Introduction to Ruthless Execution: How Business Leaders Manage Through Turbulent Times, 2nd Edition
This chapter is from the book
This chapter is from the book
This chapter is from the book
Ruthless Execution II
As was the case with the first edition of Ruthless, the strategies of ruthless execution are framed in three distinct categories that are already part and parcel of every executive’s daily life: leadership, critical capabilities, and governance. After a decade of turbulent times in which businesses faced down a great recession and made it through, we wanted to see whether the Ruthless concepts were still valid. Did companies who were able to weather the storm employ some of the same strategies? Were new approaches born in the process? Within each of these categories, a number of practices will be detailed throughout the book. What we’ve tried to do with the new edition is validate what still holds true more than a decade later and, more important, document what’s new or different from the previous strategies employed. There is no suggestion that engaging successfully in any one of these strategies automatically allows you to break through a performance wall. The idea is to point out the common ingredients and practices of business leaders who have figured out how to effectively manage through turbulent times.
Leadership
Leadership frames the specific actions that drive strategic recalibration from formulation to execution, and to a degree, the characteristics that business leaders need to overcome business reversals. The focus in the leadership category is on strategic formulation.
The key questions to answer for this category are as follows:
- What is important to your company? How do you fundamentally create value?
- What is your “return on strategy”? Are you effectively balancing between performance-oriented initiatives and growth efforts?
- Has a clear focus been defined and effectively communicated throughout the organization?
What has emerged in the past decade is that rather than this being an exercise that leaders do every three years as part of their long-range planning, today’s Ruthless leaders employ these concepts on an ongoing basis. The best organizations are continuously undergoing transformational efforts.
After developing necessary strategies, business leaders are ready for the actual recalibration process to occur. They must put in place a number of critical capabilities that are, in and of themselves, the very essence of recalibrating.
Critical Capabilities
Critical capabilities are the specific initiatives that executives must make part of the corporate DNA in order to survive the tectonic shifts in today’s markets. Critical capabilities are very action oriented. As was the case more than a decade ago, these critical capabilities include productivity management, talent management, and focused corporate transactions (mergers, acquisitions, and divestitures). However, two new critical capabilities have emerged: managing customer success and what we call the “cloudification” of business. It is through these critical capabilities that business leaders can leap over their competition and clear current performance hurdles.
The key questions to answer for this category are as follows:
- Are costs and productivity improvements in the DNA of the organization?
- How good are you at finding and getting rid of nonperformers?
- What business functions should you keep and which should you let go?
- What measurable value are your customers harvesting from your products/solutions?
- How is the cloud and Big Data changing the way you deliver value to customers?
Governance
Governance spells out the rules of the game; it deals with issues such as the way decisions get made and the discipline that leaders impose on their teams. Toward that end, leaders need to operate within the governance framework, with accountability, performance management, and discipline as the main strategic drivers for determining how to engage in the recalibration process.
The key questions to answer for this category are as follows:
- Do you have a disciplined process for allocating resources and spending capital?
- Do you use the right performance measures, and are you measuring the right things?
- Do you have a disciplined performance-management process in place?
- Are Big Data and the cloudification of business on the board’s agenda?
- Does the board meet regularly with customers to understand the value they are delivering?
Throughout this book, case studies will be used to illustrate a particular ruthless execution strategy. These studies show how the company in question has used one or more of the strategies to cope. We believe that you also can benefit by employing one strategy or another in your own efforts to manage through turbulent times and break through your performance walls.
Lastly, we introduce the Ruthless Execution Index. This index can serve as a “signpost” for business leaders who want to understand where they can improve their ruthless execution. We encourage you to revisit these practices on a regular basis.