We have the goal and the strategy. The next step is to convert them into actions which will steer the organization to its goals.
The real execution begins with decision-making. We will not enter into any detailed discussion on this complex subject. In this article, we can only highlight some executional imperatives of decision-making. The first requirement is to define clearly the decision-boundaries, which means who is responsible for what decisions. The second condition is to ensure that each decision-maker has the information, knowledge and the skill to make the right-decision.
Organisational processes and systems are the main instruments for converting decision into action. In this domain the main success-factors are effective systems for problem-solving and continuous improvement, Toyota is one of the exemplars in this area. In this Japanese auto-major, workers are provided with detailed guidelines on problem-solving and process-improvement. For example there are manuals in Toyota on how to ask repeated “why” until you reach the root cause of a problem. However in a holistic perspective continuous improvement has to be pursued in four dimensions: first is techno-economic, in terms of efficiency, productivity, utility, cost-reduction and technological upgradation; second is ecological which means a constant effort towards reducing the carbon footprints of the company in terms of pollution control, waste reduction, energy conservation and recycling; third is aesthetic dimension, which means effort towards a more and more beautiful and harmonious corporate life from the supply chain and production, to product design and packaging; fourth is the human dimension in terms of a conscious and constant quest for a progressive perfection, excellence, well-being and fulfillment in work.
Another practice which can enhance executional excellence is a culture of collecting and sharing best-practices within and across the organisation and also collecting them outside the organisation.
In GEC, this culture of best practices is called “boundarylessness” which means, as the former CEO of GEC, Jack Welch explains: “relentlessly seek out best practices, whether inside or out, adopt them and continually improve upon them… whether its sources was a colleague, another GEC business or another company across the street or on the other side of the globe.”
The other great challenge of execution is to arrive at the balance between standardization for efficiency and creative freedom for innovation. For maximising efficiency, those domains or process which does not require much creativity have to be standardized. On the other hand, in activities which require innovation and creativity, there must be sufficient freedom for people to respond creatively to the changing needs and situation. For example, Ritz-Carlton, the well-known hotel chain, gives large freedom for front-line team to plan, innovate and decide what is best for serving the customer. But it maintains carefully defined standards for cleaning room and other facilities.
We are now brought to the last part of the journey which is to monitor results based on well-defined performance standards. There must be some form of a scorecard or matrix for measuring and monitoring the progress and results of the process of execution. There is the well-known “balanced score-card” system of Robert S. Kaplan. In an article in Harvard Business Review, Kaplan and his coauthor Norton define the objective of a balanced scorecard as to provide executives “with a comprehensive framework” for translating “a company’s strategic objectives into coherent set of performance measures.” Kaplan’s scorecard “complements traditional financial indicators with measures of performance for customer, internal process and innovation and improvement activities.” Kaplan gives the example of Rockwell, which we have cited earlier. This global engineering company has a scorecard which measures the company’s performance on four parameters: financial, internal process, customer satisfaction and growth. Each of these categories is subdivided further. For example, internal processes are measured in terms of tender effectiveness, quality service, safety and superior project management.
However each company has to evolve a scorecard which is in harmony with its unique needs. As Kaplan points out: “The balanced scorecard is not a template that can be applied to business in general or even industry wide. Different market situation, product strategies and competitive environments require different scorecard. Business units device customized scorecards to fit their mission, strategy, technology and culture.” We may add one more factor to the scorecard: values. There is at present increasing recognition of the importance of values for long-term effectiveness of the organisation. Many progressive companies regard value as a crucial factor of success. But performance in values cannot be measured or quantified as in other parameters like finance. However if a company regards values as a vital factor it has to find some methods by which it can assess how they are lived by its employees in all the levels of the organisation. For example, the Indian IT major Wipro conducts such periodic value-assessment surveys among its employees.
Another important part of monitoring is to build alignment which means, at every step of the execution, the CEO or COO of the company has to ensure that all the stages and various parts of the process of execution are aligned with each other, for example strategic goals are aligned with vision, operational objectives are aligned with strategic goals, performance measures are aligned with operational objectives, decisions are aligned with values. This requires an organisational structure where information flows freely across the organisation without any fetters created by hierarchy or divisions and a culture of collaboration made of cross-functional teams.
Courtesy : VILAKSHAN, XIMB Journal of Management
The author is a Research Associate at Sri Aurobindo Society and on the editorial board of Fourth Dimension Inc. His major areas of interest are Management and Indian Culture.