The Cap Seller and the Monkeys: A Leadership Parable

(This is a post from several years back, but a good concept to think about over the weekend.)

124 hat vendor, Ipanema Beach

“As ye sow, so shall ye reap.” Galatians 6:7

Once there was a young boy who sold caps (baseball style caps) as a way to help his family earn money.  He wandered the streets every day before and after school touting his brightly colored caps.  His caps were hung on a line around his cart and made a colorful sight.

One hot day he parked his two-wheeled cart loaded with capsAnimal-pictures-monkey-wallpapers-hd-photos-monkey-wallpaper-5 under a tree to rest and escape the hot sun.  As he was sitting in the shade having a drink of water a troop of monkeys came down from the top of the tree and stole all his caps.  They immediately began howling and chattering with delight at their success and hung all the caps on high branches.

The boy looked up.  His caps were high up in the tree out of reach and the money to help his family seemed to be gone.  In anger he picked up some rocks and started throwing them at the chattering monkeys.  Seeing the boy throwing rocks at them the monkeys gathered the large fruit from the tree and began to throw  them down at the boy.  One even hit him on the head.  The monkeys roared with delight.

The boy sat down by his cart, dejected and depressed. But as he relaxed and his mind calmed, no longer filled with thoughts of revenge on the monkeys, ideas began to occupy the space where angry thoughts once had been.  Suddenly he had an insight.

He stood up, yelled at the monkeys to get their attention, grabbed his own cap off of his head and threw it to the ground.  Immediately the monkeys grabbed all the caps in the tree and threw them to the ground, laughing with delight.  Calmly the boy gathered up his caps and moved on.

Corporate Culture:

This parable illustrates one of the key tenants of corporate culture:  employees tend to watch and repeat the behavior of their leaders!  The monkeys were simply following the boy’s example: first by throwing fruit after he threw rocks and then throwing the caps down to the ground like he did!  Employees watch the behavior of the members of the senior team to look for clues on how to behave, what is really important, and how to succeed in the organization. After all, if senior executives behave like that it must be appropriate behavior.

The concept is called, Shadow of the Leaders.

When senior managers talk about the corporate values but behave differently, guess what employees tend to role model? When VP openly bad-mouth each other, guess what the level of teamwork is between their various functions?  When senior management rants and raves about profit above all other metrics, guess where employees focus?  When the senior team blames poor performance on market conditions, …… (you get the picture)

What shadow are you casting to your employees?  What behaviors are they repeating?  If senior executives talk negatively about each other, guess what employees tend to do?  They talk negatively about other departments!  If senior managers talk about teamwork but bitterly fight and complain about unfair budgets and allocations, guess how employees behave with respect to teamwork?

Be careful of the examples you set through your personal and collective behavior as senior executives.  It gets multiplied far down into the organization.

As you sow, so shall ye reap.

Written and Posted by:

John R. Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture and FASTBREAK: The CEO’s Guide to Strategy Execution
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

PS: John also writes thriller novels

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Focusing on Quotas to Improve Board Diversity is Stupid!

ECONOMICS US

Countries with higher levels of gender equality have higher economic growth. Companies with more women on their boards have higher returns. Peace agreements that include women are more successful. Parliaments with more women take up a wider range of issues – including health, education, anti-discrimination, and child support.  ~Ban Ki-moon, UN Secretary General

In boardrooms and corporate executive meetings around the globe the focus is on increasing gender diversity at all levels of the business, but especially at the top.  With recent studies by McKinsey (Women Matter, McKinsey & Company) and others showing that more diverse senior teams consistently deliver better business performance, there has been increased pressure to increase the number of women at the top.

In 2011 the UK government published the Davies Report on Board-level diversity (Women on Boards) and set a target of 25% female board directors by 2015. This is starting from 12.5% in 2010.  Essentially doubling in five years!  Great objective and as of the most recent 2014 BIS Women on Boards report, it looks like the goal will be achieved.

Untitled

 

Job Done?

