The Theory

A business strategy is king of the mountain, the star of the movie, the General of the Army. It is the stuff that captains of the ship do. Implementation is for the underlings. Execution of the strategy takes a backseat to creating the big idea that will create great success.

A Big Example

It happens in the US at least every eight years. A new President is elected. The President (the nation’s CEO) announces a grand strategy for finally getting this country moving in the right direction (since the previous direction was always wrong). Then four years later, the existing bureaucracy has the CEO worn down to a frazzle. He says one thing, and they do another. Projects go off in unintended directions. New Orleans stays underwater. Wars grind on. Frustration builds. Execution, it seems, is a lot harder than strategy.

Kiss Theory GoodBye

A study (Overcoming Stall Points) by the Corporate Strategy Board examined 172 companies that were at one time in the Top 50 of Fortune 500 companies. Only 5 percent achieved sustained inflation-adjusted growth of more than 6 percent while 95 percent stalled. Of the companies whose growth had stalled, only 4 percent were able to successfully reignite their growth even to a rate of 1 percent above GNP growth.

Three additional recently published studies indicate that roughly only one company in 10 succeeds at sustained growth:

• Profit from the Core (Chris Zook and James Allen) only 13 percent of 1,854 companies achieved sustained growth.
• Creative Destruction (Richard Foster and Sarah Kaplan) only 16 percent of 1,008 companies achieved sustained growth.
• Good to Great (Jim Collins) only 9 percent of 1,435 companies achieved sustained growth.

Has it always been this way?

Admiral Bull Halsey led US Naval Forces in The Biggest Sea Battle in the history of the world. His carriers, battleships, destroyers, subs and PTs were responsible for protecting the GIs from the Japanese as they landed to retake the Philippines. The Japanese sent in just about every boat they owned to stop the Army at the beach. The strategy was all set, until one of Halsey’s scout planes spotted a fleet of Japanese aircraft carriers about 500 miles north of where the battle was to occur. Halsey diverted most of his firepower to go after the carriers up north, only to realize they were a decoy (they had only a few planes left on the carriers; the rest were all shot down). Halsey confounded the strategic planners back at Pearl and DC. The biggest sea battle ever was fought by smaller ships that had luck on their side. They broke the backbone of the Japanese Navy while Halsey was vacationing up north.

War, it seems, almost always brings out the stunning clash between having a great idea and making that idea work.

An example from the world of business?

One sales team serving indirect sales channels spends $200,000 on a marketing campaign that builds awareness and offers a 10 percent discount to partners. At the same time, another sales team in the same company selling the same product offers a 30 percent consumer discount through retail chains. The partners soon realize that their customers can buy it cheaper at retail than they can buy from the company. Channel conflict is aggravated, and partners move off to a competitive offering where they can make money; failed execution.

What are the repercussions?

C-level exits are running at record levels. Few CEOs make it more than just a few years. Failed implementations eventually lead to downsizing of companies. This, folks, does not feel good to anyone.

Bob Prosen to the rescue!

Bob’s new book Kiss Theory goodbye is a rarity.

Most business books stay in the stratosphere with high-level concepts. From these bestsellers, we skim off a few magic bullets that will help us change for the better. But a few weeks later, we’re off reading another book, looking for more silver bullets to accelerate our careers.

Bob instead gives us practical tools and a roadmap to make a difference … to execute strategies consistently and uncommonly well.

Bob has agreed to share with readers of Expert Access some of his secrets and a few insights that never made it into his book.

Let’s talk with Bob.

Dale: What got you so focused on this implementation part of business?

Bob: In my past as a senior executive at several companies, there was a pattern — in one company after another — a pattern of failed strategies. It wasn’t that the strategies were bad. In fact, most were very sound. But in one company after another, execution flubbed.

There are never enough resources to go around. Squandered resources are a terrible thing. Management’s inability to execute the lower-level components of a business strategy can cause repetitive problems and deplete scarce resources on wasted energy.

By and large, most organizations are terrible at consistent implementation. Once I saw this pattern, I could not leave it alone. I started digging into what was going wrong and came up with some fascinating insights.

Dale: Can you give us an example of what you were observing?

Bob: One company was AT&T. The leadership was trapped in a monopoly mentality and when de-regulation came along, they set off on new business strategies. But they just could not shake the old ways. Everything was hierarchical — a rigid, top-down chain of command. No one challenged people above them. Getting things done took too long, and in the new business environment, they could not keep up with the competition. They lost billions and eventually were acquired by one of the Baby Bells that had spun off from the parent.

