Admitting You Have an Execution Gap Is the First Step

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 past?

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 initiatives.

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.