Ray Attiyah, Founder & CIO, Chief Innovation Officer

Growth & success is best seen by those who embraced RIG before challenging times.

Life often shows us how foundational problems tend to surface during challenging times– both in our personal and business lives.  Foundational problems are those that have been a problem from the beginning, but are either not visible to everyone or are ignored until they cause major disruptions.  At the office, unnecessary overhead costs and the inability of managers to execute on important initiatives due to daily problems are two symptoms of foundational problems that become more evident during declining periods.  These two symptoms are interconnected given they both reflect on organization’s performance in three areas:

1. Designing growth-minded management systems
2. Communicating high expectations for their team to flawlessly execute without management
3. Building robust and bulletproof execution and improvement processes.

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During challenging times, more pressure is placed on financial results which lead to reviewing overhead and their effectiveness.  When many organizations review what their managers are doing, they realize rather than working to introduce new offerings and products or implement the right improvements, they are spending more time than they should on daily responsibilities.  This leads to questioning the effectiveness of their front line leaders.   

After analyzing hundreds of improvement strategies from many of the best organizations & leaders  over the years, the analysis shows too much time from senior managers is involved in leading and initiating the improvements.  These organizations are proud of their improvements and success.  However, to be clear, what is needed is the standard of not only what improvements need to be realized, but how these improvements need to be executed.  During challenging times, senior leaders need to focus on growth, the external market environment, and innovation to maintain their relevancy, margins, and strategic position.  Therefore, a higher improvement standard that drives innovation is needed.  During challenging times, innovation becomes more valuable.  Despite the fact that most people agree with innovating, innovation is difficult when there is no crisis.  One way to innovate in any situation is to change this standard of “what is good” and challenge your group to ask “what’s next?” during good times.

In reaching these higher standards, Leaders have focused more on GROW rather than IMPROVE while their managers needed to be focused on IMPROVE rather than RUN.  Many of the organizations that I have worked with now establish Run-Improve-Grow expectations in their job descriptions.  Some include them on their organizational charts.  Some even measure their leadership time each week to ensure they are “adding value”.  Why wouldn’t you measure the productivity of your leadership team?  Do you only expect your front line to be measured?  I am proud of these leaders who inspired their organizations to fully utilize Run-Improve-Grow™ over the past 10 years.  Not only have they realized sustainable improvement results, but they have also created a competitive advantage to gain market share.  This is a proven management tool for raising the standard and expectations for any organization.  

Just imagine where you would be had you implemented Run-Improve-Grow™ 10 years ago too.  How much more predictable and more in your control would your business life be?  How would this business life affect your personal life too?  It’s not too late for others to realize the power of Run-Improve-Grow™.

© 2010 Definity Partners, LLC. All rights reserved.

Seemingly minor issues that you thought were resolved can re-emerge and morph into critical liabilities for organizations.  These are especially problematic during major changes in business cycles such as quick downturns or rapid surges. Do some of these statements resonate with you?

• “I can’t trust our forecast.  We need better information.”
• “Our products have become commodities.  We need new products with better margins.”
•  “Our markets are shrinking.  We need to learn how to sell to new customers in growing industries.”
• “These suppliers are late.  We need more reliable partners.”
• “These reports don’t help me make decisions.  We need to better utilize our (ERP) system.”
• “Our customers don’t trust us as we rarely hit commitment dates.  Delivery performance needs to improve.”
• “Our customers selected our competition.  We need to improve our quality and performance.”

At a time when business leaders are demanding more out of their managers to improve and grow the organization, old problems burden daily schedules.  Are your talented (and higher-paid) managers feeling stressed?  Has downsizing drastically altered the workload among key managers and employees? 

These situations have surfaced for a number of reasons:

1. Many problems were previously “managed” every day by the dedicated staff, some of whom are no longer with the company.  I use the word “managed” because it better represents how many people dealt with problems.  Rather than eliminating the problems, they created processes to manage them.
2. Business has become more competitive. Therefore, what was once “not a problem” now is.  Customers are no longer willing to accept what was once standard.  The measure of success has risen and turned what was once acceptable to unacceptable.  Some people have yet to realize this fact.
3. Volume is lower, and financial performance can no longer hide behind other numbers.  Risen tide lifts all ships.  The tide has receded and managers who measured success only by numbers are realizing that is not how excellence is achieved.
4. Volume is higher (or surging without notice), and our systems are stressed.  Our business systems were designed years ago based on old business assumptions.  These assumptions have changed.  Designing a new business model is not a skill many people have.

Think of these problems as cracks in a dam.  With increased pressure, these cracks become small holes and begin to leak.  These leaks require daily attention to prevent a flood.  In the past, small holes were handled by staff members who had the time to stick a finger in a leak and clean up.  Now the cracks are getting larger and are being discovered in greater numbers due to greater demands on the dam – and at a time when there are fewer hands available. To prevent a crisis and support the remaining staff, managers begin to stick their own fingers in the leaks.  Worst of all, managers who were able to look above the mountains and plan the future are now in the valley urgently helping to prevent a major catastrophe. 

What’s the cost of well-paid managers subsidizing bad processes?

Leaders who set high standards are not surprised by the level of challenges.  These leaders are demanding more than financial results – they demand excellence in execution.  However, the majority of managers only now realize how many problems have been an integral part of their organizations.  Organizations dealing with rapid growth or a sudden crisis (not unlike the rising water in a flash flood) experience more of the effects of existing foundational problems. 

