Are you Ready to Rebound? ~ Seven questions to ask by Donald Sull
The recession of 2007 has leaders realizing that they must set a broad strategic direction while remaining open to unexpected opportunities that appear along the way. History has proven that volatile markets do produce opportunities. You see shifting regulations generate unexpected sources of funding; changing consumer preferences create demand for new products or services; and distressed competitors selling off assets cheaply.
More than ever, companies need the capability to consistently spot and execute on unexpected opportunities before competitors do. Donald Sull conducted research over the last 10 years, studying firms hat excelled at execution in some of the world’s fastest-changing markets, and most unforgiving industries. Through his research he identified common obstacles that undermine an organization’s ability to execute on their established strategies and take advantage of unexpected opportunities. According to Sull, by asking themselves seven questions, manager can quickly assess their companies’ readiness to rebound.
• Do you miss opportunities that others spot?
o To continually identify gaps in the market, firms need real-time data and the ability to share it widely throughout the organization.
• Are your hydraulics broken?
o Organizational hydraulics are the processes to set strategic priorities, cascade objectives, and measure employee progress in achieving goals. In many organizations, execution stalls when executives deluge the organization with multiple—and often conflicting—priorities.
• Do you reward mediocrity and call it teamwork?
o Executives often socialize bonuses in the name of teamwork, arguing that differential payouts could stifle cooperation and long-term thinking. Sull believes this is a mistake. To ensure execution, organizations should recognize and reward individuals who do what they say they will with large bonuses. Paying for performance also attracts and retains ambitious employees and encourages them to execute on current priorities.
• Are your core values a joke?
o Companies that execute on their strategies ensure they have the right culture, people and leadership for execution. According to Sull, the most agile organizations share a core set of values: achievement that recognizes and rewards employees for setting and achieving ambitious goals; ownership to take personal responsibility for results; teamwork to foster coordination; creativity to challenge the status quo and integrity to offset the temptation to cut corners that can arise when employees strive to hit ambitious performance targets.
• Are you talking about the wrong things?
o Managers spend approximately three-quarters of their time in discussions—hallway encounters, formal meetings, phone calls and email exchanges. An organization’s execution depends on how well managers are able to set up and lead discussions for action.
• Have your Vikings become farmers?
o As a business matures, early entrepreneurs may leave for new adventures or settle into safe routines. New employees join the company for its perceived stability, not for adventure. Firms need farmers of course, but companies with too few Vikings on the payroll struggle to execute with sufficient urgency.
• Do you rely on heroic leadership?
o Executives who dash from crisis to crisis are a sign of organizational weakness, not leadership strength.
Donald Sull is a professor and faculty director of executive education at London Business School. His most recent book is The Upside of Turbulence from which some of the ideas in this article were adapted. To read more, check out Donald’s article in the March 2010 edition of HBR http://hbr.org/2010/03/are-you-ready-to-rebound/ar/1