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Solid Leadership. Sound Strategy. Flawless Execution.

April 23, 2008

“The failure to execute is a major concern of executives because it limits organizational growth, adaptability and competitiveness. The problem is how to close the gap between the strategy and the actual results,” writes Mary Lippitt, author of the article “Fix the Disconnect between Strategy and Execution”.

Given the concerns echoed above, the number of failed efforts is neither new nor surprising. In a study by OnPoint Consulting, 49% of firms reported a gap between their ability to come up with sound strategies and executing them. Of this 49%, 64% said they didn’t have the confidence to close this gap.

In a separate study conducted in 2006 by the Center for Business Practices in Havertown, Pa., almost half of the managers surveyed said their projects had significant issues. Only 24% of troubled projects were recovered, 19% remained troubled and 5% failed. That means an average of $30 million in at-risk projects per organization.

WHY EXECUTION EFFORTS FAIL

If executing strategy is a problem for companies both big and small around the world, the question we must ask is why?

Although many leaders offer a myriad of excuses, John P. Kotter narrows these down to eight fatal errors. These include failing to establish a sense of urgency; creating a powerful guiding coalition; communicating a vision; removing obstacles; systematically planning for small short-term wins; declaring victory too soon and tethering changes to corporate culture.

However Ronald Lamb, a San Francisco-based management coach, suggests the process of implementing new ideas resides on a “strategy-execution continuum” – where the gap between strategy and execution will never be bridged, because the number of resources will always be limited. While Kotter and Lamb make valid points, getting to the root cause of why we fail is only half the battle. The other half is using a systematic way of implementing change to guarantee our strategies are carried out.

At Tatham Group, not only can we predict a recurring pattern of failed execution, we have spent over 35 years proving that a simple method can change the way companies operate allowing them to achieve superior performance. Typically these are good companies who have become victims of two distinct but related factors – their organizational structure and a culture of heroism.

In today’s world, organizations are so large that they are managed by being broken into many smaller parts. This fragmentation drives the need to communicate across these small pieces or ‘silos’. Despite this need, communication tends to stay within the secure walls of each silo.

Organizations continue to operate using an existing process to deliver value to the customer (that’s why they’re still in business) however the independent silos do not allow the process to be fully connected. And this disconnection inevitably creates complexity and conflict, leading to frustration, wasted time and money and eventually customer failures.

This is when a ‘hero’ swoops in to save the day. Heroes are individuals who use informal relationships and a ‘break-the-rules’ attitude to get things done. Their success often leads them to a promotion and eventually they become the leaders who, in turn, recognize and reward other heroic behaviour.

What leaders fail to see is that when this behaviour is rewarded, the success of the company relies on a few individuals. This individualistic approach steers people into looking at problems in isolation rather than looking at them as a piece of the overall system. While this may be an advantage for the individual who is being promoted, it my negatively impact other areas of the company or worse – the customer.

A SIMPLE WAY TO ENSURE FLAWLESS EXECUTION

Here’s where we challenge traditional approaches. When a problem arises, rather than setting out on an independent rescue mission, the immediate action should be to cease action. Then assess the situation from an end-to-end perspective in a systematic and disciplined way.

Often the mindset is that people are too creative or smart to follow a process. This is not the view of pilots whose process-following skills keeps millions of people alive. The Tatham Method is a common sense problem solving process that, when followed, ensures the customer is driving the change. Facts and data are used, root cause is found and a feedback process is created during implementation to prevent future failures.

Following a process not only guarantees a reliable outcome, it also frees up capacity to allow the company to be more creative. If management is committed to applying the five critical success factors, they can turn this weakness into their strength. It will enable them to properly apply the amazing capabilities of their people to transform the culture of the organization and innovate for growth. And there is nothing more exciting than watching a company go from being good to being great.