Dale: What’s going wrong here? Can’t the leadership see that things are going in a bad direction or do they refuse to acknowledge it? It seems like the financial reports would be screaming at them. We all know you can’t keep doing the same things and expect different results.

Bob: Actually, several things begin going wrong — all together. I’ve boiled them down to five common problems, but the really big one is a lack of accountability. Well-intentioned people rationalize the numbers; they find excuses for problems rather than take the painful route of identifying what’s going wrong and assigning responsibility to individuals or teams, and then hold everyone responsible for achieving results.

I was counseling the management of a $50-million technology company a few years ago. They had an incredible product, but the team lacked business experience. When the going got tough, they failed to see the early warning signals. They literally refused to hold themselves accountable for the changes they needed to make. They rationalized failure. And eventually failure is what they achieved. It is really sad to see these things happen. Good people lose their jobs. Companies go out of business. There is real pain in the human drama that surrounds failed implementations at the corporate level.

At another company, they held regular business reviews. That was good. But again there was no accountability. The managers who told the best stories got a pass for failed results. As I watched them conduct several of these reviews, it became more like news reporting than a meeting to drive results.

This happens in one company after another. So, yes Dale, I think the failure to demand and accept responsibility is one of those bad habits we see in struggling companies. And this is something that should be fairly easy to fix.

Dale: Easy to fix … if we just had the will to do it. You mentioned there were five barriers to success. What are the other four?

Bob: Well, I kind of covered two of them before — there was lack of accountability and mixed in with it was rationalization of failure. The next most common biggie on the list is a lack of clear direction. Most employees simply have no idea where the boss wants to go, because the boss never issued a clear direction and set of priorities. If everything’s a priority, then nothing is a priority. And nothing important gets done.

Also on the list is risk aversion and one that might sound absurd … its kind of the opposite of no clear direction … it’s planning in place of action. George Bernard Shaw said that the problem with communication was the illusion that it had occurred. The same is true about planning being the illusion that action happened. Only it didn’t because there was no investment in action. When results fail to come in, managers too often step back and say, “Let’s revise the plan again.”

Dale: That’s one bad habit you’d never pin on General Patton. Everyone who’s read any of Steve Kayser’s Shoot the Donkey essays in this newsletter knows the story of how Patton realized his Army was stalled … so he rode to the front of the march and found a farmer’s donkey blocking the tanks on a narrow bridge. The farmer was trying to pull the donkey out of the way. But Patton, a real man of action, just pulled out his silver revolver, shot the donkey and had it thrown over the side of the bridge. The tanks began moving forward again.

Bob: My guess is that Eisenhower hired Patton for that job precisely because he knew Patton was a man of action. All superstars are like that. They get stuff done. This is something I tell HR departments they should do. Instead of hiring procrastinators, hire people who already are accountable. They instinctively get things done, and every organization needs people like this. Strategists too often get caught up in the longer view and disconnect from the day-to-day. Good strategists need people behind them with the skill set to move on and get it done.

Here’s one way of improving this skill set within your management team. If you look at leaders and managers as having different skills, you should alternate them in roles where leaders take on management tasks and managers take on strategic tasks. Then they all learn how to blend the two. Your job as a leader is to surround yourself with doers … and they should be hired because they are smarter than the leader in their respective area.

You don’t need to be liked all of the time, but you do need to be fair and respected. You need to be easy on people, but hard on performance. When things go wrong, attack the process not the people. Too many leaders hire people like themselves. Kings don’t shoot other kings. They protect themselves. Accountability goes out the door and rationalization enters.

This is pretty simple. Hire smart, action-oriented people … people who are skeptical of power, and then listen to them. Challenge them, and help them raise the bar. Listen to their advice. That doesn’t mean the leader has to accept every piece of advice, but the leader should listen and consider what he’s hearing.

Dale: Any examples?

Bob: Let me give two — one a successful leader and one who resigned under pressure.

Since we’re on a World War II vein of thought today, I will put up one of my favorite all-time leaders — Winston Churchill. He came close to losing his country, but he never gave up. At the end of the war, he stood before a huge crowd of Brits, and his speech was “never, never, never give in.” When he sat down, the crowd erupted. Pick the course, and get it done.

You have a reverse example right in your hometown (Cincinnati) at Procter & Gamble. A decade ago, Durk Jager took over as CEO. He gained a reputation for moving aggressively and running over people — a bit of an Attila the Hun. He resigned under pressure amid criticism that he launched too many new products too fast. He was surrounded by brilliant people, but he wouldn’t listen.

