You can listen to our conversation here.
Gary Harpst and his books and consulting practice at Six Disciplines offer proven solutions to one of the greatest challenges for any business. That challenge is execution.
In 2004, Gary published Six Disciplines for Excellence: Building Small Business That Learn, Lead and Last, which became an award-winning handbook for continual business performance improvement.
He published a 2nd book, Six Disciplines Execution Revolution, in 2008.
I have read both of his books. They are outstanding. They are perfect for small to medium sized businesses looking for the tools and the methodologies and the plan to use them together to create a disciplined, engaged, consistent execution of their strategy.
Gary, how are you? What are you doing?
These times are challenging. We're focused on how do we build great teams of people who can continue sustain their vision and growth all the while the world around 'em is changing.
Lets talk about your book. Six Discipline’s Execution Revolution: Solving the one problem that makes solving all other problems easier.I don’t see you as a firebrand renegade. Maybe that makes you more dangerous. But in your book you’re inciting a revolution. Why does business need a revolution in how it tackles execution.
Well, I think revolution may be an overused term. The reason I think of this is a revolution is I see it as a sea change of how businesses should run their business.
I cited the story of India and how when we were laying land lines for phones, lines for cable TV and paving roads India didn’t have that ability to do that. And now all of a sudden India has skipped over all that and now has jumped to the latest technology. They’re the most advanced wireless country in the world. Every once in awhile being later in the cycle gives you great advantage.The revolution opportunity for small business is to take many of the techniques big business has been perfecting for 50 years and see small businesses do what India did and go from last to first.
Next week’s guest is Erika Andersen. She coined the phrase reasonable aspiration or hoped for future. What was your reasonable aspiration 2-3 years ago for writing Six Disciplines Execution Revolution?
The idea goes back farther than 2 or 3 years when the book was crafted.
We sold a business, Solomon Software, and I was speaking at business conference. And the whole topic was how to build better practices. And I asked someone how they liked what was being said here. And, one gentleman said all that was being said was great. But 2-3 years from now he won’t be doing any of this.
The thing that went around in my mind seems like there’s this pattern we get some good input, we recognize it's good input, but we don’t stick to it, we don’t follow through on it. That became the nucleus for 6 Disciplines corporation and researching why organizations don’t follow through on what they know is important.
The first was written as a quick read because CEO’s won't read big, thick books, and the purpose was to penetrate the mind of a CEO to make them aware of what was emerging in business because if they don’t they’re going to get run over by these changes.
For whom did you write Execution Revolution? Describe the reader in your mind as you wrote this book three years ago.
We did quite a lot of research, some focus group work, and ultimately some quantitative research. We ranked organizations based on their performance relative to their competitors and we saw the top performers in every industry were the early adoptors of something like this.
By something like this we mean the businesses who are preparing for tomorrow and not just putting out today’s fires.
The organizations most successful today are the ones with the bandwidth at the top to be thinking farther ahead. If you’re attention is on putting out fires you can’t look to long-term fitness. We use the analogy of it’s a poor time to go on an exercise program when you’re having a heart attack in the emergency room.
We believe this will become a mainstream concept. But we have to validate it first with CEOs who get it. They see the value of making short-term investments that will produce long term results.
Are you finding CEOs who get it?
Yes! We do have to sort through. But we are finding them and they are excellent partners.
We have to find the right CEO. But the very next question after they see the vision for what should be changed is how to get the rest of their team to see this vision. The biggest concern is that they don't come in with a new program that won't last.
Every CEO I know, including me, has gone on to events, conferences, hired consultants and a year later are not doing anything about it.
If we bring it in here, it has got to work.
As a leader your integrity is on the line with a new initiative especially if you’ve done it 3-4 times before.
There’s been a bit of turmoil in the 2 years since you published that book. In 2008 we were beginning to crest on that bubble. Has your audience since then changed much?
We’ve seen different things go on since then. In different parts of the country there is different types of turmoil. In Florida we saw turmoil start in the residential real estate markets and then spread into the commercial markets and then into the whole economy.
They go through the cycle of wondering if this will effect them. And then they see it is effecting them and they wonder if they'll survive. Then they see they can survive so now they ask: Ok, now how do I thrive?
It’s an interesting thing to see as diff industries are having different experiences.
You write that all revolutions are based on a core set of ideas. What are the three core premises for your book?
The first one is the most significant. If you talk to most business leaders and ask what their biggest problem is they will give you an answer that’s not their biggest problem. As President of Solomon Software I saw we worked with 60,000 organizations around the globe. Our channel of distribution was 1000 partners that were small and midsized organizations. I’ve been immersed in this market for 30 years.