While this may look like good news and “job done”, there is much more to the story. First of all, a good number of women on boards in the UK are American, and secondly, they serve on multiple boards! Not exactly what was intended, but it helps tick the box!

More importantly, if you look at what is happening inside of companies where the real work is done, and where the value of diversity of all types pays big dividends, the story is less than flattering.  While women start out in about equal proportions to men in entry-level positions in UK corporations, there is a massive amount of female attrition in the higher management levels.  For greater insight into this fallout, and the figure below, see Your Loss by Christina Ioannidis and Nicola Walther.

attrition-triangle

The fallout is so great that very few women are available for senior executive positions. And even more interesting, the % of women in senior executive positions has been declining over the past several years!

Boards and Exec

It’s the Culture, Stupid !

As a response, a multitude of “women only” training courses and workshops designed to “prepare women for senior roles” have sprung up in the UK.  And then there are external and in-company “Women Networking” events to build stronger women to women networks. The theory behind all these activities being that women don’t understand the special nature of senior roles and need additional training, networks and education. Another one of life’s great myths! (for an excellent review of the many myths about women in business, see Cracking the Code).

Teaching women to understand the challenges of senior management is like polishing the apples when the barrel is rotten!

It’s the current corporate culture that’s the problem, not women’s skills or capabilities.

The fact is, business is a male dominated environment and the corporate culture of most, if not all companies, is a collection of male habits and behaviours. It’s not right or wrong, it’s just the way it is.

The way corporate cultures evolve is by the establishment, repetition and consolidation of reasonsbehaviours, work habits, ways of dealing with each other and customers, into characteristic “ways of working”, or “how we do things around here”. And it’s mostly driven by male-dominated styles.  Male jokes, male aggression, male fun, male drinking sessions, male internal competition, male bonding, male ways of dealing with each other. They all combine to create a heavily male corporate culture. And (no surprise) women are wired differently than men, they approach problems and people differently, it’s the way it is. And it’s one of the great values of diversity!

Trying to teach women executives to be more male-like or fit into the male dominated corporate culture is the wrong approach.  Instead of workshops for women, we need workshops for men and women together!  Customised in company workshops designed to bring both groups together to learn from each other, to build a corporate culture that works even better, for improved competitive advantage.

Want to increase the % of women and others on boards and in senior management? Want to really capture the power of diversity for competitive advantage and business effectiveness?

Forget about quotas.  Start bringing all the parties together to build a new, high performance corporate culture that is powered by diversity, not quotas.

Written and Posted by:

John R. Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture and FASTBREAK: The CEO’s Guide to Strategy Execution
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

PS: John also writes thriller novels

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Leadership, Friction and Culture Change

work smarter

The secret to success is to work smarter, not harder!

In a recent blog (Friction and Culture Change) I used the physical concept of friction to help explain the difficulties in culture change and why reshaping corporate culture is so hard and often fails.

If you look inside an automobile engine you will see many parts whirring around at high inside enginespeeds (RPMs), metal gears meshing with larger and smaller gears, and metal cylinders moving up and down against metal walls.  All the metal surfaces of these parts have small microscopic bump or imperfections and when two substances are pressed against each other, they catch on the imperfections, adding to the friction. All this moving up and down and whirring around creates wear and heat, thus slowly damaging the efficiency of the engine.

engine-oil-914431An excellent way to reduce the force of friction and wear inside the engine is to add motor oil as a lubricant.  A lubricant like motor oil is a viscous substance that coats the engine parts and allows the parts to move past each other easier and with less friction, thus increasing the longevity and efficiency of your car engine.

how-lubricants-workThe lubricant fills the space between the two surfaces, thus covering the imperfections and bumps and allowing the two surfaces to move past each other more easily (with reduced force stone friction pyramidsof friction). It has even been theorised that the ancient Egyptians added water just in front of the sleds carrying the large blocks of stone used to build the pyramids in order to make the process of pushing the sleds easier.

So What About Culture Change?