Another example … I was negotiating a huge contract. We built a good solution, but there were a number of areas we wanted to confirm with the CEO before going forward. I met with him to run over the project. The entire half-hour we reviewed the details, I could tell he was not listening. He kept playing with his Palm Pilot. He was bored by the details. I wanted direction but got no feedback. Experiences like this have taught me a lot about the right and wrong way to run a business.

Dale: I like your notion about being easy on people but hard on performance. How does this work?

Bob: Leaders need to understand how their organizations work and how results are generated. Too many have retreated into ivory towers and don’t walk around often enough.

Years ago, when I was at AT&T, we had a big project that was not going well. I called in all of the managers to a hotel room and asked them to chart out on paper how the process worked. They came up with something like 50 steps. A few hours later, I came back and reviewed their flow chart, and then asked them to come back to the hotel at the end of the day. When they left, I brought in a group of the technicians and asked them to review the flow chart and adjust it where it did not match their view of reality. They filled the chart with work-arounds and fixes and steps that the managers were unaware needed to be done. The list grew to about 75 steps. Then we assembled everyone together and reviewed the chart, with the goal of simplifying without losing anything major. We never attacked the people running the project, but instead got at the root causes of confusion and lost time. And we got our project moving forward again.

Dale: You identified five attributes of highly successful companies — the ones that do best at getting a business strategy implemented.

Bob: Changing culture is never easy. It becomes inbred. There are sacred cows everywhere you turn. You change direction with communication, two-way communication. Get out of the office and talk with employees. Hear what’s going on. Then teach everyone the rationale for the new direction, and give them the skills too so they can make change happen. Change will not happen in the corner office; it happens in the halls, cubes and factory floors.

Your example, however, reminds me of another big … really big thing going on in business today. Rewarding best customers by devising segmentation policies and pricing flexibility is an example of what a lot of people call Customer Experience Management. First off, I hate that description. Did you ever run into a customer who wanted to be managed by a vendor? It is better to think of it as Customer Experience Delivery.

Dale: As you might have noticed, providing customers with a great experience is something we pay a lot of attention to here at Cincom. We see the goal here being to provide a unique and highly valued experience that encourages customers to become loyal advocates of Cincom. What lessons can you leave us with on this?

Bob: First, call it CED instead of CEM. Businesses do not manage customers. Customers manage us. Customer Experience Delivery is the new “new thing.” We all know that delivering a superior customer experience is a lot more complicated than putting out some customer-friendly ads. Indeed, customer experience is all about people doing the right things, processes that have been honed to efficiency and a product offering that comes packaged as a unique, consistent and valued experience.

It makes a lot of sense, but keep in mind that the company must come out as a winner in this process. At the end of the day, the company must make a profit. So keep that at the top of the list but balance it with the needs of your employees and of your customers. Everyone in your organization should have an understanding of what success means from the customer perspective. Then design the experience so that it makes customers successful. Hold each other accountable to deliver a great valued experience, but if there’s no corporate profit, it is bye-bye.

We recently polled 70 CEOs and asked them how many test out their own customer service. The answer was appalling. My suggestion is that you should get on the phone and call your own customer service department and find out how they treat you. If it is great, then reward them. If it is not, hold them accountable for results and work on a new process to make service great.

Customer experience delivery is all about executional capability.

Dale: That’s why Bob Prosen’s new book Kiss Theory goodbye is mandatory reading for anyone trying to deliver customers an experience that turns them into advocates for the brand.

I read Kiss Theory goodbye a few weeks before Bob and I could get together to have the discussion above. When I read books I underline two different ways. I use a black pen to underline good ideas that I should practice. I underline with a color marker ideas that I have not heard or read about before — new-to-Dale thoughts. And his book had a lot of colored underlines when I was done. I re-read the book the weekend before the interview so it would be fresh in my mind. I was amazed, simply amazed at all of the new things I learned that I had missed on the first reading. So I can tell you firsthand, this is a book worth studying. It will make you a better manager and a better leader.

Ignore Bob Prosen at your own risk.

About Bob Prosen: Bob is president and CEO of the Prosen Center for Business Advancement. In addition to offering training programs, he speaks to a wide range of businesses, professional associations and not-for-profit organizations. Bob was formerly the senior vice president for Sabre, vice president of professional services for Hitachi and managing partner at AT&T Global Information Solutions/NCR.

About Dale Wolf: From sports journalist and editor of an international trade magazine to marketing director for three companies before founding WBK, which became one of the 50 largest promotional marketing agencies in America, Dale pioneered contextual marketing for successful brands at P&G, Pepsi, Disney, Toshiba, Compaq, Imation, 3M and now for Cincom. He is an expert in the area of Customer Experience Delivery and is an author and editor of The Perfect Customer Experience.