If you spend time looking for business-related reading in a bookstore or a magazine shop, you see lots of works on planning and strategy. Many of them are good. Often they are how to ideas and processes that you can apply to your situation.
Along the same lines, there are plenty of consultants and experts an advisory firm executive can call in for help with strategy, tactical planning and process engineering.
With all that information and help, you would think business would be humming along for every firm, right?
The stark reality is quite different. Even back in 1999, in a classic Fortune article titled Why CEOs Fail, Geoffrey Colvin and Ram Charan reported that 70% of CEO failures or removals came not from poor strategy, but flawed execution.
The Conference Board, a business membership and research association, also issued a report in the intervening years finding that excellence in execution ranked as a top CEO challenge.
If executives at big companies have this problem, are small planning firms in even deeper trouble? How can an advisory firm increase its ability to execute? What issues will it face and what should firm leaders concentrate on to get the job done?
KNOWING-DOING GAP
I read about the idea of a knowing-doing gap in the book Stick With It by Lee J. Colan and Julie Davis-Colan. The basic idea: People know what they should do, but they just dont do it. We all know about diets that started with great energy and intent, then fizzle after a few weeks or months. The same is true with most New Years resolutions.
As the authors point out, the failure to execute occurs at all levels of business and personal endeavors.
This knowing-doing gap is the greatest challenge to making a strategic plan or program work. In other words, its not a lack of innovation or good ideas, correct thinking or planning. The real trouble is the failure of team members to stick with the plan. Adherence, say the Colans, is the necessary link between strategy (knowing) and results (doing).
The pair also argue that high adherence is much more important to running a successful business than having a perfect strategy. An average strategy executed well produces a better outcome than a great strategy poorly executed.
There are three major factors that combine to produce adherence. Heres a brief description of each factor, and how were addressing them to increase our execution at my firm, Savant Capital Management.
1. COMPETENCE
Competence is about having the right people doing the right jobs. First and foremost, you must hire top talent: They must be carefully selected, trained, mentored and engaged.
Savant uses psychometric testing and multiple interviews with staff members and outside experts before hiring anyone for a professional position. In recruiting, we are particularly wary of cultural mismatches, which can do more damage to the firm than skill mismatches.
We have internal and external training programs, a formal intern training program and continuous professional development. Weve identified our high-potential employees, and we mentor, train and reward them appropriately.
You need to develop expert systems as well, including checklist work processes and automated procedures that minimize errors and increase efficiency. Savant hired consultants to review workflows and create lean processes for client onboarding and trading. This analysis and streamlining continues, with collaboration from everyone on each team.
Competence must be visible to all. Savant measures and reports successes in areas tied to business development, training, and professional and personal accomplishments. Growth is reported weekly and is highly visible to every employee. Professional performance metrics are key components of regular staff reviews.
2. FOCUS
Simple can be harder than complex, Apple co-founder Steve Jobs once told BusinessWeek. You have to work hard to get your thinking clean to make it simple. But its worth it in the end because once you get there, you can move mountains. In todays business environment, being focused is like using a laser rather than a flashlight to cut through a diamond.
At my firm, we are making things simpler. In addition to automating procedures which gives everyone more brain bandwidth to stay focused on what matters weve been using an ideal-client matrix to identify our golden geese, the 20% of our clients who provide two-thirds of our referrals and over half of our revenue.
And, obviously, we focus a lot of attention on them.
Many people are proud of their ability to multitask; I used to be one of them, although no more. Research has shown that people who multitask reduce their productivity.
To counteract efficiency-robbing multitasking, weve cut down on the number of tasks, projects, reports and time-wasting meetings that individuals have to be involved in.
One way to get more focus in your firm is to ask members of your team, What is the most valuable thing you can be doing right now? Then, allow them to get on with it.
Other simple steps: Stop using reply all on emails, so people dont read useless stuff, and avoid leaving important stuff for last when youre stressed or tired.
Focus helps get things done. I mentioned keeping results visible: Our firm issues regular reminders of performance and progress reports to help people stay focused on whats important.
3. PASSION
Passion the level of energy, resolve and motivation you bring to your team is an intangible that can be difficult to ignite in some people. To help with that ignition, here are some ideas for accelerating passion in your organization.
- Visibly display the core values of your firm. Make sure everyone knows what they are and that they are important to everyone. Discuss them with each employee, and make sure your plans and work output reflect your values. (In other words, make sure you walk the walk.)
- You want enthusiasm? Show enthusiasm for your teams efforts. Applaud wins, but also shore up individuals who strive for a goal and give it their best shot, but dont quite hit the mark. A little Next time, youll get it! goes a long way. Dont be Pollyanna-ish, but be the companys best cheerleader.
- Make sure all members of your organization see a bigger purpose in what they do. Throughout history, great things have been accomplished by those who first imagined them and then spread the gospel of imagination and enthusiasm to others. At Savant, we talk about building ideal futures not only for clients, but also for our organization and communities. Its not just about doing a job; its about changing the world around us in a positive way.
- Communicate, communicate, communicate. Nothing will build passion faster than regularly talking about where the firm is going and why, what youre doing about it, and what the positive end result will be for all stakeholders. Nothing will destroy passion faster than remaining silent in the face of challenges and adversity. Silence undermines trust and leads to doubt, fear and, sometimes, panic. When the 9/11 attacks occurred, I wrote to every client within three days. Your team needs to know whats going on when a challenge occurs. Dont leave them in the dark.
Good planning is fine, but good execution is better. Break down execution into bite-size chunks and then be sure you are applying competence, focus and passion to build world-class adherence.
Glenn G. Kautt, CFP, EA, AIFA, is a Financial Planning columnist and vice chairman of Savant Capital Management, based in Rockford, Ill.
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