Tuesday, April 15, 2008

Execution: The Discipline of Getting Things Done by Larry Bossidy and Ram Charan

I’ve got to stop reading these business books. The more I read them and more I think they’re only useful in helping me understand the world my association members live in. There is very little here I can apply to my own world, which gets underscored as being different from the world of business with every book I read.

A quick example. Here’s what Chapter 3 says are the seven essential behaviors of a leader:

1. Know your people and your business.
2. Insist on realism.
3. Set clear goals and priorities.
4. Follow through.
5. Reward the doers.
6. Expand people’s capabilities.
7. Know yourself.

All good advice, but all the details the rest of the book describes are from a for-profit, number-driven perspective. As the authors summarize in their conclusion: “And because compensation is the ultimate driver of performance, you must ensure that your compensation system rewards the doers.” Compensation is the ultimate driver of performance? Really? Not in my world.

Their world is a lot more cutthroat than mine. Here’s a passage that typifies one of my biggest current fears:

A certain executive lacked an essential quality that he needed to be a strong leader. He was the CEO of a large company I worked with, who had two executive vice presidents reporting to him. One VP, responsible for about 60 percent of the company’s business, was an old and trusted colleague, completely loyal to the CEO. But he was faltering. In his gut, the CEO knew it, but he was unable to make the tough decision to let him go. (It wasn’t the first time the CEO had faced this issue and frozen; that other time somebody else cleaned up the mess.) Eventually the board ordered the CEO to get rid of him. With that, the power passed to the board, and the inevitable consequence was that the CEO himself went shortly thereafter.

Do I lack an “essential quality”? And if I do, am I going to face the “inevitable consequence”? Read this:

But Stan didn’t do so well as head of North American operations. He missed his first year’s financial commitments. He lost market share, and the cost structure of his operation became uncompetitive. The industry was suffering at the time from excess capacity, but Stan did not close plants, cut costs, or focus on execution. The company’s margins and cash flow declined, and its stock price dropped like a rock. But the CEO took no action, feeling that Stan was still new and needed time to get into the culture, and that his coaching would put him on the right track.

Then Stan missed the second year’s targets. Cash flow declined again, and the stock price dropped further. The board became very concerned. After Stan made his next quarterly report to them, the board met in executive session with the CEO and essentially told him to fire the man. But the move came too late to save the company. By this time, the stock price had been cut in half. The company became an inviting product for investment bankers and a target for aggressive, acquisition-minded companies. Within six months, it was taken over.

This may be the best passage in the whole book for typifying why I struggle. This is so obviously not my world. This is a world I would implode in. These are not my problems. And since they are not, is there any value for me in the strategies the book describes to address them?

And let’s look at some of those strategies.

There is nothing sophisticated about the process of getting the right people in the right jobs. It’s a matter of being systematic and consistent in interviewing and appraising people and developing them through useful feedback.

Okay, but will that really help me get the right people in the right jobs? Sounds more like I’m focusing too much on finding the right people, but not focusing at all on defining the right job. Hadn’t I better do that first? Decide what the job is before I go interviewing people?

The CEO and the group executive decided they needed more viewpoints. They brought in the CFO and the head of HR. The four debated—heatedly at times—for four hours. At the end they agreed that Paul was not the person for the job. The lengthy discussions revealed the flaw in his record of success. The record was accurate as far as it went. But he’d never had to face adverse conditions, and in exploring his personality traits, the group concluded that adversity was a test he would fail. What’s more, they were persuaded that he should no longer be a potential CEO candidate.

Interesting. But how do you “know” these things? This group of people got together and talked about it. If I meet with people and talk about an issue, will I also know what to do? Is that the mechanism for knowing? I’m confused. A lot of this book is like that. Long on anecdotes and short on practical strategies for getting things done. Practical at least to my world. Unless I can go on the six-month sabbatical in Australia that one of the anecdotal CEOs did to help him figure out his problems.

But it’s not a total loss. Read this:

Leaders who can’t work through others often end up putting in untold hours, and pushing everyone else to do the same. They’re like Charlie, whom I mentioned in chapter 3. I’m always asking such people, “What did you get done, and is everybody else in the game?” In performance reviews, I’ve often had to tell some very smart eighty-hour-a-week people that they need to change their work habits, and that the eighty-hour week is actually a major weakness. People like this usually force their direct reports to be in the office or the plant with them on Saturdays, Sundays, and holidays. They run them ragged and drain the energy of everyone around them. I’ll tell them, “You have to come in here less, but your performance can’t change—it must be just as good as it is now. Learn how to get things done through others. Because if you can’t get things done through others, ultimately you’re going to sink or burn out.” If they promote others on the basis of very long hours worked—which they will, because that’s what impresses them—those people will have the same problem.

People who can’t work with others reduce the capacities of their organizations. They don’t get the full benefit of their people’s talents, and they waste everybody’s time, including their own.

The last saving grace of continuing to read these business books is the way they consistently trash the management style of my former boss.

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