In the previous 5 minute growth tip article, I discussed how strategy is not a lengthy action plan but the evolution of a central idea about how a company can be unique and valuable to its customers.
So if a strategy is about how the company needs to compete, then how does a CEO and their A player leadership team make it happen? With a best practice execution plan and process.
The Execution Challenge
In my experience over the last 16 years working with leadership teams, when CEOs and owners of mid-size companies decide to do formal planning with their leadership team, they often go through a traditional strategic planning process.
However, this often only goes so far.
Many strategic plans include a mission (or purpose), vision and values - all important - yet little, if anything, about how the company will compete in the market.
And often, these documents have vague plans for implementing whatever rough direction they’ve set out: some high level multi-year priorities, or maybe some one year initiatives. In the best case, an annual budget is built with the strategic plan in mind.
From there, leadership team members will report on their numbers quarterly, or maybe monthly.
In the meantime, the CEO assumes the leaders are working on making improvements and changes in their departments that align with the high level priorities.
After a couple of quarters, a few things can happen:
Does this pattern seem familiar?
Does it cause drama, tension and low morale? Usually so. Is it efficient? Not really. Does this hamper progress, growth and profitability? For sure it does. And is it any fun? No.
So, what’s the solution? Not a traditional strategic plan. But a strategy (which I outlined here) and an execution plan and process.
Our 3 key disciplines of low drama execution describe how it works: 1) Metrics and Targets, 2) Priorities and 3) an effective Meeting Rhythm.
Metrics and Targets
Watching the numbers may seem like the most obvious of the three disciplines. We all know that tracking financial results is an important part of monitoring whether we’re on track.
However, there are other key numbers to monitor as well.
While some metrics tell us how we’ve done, others give us an indication of how we’re going to do. This is the difference between lagging metrics and leading metrics.
For a company as a whole, lagging metrics will be things like financial results, units delivered and market share. Some leading metrics may be customer loyalty, on-time delivery, employee engagement or the percentage of employees that are A players.
We want to set long term targets for our key metrics - say for 3 to 5 years out. These targets should align with our 10 to 30 year vision, or big hairy audacious goal, as well as our best-guess estimates of what’s possible with the core customer and sandbox we chose in our strategy.
From there, we can set goals for those same metrics for the next year. For most of those metrics, we’ll also set goals for the first quarter. And finally, for some metrics, often leading metrics, we might be able to set monthly or even weekly milestones.
Setting short-term goals that align with mid-term targets that align with a longer term vision allows the leadership team to commit to biting off a certain amount of progress each quarter.
This way, we can check that we’re making enough progress over the weeks, months and quarters to achieve what we need to for the year, which will contribute to reaching our 3 to 5 year targets and our vision.
Metrics measure the results and state of our day to day operations, and how they’re progressing towards our vision.
Priorities, on the other hand, are the changes and improvements to those operations. These are what we want and need to implement to make it possible to achieve those mid to long term goals and targets.
Going back to my first article in this series on how companies need to do things differently to continue to grow and profitably, these priorities represent, in part, those very structures, systems and processes.
Priorities may also be about building or buying new facilities, equipment, or other significant capital assets to expand or replace capacity.
Priorities should also build the capabilities needed to bring to life or strengthen the unique brand promises we chose in our strategy.
Like with metrics, we chunk these down from long term to mid term to short term. This again helps us make progress every quarter that supports the progress we want to make over time.
We can start with the 3 to 5 year priorities (we sometimes call these Key Thrusts or Key Capabilities). These are the broad, multi-year categories of change and improvement that need to happen to support achieving our 3 to 5 year targets. For example, “developing leadership capability at all levels” or “automating our production processes”. Both likely take multiple years.
From our 3 to 5 year priorities, we’ll identify our 1 year priorities (we sometimes call these Initiatives). They capture the handful of large multi-quarter change projects that bite off a chunk of one or more of our 3 to 5 year priorities.
And from our annual priorities, we’ll choose quarterly priorities (we sometimes call these Rocks). These are the multi-month change projects that will help us complete one or more of our annual priorities.
An Effective Meeting Rhythm
It’s great to know what targets need to be achieved and what priorities have to be accomplished over the next quarter to make enough progress towards our long term goals.
But we know that unforeseen things will happen during the quarter. Problems will come up. Things can get forgotten. People can lose focus.
So, how do we make sure our leadership team executes on our quarterly plan in the midst of all that?
Through regular communication. An effective and efficient meeting rhythm is the key.
This meeting rhythm includes:
The purpose of weekly leadership team meetings are to check that our metrics and priorities are on track, to take corrective action, and to problem solve where needed.
Daily leadership team huddles are to keep all team members in sync throughout the week and identify problems quickly so they can be resolved as they come up.
Monthly leadership team meetings are for checking that our metrics, priorities AND monthly financial results are on track, taking corrective action, adjusting the plan as needed and tackling larger tactical or strategic issues.
Quarterly planning meetings are to check what we accomplished over the last quarter, adjust course for the year and set our quarterly goals and priorities for the next 90 days.
The annual planning meeting is for assessing overall progress, noting market trends, adjusting our strategy, long term vision and 3-5 year targets and priorities, and deciding what we’ll bite off with our goals and priorities for the coming year and for the first quarter.
With a clear purpose and a proven agenda for each type of meeting, and with the right people in the roles of facilitator, time-keeper and note-taker, these meetings can efficiently keep the leadership team and its members focused and executing throughout the year.
Pulling it all together
A clear, aligned execution plan and an effective execution process will minimize drama and maximize efficiency and goal achievement.
However, this will work best if we create the execution plan with the leadership team, so there is efficient leadership team buy-in. And this goes for the strategy as well.
Combine all this with strong accountability practices and having A players on our leadership team, and we have a powerful mixture to reliably implement the structures, systems and processes to implement our strategy, build capacity, and grow consistently and profitably...AND enjoy the ride.
That said, this all may seem daunting if you and your leadership team are too busy working in the weeds.
If that’s you - and most CEOs I meet have this challenge - keep an eye open for my next article on how to shift from working mostly “in the business” to working more “on the business”, and having more time for you and your family as well.
How can you execute with less drama in your company?
To find out how to have more efficient execution to grow more easily, quickly and profitability, AND enjoy the ride, try our complimentary Agile Growth Checklist. This self-service questionnaire takes 5 to 10 minutes to complete. You'll receive the checklist with your responses immediately. Within 24 hours, you'll receive a compiled report highlighting areas to improve. Complete section 4 to check your execution processes. Or complete all 7 sections to find out how your company is doing in each of the 7 areas needed to produce more rapid, profitable and sustainable growth. This report is complementary and involves no obligation.