The first in a series on execution management looks at what companies need to do to make change happen

There is a refrain among managements and promoters about the difficulty of making things happen as they intend. This is from companies of varied size and composition, growing rapidly, modestly or those going the other way. The final customer of the product and service must surely bear the impact of some of these frustrations. The customer usually has choices.

The objective in this piece is to table observations that come from experience in corporate life and as an independent business coach.

Effective execution

There is a tendency amongst promoters and managers to be erudite on the latest financial engineering concepts or management fads. Or talk about what others are doing so brilliantly. What is missed is that the same knowledge is out there in the open. Management books flying off the airport bookshop shelves are also being bought by competition. Those that do well are the ones that execute effectively and efficiently. In sessions on execution as a competency, senior managers are asked how they see the level of business challenges (external, led by customer and competitor) versus management challenges (over which there is high level of control and are internal in nature). Without exception the ratio is 25:75. Makes one wonder what many are actually doing at work. Developing strategies that remain unexecuted?

Flawless execution is a perennial grind — it is detailed, needs patience and does not have the more glamorous parts of strategy conversations included. It all starts and ends with the top man in the business. The role of leadership more so in the SME space, cannot be emphasised enough. If this is at an appropriately high level and is added to the entrepreneurial spirit, risk taking ability and speed of decisions, then growth and profitability can be exponential. The role involves making sure what is important is communicated, resources organised, the objective and path defined and rigorous reviews undertaken.

All encompassing

A common misjudgement is in linking execution only to the tangible parts of a business. That is the visible, controllable and easily measureable aspects, for example production, distribution and sales. This has risks.

Good execution goes across all aspects of a business and must be consistent. In smaller and mid-sized businesses immediacy and the next month's cash flow often dominate. It is important that Chief Executive Officers (CEOs) create the space and time for an inward look at medium-term actions that will strengthen the business.

In large multinationals, of which I have some experience, this can become an overwhelming exercise that totally disrupts normal operations and can lead to initiative overload. As one practical man put it during an annual three month mind-numbing planning cycle “tell customers not to bother us now we have a plan to produce.”

In one case, the challenge could be good governance and the processes around it. In another it could be a weak culture and its associated perils.

Working capital management is always a core issue. I have seen this dealt with by pressure to collect money using pleading as a proposition. High attrition is a common feature these days. Now factor in the present widespread skill deficit, which also extends to practising middle management levels. A recipe for general turbulence and avoidable cost is created.

Focus on intangibles

These softer aspects are often not given focus since there are others that are more comfortably dealt with, by decisions and putting out of fires. Better control over these less tangible business activities make for sustainability, keeps companies out of trouble and will have a definitive economic case to put effort and resources behind them. The need is to prioritise, since every business operates within constraints.

I know of a firm where the attrition level is an issue. The business is financially attractive, employs over 300 people and has an international footprint and ambitions to ramp up. The main input is knowledge and the skills of people to create sophisticated bespoke technical content.

The human resource (HR) department remains in transactional mode. That is repeatedly doing the same thing and filling the people pipeline. It is, however, misaligned and an example of poor execution since an opportunity remains under-exploited. The chance to reduce attrition, create continuity, service the clients better, and build a reputation to attract more clients and move up the pricing chain is not fully used.

The prime need is to ensure that the HR team has the right people in it. Then they can analyse the attrition trends, understand which group of people, skill sets or division has the main challenges. They could also benchmark salaries, survey employees and then develop propositions for their existing people and to attract others. They can make choices on what to embed in the firm, make a business case, and seek alignment from all managers involved in recruitment and finally implement.

Will this take away attrition completely? No, and that is also not desirable. This may all sound complicated. It can easily be made so and that must be avoided. The thrust should be in remaining fit for purpose, ruthlessly rejecting complexity and ensuring that solutions are based on what is effective in terms of the objective. The HR will then operate to achieve desired business outcomes rather than as administrators or an isolated activity. Simplicity, not simple mindedness must prevail.

In summary, the message is that execution is a continual challenge. It is dependent on the leaders of a company and will include priorities from every function of the company. These should be approached structurally. Think about it, should it be any other way?

(The writer is a Chennai-based business coach)

(This article was published on June 15, 2012)
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