Why do so many companies find they’re unable to grow fast enough? We believe it’s because they neglect execution – the most important of the four major decision areas (strategy, people, cash and execution) discussed in Verne Harnish’s book Scaling Up:How a Few Companies Make It…and Why the Rest Don’t.
Everyone understands the need for a strategy – what you’re intending to do and how you’re going to do it. It’s also reasonably clear what type of people you need to recruit and how much cash you’ll need to execute your plans. But when it comes to getting things done, many companies lack the discipline needed to keep on track of execution plans.
Success for all employees
Entrepreneurs work long hours and expect their employees to do the same. But execution isn’t just a question of everybody working harder and more effectively. Why should employees, who have no ownership of a business work hard to make the owner rich? In the Western world, people are motivated to work if they feel they’re doing something useful, and can do it well. The entrepreneur’s job is to create an environment where everybody is self motivated and can be successful. This goes to the heart of execution.
The execution planning process will begin at a high level with objectives in the business plan and then ripple down to objectives for each department, team and individual. It’s important to decide who is accountable for key activities, such as sales, marketing and product development. If everyone knows who is responsible for what, fewer interactions will be needed between departments. Keep in mind that every interaction will slow things down.
Split long-term and short-term activities
Split jobs according to whether they are long-term or short-term activities. It’s not a good idea to give somebody responsibility for long-term and short-term tasks, as they’ll probably do neither well.
Software development tends to be long-term (measured in months/sometimes years) and you wouldn’t expect a software developer to also be responsible for generating sales, which is a short-term activity (measured in days/weeks). Raising cash takes several months and executing a business plan requires quarters/years to progress.
Sequence meetings
Organize regular management meetings to cover the main areas of your business with appropriate frequency. The schedule and structure of meetings will reflect the rhythm of business life and need careful planning.
For many software and internet businesses the following works well:
- Weekly or daily meetings to review sales and operational delivery for the current week/month.
- Monthly meetings to review financial performance and agree corrective actions
- Quarterly meetings to review progress against quarterly planning goals and external market events that affect strategy.
- Annual business planning meetings to reflect on progress and to set goals, resources and budgets for the next year.
Stick to the agenda
At Vie Carratt we believe it’s better to focus on short-term issues, with daily or weekly meetings to discuss what you want to achieve operationally. This is why we recommend holding strategy reviews quarterly. To have a balanced perspective on your business strategy you’ll need time to reflect on company and industry news. Don’t overreact to individual events, such as winning or losing a client, as you’ll draw the wrong conclusions. Quarterly reviews will mean everyone sees the bigger picture.
Keep daily and weekly meetings short – i.e. ten minutes. As a consequence, it’s important to start on time. A great trick is to schedule meetings for 8.57am instead of 9am. If you’re going to as precise as 8.57 – 8.58 is late!
A lot of CEOs make the mistake of trying to schedule meetings when everybody can attend. The problem with this is meeting times start to shift to fit with peoples’ schedules. Nobody should be indispensible, it’s better for meetings to take place regularly. Only the relevant managers need to attend and if they can’t they should catch up later, including the CEO.
Make sure you stick to the agenda. You don’t want meetings where anyone can talk about anything. If there’s an issue involving only two people, suggest they discuss it outside the meeting. For example, finance and sales managers may want to discuss a tactical pricing issue.
Synchronize work
There’s no need to keep detailed minutes of meetings. Agree a few actions and share these via email as bullet points. The purpose of daily and weekly meetings should be to synchronize work and make sure any ambiguities are sorted out – conflicts quickly arise when you’re trying to do several things at the same time.
Execution takes discipline, but as soon as you get into the flow of regular meetings you’ll be able to make the most of opportunities and remove obstacles that prevent the rapid growth of your business.
If you missed our first article on “A structured approach to scaling up”, please click here.
Our next article will discuss strategy – let us know if you have any question!