The Three Imperatives of the Effective Executive…Part I of IV

Series written by Ron Wilder:

What does an effective executive do? In my experience, effectiveness as an executive comes down to doing three things well: building the right business model, executing it, and rapidly learning how to close the gap when the business model or execution is not where it needs to be. (In this first article of a four part series, I'll outline the case for the three imperatives. In the next three articles, I'll explore each imperative in more depth.)

There is a phase of my career I like to describe as the tale of two start-ups. An opportunity presented itself for me to leave the consulting firm I was with to join a new start-up in a business development role, working for one of the partners who had been a great mentor to me. I jumped at the chance. In just eighteen months, this company grew to millions of users, acquired and integrated its biggest direct competitor and then sold the company to a major player. It was a whirlwind and a win-win all around. We created a great service that still is widely used today. Along the way, we also created a lot of value for investors, including all of the employees.

After the first company acquisition, I stayed for about six months before another start-up opportunity presented itself. The first start-up experience was terrific, so I was ready to roll the dice again.

Only the second time did not have the same outcome. Instead, it was an extremely frustrating and disappointing experience. The product concept for the company promised to create significant value, yet this concept did not translate into real customers, revenues, and profits. The company struggled to adapt and the outcome was frustrating and disappointing for all involved. After a couple of years of trying to make a difference in the outcome, I decided to leave the company and start my own consulting practice.

I found myself reflecting on the vastly different experiences of these two-start ups. At the time I joined each company, both companies looked good on paper. Big market opportunities, differentiated products, solid technology, and great people. Yet one succeeded and the other did not. What made the difference?

When I considered these two companies and the numerous other companies I had encountered in my work, I boiled it down to one critical factor: the effectiveness of the executive team. Specifically, how effectively could the executive team, led by the CEO, identify the right opportunity, craft the right business model and strategy to capitalize on the opportunity, build the right team of people to execute, and then actually do it?

Since those two start-up experiences, I have had the opportunity to work with many executives in different companies - large/small, high-tech/low-tech, for-profit/non-profit, public/private. I have observed many executives in many situations. The best executives I have had the privilege of working with seem to consistently hold three questions in their mind:

• Do we have the right business model?
• Are we executing effectively?
• If not, what is the single most important thing to focus on to positively impact questions 1 or 2? Once they figure this out, they rapidly learn what the need to learn to get there.

These three questions form the basis for what I call "The Three Imperatives of the Effective Executive". Imperatives are those things which are essential and urgent. In other words, they are your "must-do's" to be effective as an executive.

Imperatives are ultimately about behavior. At the end of the day, it all comes down to behavior. In real estate, the three most important factors are "Location, location, location." For business leaders, a similar mantra applies -- "Behavior, behavior, behavior!"

The three imperatives of the effective executive are:

Executive Imperative Number 1: Building the right business model.

As the leader of the business, your first imperative is to make sure that you have the right business model to survive and thrive in a constantly changing environment. Even if your business model works today, you cannot operate as if your business model will work indefinitely. You must prepare yourself and your organization to shift your business model before it becomes necessary.

Executive Imperative Number 2: Execution.

As the leader of the business, you must make sure that the local behavior of all people in your organization is aligned to achieve global results.

Executive Imperative Number 3: Leading Learning.

As the leader of the business, you must help people learn the new behaviors that are required for success.

How well are you doing on these three imperatives? Do you have the right business model? How well are you executing? If not, do you know what to do about it and are you doing it?