A department manager in a struggling company recently summed up what’s wrong with many organizations.
Contemplating his firm’s abysmal performance, he told me: “We have lots of projects, goals and priorities. We’re constantly making lists and setting action plans. But we seldom see anything through to completion before some urgent new priority is pushed at us.”
His division manager, he said, is “like a nervous water bug that flits from one half-baked strategy to another.”
Faltering organizations are often beehives of activity and hard work that generate little practical return. Managers confuse “busy work” with results. They are like pilots who say “we’re lost, but we’re making great time.”
This is a critical leadership issue for the 1990’s, says Larry Huston, total quality manager in Procter and Gamble Co.’s worldwide research and development program. He argues that the decade’s successful business leaders will be those who can:
Define one or two key competitive themes;
Effectively focus scarce resources to carry them out.
“What will ultimately separate the winners from the losers will be the ability to execute,” Mr. Huston says.
One key to developing the needed focus is to have a company’s leaders set out “strategic imperatives” – the things that must get done. These are the vital few objectives, usually 12- to 18-month projects, that can catapult the organization toward its long-term goals.
Among the vital key steps in realizing these imperatives:
Narrow the must-do list to three or four things. A long laundry list of urgent goals diffuses focus, spawns unproductive work and provides enough bureaucratic cover to justify pet projects or protect turf.
Make your imperatives measurable. The clearer the target, the surer the aim. “Improving customer satisfaction,” “re-engineering key processes,” or “changing the culture” show up on every organization’s wish list. Setting concrete goals turns this rhetoric into reality.
Focus all key systems and processes on this handful of imperatives. Training, measurement, information systems, human resource systems and other resource-intensive activities must pass the value-added test: Does this work help or hinder these goals?
Ensure that the objectives of any improvement team serve the imperatives. Too many teams waste time and effort making improvements that don’t really matter. Concentrate precious resources on vital leverage points.
Such unwavering focus does pay off. Since 1956, Emerson Electric Co. – a maker of power tools, compressors, instruments and electric motors – has produced an average annual return to investors of 19.1 percent.
Emerson does it by managing the basics. It develops annual financial targets and identifies key strategies to meet them. At the moment, it is focusing on four areas: total quality; thorough knowledge of competitors and their costs; manufacturing effectiveness; and capital spending on plant and technology.
“A corporation has to work to have a simple plan, simple communications and simple organization,” chief executive Charles Knight says. “It takes real discipline to keep things simple.”