In our work over the past 30 years on helping shift and reshape corporate culture, it has become obvious that there are two key elements that help reduce the friction (sticky habits and old ways of working) during culture change. These two elements are the behaviour of the senior leaders and the important role of informal leaders inside the organisation.

The most widely recognised lubricant against the inertia and friction of culture change is changes in the behaviour of the CEO and members of the senior executive team.  Employees take their cues as to what is important, what is not, and how to get ahead in the company from watching the behaviour of the senior team, as individuals and collectively as a team.  It’s a powerful concept termed “shadow of the leader“.

Organisations are shadows of their leaders; that’s the good news and the bad news!

ShadowBy articulating and role modelling a new set of behaviours at work (dealing with problems, dealing with customers, dealing with suppliers, short-term vs long-term, coaching vs ignoring bad behaviour), the senior leaders begin to cast a new shadow across the organisation that signals to employees a new way of working, thus lubricating the process of culture change.

If you want employees fully engaged with your business strategies, you need leadership fully engaged with employees

The other culture change lubricant is less well-known, but perhaps even more powerful. It is the important role played by informal leaders and respected employees.  It goes like this. There is no such thing as one overall corporate culture but actually a company is a collection of “subcultures”. Each subculture is an informal group with a respected and trusted individual determining the ground rules. Combine the importance of respect and trust given to this individual with the very real human need to “fit in” and be a part of the group, and you have the ingredients for a strong subculture.

Senior management may make the strategic decisions about the company goals and objectives, but the real culture resides at the subculture level. Numerous studies have shown that most employees trust their informal leaders far more than upper management when it comes to company communications and change. Employees don’t change just because senior management communicated the need or the logic. They change their behaviour in accordance to whether or not the informal, respected leaders in the subcultures change!

subcultures

The sad fact is, most senior executives (and outside culture change consultants) have no clue who these informal and trusted leaders are! And unless they are identified and recruited to help lead the culture shift, real change won’t happen!

Just like the laws of physics and reducing the force of friction, culture change has its Large Image“laws” as well, if we take the time to understand and use them wisely. Attempting culture change from the top down, without the lubrication provided by informal leaders, is like trying to run an engine without motor oil.  Lots of heat and noise, but eventually it will burn out and grind to a halt!

Posted by:

John R Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture and FASTBREAK: The CEO’s Guide to Strategy Execution
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

PS: John also writes thriller novels

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The Hidden Dimension of Strategy Validation

(Note:  This blog was published for the first time several years ago, but it is still timely. Enjoy)

validate

The logic of validation allows us to move between the two limits of dogmatism and skepticism.
~Paul Ricoeur

It is too often the sad truth that the only way we find out whether a strategy was good or bad is after it is implemented.  And then it gets confusing as to what caused the strategy to fail.  Was it a bad strategy or was it just badly implemented? This chicken and egg argument is currently rampant in academic business circles and in the literature on strategy.

Whenever I am asked to come into an organisation by the CEO and help improveperformance through effective strategy execution, one of the first things I do is spend time validating the strategy.

Now there are a myriad of ways one can go about this.  Most strategy validation exercises conducted by the big consulting firms involve lots of market research, weeks of data analysis, and analysing the company strategy versus current and future market trends.  This is an important piece of the strategy validation process.

However, I have been surprised that even when the strategy gets the green light from the consulting firm, the strategy may still fail.  Ah, you are saying, poor execution is the culprit.  Maybe you are right, but it would be great if there was a better early warning signal that the strategy might fail, instead of waiting for 12 months to determine the outcome.

My approach to strategy validation has less to do with market and customer analysis and more to do with evaluating the alignment and commitment of the senior leadership team.

However beautiful the strategy, you should occasionally look at the results.  ~Winston Churchill

Here’s a good example.  Several years ago I was asked by the new CEO of a major european manufacturer to help with their turnaround through improved strategy execution.  He needed to it happen as they were losing both market share and millions of dollars.  The CEO was experienced, knew the business inside and out and had developed, along with a few other of his senior executives, an excellent turnaround plan.  The market research was solid, the financials stacked up and the forecasts were favourable. It was a good plan.

