Concluding article from the series written by Ron Wilder:
In this fourth article of a four part series, I'll focus on the necessity of leading learning within your organization.
As the leader of the business, you must help people learn the new behaviors that are required for success. It is not enough to devise a new business model or maintain a tight focus on execution. Even when the organization enthusiastically supports innovation in the business model, the people in the organization still need structure, support and time to adopt the new right behaviors. Recognizing and planning for these needs up front can greatly reduce your risks and can actually accelerate your transition to a new business model.
Consider this example. A non-profit arts organization was highly regarded as a leader in its community and was growing in stature nationally. They were quite successful as far as arts organizations go. The senior leadership aspired to a much bigger vision of bringing music to a larger and wider audience. They recruited an acclaimed artistic director and their performance quality was increasing. The organization was financially stable with a solid budget.
However, their approach to customers was still based on the traditional model followed by the vast majority of arts organizations. A marketing group was responsible for ticket sales or earned-income. A development group was responsible for generating philanthropic gifts, or contributed income.
This approach created some aggravating annoyances for customers. The same customer would get a call from marketing to sell tickets and separate call from development asking for gifts.
The leaders realized that their model of marketing and development approach wasn't necessarily broken. After all, it had worked for well for years and customers pretty much accepted it as the status quo. Yet to realize their much bigger vision, they realized they would need to break their business model and create a new one.
This new model was based on a concept called "lifetime patron relationships". Patrons would be developed in an integrated manner over a lifetime, from their very first exposure to the organization, through their first purchase of a ticket, through their first gift, to the point where they became significant sponsors or philanthropic partners. Traditional marketing and development functions would be dissolved and a new integrated patron services department would form. This concept generated a huge amount of excitement among everyone - key patrons, board members, and the staff members.
The elusive holy grail of "buy-in" had been achieved!
Fast forward about sixty days after the new business model concept got the go-ahead from the board. Anxiety was rampant among the middle management team, conflicts were heating up, and productivity was taking a huge dip.
At the root of these issues was behavior. The team was struggling to move from concept to concrete. They understood the concept of the business model. It made sense emotionally and intellectually. Yet they were struggling to translate this into the concrete reality of new behavior. These were some of their questions:
Who is actually going to do this work?
How are they going to do it?
What happens to the current work I'm responsible for?
How do I learn how to do this new work when I am still responsible for old work?
Once some of these "day in the life" realities were defined, the anxiety level went way down and the team was able to focus on productive work. The more the leadership shifted to providing structure and support for this learning process, the faster they got the results they wanted.
No matter what business you are in, it all comes down to learning new behavior. Whether you are a 1-person or 100,000 person organization, getting this figured out is essential to achieving results. Learning new behavior includes you!
Notice the difference in mindset between "leading change" and "leading learning". In a sense, they have the same goal of getting to new behavior. But what is the difference between a leader who "drives change" and a leader who "leads learning"?
As the leader of your organization, how well are you helping your people learn the behaviors required for success? If you're currently "driving change" and it's not working, maybe it's time to learn to "lead learning" instead.
Continuing with the Third Part from the four-part-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 leading learning to close the gap when the business model or execution is not where it needs to be. In this third article of a four part series, I'll outline the necessity of focusing on effective execution.
Wilbur Ross, the billionaire who invests in struggling companies and turns them around, once said "I'd rather back a mediocre idea that was brilliantly executed than a brilliant idea that was poorly executed."
While many of us would love to have a brilliant idea and business model (such as Google's), we'd be happy to just get decent execution. Consider this recent study:
Execution is the number one concern of CEOs. This number one concern is linked to their second, third, and fourth concerns: top-line growth, effective execution, and bottom line growth. Number five is finding and retaining qualified managerial talent (presumably to deliver on items one through four). (Source: Conference Board Survey, 2007)
Unfortunately, instead of complaining about execution, executives need to look in the mirror. Consider these findings:
In over half of organizations, employees do not understand the strategy of the company and senior management does not do an effective job of communicating the strategy. (Source: International Association of Business Communicators/Right Management Study)
The number one factor determining employee productivity and execution is the degree to which they understand the connection of their role to the strategy of the company. (Corporate Executive Board)
So let's put this all together:
If execution is the most important concern of CEOs, ...
