Human Resource Executive Online recently published an excerpt from Dave Ulrich, Norm Smallwood and Kate Sweetman’s book, The Leadership Code, Five Rules to Lead By.  The post presents five individual execution disciplines that successful executors like the former CEO of Proctor & Gamble routinely practice:

1)  Make change happen;

2)  Follow a decision-protocol;

3)  Ensure accountability;

4)  Build teams;

5)  Ensure technical proficiency.

The link to the full article can be found at the end of this post. 

I don’t read many leadership books these days mainly because most books present little that is novel or new.  This book is different.  The authors do a nice job synthesizing and summarizing years of research into a straightforward, readable and highly practical guide on leadership.  The book is certainly worth reviewing for anyone–even seasoned executives–expressly charged with directing teams that execute strategy.

To read the full article click here:  http://www.hreonline.com/HRE/story.jsp?storyId=330869377

Yesterday the Wall Street Journal published an article on strategic planning entitled–Strategic Plans Lose Favor (the link to the article is at the end of this post).  It’s a good read, but a bit on the dated side if you’ve followed the strategy conversation throughout the recent economic slowdown.  No one close to or immersed in organizational management doubts that strategy practices are in need of updating; the downturn has certainly underscored that point.  However, the real question is ‘what exactly needs to change?’  Is it the strategic planning process or the strategic management process?

Based on my consulting and research, what is clear is that many organizations conduct strategic planning with the false beliefs that what they are really engaged in is strategic management.  This simply isn’t true.   Strategic planning is but one part of an overall strategic management process.  There’s nothing wrong with marshalling top leaders in an organization, assessing the environment, setting goals, aligning initiatives with resources and assigning accountability.  These activities and the development of a strategic plan are just good management practices.  Too often these management practices collectively describe where the strategic management process begins and ends.  The strategic plan isn’t regularly reviewed, performance isn’t measured or evaluated critically, ongoing assumptions aren’t tested for validity, and environmental assessments aren’t carried forward.  Each of these activities is a time-tested, critical strategic management practice.  The real problem is they’re not being practiced.  So, what the article highlights aren’t really changes to strategic planning, rather they’re changes to strategic management.  Executives are finally learning to adjust their planning horizons to the environment’s velocity and turbulence levels.  Leadership is beginning to meet more often to measure and critically assess performance.  Perhaps most importantly, top managers are now deliberately making course corrections mid-stream.  In short, senior leaders are finally learning how to engage in more comprehensive and dynamic strategic management.  So while we might want to conclude that the “Fall of Strategic Planning” predicted by Mintzberg has finally arrived, a better conclusion is that the “Rise of Strategic Management” is here at last; a refreshing thought given 30 years of strategic management research.

http://online.wsj.com/article/SB10001424052748703822404575019283591121478.html?mod=dist_smartbrief

Evidence-based management (EBM) is a recent concept in the area of management practice, although evidence-based practice in disciplines such as medicine is not. As is the case with most new management ideas, defining what it is and whether or not it matters to managers is the subject of ongoing debate. In the most recent edition of The Academy of Management Perspectives, three scholars who are leading the EBM charge clarify the definition and why it indeed does matter to managers.

In their article, Evidence-Based Management: Concept Cleanup Time? Rob Briner of The University of London, David Denyer of Cranfield School of Management and Denise Rousseau of Carnegie Mellon University, note that EBM is “about making decisions through the conscientious, explicit, and judicious use of four sources of information: practitioner expertise and judgment, evidence from the local context, a critical evaluation of the best available research evidence, and the perspectives of those people who might be affected by the decision.” They continue on to point out that EBM is intended specifically for practitioners and not scholars, that it incorporates a family of approaches and that managers and scholars alike need to build EBM supporting structures. Of particular interest is their guidance regarding how managers can start using EBM in their organizations by employing five simple steps:

1. Define the problem, question or issue;
2. Gather internal evidence to check the relevance and validity of the matter;
3. Collect and appraise external evidence regarding the issue;
4. Consider views of stakeholders and those likely affected by the issue;
5. Make a decision that integrates the above four sources of information. 

My experience from practice is that managers’ use of any of these five steps is spotty.  Thus the challenge goes out to managers everywhere: consider making a business resolution for 2010 to deliberately improve your evidence-based practices.