As CEOs we all fall into the habit of seeing the problem ahead of as the most important. The real problem is that we will always have new problems. And a different one after that, and a different one after that. The real problem is not the problem in front of us but it's building an organization that recognize there’s going to be a another problem and another problem after that and how do we build an organization that is increasing in its capacity to solve the future problems.
This first point is the biggest aha that needs to get through to CEOs. If you are growing your business and executing well your problems will get bigger. Because execution drives growth and growth creates bigger problems. And until you learn to manage with the idea that you will have bigger problems next year you will never build an organization that’s predictable.
The first premise of this book is we don't understand what our biggest challenge is.
The 2nd one is that there is one problem if you solved makes solving all the others easier. I stole this from Holman Jenkins a WSJ writer. That’s what execution revolution is all about. It’s about organizations coming to grips with the idea they have 2 products. You're building two things: A machine to build your widgets and the widgets, themselves. Solving the one problem that makes solving all other easier is focusing on crafting strategy and executing it .The 3rd premise is that every once in awhile we reach a market where technology and expertise can be assembled in a new approach. Ford didn’t invent the industrial age. It had been around for 100 years when he created his first car. So you had a whole series of Technologies emerging for a 100 years and all of a sudden Henry Ford comes along with the idea to put a combustible engine on a frame and add rubber tires... he figured out how to integrate all these pieces into making cars.
100 years in the making but it was sprung upon America quickly.
What’s the analogy with business execution? We've been working on things for the past 30 years. Our country was working with Baldridge and Deming was working in Japan from the '50's, Baldridge service awards, PC, internet, better hardware, technologies, executive coaching can have value...the 3rd premise is we can put all these pieces together in ways they have never been assembled and for a fraction of the cost...transform organizations.
And those leader who recognizes this early. If you don't learn to transform your organization you won't exist as an organization.There’s one area I didn’t mention. Businesses throw technology at problems. All the other things have to be wrapped around the technology. Tech is an ingredient in the solution; it’s not a solution.
What are the conditions now that are so different than in 2008. What are the conditions now that make your book and your solutions so more ideal now?
There’s kinda 2 or 3 categories of business and I'll focus on the last two.
1. Those in trouble and trying to manage their way out of it.In the first case, organizations don’t know how to re-size themselves or cut costs. Many times you are trying to stop the hemorrhaging of cash. That usually is about cutting people. What we find is a much better way to reorganize is to ask yourself what do you need to be good at. Then ask yourself how you spend your time, how people are spending their time, in the organization. Then you identify the time that’s being mis-allocated.2. Those whose bleeding has stopped and they are trying now to resume growth.
What it results in is doing undue damage to the organization as opposed to really identifying the most important activity you should be doing.
We strongly encourage:
- Identify the core business.
- Re-source your assets accordingly.
- Form a team built on growing the business, 100% of their time.
Divide the group in 2. Sustaining and Growing. Both focused 100%. You have much clearer responsibility.
Whether you’re in good times or bad you have to answer certain questions, over and over, otherwise you lose focus. You can divide the 6 disciplines into two categories.
- Getting everyone on the same page.
- Then going there.
- Getting everyone on the same page is very difficult in crisis. Our process works very well in that crisis mode as it gets everyone on the same page and gets focus.
What motivates the human heart is knowing what I’m doing is important. The group that is running the business gets more purpose out of what they are doing as they’re creating the capital and the opportunity for the other group to focus on the future.
29:44
We focus a lot on human nature. Motivation comes from purpose. This transforming a business is all about communicating vision for what each person’s role on a team is...
What’s in it for business? Why should they care about improving their execution? If more businesses understand what’s in it for them, then they’d join the revolution.
You can answer this on multiple levels.
- For the CEO It’s a whole lot more fun to run a business that works.
- For a business, a business that is predictable is worth tremendously more than a business that is not predictable.
Research found 4 factors that predict almost 90% of what someone will pay. The first three were what you'd expect:
- Investing in R& D for the future,
- Growth trend,
- Return on equity and how the management team has deployed capital,
But the 4th one was more of an influence than all the others put together. And it was:
- how predictable has this business been.
3% of businesses in the US are in a balanced mode where profitability and growth are strong. It was a study published by the Small Business Administration. This 3% took on average 17 years to reach this high performance stage. But, once they reached this high performance stage, 3 out of 4 of these high performance companies fell out after about 4 years.
My own experience says I could have kept businesses I’d run in the past in the High performance mode if I knew what I know now.
We can strengthen our economy if we can get these 3% to 4%. Then we can grow our economy.
