Question

What do you feel is most important in indicating success of an INCLUSIVE BREAKTHROUGH for a company? Give explanations and examples.

Answer 1

A brilliant strategy, blockbuster product, or breakthrough technology can put you on the competitive map, but only solid execution can keep you there. You have to be able to deliver on your intent. Unfortunately, the majority of companies aren’t very good at it, by their own admission. Over the past five years, we have invited many thousands of employees (about 25% of whom came from executive ranks) to complete an online assessment of their organizations’ capabilities, a process that’s generated a database of 125,000 profiles representing more than 1,000 companies, government agencies, and not-for-profits in over 50 countries. Employees at three out of every five companies rated their organization weak at execution—that is, when asked if they agreed with the statement “Important strategic and operational decisions are quickly translated into action,” the majority answered no.

Execution is the result of thousands of decisions made every day by employees acting according to the information they have and their own self-interest. In our work helping more than 250 companies learn to execute more effectively, we’ve identified four fundamental building blocks executives can use to influence those actions—clarifying decision rights, designing information flows, aligning motivators, and making changes to structure. (For simplicity’s sake we refer to them as decision rights, information, motivators, and structure.)

In efforts to improve performance, most organizations go right to structural measures because moving lines around the org chart seems the most obvious solution and the changes are visible and concrete. Such steps generally reap some short-term efficiencies quickly, but in so doing address only the symptoms of dysfunction, not its root causes. Several years later, companies usually end up in the same place they started. Structural change can and should be part of the path to improved execution, but it’s best to think of it as the capstone, not the cornerstone, of any organizational transformation. In fact, our research shows that actions having to do with decision rights and information are far more important—about twice as effective—as improvements made to the other two building blocks.

IMPORTANT TACTICS OF COMPANIES:-

To get a sense of the process from beginning to end—from taking the diagnostic profiler, to formulating your strategy, to launching your organizational transformation—consider the experience of a leading insurance company we’ll call Goodward Insurance. Goodward was a successful company with strong capital reserves and steady revenue and customer growth. Still, its leadership wanted to further enhance execution to deliver on an ambitious five-year strategic agenda that included aggressive targets in customer growth, revenue increases, and cost reduction, which would require a new level of teamwork.While there were pockets of cross-unit collaboration within the company, it was far more common for each unit to focus on its own goals, making it difficult to spare resources to support another unit’s goals. In many cases there was little incentive to do so anyway: Unit A’s goals might require the involvement of Unit B to succeed, but Unit B’s goals might not include supporting Unit A’s effort.

• Information did not flow freely across organizational boundaries. Sharing information was never one of Goodward’s hallmarks, but managers had always dismissed the mounting anecdotal evidence of poor cross-divisional information flow as “some other group’s problem.” The organizational diagnostic data, however, exposed such plausible deniability as an inadequate excuse. In fact, when the CEO reviewed the profiler results with his direct reports, he held up the chart on cross-group information flows and declared, “We’ve been discussing this problem for several years, and yet you always say that it’s so-and-so’s problem, not mine. Sixty-seven percent of [our] respondents said that they do not think information flows freely across divisions. This is not so-and-so’s problem—it’s our problem. You just don’t get results that low [unless it comes] from everywhere. We are all on the hook for fixing this.”

• Important information about the competitive environment did not get to headquarters quickly. The diagnostic data and subsequent surveys and interviews with middle management revealed that the wrong information was moving up the org chart. Mundane day-to-day decisions were escalated to the executive level—the top team had to approve midlevel hiring decisions, for instance, and bonuses of $1,000—limiting Goodward’s agility in responding to competitors’ moves, customers’ needs, and changes in the broader marketplace. Meanwhile, more important information was so heavily filtered as it moved up the hierarchy that it was all but worthless for rendering key verdicts. Even if lower-level managers knew that a certain project could never work for highly valid reasons, they would not communicate that dim view to the top team. Nonstarters not only started, they kept going. For instance, the company had a project under way to create new incentives for its brokers. Even though this approach had been previously tried without success, no one spoke up in meetings or stopped the project because it was a priority for one of the top-team members.

• No one had a good idea of the decisions and actions for which he or she was responsible. The general lack of information flow extended to decision rights, as few managers understood where their authority ended and another’s began. Accountability even for day-to-day decisions was unclear, and managers did not know whom to ask for clarification. Naturally, confusion over decision rights led to second-guessing. Fifty-five percent of respondents felt that decisions were regularly second-guessed at Goodward.

• Pushing certain decisions down into the organization to better align decision rights with the best available information. Most hiring and bonus decisions, for instance, have been delegated to immediate managers, so long as they are within preestablished boundaries relating to numbers hired and salary levels. Being clear about who needs what information is encouraging cross-group dialogue.

• Identifying and eliminating duplicative committees.

• Pushing metrics and scorecards down to the group level, so that rather than focus on solving the mystery of who caused a problem, management can get right to the root cause of why the problem occurred. A well-designed scorecard captures not only outcomes (like sales volume or revenue) but also leading indicators of those outcomes (such as the number of customer calls or completed customer plans). As a result, the focus of management conversations has shifted from trying to explain the past to charting the future—anticipating and preventing problems.

• Making the planning process more inclusive. Groups are explicitly mapping out the ways their initiatives depend on and affect one another; shared group goals are assigned accordingly.

• Enhancing the middle management career path to emphasize the importance of lateral moves to career advancement.

Goodward Insurance has just embarked on this journey. The insurer has distributed ownership of these initiatives among various groups and management levels so that these efforts don’t become silos in themselves. Already, solid improvement in the company’s execution is beginning to emerge. The early evidence of success has come from employee-satisfaction surveys: Middle management responses to the questions about levels of cross-unit collaboration and clarity of decision making have improved as much as 20 to 25 percentage points. And high performers are already reaching across boundaries to gain a broader understanding of the full business, even if it doesn’t mean a better title right away.• • •