In his book Winning, Jack Welch says “…strategy is actually quite straightforward. You pick a general direction and implement like hell.” I think Jack Welch would agree that he was making it sound more simplistic than it really is but he was trying to make the point that strategy gurus and leaders often make it much more complex than it needs to be.

I’ve come to believe that strategic excellence is far less about rigorous analysis and number-crunching to determine your strategies and far more about making hard choices about how you want to compete and then relentlessly implementing and executing the choices (strategies) you’ve decided on.

Over the course of helping many Fortune 500 clients to make these hard strategic choices as well as to implement them in their organizations, I’ve discovered that there are five imperatives for strategic excellence:

ONE
Make sure you have a crystal-clear mission & vision for your organization before you begin making core strategic choices

Since a mission should define a business’s core purpose (what you do, how you do it and who you serve) and a vision should represent what you aspire to be as an organization at a point in the future, clarity and agreement regarding both are required before any serious strategic planning is engaged in.

Strategy is concerned with how you will achieve your aims, not with what those aims are or ought to be.

• Strategy only has meaning when it is in direct relation to some aim or end
• Engaging in strategic planning before you know exactly what your organization’s core purpose is and what you aspire to be as an organization (right down to how it will look, operate and feel), is akin to determining the best mode of transportation before you know where you’re going

TWO
Make the tough choices

The biggest challenge for virtually every organization I’ve guided through strategic planning is making the tough choices that tend to be mutually exclusive relative to other potential choices. E.g., do you want to be exceptionally innovative or do you want to be relentlessly driving costs down?

Consider how Domino’s Pizza hangs their hat on being the most efficient pizza delivery company but not the purveyor of the best pizza. In stark contrast is a pizza joint in San Diego, California near where my company is based that refuses to deliver their pizza or expand their menu because they hang their hat on making the best New York style pizza in the area and they don’t want delivery issues or other menu items to get in the way of executing this core mission.

• Have you made the tough strategic decisions about what you will be the best at - and just as importantly - what you won’t be the best at?
• Choose the fewest core strategies necessary to carry out your mission and realize your vision
• Figure out how you want to strategically compete and then have the good sense to focus all of your energy on how to do that as well as you can

THREE
Set specific measurable goals in support of each of your core strategies

You must have goals each year that will enable you to measure your progress against your strategies.

Ensure you are measuring and tracking the key performance indicators for each of your core strategies.

Your goals will naturally evolve year-to-year even if your core strategies remain the same. Going back to the Domino’s example, they recently set the goal of designing and implementing a state-of-the art online ordering system. Not all that long ago, this wouldn’t even have been on their radar screen. Now they have one of the best online ordering systems in the food delivery industry. The strategy of being the most efficient pizza delivery company remained the same but they set and achieved a new goal in support of the strategy.

• Review the goals at least monthly to ensure you’re strategic execution is on track
• Be absolutely relentless about getting the results you need to gain a strategic competitive advantage

FOUR
Ensure your organization is actually capable of executing your strategies

Whatever core strategies you choose, back them up with whatever is necessary to successfully implement them. If you decide that your organization is going to have the best people in your industry then you need to be willing to pay for the best people. If you decide that fast service is going to be your advantage then you need to have the systems, processes and people that can deliver on that promise.

To say that this is critical cannot be overstated yet I frequently observe organizations that demonstrate they don’t comprehend how this makes or breaks their ability to convert their strategic choices into competitive advantages. An example is a hardware store that decided it would compete largely on the advantage that they have staff that really know their products and are ready to assist you with any questions you may have to help you decide what you need and so on. You hear about this and you decide to try the store out one day as you’re looking to install new lighting fixtures throughout your house. What you encounter is a 15 min. wait to even talk to a clerk about your needs and once a clerk finally does try to help you it quickly becomes obvious the clerk has virtually no expertise in this area whatsoever. It turns out the reason for the 15 min. delay was because store management wasn’t willing to provide sufficient staff to serve their customer traffic in a timely manner. The reason for the lack of product knowledge is a corresponding lack of a store training program to ensure that all staff members possess the requisite knowledge to fulfill their promise of expert assistance. Again, store management wasn’t willing to invest in the training.