He asked me about his turnaround plan.  I told him it was going to fail.  And he’s why?

I had spent a week talking one-on-one with all the members of the senior team, a large number of key next level leaders and managers, and developing and implementing an on-line survey to all middle managers and above. My assessment was that this team, one of the most knowledgable in the industry, could not work well together.  And for the new Go Forward plan to succeed, it would take excellent cross functional teamwork and sharing of resources, especially since the turnaround plan also required considerable cost cutting to get the financials in line with the realities of the marketplace.

Over the past 30 years I have discovered that alignment, or in a case like this lack of alignment at the top, is a critical factor in deciding whether a strategy is valid or not for a business.  And this deciding factor is often overlooked and undervalued for its impact on the ability of a business to perform.  In this case precious time would be wasted in meetings where the senior executives would argue, defend their functional silos, play politics to look good in front of the new boss, and hoard resources. The had no common agenda since they were measured and compensated on functional objectives more than how well the overall business performed.

As a result of this insight, the new CEO revised the compensation of the senior team to focus totally on the turnaround of the company, instituted a Line-of-Sight execution roadmap that linked objectives across functions, pinpointed specific enterprise initiatives, and spelled out clear accountability within the strategy for each member of the senior team.  He had changed the “leadership processes” and as a result, created a shift in the leadership culture towards more collaboration and teamwork.

The company broke even the first year and made a significant profit in year two as well as reversing the downward slide of market share.  A good strategy delivered by a good team.

Strategy validation is more than just analytics and market insights.  There are people and process insights as well.

Posted by:

John R Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture and FASTBREAK: The CEO’s Guide to Strategy Execution
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

PS: John also writes thriller novels

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Friction and Culture Change

sled

I don’t know about you, but every once in a while I get a flashback from High School. Sometimes it’s about my lackluster sports career, sometimes about the marching band I played in, and occasionally about one of my classes. The other day, for no apparent reason, my high school physics class popped into my head (guess I was bored) and I began to think about the concepts we learned, and specifically the concept of Friction.

I must confess I didn’t recall all the formulas relating to friction, but I did remember the concept that to move one body resting on top of another, an amount of force greater than the coefficient of friction needs to be applied. It is interesting to note that the coefficient of friction cannot be obtained through calculation, but only through empirical measurement.

hockey puck on ice

As common sense would dictate, a steel block on ice has a relatively low coefficient of friction compared to a steel block on a piece of sandpaper. In other words it takes less energy to move the steel block across the ice than across the sandpaper. (that’s about the limit of my physics!).

In researching the topic of friction on the Internet, I came across this graph of the energy required to move one object across the surface of another.

Static_kinetic_friction_vs_time (1)

So? What’s the Point?

Looking at this graph and reconnecting with the concept of friction suddenly gave me an insight into Culture Change!

First of all, culture change takes a lot of energy, more than most CEOs and senior teams realize, and certainly more effort than most consultants inagine. In fact, it takes a lot of energy on the part of the senior team, middle managers and the “informal leaders” at all levels to break the force of old cultural habits ( = static friction) and begin to move the company towards a new set of work habits and behaviour patterns.  Just putting together a new set of Corporate Values and conducting a road show may sound like a lot of effort, but not much changes.

To break the grip of the old culture (I call it “cultural static friction”) requires focused effort to be applied all at once in many different areas. The senior team needs to change the way they interact with each other and with employees. Old company policies and work processes need to be revised to promote new behaviours. Hiring, promotion and performance reviews need to be rethought and changed. Informal leaders (those individuals highly respected by employees) need to be recruited to help instill new behaviours and attitudes. Those managers and supervisors who resist the new culture need to be coached in or out! The same goes for members of the senior team.

The good news, however, is that once leaders, managers and employees break free from their old unconscious cultural habits and small shifts in the culture (ways of working) begin to take place, it takes less energy to continue the process of reshaping a new culture (cultural kinetic energy). In this phase of the reshaping or culture change process, consistency is the key. Stop or back off on the new leadership behaviours, revert to old policies, avoid taking action on bad behaviour, and the strong force of static friction begins to take hold.