It’s one bright spot for America. We see rapid growth in China and India. But America’s well-positioned to execute this business revolution as we’ve been longer and farther down this road in the Information Age and so more of these pieces are at critical mass in the US. We’re at a better position than any other economy in this world to make this transformation. We're in a better position to use these pieces to make this transformation and move that 3% to 4%.
What are these 4 quadrants of business excellence?
Upper left corner is the growth corner. I’ll jump to to the lower right corner. You cease to grow and you want to focus on profits. It's not a growth focus, it's an execution focus. The firefighting quadrant is the one where you have weak growth and weak execution. You’re in react mode. Quadrant two, the balanced quadrant is where that high performance company has strong growth and strong profit.
All businesses go through these. If we put in place those 6 disciplines we can do a better job and stay in Quadrant two.
Let’s talk about the quadrant with Strong Execution/Weak Strategy. You describe this as Sales slow down, profits decline and the company focuses on efficiencies and cost savings. That’s a mature company in a mature market. Their cash-cow is tipping over and they’re trying to prop it up.
What’s wrong with focusing on efficiencies and cost savings? That’s the only opportunities left in their market.
One time as a young CEO at Solomon, we won a PC magazine award and in 90 days our business grew 250%. Overnight I had all the growth I could handle. And now I had to drop down to execution: phone lines, training, hiring. We spent a couple of years building the infrastructure to handle this growth. And once we did we found we no longer were growing.
My point is that there’s nothing wrong with milking the cash cow if you can think of your business in 2 parts. You have to think about your business as a portfolio. Here’s the part that's in execution mode. Here's the part in the growth mode. And if you don't do the milking the cow mode you won't be able to do the growth mode.
There’s a lot of infrastructure and careers with perks, privilege, pay and power tied to the existing infrastructure. How does a business leader address those entrenched incentives in order to create a new, strong strategy?
One of the things we noticed about the top quartile companies was the strength of their leadership. People go where their leaders are walking, not where they are talking.
It takes real leadership to get people in the room and involve them in being honest with the choices they have. Whether you involve people, tell them the facts or cover them up and try to hide things.
Our processes help build in to the organization the openness and candor that helps make these decisions and build trust.
With that kind of honesty you can change an organization. Without that trust you can’t change.
Our process develops leadership on 4 levels:
- Executives
- Team Leaders
- Departments and how to interact, build best practices, hiring and firing.
- Individuals and to manage their own career.
Which people have demonstrated their ability to lead themselves. Those are the ones ready to lead others.
This becomes a huge factor that you have this leadership factor going on all the time thorough the organization.
You gotta be preparing those leaders today.
Our guest a few weeks ago was Michael Johnson, from Innosight. he wrote a great book titled Seizing the White Space He had consulted with Singapore on their policies to encourage innovation. By coincidence they take our lunch money when it comes to being innovative, generating jobs, having a strong economy. Do we need a national policy on strategy development or business execution?
I’m not a big believer in top down leadership on things like that. I’m more of a "Prove it in the front line and the ideas will catch fire. "
Skip and I love social media. We might share this irony. That’s as more ‘conversation’ takes place with these tools there’s the greater illusion that communication has taken place. I’m paraphrasing George Bernard Shaw quote in your book.
Is social media building a Tower of Babel?
I think it remains to be seen. I think what is doing is allowing like-minded people to associate and develop synergy.
I’m a student of the Bible. There’s something very interesting in the story of The Tow. There’s a hidden agenda. If I hadn’t scrambled their language there is nothing they couldn’t do. To do that you have to be able to communicate and get on the same page.
I don’t think we’re building a Tower of Bable. It may look like it. I think it will mature and settle into the pools of communication that brings value.
Social media democratizes organizations. You can see it with the elections in Tehran.
You spend a chapter talking about community and community learning. Why’s that so important?
There’s this principle of compounding going on. You get like minded people together.
Weight Watchers has 4 steps to their success. Those that take all 4 steps are wildly more successful than those who take 2 or 3 of the steps. A huge part of their business has to do with the sharing of information.
Looking to the horizon, what’s the biggest trend in business execution you see coming?
There’s more and more discussion about execution. To get this into the mainstream that execution is our biggest challenge. They have to have a formal program to address execution consciously.Jim Rohn is quoted as having said Leaders are readers. You’re a leader. What are you reading?
I really like books that help me understand the human side of business.
- The 5th Discipline: The Art and Practice of the Learning Organization by Peter Senge. He talks about the human condition and how you build learning organizations.
- The Strategy Focused Organization, Kaplan & Norton
Thanks, Gary!
Find Gary Harpst on the web:
* Gary Harpst website
* Six Disciplines corporate website
* Six Disciplines blog
Comments