Execution-the discipline of getting things done by Larry Bossidy and Ram Charan

Title: Execution-the discipline of getting things done by Larry Bossidy and Ram Charan

1. The people process
2. The strategy process
• Corporate level strategy is a vehicle for allocating resources among all of the business units
• It must add value to strategies created at the business unit level
• It defines the walls of a company-the business it wants to be in and the general arena of play
• It analyzes the mix of businesses and makes decisions about whether the mix should change in order to earn the best sustainable return on the company’s capital.

Building the strategic plan:
• Where it is now?
• Where it will be going in future?
• And how it will get there?
• What is the assessment of the external environment economic and demographic trends and regulatory shifts to new technologies, alliances between competitors, the drivers of increasing and decreasing demand for its products
• How well do you understand the existing customers and markets? If you have a new product? Who buys this product? Who specifies this product should be purchased? Understand the specific people who make the purchasing decisions and their buying behavior
• What is the best way to grow the business profitably, and what are the obstacles to growth? Market segment mapping
• Who is the competition?
• Can the business execute the strategy?
• Are the short and long term balanced? Anything, from customer preferences to cash flows, can change in mere moments. Balancing short run with the long run is a critical part of a strategic plan.
• What are the important milestones for executing the plan? A good strategic plan is adaptable
• What are the critical issues facing the business? Why can’t we achieve higher productivity? Why can’t we grow more rapidly? Why do we continue to have quality problem? How can we continue to grow our market?
• How will the business make money on a sustainable basis? Pricing at different levels of demand. Will the customer pay a premium for what you claim is a differentiation? Cost and cost structure now and in the future. Cash required for working capital. Actions required to ramp up revenue growth. The investment required to market the product. Continued investments in technologies to prepare for the next generation of product. Competitors’ pricing reactions.

Questions to raise at a strategy review:
• Is the plan plausible and realistic?
• Are people committed to it?
• How well versed is each business unit team about the competition?
o What are our competitors planning to do to serve their customer segments and prevent us from serving them?
o How good are their sales forces?
o What are our competitors doing to increase market share?
o How will they respond to our product offerings?
o What do we know about the background of our competition’s leadership?
o What do we know about the leader of a fierce competitor and his motivations, and what does that mean for us? ( if a competitor has heavy incentives to gain market share, his motivation could well be to prevent us from moving into that segment even if his profitability goes down. He may not sustain falling profitability for long, but it will block our entry)
o What acquisitions will our key competitors make that will affect us?
o Could a competitor form an alliance and attack our segment
o What new people have competitors added that could alter the competitive landscape?
• How strong is the organizational capability to execute the strategy?
o Do we have the sales force and sales engineers to win in the new market segments, or are they yesterday’s people?
o Do we know the technology and have a roadmap of how it will change over time?
o Do we have a cost structure that will allow us to compete profitably?
• Is the plan scattered or sharply focused?
o Is the plan too ambitious? What are our priorities to avoid fragmentation of effort?
o Is our leadership team taking on too many market segments simultaneously? Will it dilute our focus on our original market segment, to the extent that we could lose the golden goose that is to fund the new segments?
• Are we choosing the right ideas?
o Is this idea consistent with the realities of the market-place?
o Does it mesh with our organization’s capabilities?
o Are we pursuing more ideas than we can handle?
o Will the idea make money?
• Are the linkages with people and operations clear?
o If a new organizational structure is required, what new sales management skills will be needed?
o Are financial resources assigned in the next year’s budget to build whatever is required to launch entry into the new segment?
o What are the programs for each quarter? How will the programs be funded quarter by quarter? Will the need for quarterly profits squeeze out these programs?
o Do you have the right kinds and numbers of people to do these things?
o Have you allotted enough lead time for the required actions?

3. The operations process
• Create an operating plan that has quarter –by-quarter action steps
• Debate on assumptions. People bring their assumptions to negotiations through the lenses of their functions and their position. For example, a production man wants to have the lowest possible costs, so he wants to build the maximum amount of product and have a stable production level. The sales leader likes the idea of having lots of product too; the more she has on the shelf, the better chance she has of making a sale. The finance officer is saying “wait a min, I don’t see thins kind of growth in the economy. We’ll wind up with a ton of inventory, which will cut into our cash. Then we’ll have to discount it and spend a lot of extra promotion money to get rid of it.”
• Who is the customer? How does he buy it and why? What’s the need? How long will the need last? What is the competition doing? Is your value proposition good enough? How will your competitors react to your moves? Will they change their pricing? What do you know about their company product introductions? Will one of them launch a marketing campaign to muscle deeper into your territory? Your suppliers: will they be able to deliver enough, just in time at the right prices? If they’re in other countries, what will currency fluctuations do to your costs?