And the most important factor determining employee execution is making a connection between the strategy and their role, ...
And senior management does a poor job of communicating the strategy...
Then who is ultimately responsible?
Often times, the senior leaders will complain that employees just don't get it. But if your employees consistently do not get what you are communicating about the strategy of the company, perhaps it is time to consider a new approach.
Execution is really about behavior.
As leaders and managers, we often refer to behavior in the workplace as the touchy-feely soft skills that helps create a positive work environment. Managers are sent to training courses to address negative behavior uncovered during 360-degree reviews. Behavior is often narrowly viewed in terms of interpersonal skills.
Yet in terms of our business model and execution, behavior covers all of the decisions and actions that our people do every day, and the manner in which they do them. The sum total of these local behaviors determines the global performance of the company and its success in execution.
These realities lead me to the second imperative of the effective executive:
As the leader of the business, your second imperative is to focus on effective execution -- you must make sure that the local behavior of all people in your organization is aligned to achieve global results.
Continuing with the next Part from the 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 leading learning to close the gap when the business model or execution is not where it needs to be. In this second article of a four part series, I'll outline the necessity of building the right business model.
While it may seem hard to imagine, Google is only ten years old as a company. Can you imagine life without Google or even remember the time "P.G." - Pre-Google? Today, Google has become a verb - it is not just a company, but it is something we do multiple times per day. We "Google" people to learn about them on the Internet and to search out all kinds of information on every subject under the sun. If you have installed a Google toolbar in your Internet browser, think about how ingrained Google has become to your daily life at home and at work. Google is now one of the most valuable brands on the planet.
What is behind Google's rise to power? Some would say that they developed an innovative technology for searching the Internet. True, but new technology by itself did not get Google where it is today.
Google's power lies in the power of its business model. By combining a technology innovation with a business model based on pay-per-click advertising, they have created tremendous wealth. In less than ten years, Google has grown from revenues of zero to over sixteen billion dollars. (Yes, that is billion, with a "b").
Google's impact has been so significant that all of the major technology companies are frantically reevaluating their strategy for how to compete. Even the mighty Microsoft spent the first part of 2008 attempting to purchase Yahoo! so that they could better compete in the changing environment. Yahoo!, which once dominated the Internet, is now struggling to adapt to the Google-dominated world. In roughly the same time span, Google's fortunes rose while Yahoo!'s fell.
But it is not just the technology giants who are impacted by Google. Google is using their power, reach, and financial muscle to innovate in cell phones, health care, and energy.
And this isn't just about big companies. This is about small businesses too. Google is impacting everyone's business. Think about how you search for products or services. Where do you go first? Now think about how your customers, prospects, employees, and investors find out about your company. By making information so instantly accessible, everyone is affected.
If you are a travel agent, a real estate agent, a financial planner, a chiropractor, a distributor of industrial parts, a life coach - you participate in a business ecosystem where changes by big players and new players impact your business. Think about how your customers find you and how you seek information. Google's impact on businesses of all types is immeasurable.
In the same ten year period of Google's rise, we have seen numerous other examples of business model shifts across industries:
The Apple iPod and iTunes music store have reshaped the music industry.
Traditional newspapers continue to see their audiences and classified advertising revenue vanish as online alternatives for news (blogs) and advertising (e.g. Craiglist, eBay) have emerged.
The network television model has changed dramatically due to developments such as reality TV shows (e.g. Survivor, American Idol), proliferation of cable channels, and digital video recorders like Tivo.
Blockbuster and other traditional video rental businesses have faced the new threat posed by Netflix, which completely shifts the nature of video rental.
The airlines and automakers have struggled to remain viable under the threat of rising oil prices, labor costs, and pension liabilities.
The business model for the entire financial sector of our economy is in question and it is not clear what will emerge.