One thing I’ve noticed that is very different about the process of culture change from the model of overcoming friction, is that if you fail to keep up the effort and the old habits tend to re-emerge, it becomes harder to break free again. In other words, the force of cultural static friction becomes greater, since people are now more cynical and skeptical of management’s real commitment to change!

breaking free popupIt takes leadership and effort to break free from old cultural habits, but the effort can definitely be worth it.

Posted by:

John R Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture and FASTBREAK: The CEO’s Guide to Strategy Execution
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

PS: John also writes thriller novels

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Most Organization Change Really Isn’t Change

box

Changing the title or job description is not really change. Real change is adopting and implementing a new set of behaviours appropriate for the situation.

When faced with a change in market conditions, new competition or a disruptive technology, most companies are quick to revamp their business strategies to adapt. Once the new strategy is developed, the next step is usually to reorganise to more readily deliver on the new strategic imperatives.

New programs and in some cases new departments are set up and staffed.  This usually requires one or more members of the senior leadership team to move from his/her old role into a new role.  The changes may be designed to focus more on customer relationship marketing or to capitalise on a regional opportunity.

An organisation, no matter how well designed, is only as good as the people who live and work in it. ~Dee Hock

The problem, however, with most reorganisations, is that real change rarely happens, or it happens too slowly to catch up to the external market changes. One of the key reasons is that changing strategy and structure is not enough. The culture must change as well. Otherwise the corporate culture (the habitual work behaviours and routines that determine how things get done) can act as an anchor to real progress and change.

SSC

A Real Life Example at the Granular Level

A few years ago I was asked to consult with the GM and senior leadership team of a major US defence company.  The senior team was made up of very capable engineers with years of expertise in their particular market niche (weapons and weapons systems). In fact, on the staff were some of the recognised “gurus” in this field.

As a result of several shifts in the global defense market, the senior team developed a new go-to-market strategy and initiated a reorganisation.  One particular member of the senior team was asked to move from his current role to take on an entirely new function, which he did. The results however, were dismal and after 6 months the GM had to make another set of organisational changes.

What really happened? Wasn’t the VP smart enough? Did he not understand the new business challenge?

“The Devil is in the details, but so is salvation.”  ― Admiral Hyman G. Rickover

It took me a while to figure out what the problem was with this senior executive since he had a brain the size of the planet and deep expertise in all the required areas.

One day, sitting with him in his office, it suddenly dawned on me. He was approaching the new job with old habits.  He had a new team and a new business challenge, yet he went about managing and leading just like he did in his former position. I remembered Marshall Goldsmith‘s famous quote: “What got you here won’t necessarily get you there!” in relation to corporate advancement.

The clue was in his office. It was filled with memorabilia of his past successes. Photos of him accepting a conference award, several advanced degree diplomas, momentos of former development programs, models of ships, aircraft and weapon systems he had helped engineer. His office was a shrine – of old habits and old thinking!

He had been in the same office for many years. He ate at the same time in the same cafeteria. He parked in the same parking place. He managed people in the same way he had all his life. He held meetings in his office, just as he had always done. He was surrounded by habits of work patterns, habits of thought and habits of dealing with people.

All breakthroughs begin with a break from.

After that lesson, whenever I am asked to help coach an executive in a new role, one of my key recommendations is to move offices, pack up all the old memories and old successes, and start fresh. After all, they aren’t the same old people and it’s not the same old business environment. New roles and new business challenges require new and fresh thinking. Use past “success principles” if you need to, but don’t go into default mode and just repeat the past.

Your immediate environment tends to reinforce old behaviours. In my own life I runnig kitdiscovered this as a marathon runner. To train for my first marathon I had to totally alter my environment.  Getting up at 5:30am for a 2 hour morning training run was not easy for a night owl like me. To design my environment for success, I would put my running shoes and clothes on the floor beside my bed every night so they were handy in the early morning. I moved the alarm clock to the other side of the room so my old habit of hitting the snooze button wouldn’t kick in. I put a bottle of water by the front door so I wouldn’t forget to hydrate during my run. I put up a visual chart in the kitchen plotting my daily, weekly and monthly running miles and times.