BP’s catastrophic failure in the Gulf of Mexico is a perfect example of longstanding foundational problems affecting business performance.  BP had numerous safety incidents prior to the Deepwater Horizon disaster.  Over a three-year period, it’s been reported, BP had 760 “egregious, willful” safety violations.  During that same period, Exxon Mobil had one comparable citation.  The failure in the Gulf of Mexico should not have been a surprise based on BP’s track record.  Now, while Exxon Mobil leaders continue to execute their growth plan and demonstrate safety excellence to the point of monitoring the temperature of the lettuce in the company cafeteria, BP leaders are consumed with crisis management.

Even the best organizations have problems.  Organizations that believe they don’t likely have very low standards.   I was amazed to hear that the 1990s Atlanta Braves had a team goal of winning every inning.  Based on this standard, any inning they did not win presented a problem to solve.  In that decade, the team went to the World Series five times, winning the title in 1995. High standards only make organizations stronger and better. 

A strong foundation allows you to have the confidence to respond to uncertainty and complexity.   Here are questions to ask your team in your next staff meeting:

1. Are today’s problems really new, or are the impacts of pre-existing problems new?
2. Are our most talented contributors investing their time on the most valuable initiatives, or is their performance restricted by pre-existing problems?
3. Which pre-existing problems frustrate our top performers?
4. What permanent solutions will free up our key contributors to support our initiatives? 
5. In which foundational processes do you have unquestionable confidence? 
6. How do we achieve the same level of confidence in all areas?

With a solid foundation, your most talented team members will not be the fingers in the dam.  They will be able to guide your organization effectively to the lead while your competition’s top performers are stressed and weighed down with the sandbags and concrete repair kits. 

Over the next few weeks, specific case study examples will be examined to demonstrate how leaders solved the most challenging business problems that have stymied their organization.  You will also discover how the organization behaved after these foundational problems were no longer assumed by their team.  You will learn how the organization not only achieved improvements in immediate business results, but also how leaders and top talented employees were better positioned to focus their time and skills in new, more productive efforts to grow and improve the business.  The new business system supported them rather than them “managing the waste” of the existing business system.

How did a leader grow his business 300% in three years?  It wasn’t through gimmicks — just flawless execution.

Securing new business is more challenging than ever as companies tighten their spending. So it’s even more critical that you provide your customers with greater value.

One of the most underused “new” business strategies is an old basic — reliable execution.  When a customer places an order with you, he or she needs to know there will be NO surprises. 

The order will be exactly the way the customer wanted it.  The order will be delivered when the customer wanted it.  The customer will know the status of the order and never have to call you to double-check.

Reliable execution earns double benefits.  Not only does the company remain loyal to you and never finds a reason to seek a new supplier, but you also obtain the personal loyalty of the individual who buys from you.  If the buyer moves to a new job or starts a new company, you will be the first one he or she calls. That person will remember how easy you made their job.

Service problems drain productivity, affect business growth

Do your salespeople, service reps and managers spend an inordinate time speaking with customers to apologize about late delivery, poor product quality, invoice errors and other problems?

These problems degrade your brand in your customers’ eyes.  They also create a higher hurdle for your salespeople to overcome to obtain higher prices and gain more of your customers’ business.

Imagine if your salespeople can have 100% confidence in the execution of your operation.  You always meet your customer requirements, without additional follow-up by your customer or your salespeople.  What will complete confidence provide your salespeople and managers?  Where will they spend their time and mental energy?

A mid-sized manufacturer was surprised to learn that 40% to 60% of its sales staff’s time was spent on orders that had already been won.   The salespeople would repeatedly provide status updates to customers about their orders, negotiate with schedulers to move their orders up, ask for new delivery dates from customers, and so on.

This company had conditioned its salespeople, customer service reps and customers to invest their time according to the business’ historical performance.    Despite some improvements made in delivery performance and quality, the lack of confidence remained because the improvements were not significant enough or sustainable during all periods.  Lack of confidence in a company’s reliability drives workers to invest their time in fulfilling current orders rather than gaining new orders.  

How to develop reliable execution

Reliable execution provides your customers the confidence to give you more of their business, and it provides your organization the confidence to go after new, more complex business.

Organizations that seek new business without having the old business buttoned down experience more overhead, greater stress and lower success rates.  If problems of the past never really go away, they become amplified during the drive to gain new and different business. 

Let’s return to the manufacturer at the beginning of this article. Once this manufacturer demonstrated it had the systems, talent and processes to execute every order reliably, it was able to grow 300% over the next three years.  In a short time, the company managed to change the behaviors and beliefs of its team and customers and win business in new growth markets with higher profit margins. 

The salespeople and operations staff together went to their customers to show them the significant enhancements they had made, and how the changes would benefit the customer. The fact that the operations leaders could step away with the salespeople helped convince the customer that the business was designed well enough to not be dependent on specific managers.

To start growing your business through reliable operations, ask your team these questions:

• How much time do we spend on new business vs. orders we already have? 
• How much business would you have now if you had had flawless execution over the past five years, when business was “great”?
• How confident are our customers that we will perform flawlessly every time and never miss a commitment?
• How well do we perform with first-time customers or first-time orders?
• How confident are our salespeople in guaranteeing our customers 100% performance?

Studies show people want reliability more than they want quality.  People want consistency in performance.  They would rather order a hamburger that is consistent every time than a filet mignon that sometimes is awesome and other times poorly cooked.  This is why McDonald’s and other fast-food franchises do so well.  If you can provide BOTH reliability and quality, you will not only build the confidence of your customers, but you will also build the confidence of your salespeople, operations team and management to go after new, higher-growth, higher-margin business – and with a lot less stress than ever before.