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Superior Business Execution: Constructed or Allowed?
 

What is Superior Business Execution?   From my perspective, Superior Business Execution is being just-in-time with all that is needed at all levels of the organization—Strategy, operations, development, products/services, production, maintenance, sales, marketing, customer service, innovation, etc.  Organizations with Superior Business Execution are efficient, consistent, proactive, generate results, and are sustainable.

This sounds like a pretty vague definition, and one that is almost impossible to realize for our complex organizations and business environment, doesn’t it?

This is where you start to experience the difference between a “Constructed” Superior Business Execution, and an “Allowed” one.

It is almost impossible to “construct” a superior business execution that will fulfill this definition,  ... but it is absolutely possible to allow it to happen naturally.

Constructing Superior Business Execution Means Planning and Getting Ready for Every Possible Situation

You can see how such a constructed superior business execution is an impossible task to do, and it is an even more impossible task to manage within our complex organizations, constantly changing business environment, personnel turnover, financial constraints, etc. 

Even if this is an impossible task, many organizations are managed and structured in a way that attempts to create the “perfect” organization—An organization that has all the systems in place to respond to every possible scenario.  The problem with these organizations is that they are NOT efficient, and are NOT sustainable.  They are proactive in the planning of the business, but are NOT proactive on the way they execute their business.  Finally, to be consistent and generate results, they need to have continuous monitoring and reinforcement take place, which kills the bottom line.

Allowing Superior Business Execution Means to Push Execution and Innovation to the Borders

What does this mean?  It means to give each employee the responsibility, accountability, latitude, and authority to create superior business execution within their Circle of Influence.  Someone’s circle of influence is what he or she has direct access to and/or direct control over.  The word “control” here signifies being always able to predict the outcome of a specific action or process. 

If I am a sales person, I have direct control over my decisions, actions, innovations, etc., related to bringing business in, and I have direct access to my prospects and customers
If I am CEO, I have direct control over my decisions, actions, innovations, etc., related to the business vision, the business strategy, the business structure, etc., and I have direct access to my VPs and heads of departments, the board of Directors, investors (in the case of private organizations), etc.

So the job of the CEO, COO, and heads of departments in organizations is to create an environment, an organizational “container,” that allows Superior Business Execution—An environment that decentralizes execution and innovation decision power and accountability to each employee of the organization (within their circle of influence).

From Top Down to Inside Out

Organizations are NOT hierarchical or matrix-based, distributed, etc. We give them different names, based on the way they are managed, but the inherent structure of organizations is more like Russian dolls. 

A Company is a “container.”  It is a structure that “contains” different organizations.  An organization is a structure that contains different departments, and a department is a structure that contains different teams.  Finally, a team is a structure that contains different individuals. You see how organizations’ natural structures are much more like Russian dolls than any other structure.

Taking Advantage of the Natural Russian Doll Structure of Organizations

Where does this leave us?  Organizations being Russian dolls tells us many things.  It tells us that:

The leaders of organizations and departments create the environment within which teams and employees will operate
Organizations are naturally divided into “Service Centers” with “inputs” and deliverables (outputs)
The largest service center of the organization is the organization itself, and the deliverables of the organization are generated by the different departments that compose it
The smallest service centers of the organization are the individuals forming the organization
Each leader of a service center is responsible and accountable for the results (outputs) generated by the service center

This means that it is possible to track the “inputs” and “outputs” of each one of these service centers (down to each individual).  It also means that the CEO, and/or the “corporate side” of the organization do NOT have to have everything figured out, designed and managed.  They just have to clearly define the deliverables of each of the departments forming the organization, and how these deliverables contribute to the fulfillment of the business vision and key business objectives, and let the department’s leaders make it happen.

Example
Many years ago I took the lead of the housekeeping department of a psychiatric hospital.  My mandate was to make the department profitable (meaning, costing less to operate than if the work was given to a subcontractor). 

The department was costing over two times the cost of giving the contract to a subcontracting housekeeping organization.  Employees had defined routes, with defined processes they were following to the letter, and had access to over one hundred different specialized maintenance products.

Even with all of that, clients were complaining of the lack consistency and level of service between the different housekeepers.  Moreover the hospital facilities were getting destroyed at the speed of light, by the consistent use of harsh chemicals.

What I discovered was that employees were following the processes perfectly, but had stopped thinking and caring.  They were going through a checklist.

The action I took was to give back accountability and authority to each employee. Each employee gained a clear understanding of their deliverables (outputs), and what was needed for them to create them.  They also gained an understanding of the “cost” of operating their business (products, and time), and how their job was to keep their customers satisfied.  My job as the leader was to help them start thinking again, make sense of the different products and cleaning methods, and streamline the number of cleaning products to be used.  I also trained them on customer service, and started a PR campaign with the department’s internal clients.

The results of this initiative were that in 6 months, the department reached the desired level of profitability, customer satisfaction soared, and employees were happy to come to work. The results also became sustainable.

My contract ended after 9 months (3 months after we reached our objectives).  Three months later, due to a reorganization of the hospital, half of the staff was laid-off and replaced by other employees (employees with more seniority coming from other departments).  Even with this dramatic change, the department kept the same level of profitability and customer satisfaction.
 

The Service Oriented Organizational Structure

The operational model of this Russian doll structure is called the Service Oriented Organizational Structure (SOOS).  In this structure, processes are there to serve the different business centers, NOT to control them.  Service centers are measured and rewarded on what they produce, and based on how much it costs them to produce these results.  Employees are self-monitoring and proactive because they are accountable for generating specific results, and for their “cost” of production.  Finally, employees respond to the leader of the service center within which their service center operates.

Next Step as the Leader of Your Own Service Center

If you are the leader of an organization, review your business vision and your organization’s key business objectives.  Define what your organization needs to fulfill the vision and business objectives, then develop the departments forming your organization around these needs.  Each of the needs will likely become a department.  These needs then become the key business objectives of each one of the departments.  Then get the leaders of your departments to do the same exercise, then the team leaders, ... then each employee.  Once you have done this exercise, you have defined the Service Centers of your organization, and you can define their “inputs’ and “outputs.”  

If you are an employee define what you need to deliver to contribute to the fulfillment of the business vision, define your deliverables and how they contribute to the business vision, and define the “inputs” you need to generate your deliverables.  This will start to reveal where you need more autonomy and authority to generate the desired results.  You’ll also be better position to make a difference.

To help in this assessment, you can also use the SOOS definition application.  For more information email me at efactor@strategy-driven.com.

Conclusion

There is a lot of progress for an organization to be made by taking advantage of its natural structure. Acknowledging this fact and starting to move in the direction of a Service Oriented Organizational Structure (SOOS) will dramatically reduce headaches and operating costs, and will dramatically reinforce the five (5) characteristics of Superior Business Execution: Results, Efficiency, Consistency, Proactivity, and Sustainability.


Please send me your questions or comments at efactor@strategy-driven.com  or see my profile => Marc Chouinard. You can also subscribe to my RSS feed. (see top right corner)