Continuing their dinner conversation:
Sue CEO, challenged with infighting among her senior team and declining company performance, is finishing dinner with an expert in leadership processes and business performance. Sue wants to learn more about a specific leadership process mentioned during the entree course.
“Okay, tell me more about this leadership process that can help improve strategy implementation and business execution.”
He companion replies, putting down his coffee cup. “There are numerous approaches to strategy development (SWOT Analysis, Scenario Planning, Disruptive Strategies, Value Analytics, etc.) but not for strategy execution. As Jack Welch likes to say:
Most CEOs believe if they have good people and a good strategy, then the strategy will be delivered. The team will each deliver their own part of the strategy and and it will all add up to effective strategy delivery.”
Sue nodded and urged him on. “However, the fact is most companies are organised functionally (each runs a separate department) and senior executives spend more time working on departmental objectives than strategic objectives. Research shows less than 5% of a senior team’s time together is spent on strategic objectives.”
Sue sat back abruptly. “Boy, is that true. I have a quarterly strategy review meeting and it quickly devolves into discussions about pressing functional problems like late shipments, HR issues or a quality complaint from a major customer. We never have time to really work together on the strategy.”
“That’s where a robust leadership process comes in,” remarked her companion, picking up his coffee cup again. He took a sip, smiled and continued. “It took me a long time to understand why the statistics on strategy execution were so poor. Several research studies across multiple industries confirm that less than 50% of strategic objectives get successfully implemented. In real terms that adds up to billions of unrealised revenue and lost competitive advantage. And what’s even more real, 70% of all CEOs who get fired are terminated for failing to deliver on the strategy they sold to the Board.”
Sue CEO suddenly paled, then put down her fork, leaving her dessert untouched. “I’ve suddenly lost my appetite for dessert, but not for your ideas. Tell me, what are “leadership processes”? I know all about business processes but I’ve never heard of leadership processes before.”
“Well, look at it this way. It is well understood that the senior leadership team is an influential group and their collective activities drive the organization. What’s not so well understood is that the senior team can have a negative impact on overall company performance, in numerous ways, many of which they themselves are not even aware of.”
“You see, the leadership team does a certain amount of work, usually in the form of planning, decision making, risk assessment, hiring and promoting, to name a few. This work should be delivered through robust, well developed processes that have been specially designed to be effective, eliminate waste and deliver a high quality product. But most senior teams never really design their own processes (what I call leadership processes) but rather use ways of working they picked up years ago when they were learning the tasks of management. In fact, the work processes of the senior team have rarely been studied for the purpose of documentation and improvement. It’s queer, but executives and academics have focused on process improvement in most areas of modern business; supply chain processes, manufacturing processes, service delivery processes, and process in all functions. Everywhere we have been improving business processes, except the leadership processes!”
“And poor leadership processes can actually destroy economic value through redundant, inefficient, wasteful and time consuming work activities at the top, which then magnify as their negative impact moves down through organizational layers. What we have termed the “shadow of the leaders“.
Sue was stunned. It all made so much sense to her now that she could see her situation objectively. She smiled at her dining companion. “You’ve given me a lot to think about. I can see now that I really haven’t established very many robust processes for my senior team to work with. We just work on the problem without any real rules, limitations and boundaries.”
They both laughed. “Well, you do have a lot to think about. I suggest we meet at your office in a couple of weeks to see how you have put into practice what we have been talking about and then I will show you the template we have developed for effective strategy execution. It’s a robust leadership process that will get your entire company aligned on delivering your business objectives.”
“I look forward to our next discussion.”
Tight Lines . . .