Execution: the missing link
Coffee
table conversations in global lounges suggest that we in India are great
strategists and thinkers, have strong viewpoints and numerous theories, but
often fall short on our actual ability to execute these same theories, ideas
and strategies that we vociferously propound.
In fact, a key measure of a company’s ability to execute and be successful, i.e. ‘sustained profitable growth’, eludes most companies (and this is true internationally). A recent study of 1,854 public companies found that during the boom decade of the 1990s, only about one company in eight grew by at least 5.5 per cent in revenues and earnings, while earning cost of capital. That is, only about 13 per cent of public companies were truly profitable. Yet, more than 90 per cent of companies had projected returns well above these levels. In other words, even in the booming 1990s, about nine out of 10 companies failed to consistently deliver results, even at the low end of their own projections.
So the question is - what does it take to be among the 13 per cent of companies who create value over time? How do you get to be one of the few who grow consistently and profitably? Focus on the core. Analysing the study, we see that four out of five of the long-term value creators focus sharply on the things they do better than anyone and that brings the biggest payback. By focusing on what they do best, they end up dominant. Ironically, it is narrow mental focus on the core mission, the core business, or the core economic drivers that produce expansion.
Execute with precision. Value creators avoid the ‘fatal distractions’ that blur focus at every level of the organisation. The main problems here are leaders who keep shifting priorities, who allow the many good ideas and opportunities to eat away core ideas and opportunities. Or when they do get focused, they fail to follow through.
Research demonstrates that leaders who succeed over time focus on a handful of core priorities and require disciplined follow-through. A leader who says ‘I've got 10 priorities' doesn't know what he's talking about. You’ve got to have these few, clearly realistic goals and priorities, which will influence the overall performance of the company.
Closing the execution gap is key to achieving profitable growth over time. The great value creators focus sharply and execute relentlessly. They close the execution gap by unleashing the power of a disciplined team of people who are tightly focused on a few clear core objectives. John Kotter of Harvard Business School verifies this success pattern in his classic studies of highly effective business leaders. Observing the daily work of general managers noted for getting results, he finds that they have these things in common: they focus totally on a limited agenda of clear core objectives, and keep their people constantly and measurably moving forward on those objectives.
Clearly, although managers are perceived as busy and hardworking, their ability to stay focused and get results is not so highly regarded. This intriguing paradox led us to try to answer the question: what makes organisations good at executing?
RAJAN KAICKER The author is the executive chairman of RCS SouthAsia and Franklin Covey South Asia
In fact, a key measure of a company’s ability to execute and be successful, i.e. ‘sustained profitable growth’, eludes most companies (and this is true internationally). A recent study of 1,854 public companies found that during the boom decade of the 1990s, only about one company in eight grew by at least 5.5 per cent in revenues and earnings, while earning cost of capital. That is, only about 13 per cent of public companies were truly profitable. Yet, more than 90 per cent of companies had projected returns well above these levels. In other words, even in the booming 1990s, about nine out of 10 companies failed to consistently deliver results, even at the low end of their own projections.
So the question is - what does it take to be among the 13 per cent of companies who create value over time? How do you get to be one of the few who grow consistently and profitably? Focus on the core. Analysing the study, we see that four out of five of the long-term value creators focus sharply on the things they do better than anyone and that brings the biggest payback. By focusing on what they do best, they end up dominant. Ironically, it is narrow mental focus on the core mission, the core business, or the core economic drivers that produce expansion.
Execute with precision. Value creators avoid the ‘fatal distractions’ that blur focus at every level of the organisation. The main problems here are leaders who keep shifting priorities, who allow the many good ideas and opportunities to eat away core ideas and opportunities. Or when they do get focused, they fail to follow through.
Research demonstrates that leaders who succeed over time focus on a handful of core priorities and require disciplined follow-through. A leader who says ‘I've got 10 priorities' doesn't know what he's talking about. You’ve got to have these few, clearly realistic goals and priorities, which will influence the overall performance of the company.
Closing the execution gap is key to achieving profitable growth over time. The great value creators focus sharply and execute relentlessly. They close the execution gap by unleashing the power of a disciplined team of people who are tightly focused on a few clear core objectives. John Kotter of Harvard Business School verifies this success pattern in his classic studies of highly effective business leaders. Observing the daily work of general managers noted for getting results, he finds that they have these things in common: they focus totally on a limited agenda of clear core objectives, and keep their people constantly and measurably moving forward on those objectives.
Clearly, although managers are perceived as busy and hardworking, their ability to stay focused and get results is not so highly regarded. This intriguing paradox led us to try to answer the question: what makes organisations good at executing?
RAJAN KAICKER The author is the executive chairman of RCS SouthAsia and Franklin Covey South Asia
No comments:
Post a Comment