Excerpted from Execution by Larry Bossidy and Ram Charan. Copyright © 2002 by Larry Bossidy, Chairman and CEO, Honeywell International and Ram Charan, author of WHAT THE CEO WANTS YOU TO KNOW. Excerpted by permission of Crown Business, a division of Random House LLC. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
A conversation with Larry Bossidy, co-author (with Ram Charan) of
EXECUTION: The Discipline of Getting Things Done
Why did you and Ram Charan decide to write a book about execution?
We were struck by the fact that there are hundreds of books devoted to strategic planning, CEO profiles, and customer service, but very little on turning strategy into reality. No one takes a class on execution in business school, and many leaders have no idea that it’s a discipline in its own right, not just a matter of tactics.
Look at how many CEOs have been asked to resign in the last couple of years. If you understand execution, it becomes very clear what went wrong at companies like Lucent, Compaq, Hewlett-Packard, Campbell, Kodak, and AT&T. These were good companies, with smart CEOs and talented people, yet they failed to produce the promised results. They failed to execute.
Ram and I believe that EXECUTION can help leaders get things done more effectively at every level, in every size company.
You write that some companies have an “execution culture” – what does that kind of culture look like?
At a company like General Electric, EDS, Dell, or Wal-Mart, people are held accountable for what they promise to deliver. They know that their bosses and colleagues are going to ask tough questions and follow up. They don’t suffer through endless meetings where nothing gets resolved and the hard problems are swept under the rug. Everyone tries hard to be realistic – especially about people, strategic plans, and budgets.
When you have an execution culture, people also learn that excuses don’t count for much. You say that the economy took a downturn, or your competitors did something completely unexpected? Well, why didn’t you see it coming sooner and make adjustments? No one can solve every problem, but if you tolerate excuses, the people who work for you will get into the habit of making excuses, instead of taking responsibility and looking for creative solutions.
Leaders at these companies are passionately engaged in the details, not just a sweeping vision of the future. They consistently ask the right questions: Are our products positioned optimally in the marketplace? Do we have the right strategy for this economy? Do we have the right people in the right jobs? Do we have enough financial and human resources to carry out our plans, and if not, what are we going to do about it?
If you don’t hear those kinds of questions, you don’t have an execution culture.
But if leaders are getting their hands dirty with details, isn’t that micromanaging?
There’s a very clear line between being committed to execution and micromanaging. Let's say I go to a business review or a planning session with one of my unit leaders. We'll debate the strategic plan for three or four hours, and then it's over. But I'll write that person a letter on what we agreed upon in that strategic plan. And then I'll follow up on that letter to make sure those things got executed.
On the other hand, I'm not setting pricing for that business, or trying to determine its next marketing plan. I am trying to make sure that the key decisions we make about running the business – whether they're in personnel, strategy, or operations – get done. I don't think people at Honeywell would say I micromanage, but they would say I'm involved in everything.
How do you establish an execution culture at an organization that doesn’t have one?
It’s not easy – you can't just announce, “We're going to have an execution discipline from now on.” You have to begin to evaluate people by what they do, as opposed to what they say. You have to differentiate between those who get results and those who don’t, and you have to make sure your stars are recognized and well-compensated.
You can’t accomplish this overnight. But you can send a clear signal early on that the company is putting a premium on execution. This cascades down through the organization, and people will start to focus on concrete results, as opposed to fuzzy visions for the future. Once that mind-set begins to form, it's a terrific asset.
What about people who don’t embrace the execution mind-set?
Ram and I believe that most people really want to improve their performance, and are open to being coached. The problem is that too many managers are afraid to give honest performance reviews and constructive criticism. They do people a great disservice by not confronting their shortcomings.
Let’s say I'm appraising you. We talk about your successes and good points, but I also bring up several key skill sets that you need to work on. And I explain that I have an obligation to help you develop, because a year from now, if we have the same list of things to improve, I'll be critical of you, but you have reason to be critical of me, too. Together, we have to make sure that you make progress. That's what I do with all my direct reports, and if this process goes on all over the company, the workforce does get better.
Of course, there will sometimes be people who resist coaching and consistently fail to improve, and then you need the courage to ask them to leave, because over time they’ll hurt the rest of the organization.
Why do you think it has taken so long for execution to be seen as a critical management issue?
In the past, business leaders could get away with poor execution by pleading for patience. But now everything moves much faster, and Wall Street measures success in quarters, not years. A company can lose a key market before it knows what hit it. If your competitors are executing better than you, they’re beating you in the here and now, and the financial markets won’t wait to find out how your brilliant five-year plan is going to play out. So you can’t just delegate execution to someone else – you have to make it a priority every day.