This post is from Ed’s January/February Planning through Performance newsletter.  To see more articles from this edition, review past newsletters or to sign up for future mailings visit http://www.edbarrows.com/Resources/newsletter.htm

Rotman School of Management Dean Roger Martin just wrote an article for Harvard Business entitled, Why Most CEOs are Bad At Strategy.   Don’t feel bad if you’re a CEO–heads of strategy and strategy consultants were thrown under the bus with you.  As he boldly states, “There is a lot of strategy in the world, produced by all types of CEOs, corporate heads of strategy, and strategy consultants. Yet very little of this strategy is any good.”  His theory (untested and seemingly unresearched save experientially) is that good strategies are the product of two disparate logics which manifest themselves within two fundamental–and distinct–strategic choices:  where to play and how to win. 

He concedes that strategy consultants and even CEOs can ably apply their tools of analysis in each of these areas; five forces as it relates to where to play for example and the value chain as it pertains to where to win.  But it is at the intersection of these two simultaneous choices where bona fide and truly creative strategies live.   Sadly, he notes, there is no tool available now that can bridge or bind these two disparate logics.  Thus, bad strategies abound.  I suspect fellow Canadian and strategist Henry Mintzberg would agree.

These are damming words for strategy firms and for profit companies everywhere.  But are they true?  I’ll agree that these two choices are fundamental to a good strategy.  But are CEOs really so bad at them?   Read his article yourself, consider you own CEO (or a former one)–whether a boss or a client–and respond.  I’m interested in other’s thoughts. 

http://blogs.hbr.org/cs/2010/01/why_most_ceos_are_bad_at_strat.html

Here’s an article I just wrote for American Management Association’s monthly newsletter Moving Ahead entitled “What is Strategy Execution?”  Please have a look and comment if you like.  http://links.mkt2180.com/servlet/MailView?ms=MjgzNTYzOAS2&r=NzE5OTc4MjIxS0&j=ODE4NTQzOTAS1&mt=1&rt=0

If you’ve been reading my blog you know I’m a Don Sull fan.  He’s a smart guy with a practical look at management, strategy in particular.  McKinsey seems to think so too.  Recently McKinsey Quarterly posted this video interview of Don with their director of publishing Rik Kirkland where they discuss strategy during turbulence.   Don’s thoughts come from his new book The Upside of Turbulence: Seizing Opportunity in an Uncertain World.  https://www.mckinseyquarterly.com/home.aspx

In short, Don makes the point that turbulence is increasingly becoming a challenge organizations must confront.  Turbulence is caused by ongoing technology development and diffusion as well as increased interconnectedness across enterprises.  He notes that many companies incorrectly respond to turbulence by simply doing more of what they’ve been doing, by following the lead of other organizations (regardless of whether or not what they’re doing makes sense) and by trying to plan their way out of it.  Better responses, he believes, come from developing a more agile business, shifting portfolio resources and looking to actively seize the ‘golden opportunities’ presented by turbulence.  He also provides an interesting point of view on innovation.

It’s no surprise organizations shun turbulence.  Managers like control and turbulence doesn’t lend itself to being controlled; increased levels of planning represent a learned response to turbulence since at its core planning–both financial and strategic–are control mechanisms.  Organizations must work to become more flexible in their management approaches.  Flexibility can be incorporated into budget planning as well as into strategic planning.  But the time-tested systems of planning need to change–at least in mangers minds–before better management of turbulence can realistically occur.

Like most people I’ve been traveling a bit over the holidays.  When I’m in the car I listen almost exclusively to NPR (National Public Radio for any non-fans).  Given vacationing member station staffs, I’ve noticed frequent replaying of previously recorded content.  One particularly funny segment I heard last weekend was “Wilhelm” from WNYC’s show On the Media.  The piece presents the history of the Hollywood sound effect the Wilhelm scream.  Here’s a link to the audio transcript and another to a YouTube compilation of Wilhelm scream scenes themselves.

http://www.onthemedia.org/transcripts/2005/12/30/06

http://www.youtube.com/watch?v=cdbYsoEasio

Taking a page from NPR’s playbook, here’s a Best Practice article I wrote for Harvard Business earlier this year entitled Four Fatal Flaws of Strategic Planning.  As managers steer their organizations into 2010, now is a good time to review and reflect on long-standing strategic planning practices—well before the screaming brought on by the actual process begins.  

http://blogs.harvardbusiness.org/hmu/2009/03/four-fatal-flaws-of-strategic.html

Despite the fact that Enterprise Performance Management (EPM) software is a multibillion dollar business annually, the most popular EPM application is still the spreadsheet according to recent research.  A joint study of U.S. performance management practices authored by Oracle, Cranfield School of Management Centre for Business Performance and Fisher College of Business at The Ohio State University of 123 companies across all sectors found that 60.2% use spreadsheets as their EPM technology.  This finding is surprising in light of the many advanced technology applications available today.  See the full report at http://www.som.cranfield.ac.uk/som/dinamic-content/media/CBP/Areas%20of%20Expertise/US.pdf

The reality is that for many organizations the spreadsheet is a viable if imperfect option for reporting.  Still, there are ways to significantly enhance the basic spreadsheet.  For those interested in improving your Excel performance in 2010 take a look at the book “Balanced Scorecards and Operational Dashboards with Microsoft Excel” by Ron Person.  

