Execution Gap
Do you know the difference between your WIGS and PIGS?
The idea of selecting the vital few gaps for our strategic focus is to help the team avoid falling into the trap of intentionally focusing on too much at one time (leaning too far over one's skis). However, I have repeatedly seen clients create a plan with essential items and then let other things creep in throughout the year. This balancing of the vital few with the trivial many is a struggle for many companies, and it must be dealt with during each plan review or check/reflect/adjust cycle. We cannot continue to wait until the end of the planning cycle and ask, "What happened?" We should know what happened long before then.
In his book "The Four Disciplines of Execution," Sean Covey describes a survey of Fortune 500 companies. The survey asked, "What is the number one gap within your organization?" The overwhelming majority stated that the EXECUTION of their strategic plan was the number one gap.
When we dive deeper into the reasons for this gap, we find that two factors drive results - those we cannot control (economy, competition, and market) and those we can control (strategy and execution).
In the case of strategy (what we can control), there are two facets:
One, Stroke of Pen Strategy (most companies do not struggle here):
Two , Behavior Change (most companies do struggle here):
When we consider that most companies struggle with executing Behavior Change, this is where we must focus our efforts. However, looking more closely at occurrences within any given business, we see two forces constantly competing against each other.
Our Day Job (The Whirlwind or Quadrant 1 from the Covey quadrants):
Goals/Improvement (New Activities, Quadrant 2 from the Covey Quadrants):
Which wins when our day job (the whirlwind) and our goals/improvement (new activities) compete for our time and attention? The whirlwind wins, of course. The challenge for any leadership team is to execute the strategy during a 100mph whirlwind. To do this, we must narrow our focus on what Sean calls the Wildly Important Goals rather than on the whirlwind. While we can narrow our focus on wildly important goals, we cannot lessen our focus on something that acts on us: the whirlwind!
The data in the study supports the conclusion that fewer goals will generate a better chance of success for the business. The easiest way to paralyze an organization is to over-goal the company and let the whirlwind take over completely.
There will always be more good ideas for the organization than there are resources to execute those ideas with excellence. One must remember that simply because you can do something does not mean you should do it. We must be aware of two focus traps: turning everything in the whirlwind and saying YES to every good idea. Most companies believe they can do anything, which is probably true, but they cannot do everything. Thinking you can do everything in the middle of a whirlwind is "playing not to lose" rather than "playing to win."
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"We are the most focused company that I know of or have read of or have any knowledge of. We say no to good ideas every day. We say no to great ideas to keep the number of things we focus on very small in number so that we can put enormous energy behind the ones we do choose. The table each of you is sitting at today, you could probably put every product on it that Apple makes, yet Apple's revenue last year was $40 billion." - Tim Cook, Apple CEO (the company now has a market capitalization of $2.3T)
When Steve Jobs returned to rejuvenate Apple in 1997, he said NO to many things that were asked of him and the business. The company had fallen into both focus traps mentioned above. His first order of business, after ousting the CEO at the time, was to reduce the complexity of the organization. He consolidated departments, reduced the product line by 70%, and reduced the research development to several projects. All Apple products could be placed on a small table when he finished. The strategy was to develop desktops (personal and business) and laptops (personal and business). The whirlwind was around these products. In this case, Jobs was able to reduce the whirlwind by lowering complexity so that they could narrow their focus on the strategic path. Their strategic direction was in research, focusing on what would later become the iPod, the precursor to the iPhone and the iPad. The iPhone now comprises greater than 70% of Apple's sales, and the iPad makes up >12% of Apple's sales. In the design department, simplicity became the mantra, and in the supply base, the number of supply partners was reduced from one hundred to twenty-four key partners. The results speak for themselves.
My experience shows the following to be the critical gaps when execution is not where we want it to be:
If we find ourselves in the execution gap, we must ask ourselves the following questions:
Having too many metrics can also increase the effects of the whirlwind. We must decide what metrics we will use to run the business. I recommend that we use the following classification:
The lower-tiered goals should have a link up to the tiers above to ensure goal alignment. When measuring the necessary and critical goals, we must have different levels of metrics. Those metrics should fall into two groups: leading (process) or lagging (results). Leading measures are measures that, if met, will lead us to the goal (lagging measure). Leading measures are things over which we have control. Lagging measures are result measures that tell us if we have met the plan because of improving the leading measures.
An example of these two measures being applied to everyday life is when one wants to lose weight; the weight goal is the lagging measure. Meeting the goal requires focusing on the leading measures (caloric intake and exercise). This approach is referred to as energy balance. When there is excess energy (more calories in than out), one can expect to gain weight. Where there is an energy deficit (more calories out than in), one can expect to lose weight. Weighing oneself each week and expecting a reduction without a plan to reduce calories and increase exercise would be a fantasy.
At this point in the strategic planning process, I am assuming we have answered the question, "Which thing(s) (no more than three, and awesome if you can get it to one) would transform the business if we focused all of our resources on it(them)?"
Now, we need to ensure daily accountability for focusing on the leading measures (process-focused) that will help us meet the lagging measures (results/goal-focused). Systems that allow us to assess the leading measures are below:
These systems, if monitored and followed correctly, will ensure the proper execution of the plan and highlight any issues with the execution of the plan. Strategic Planning should be the setting and controlling of direction. We set the path for the business by completing and communicating the strategy. Now it is time to control that direction. Consider these systems the front-line indicators of the effectiveness of the plan. Leadership's job is to ensure these systems are working correctly. They will also learn if other initiatives are creeping in if they manage these closely.
Now, let’s address the questions in the subject line. The WIGs are your Wildly Important Goals, and the PIGs are your Pretty Important Goals. As a leader, you must protect your WIGs from PIGs. :)
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Harold Chapman you might enjoy ‘The Crux’ by Rumelt …execution suffers when there isn’t strategic focus.