Even if you think your business model is sound today, consider two recent studies on the rate of change that companies must deal with today:
In a 2004 cross-industry survey of senior executives conducted by Bain & Company, over 80% indicated that "the productive lives of their strategies were getting shorter" and over 70% said they expected to have significant new competitors within the next five years.
By 2020, the average lifespan of a corporation on the S&P 500 index will shorten to 10 years, down from 50 years in the 1950's as companies are created and destroyed more quickly. (Source: Creative Destruction, Richard Foster and Sarah Kaplan, 2001)
As the Google story and these studies suggest, no business is immune from change that will eventually threaten the core business. Even good business models eventually come under attack.
These realities lead me to the first imperative of the effective executive:
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 leading learning to close the gap when the business model or execution is not where it needs to be. In this second article of a four part series, I'll outline the necessity of building the right business model.
While it may seem hard to imagine, Google is only ten years old as a company. Can you imagine life without Google or even remember the time "P.G." - Pre-Google? Today, Google has become a verb - it is not just a company, but it is something we do multiple times per day. We "Google" people to learn about them on the Internet and to search out all kinds of information on every subject under the sun. If you have installed a Google toolbar in your Internet browser, think about how ingrained Google has become to your daily life at home and at work. Google is now one of the most valuable brands on the planet.
What is behind Google's rise to power? Some would say that they developed an innovative technology for searching the Internet. True, but new technology by itself did not get Google where it is today.
Google's power lies in the power of its business model. By combining a technology innovation with a business model based on pay-per-click advertising, they have created tremendous wealth. In less than ten years, Google has grown from revenues of zero to over sixteen billion dollars. (Yes, that is billion, with a "b").
Google's impact has been so significant that all of the major technology companies are frantically reevaluating their strategy for how to compete. Even the mighty Microsoft spent the first part of 2008 attempting to purchase Yahoo! so that they could better compete in the changing environment. Yahoo!, which once dominated the Internet, is now struggling to adapt to the Google-dominated world. In roughly the same time span, Google's fortunes rose while Yahoo!'s fell.
But it is not just the technology giants who are impacted by Google. Google is using their power, reach, and financial muscle to innovate in cell phones, health care, and energy.
And this isn't just about big companies. This is about small businesses too. Google is impacting everyone's business. Think about how you search for products or services. Where do you go first? Now think about how your customers, prospects, employees, and investors find out about your company. By making information so instantly accessible, everyone is affected.
If you are a travel agent, a real estate agent, a financial planner, a chiropractor, a distributor of industrial parts, a life coach - you participate in a business ecosystem where changes by big players and new players impact your business. Think about how your customers find you and how you seek information. Google's impact on businesses of all types is immeasurable.
In the same ten year period of Google's rise, we have seen numerous other examples of business model shifts across industries:
The Apple iPod and iTunes music store have reshaped the music industry.
Traditional newspapers continue to see their audiences and classified advertising revenue vanish as online alternatives for news (blogs) and advertising (e.g. Craiglist, eBay) have emerged.
The network television model has changed dramatically due to developments such as reality TV shows (e.g. Survivor, American Idol), proliferation of cable channels, and digital video recorders like Tivo.
Blockbuster and other traditional video rental businesses have faced the new threat posed by Netflix, which completely shifts the nature of video rental.
The airlines and automakers have struggled to remain viable under the threat of rising oil prices, labor costs, and pension liabilities.
The business model for the entire financial sector of our economy is in question and it is not clear what will emerge.
Even if you think your business model is sound today, consider two recent studies on the rate of change that companies must deal with today:
In a 2004 cross-industry survey of senior executives conducted by Bain & Company, over 80% indicated that "the productive lives of their strategies were getting shorter" and over 70% said they expected to have significant new competitors within the next five years.
By 2020, the average lifespan of a corporation on the S&P 500 index will shorten to 10 years, down from 50 years in the 1950's as companies are created and destroyed more quickly. (Source: Creative Destruction, Richard Foster and Sarah Kaplan, 2001)
As the Google story and these studies suggest, no business is immune from change that will eventually threaten the core business. Even good business models eventually come under attack.
These realities lead me to the first imperative of the effective executive:
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.