Ron is a certified Balanced Scorecard consultant and author of 25 other books, several on programming in Excel.  The book is 5 star rated on Amazon and worth picking up for the DIY BSC practitioner.  http://www.amazon.com/Balanced-Scorecards-Operational-Dashboards-Microsoft/dp/0470386819/ref=sr_1_1?ie=UTF8&s=books&qid=1238824354&sr=8-1

As a follow-up to my previous post I came across a good high level thought piece by Accenture entitled “A Time For Bold Moves“.  The author, Caroline Firstbrook one of Accenture’s strategy practice leads, offers four questions that executives should be asking themselves now:

1.  How can we use this window of opportunity to fundamentally restructure and streamline the cost base?

2.  How can we strengthen the loyalty and profitability of our existing customer base while growing our share of the most profitable customers? 

3.  How can we capture a higher value of the upstream and downstream partners?

4.  How can we take advantage of favorable market conditions to scale the business, acquire new capabilities, and enter new markets through acquisition?

Good thoughts all of them and worth the time for executive teams to address in detail. 

The full report is available at http://www.accenture.com/NR/rdonlyres/6CA3715A-7B07-4340-8D41-8D6C8E1A5953/0/Accenture_Time_For_Bold_Moves_USLtr.pdf

In today’s Financial Times there’s a timely article on General Electric that highlights how the company is well positioned to capitalize on opportunities in 2010 and beyond given that the challenges of 2009 are safely behind them.  “We were playing defense a year ago” says CEO Jeff Immelt, “but in 2010 you can think of the company being back on the offense.”  With the final dollars completely wrung out of expense budgets and revenues now stabilized, many organizations find themselves in the same position as GE—poised to go on the offense in 2010.  But what constitutes a good offense?  Here are few tips senior leaders might care to keep in mind as they develop their own game plans.

Consider the Long-Term.  Corporate America has widely been criticized for short termism.   With coffers awash in cash and a desire to quickly ‘restore earnings’ at hand, a genuine risk exists that companies will overlook bona fide long term opportunities for the sake of returning quick results.  Management teams need to look five or ten years out—maybe longer—to ensure they’re evaluating the true long-term picture.  As Immelt says in the article, “This is going to be the gas and wind world”.  Good news for GE Energy.

Carefully Assess Competitors.   As is the case with any downturn weaker competitors are left beat up if not completely beaten out.  Opportunities exist to inexpensively acquire enfeebled businesses, capture new clients and attract key talent.   Carefully scrutinizing competitors’ resources and capabilities and then plotting their likely moves gives the evaluator a much better sense of where and how to maneuver effectively.  To wit:  GE has been setting up a series of contracts and joint ventures in China as part of their global strategy which the company believes is working.  “I don’t think anyone has played China better than GE has.” Immelt notes.

Focus the Game Plan.  Now is the ideal time to focus on the handful of businesses and initiatives that have the propensity to deliver outsized payoffs.  The downturn has forced upon organizations the discipline of focus.  With the first two tips in mind, the standard 15 to 20 major corporate initiatives can justifiably be pruned to three to five.  A simple set of priorities well executed is far more valuable than a portfolio of half-worked projects.   The FT article states that GE will return to its strengths in infrastructure, technology, energy and finance.  For a company that has historically carried a portfolio of businesses ranging from kitchen appliances to NBC television, this represents a dramatic refocus.

Play Aggressively.  “We have a much easier hand to play than we had five years ago.” Immelt concedes.  So too do many other organizations given the effects of their streamlining efforts.  That said the mandate for management teams today is to play aggressively.  Leaders must repeatedly communicate the game plan, resource it fully, assign clear responsibilities, follow-up regularly and most importantly, follow through.   Complacency will not be rewarded on the competitive field of play where stakes are as high as they’ve ever been.  If leaders are not convinced of this they need look no further than GE—a company that has successfully reshaped itself to compete in 2010 and beyond.