You can either design to fail, or design to win.

Real change is difficult, so make certain you change your behaviour, not just the title on the door!

Posted by:

John R Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture and FASTBREAK: The CEO’s Guide to Strategy Execution
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

PS: John also writes thriller novels

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Employee Engagement and Strategy Execution: A Real Example

rain_1798856c

It’s January in London. It’s cold, overcast and rainy almost every day. And besides that, at a latitude of 52 degrees North, darkness falls around 4pm, making it seem even colder. The perfect time of year for the boiler and central heating to stop working! Which is what happened at our house a few days ago. No central heating and no hot water for showers.

So, a quick call to British Gas, with whom we have a heating and boiler service contract, and the engineer knocked on the door a few hours later, ready to fix and service our heating system.  The good news is, he had it cleaned, serviced and up and running in under two hours, plus he took the time to explain to me exactly how the whole system functions and even offered to help me adjust the timer system for maximum energy efficiency.

So far, a good news story in customer service! But what came next was an excellent example in strategy execution.

Some Backstory Required

In my recent book, FASTBREAK, The CEO’s Guide to Strategy Execution, I begin by teasing out the many hidden reasons why most strategies fail to be fully delivered.  In fact, many studies have pointed out that 70% of business plans and strategies fail to deliver intended results.  I say hidden reasons because outside of such obvious reasons as faulty strategic assumptions or lack of adequate funding, there are numerous non-obvious strategy derailers:

  • Deployment is usually an afterthought rather than an integral part of strategy formulation
  • Corporate culture can be a major barrier to effective strategic execution
  • Governance of strategic initiatives is notoriously lacking
  • Poor teamwork at the top and “Silo Focus” leads to suboptimization
  • Too many “disconnected” initiatives which increase costs and waste time
  • Less than 5% of employees understand the strategic vision or strategic plan, resulting in lack of employee engagement.

When employees don’t understand or are unaware of the overall business strategy, how can they be expected to come up with ideas and opportunities to move the strategy forward?  It’s like having an army of 10,000 but not giving them any guns or ammunition!

Knowledge Leads to Engagement Which Leads to Execution

So here I am standing in my hallway chatting with the British Gas call-out repair man, who is definitely not a college graduate or an engineer. Being the curious sort I ask him about the recent new developments in digital temperature control systems, and since I am a user of Apple technology products, I ask about the new Nest thermostat.  We both agreed that digital is a future home technology whose time has come and we also agree that the Nest is an aesthetically beautiful and functionally designed.

But then he blew me away with his understanding of the British Gas business strategy by checkouthero2-80a79d88c586e53b44a9fa9297e8a10estating that their competing product, The Hive, is not only a home heating controller, but the beginnings of a digital controller for the home with the potential to link smart devices inside the home through one single hub. He also said that rather than buy it at the store, if I were to purchase the Hive from him, he is authorised to sell and install it for half the store price.

When I asked why the “deal”, he replied, “Actually, sir, it’s part of our company strategy to install as many as possible, not only because they are as good or better than the Nest, but because it then sets up our long-term strategy of helping  you connect and manage your entire home digitally, all through our Hive hub and the new products we are developing for the smart home.  Plus it fulfills our vision of helping build a sustainable business, reduce energy consumption and lower greenhouse gases!”

What really impressed me was the more he spoke about the overall British Gas home digitization strategy, the more energised and animated he became.  The strategy made sense to him, he understood the logic and the value for the customer. Here was a fully engaged employee!

When you send your employees out to deal with customers and clients without a clear understanding of company strategy, no wonder your strategy falls short.  Executives don’t deliver strategy, employees do!

Posted by:

John R Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture and FASTBREAK: The CEO’s Guide to Strategy Execution
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

PS: John also writes thriller novels

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