful accountability force that you should learn to leverage. It helps people own their critical numbers. Take the pressure off yourself as the CEO and teach your team to hold each other accountable. A Players will love this and see the value in it. B Players will feel legitimate pressure and start either hitting their goals or updating their resumes. Either is a good outcome for you!

8. How much are mistakes costing you?

This an important question to ask yourself honestly and investigate thoroughly because most of the mistakes your business makes—whether it be from a quality issue, failing to beat your competition with speed, a product recall, or a faulty part—are preventable through good execution. Find out exactly what these are costing you in dollars and in wasted employee time. Because poor execution has a ripple effect or even an avalanche effect, these mistakes can cost you millions. Or in tough times, even your business.

As a matter of fact, a client of mine who actually has put a premium on execution over the last 12 months—and seen excellent results—asked me to take their executive team point by point through this list. Unlike some teams who read this in the third person and don’t believe it applies to them, this team carefully and thoughtfully considered how to improve each bullet. When we came to this exact bullet, the CEO exclaimed, “One mistake from a C Player cost us a $500,000 client! And that did not even include other costs, like his salary!”

If you are willing to take a hard look, the mistakes that you are making due to poor execution are not hard to find. They all track back to either process or people (and remember that people are responsible for driving process and execution). You will find that B and C Players are behind the majority of your mistakes!

9. How consistently do you deliver monthly, quarterly, and annually budgeted results?

As you begin to master the art of execution, you will begin to have the experience my established clients do. They hit their numbers consistently, like clockwork. This is not by accident.

That is because they know the “success formula” that drives the end results they are looking for. They “divide to multiply,” which means identifying the drivers that lead to the build-up or achievement of a goal. In other words, they apply the teachings of the 4 Disciplines of Execution by the Covey organization and focus on the lead measures that drive the ultimate lag measures they really want. Dividing to multiply works because you can focus on the component lead measures. This approach leads to results that are multiplicative in nature, not additive!

This is a critical point. When correctly identified, lead measures are so critical because they are predictable and influenceable in achieving your goals. For example, in sales, lead measures usually include how many face-to-face, complex sales diagnostics are performed, or how many prospects reach specified stage gates in the sales process, rather than relying on some voodoo percent-of-close formula that Salesforce spits out, and that has absolutely no real accuracy in terms of predicting conversions and wins.

Being able to correctly identify lead measures is the hallmark of A Players. This ability really separates the contenders from the pretenders on your team. Weaker managers sit back and bite their nails while praying that they may hit their numbers. Strong A Player managers relentlessly track progress against these goals with provable lead measures and metrics until they are realized.

A great metaphor here is weight loss. As someone who has personally lost over 13 pounds in the last 5 months, it is done by relentlessly focusing not only on the lag measures (daily scale readings sent and graphed to my mobile phone to show bottom-line progress, as well as tape-measuring my waistline), but even more importantly, focusing on the lead measures of weight loss like calorie intake, carbohydrates consumed, and calories burned through exercise. And just like when I temporarily miss a milestone on my weight loss, there are unpleasant consequences, like going hungry or doing a workout in the rain and cold. Often, life forces us to double or triple down on our efforts when necessary to hit a goal. This is a truth that A Players understand and B and C Players are in denial about.

Remember this metaphor and apply legitimate consequences to your managers if they slack off on the accountability necessary to hit their lead measures. As the Marines say, “Pain is just weakness leaving the body!”

10. How well are your big strategic goals (your long-term, lofty goals) getting realized in actual progress each quarter?

This execution test is the most important, but perhaps the easiest to ignore. It’s also the most insidious as ignoring it will ultimately cost you the achievement of your dreams. Are you consistently seeing yourself ascending the mountain top toward your BHAG™ (Big Hairy Audacious Goal), with quarterly priorities and actions that will make these dreams a reality? If not, you are succumbing to the tyranny of the urgent over the important.

Always be doing something that will get you one step closer to your goals. If you aren’t getting closer, what’s going wrong? Is it the shiny object syndrome? Or are you and your team in reactionary mode or not committed to every step of your plan? The process you have laid out should be a series of steps that get you methodically from Point A to Point B—or as I like to say, from Point B to Point A. Everything you do should get you to a better place.
Take a good, hard look at your longer-term lofty goals. The best thing you can do this upcoming quarter is to build a concrete plan that gets you closer to its attainment. After all, if you are not making progress in the next 13 weeks or 90 days, you are just putting off, or jeopardizing, the achievement of your goal.

As a CEO, one of your major functions is to ensure your team members are including big, long-range priorities and actions in your quarterly plan. Sadly, I’ve found that most executives are not nearly as strategic as they need to be and therefore lack the discipline to include the long-range key thrust/capabilities (3–5 year priorities) in their quarterly plans because they are more focused on tactical matters. These same executives also tend to be poor at execution, and even if you as the CEO drive the inclusion of these long-term strategies into your quarterly plans, you may often be disappointed to see your team make excuses for not executing against them in the immediate term. Instead, they get caught up reacting to the day-to-day.

Executives who are great at both strategy and execution are extremely rare. This is because it takes maturity and fortitude to stay strategic in the face of daily battlefield pressures. As you work with your executive team in the development and execution of your quarterly strategic plans, it will become crystal clear who your A Players are. Coach up those team members who are less strategic or executionally proficient using the execution of the ones who are knocking it out of the park as benchmarks.

As with anything worthwhile in life, specificity wins in strategic planning, and fuzzy generalities never happen. Using a strategic execution software like either Scaling Up Scoreboard or Metronome for the execution of your strategic plan, you will soon have a rich library of strategic execution examples at your fingertips that you can use as example case studies with your team.

Here is a final example that should lock in the importance of linking your long-term goals with immediate progress in the coming quarter. One of my clients has a BHAG to become an employee stock ownership plan (ESOP) company in eight years. This is an exciting and very tangible goal for the entire leadership team, including the owner. I recently had a one-to-one coaching session with an A Player division leader from this company named Alan. He wanted to build more concrete plans. During the coaching session, he said something incredibly profound: “Rick, that goal of being an ESOP is important to me. The fastest way I can help the team get there is by driving my division’s Labor Efficiency Ratio (LER) to $5. I need to get that plan hammered out!” Alan’s link between the lofty, long-term goal, and immediate action through his quarterly plan is the hallmark of an A Player. Look for this quality in your team. If you don’t have people who can connect strategy to excellent execution, you will simply delay or not achieve your long-term dreams.

In my experience as a certified Scaling Up coach, great execution is the unsung hero of the Four Decisions framework: People, Strategy, Execution, and Cash. Nothing happens without it.

In fact, the founder of Scaling Up, Verne Harnish, asks one question that beautifully encapsulates what good execution should look like in your business: “Are all processes running without drama and driving industry-leading net profitability?” In my many years of coaching businesses, I’ve realized that the savviest, happiest, and most successful CEOs value a smooth-running, drama-free business that executes brilliantly. (Believe it or not, weaker CEOs love drama because it allows them to put on their Superman cape and wear their underwear on the outside of their pants!)

Great execution drives efficiency, which allows the strong gross margins garnered from strategy to drop to the bottom line as fat net profits. These fat net profits enable you to self-fund your business growth, provide a profit pool to reward your A Players, and give you the peace of mind to be strategic. Do you want this? The person responsible for making sure the answer is a resounding YES is you!

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