• Back up your core strategies with whatever is necessary to successfully implement them
• You need to revisit your strategic choices if you’re not willing to invest whatever resources are necessary to execute the strategies you’ve chosen

FIVE
Stay the course

I’m not saying that your core strategies should never be revisited once you decide on them. Indeed, there are many reasons why it could make sense that they should evolve or even significantly change. What I am saying, however, is that once you make your choices, and until the day might come that you decide to make changes to them, STICK TO YOUR KNITTING. Be persistent and vigilant about them. Be like Herb Kelleher, the co-founder and former Chairman and CEO of Southwest Airlines when he refused to provide meals to customers even when Southwest began flying cross-country routes. He remained steadfast to SWA’s core strategic tenets despite the obvious rationale for providing meals on the longer routes. He countered that their customers would have the opportunity to treat themselves to a fancy dinner at an upscale restaurant after their flights if they so wished with all the money they would save by flying SWA. Implicit in this strategic persistence was the fact that this tremendous savings was only possible because SWA didn’t veer from its core strategies for keeping their own costs so low.

• Be persistent and vigilant about sticking to your core strategies like glue
• A lack of strategic consistency = a lack of competitive advantage

I long ago found that most organizations don’t have a crystal-clear vision of the organization they’re building, and even if they do, few possess the passion and discipline to consistently focus on it. This is a really big deal because no organization can optimally deploy its resources nor win the hearts and minds of its people unless everyone in the organization understands, and is inspired by, the organization they are building together.

Beyond that, I’ve found that many top executive leaders, even in Fortune 500 companies, don’t really understand the difference between a vision and a mission. This matters tremendously because it’s crucial that organizations have clarity about both since in tandem they form the foundation for leading any successful organization. Why is this so? Consider that a mission should define an organization’s core purpose (what you do, how you do it and who you serve). Conversely, a vision should be distinctly different than a mission, as it should represent what you aspire to be as an organization at a point in the future. An organization lacking great clarity regarding either their mission (core purpose) or vision (what you aspire to be) is at best running inefficiently and never reaching its potential. At worst, such an organization is a rudderless and uninspiring mess of profoundly underutilized human capital. A good real-life example of both a mission and a vision and how they should be different is shown in Exhibit 1.

EXHIBIT 1 (click on images to enlarge)

Note how a well-crafted vision literally describes the future organization you’re building, including culture, impact on customers and any defining characteristics that are critically important. One way to think about a vision is to think about what you’d want to be written in a case study article about your organization after it realizes its vision. One of the most interesting things about vision statements from many of the world’s most financially successful business enterprises is that they tend to focus little or not at all on financial aspects. Instead they focus on the defining characteristics of how they will meet the needs of their customers and how they will do it in a way that inspires the members of the organization. The lesson is that disciplined execution of such a vision paradoxically often leads to a license to print money.

There are two things that all truly great organizations seem to share in common. They have a crystal-clear image of the organization they are building and the image inspires and guides their member’s daily actions and behavior. This is as true of the best neighborhood pizza joints as it is for the best-run companies in the Fortune 500.

There are two main reasons for this common trait in the best organizations. The easy one is that the efforts of organization members can only be aligned for optimum impact and results if they are all on the same page about what they’re trying to build. From the very beginning, Steve Jobs and Steve Wozniak had a vision that young children would be using their computers to facilitate learning and adventure and that school systems would prefer their computers over all others. This vision drove everything from the design of their machines to their core market strategies. Apple fully realized this lofty vision and has long since defined a series of new horizons to drive the organization.

The second main reason that all great organizations share this trait is because all other things being equal, inspired organizations beat the daylights out of uninspired organizations. Organizations that lack an inspiring vision are like an automobile running on fuel with insufficient octane. Sure, your people may be “getting the job done” for the most part (like a car that can get you from point A to Point B, but they will not demonstrate the human acceleration they are capable of or be able to perform at their best. This is because we don’t even get near our potential unless we’re inspired to give our best effort.

Which of the vision statements in Exhibit 2 (below) would inspire you to give more of yourself?

EXHIBIT 2 (click on images to enlarge)

Vision A

Vision B

A vision that truly represents what an organization’s leadership is passionate about building can be an incredibly powerful mechanism for engaging and inspiring all members of an organization. However, most vision statements aren’t worth the paper they’re printed on because they only represent an exercise in crafting pretty paragraphs that a leadership team thought would sound good. By this I mean that typically a vision statement is developed, printed and perhaps even framed and posted throughout the organization…and then…everybody gets back to business as usual and rarely if ever thinks again about what the words represent. Organizations that go about it this way (which is most organizations) would be better off not having developed the vision statement at all. At least then they wouldn’t be guilty of grandiose statements that they have no intent to commit themselves to. The world doesn’t need any more of this. On the other hand, the world would benefit greatly from more organizations clearly defining a genuinely uplifting vision and then relentlessly and proudly driving towards its realization.

