Ram Charan is one of the leading management consultants in the world. He is the author of six books, most recently, What the Customer really Wants to Know (Portfolio Books, 2007). One of his books, co-authored with Larry Bossidy, is Execution: The Discipline of Getting Things Done. More than one million copies have been sold and it is one of the best-selling business books of all time. Ivey Business Journal interviewed Ram Charan in Toronto, where he recently spoke at the annual meeting of the Human Resources Professional Association of Ontario.
IBJ: It’s now more than five years since you wrote what is considered to be “the” book on execution. Is it still as important as it was when you wrote the book?
RC: Execution is the great unaddressed issue In business today. Too many leaders today still place too great an emphasis on high-level strategy, on intellectualizing and philosophizing, and not enough on implementation. The fact is that the real difference between a company and its competitor is the ability to execute. So if your competitor is executing better than you they’re also beating you. They’re winning. I see that a lot today.
IBJ: In your book on execution, you say that many people equate execution with tactics. You also say that’s wrong. Why?
RC: Execution is a discipline and a system, it’s not only tactics. It must be built in to a company’s culture, strategy and goals. It’s a leader’s most important job. But many leaders today don’t do that. They spend time learning and deploying the latest management techniques. Execution is a discipline of its own, and today it is the critical discipline for business success.
IBJ: What are the essential building blocks of execution?
RC: There are two building blocks. One is a leader’s behavior and by that I mean a leader must do seven things. He or she must know their people and the business; they must insist on realism; they must set clear goals and priorities; they must follow through; they must reward the doers; they must expand people’s capabilities, and they must know who they are. The latter essential means character or what we call in the book “emotional fortitude. These behaviours are very important because a leader’s behaviour is the organization’s behaviour.
The second building block of execution is a leader’s ability to create the framework for cultural change. We call this the social software of execution. By “social software” we mean a company’s values, beliefs and norms of behaviour, such as the way meetings are conducted and the way that decisions are made. Ideally, robust and frank discussion is a vital part of both of these.
IBJ: How does having the right people in the right places also help organizations execute?
RC: Leaders need to pick people who have the right skills for the job. Often, leaders pick people with whom they are comfortable, though these people are not the right fit for the job. As we point out in the book, 40 percent of a leader’s time and emotional energy should be devoted to selecting, appraising and developing people. How good is a person at getting things done? If you want to build a company that executes well, you have to choose the doer.
IBJ: How much of the problem that some Wall Street firms are now experiencing is due to poor execution?
RC: The problems of these firms is attributable to one thing…they did not have enough understanding of the products they were creating, derivatives. Poor execution had nothing to do with it.
IBJ: What companies today are getting execution right?
RC: General Electric, Toyota, Honeywell.