Richard Lepsinger, president of OnPoint Consulting, has a 25-year
track record of working with clients including Bayer
Pharmaceuticals, Citibank, Coca-Cola Company, ConocoPhillips,
Goldman Sachs, Johnson & Johnson, Prudential, and Subaru of
America, among many others. His latest book is Closing the
Execution Gap: How Great Leaders and Their Companies Get Results
(Jossey-Bass). He spoke with Learning Executives Briefing about the
challenge for learning organizations, often charged with finding
solutions to helping leaders close the execution gap.
Learning Executives Briefing: Is there a bigger
gap in execution among organizations than there has been in the
Richard Lepsinger: I can't speak to whether it's
increasing or decreasing. I do know that in 2009 when we conducted
our study of 408 companies, we found that 49 percent of the
managers surveyed indicated their company had an execution gap -
they didn't think their organizations were effective at formulating
a vision and a strategy and then delivering on the promise of that
future state. While that figure is high, it wasn't particularly
surprising. It was consistent with what we had observed. We noticed
that a lot of organizations were very good at formulating
strategies. You may recall that at one time it was a challenge to
convince some senior executives that a vision was a useful tool.
Now, most senior leaders get it. Most organizations have a formal
strategic planning process in place. Yet despite having smart
people developing feasible and realistic strategies, many
organizations are still not able to deliver results.
The statistic that really caught our attention, however, was that
64 percent of the managers who thought their organizations had an
execution gap lacked confidence that their organizations would be
able to close that gap. That was the number we found most
disturbing; we wanted to understand why and what differentiated the
companies that were consistently able to execute plans and
LXB: What role does the learning executive play in
closing the execution gap?
Lepsinger: Our research showed that when it comes
to effective execution, leader behavior alone is not sufficient.
There are several factors involved, including organizational
structure, processes, and systems. Of course, leader behavior is
not unimportant and plays a prominent role. However, the desired
leader behaviors have to be clearly communicated and supported by
organizational systems and processes. For example, if innovation is
a key success factor, it's not enough to train managers and tell
them innovation is important. It helps if there are systems in
place that support the development and nurturing of new ideas on an
enterprisewide scale. Without supporting systems, you're left with
individuals spread across the organization doing the best they can.
Systems help focus, reinforce, and aggregate individual effort so
it has a broader impact.
A lot of this falls within the purview of chief learning officers
because they control and are responsible for the systems that
support and reinforce leader behavior. Take performance management
systems where goals and priorities are clarified, and people get
ongoing feedback about their performance and have an opportunity to
make course corrections. Or selection systems that ensure you're
hiring people who have the competencies related to executing
effectively. Succession management systems ensure you have a
pipeline of leaders who are not just able to envision a great
future, but who are also able to work toward the achievement of
that future. And, there are training and development systems that
ensure leaders have the competencies and capabilities they need to
be able to close the execution gap.
LXB: Are some companies inherently better at
executing plans and getting things done?
Lepsinger: Yes, but the term "inherently" might be misleading. It's not that companies are "born" with this capability. There are some companies that consistently execute well. P&G is a good example. So is Costco. IBM is another company that has been able to consistently execute well over time. The reality is that even great companies ebb and flow. Once you get execution right, you can't put it on automatic pilot. It requires constant attention. Our research identified five prerequisites for effective execution and five bridges - effectively managing change, coordinating actions and decisions across levels and work units, ensuring organizational structure supports execution, involving people in decisions, ensuring leader behavior is consistent with organizational values and objectives - that differentiate the companies that are more effective and consistent at executing plans and initiatives. All 10 elements require attention on a regular basis, but if you look at companies that were great at execution but have now fallen by the wayside, it's usually due to a lack of attention to one of the five bridges.
One example would be Dell Computers. Dell was once seen as a
juggernaut. There was no one better when it came to process
efficiency and product reliability. Then the market changed, and
Dell's approach to the market wasn't as differentiated as it had
once been. People could buy powerful, inexpensive computers at Best
Buy. Dell was hesitant to change its business model, and it
responded to this market shift the way it had in the past - it cut
prices to maintain share. But that had an adverse impact on
customer service and the quality of the product, and the company
had a hard time coming back from that. One of the five bridges is
the effective management of change, and Dell dropped the ball on
that. Even though they are getting better, you can see that the
company is still struggling and trying to reestablish its footing
as a top performer.
Look at Toyota, which at one time was seen as unbeatable. Now it is
facing problems with product quality and reliability. The bridge it
let slip was coordination and cooperation. It used to deal with
single suppliers for its gas pedals, and when it switched to
multiple suppliers, it didn't do a good job of ensuring that they
were all providing the same high-quality product. Many believe this
lack of coordination and resulting lack of quality contributed to
the unintended acceleration problems the company has been dealing
with. Lack of sufficient attention to this bridge has had a
significant impact on the company.
LXB: What role does culture play in a company's
ability to close the execution gap?
Lepsinger: A company's culture is made up of the
norms and values of the organization, which are demonstrated in
leader behavior. One of the five bridges that differentiates
companies that are most effective at execution is ensuring leader
behavior is consistent with organizational values and objectives.
The problem with this bridge is that it isn't always taken
seriously. It has a soft, "New Age" kind of sound. It's become a
platitude. You don't really understand the importance and impact of
this bridge until you see an example of when it's missing. For
example, you may recall a few years ago when the leaders of the
major auto companies flew to Washington, D.C., in private jets to
ask for bailout money from the government. That moment was really
indicative of the disconnect between their behavior and the
situation facing the auto companies and the industry in general. In
that moment you understood that these guys just didn't get it or
understand how their behavior was related to the problem. In
addition, there are some organizations that value the strategy side
more and assume the execution side will take care of itself. One of
the findings of our research was that a lot of conventional wisdom
about what it takes to succeed and achieve your objectives really
isn't that wise. Leaders are generally told to communicate an
appealing vision of the future, develop a realistic strategy,
ensure employees are engaged and make sure they have the skills
they need to do the job, provide high-quality products and
services, and focus on the customer. If these things are done,
leaders are told, plans will be successfully implemented and good
things will follow. As it turns out, these elements are necessary
but not sufficient. Even poor performing companies had these
factors in place. The companies that also attend to the five
bridges and hold people accountable for performance in these areas
tend to do better.
LXB: Do you think the ability to close the
execution gap is less easily instilled in older, established
companies as opposed to newer, younger companies that may have
built it in from the beginning?
Lepsinger: Not at all. I don't think a new company
is any more inclined to execute effectively than a more established
company. I don't think companies that have been around for years
are relegated to struggle with execution. It's more about the
ability of senior management to recognize that there is a gap in
execution, an understanding of what it takes to close that gap, and
a commitment to focus on those key factors. IBM and P&G have
both been around for a long time because they're able to
consistently focus on execution.