How an organization’s members behave on a day-to-day basis profoundly affects an organization’s bottom-line results. One of the biggest mistakes I commonly see leaders make is to vastly underestimate the negative impact that results from either not having clear behavioral standards or from a failure to hold organization members accountable for established standards of behavior.

I’m not talking about obvious bottom-line behaviors such as “sell as many cars as you can” or “produce as many widgets as you can.” Those are the easy ones to keep everybody focused on. I’m talking about the behaviors that many organizations pay mostly lip service to despite the fact that the sum of these behaviors is one of the critical differences between great organizations and their lesser counterparts.

Which behaviors am I talking about? I’m talking about flight attendants who don’t greet boarding passengers when they make eye contact with them. Or organization members who work on unrelated items on their laptops or BlackBerrys during face-to-face team meetings while important presentations are being made. Or organization members who frequently fail to respond to important e-mails in a timely manner. Or an auto repair shop owner who promises a customer that if he brings his car back the next morning he’ll personally check it out but immediately hands it over to someone else when you return and doesn’t even mention his promise (this happened to me a few weeks ago and it silently obliterated this guy’s credibility with me). I’m talking about organization members who routinely behave rudely or unethically without being held accountable because they produce excellent results in one or more coveted areas.

Why do these types of day-to-day behaviors matter so much? It’s because they impact an organization’s bottom-line as much as the obvious bottom-line oriented behaviors do. Consider what happens when a “bad apple” star professional athlete is allowed by organization leadership to pretty much do as he wishes as long as he produces a certain level of quantitative results. The organization strikes a proverbial deal with the devil. The organization might get short-term gratification in terms of fan attendance and team wins but they’re going to pay the piper in a myriad of bottom-line ways that usually don’t show up right away but instead grow like an invisible cancer until the organization is quite sick.

For example, many organizations lose some of their best people over time because the really good ones are much more likely to decide they don’t want to be part of an organization that condones bad behavior. Organizations that allow bad behavior aren’t credible. They are like parents trying to teach their children to do things that they don’t role-model themselves. Organizations that allow bad behavior are always inefficient. This is so because of the background “noise” they suffer from. It’s human nature that bad behavior will be talked about and it will upset people and it will cause conflicts and it will erode focus from the things organization members should be focused on.

The Dallas Cowboys football franchise recently cut ties with their highest profile player because they finally realized (after he almost single handedly killed team chemistry and effectiveness) that they could never be a championship franchise with the cancer this player’s behavior created. After the Cowboys announced the decision, at least one commentator asserted that now the Cowboys quarterback could simply focus on making the right play vs. having to always worry about keeping his prima donna former receiver happy to avoid another distracting tantrum.

Some magnitude of this tale is being played out in countless organizations in all types of industries as I write this. So what’s the cure for this cancer? Like so many crucial leadership issues the cure can be spelled out fairly simply but administering it requires a level of courage, consistency and candor that most leaders don’t have the capability and/or willingness to demonstrate. For those who dare, the following four steps kill the cancer and build a strong organizational immune system:

1. Determine which day-to-day behaviors are the most critical in support of your defined mission & vision (this requires that your organization has a clearly defined mission & vision and that the organization is focused on executing the mission and driving towards the vision)
   1. These behaviors become “standards” that all organization members understand
   2. Keep the set of standards to the minimum necessary (6-10 is a good range to aim for)
   3. These standards should be “observable” behaviors NOT values such as “honesty” (refer to exhibit 1 for an example set of actual behavioral standards from one of our clients).

      EXHIBIT 1 (click on image to enlarge)

      

      
      

2. Engage and educate ALL organization members regarding the standards
   1. This isn’t a one-time event but an ongoing process that never ends
   2. The organizations that do this the best make this a visible, dynamic part of how they run their organization (think Disney theme parks)
3. Be “constructively intolerant” of variances to the established standards
   1. When an organization member falls short of a standard, address it EVERY TIME, as close to real-time as feasible.
   2. This could range from a low-key but specific coaching dialogue to a documented counseling session or whatever is appropriate to ensure organization members are accountable for behaving in accordance with the standards that have been determined to be critical to the organization’s success.
   3. Ultimately, there must be significant negative consequences for those who repeatedly behave in conflict with any of the behavioral standards, even after appropriate coaching and counseling
4. Tangibly demonstrate that those who best behave in accordance with the behavioral standards are ultimately rewarded for doing so
   1. This can show up in a myriad of ways, from public feedback to performance appraisal ratings to promotions and compensation levels
   2. Provide frequent on-going positive feedback, both publicly and privately, to those who are behaving in accordance with the behavioral standards (make it specific and as real-time as feasible)