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David Hilliard …………… reflections on a life in strategy execution. CEO’s think that excellence in execution is a top priority, according to the 2010 Conference Board survey. If this is true, why do so many strategic initiatives head south – and remain that way for months on end? For more than 20 years, a staggering 80% of my work has been in programme “rescue.” When it comes to managing complex “bet the company” programmes, there are only slight differences in the way companies tackle them. The same howlers are repeated again and again – blunders that would simply not be tolerated in any other business discipline. Why does it take some dramatic force to realise that the emperor has no clothes? Why do smart top executives drag their feet so much before taking radical action? Reconstituting mission-critical programmes is hugely time consuming and expensive – and never achieves the original objectives. This paper explores how these management blindspots come about and puts forward suggestions on how the most glaring gaffes can be completely sidestepped. Programme “rescue” has been a way of life for me for the past 20 years. Typically, a client programme had been off the rails for many months, in spite of management attempts to retrieve the situation. A short healthcheck usually revealed that the true state of the programme was not anywhere close to meeting the client’s original objectives. Signs of crisis are everywhere – frantic activity; extensive overtime; impressive looking Powerpoint presentations; crisis-driven emergency meetings and teleconferences – people working as individuals, focused on getting “their bit” right. Page 1 of 7

So, why do so many CEO’s who, on the face of it, seem passionate about building high-performance organisations wait for so long to take action? Why do smart, no-nonsense CEO’s back off making decisions about getting help when there is increasing evidence that the programme team is pushing water uphill with a rake? At first, the signs of trouble trickle out slowly. Perhaps, a critical payment milestone has been missed – or a key customer has complained. Maybe some team members have voiced concerns – or perhaps the CEO has seen the warning signs before and has a “feeling” that the story does not hang together well. Something like this is usually the inciting event – the event that prompts the CEO to dig deeper. To understand why it took so long to take action, it is worthwhile reflecting on the typical circumstances that led to the problem in the first place. The reasons a programme breaks down have remained constant across the years, irrespective of the business sector. At one end of the scale, explanations range from vague objectives; fantasy plans; dreadful supplier performance and hopeless control systems. At the other extreme - truant sponsorship; unworkable organisation structures; under resourced teams - and karaoke programme management. More often than not, the critical link between strategy and execution is broken. What is more, many “strategic” programmes were not treated as if they were strategic at all. If there was a programme sponsor, it tended to be an “absentee” Director who set objectives, allocated funds, selected the Programme Manager and held sign-off authority. But, for the most part, it was top management gone AWOL - dressed up as delegation. Even when it is clear that the journey from boardroom to marketplace must pass through a “bet the company” programme, it is rare to find a Programme Manager reporting to the CEO. It does happen - but it is rare. The nuts and bolts of programme management seem unattractive to most CEO’s – at least initially. For this, and for other well-argued reasons, programmes are usually assigned to the “Most Affected” Director – the person responsible for the function that is most concerned with the change. This is a bizarre organisational mystery – because normally, they do not have either the time or the inclination to manage the programme. Regular calamities in the business prevent them from spending any more than 50% of their time on the programme. Instead, they delegate responsibility to one or worse still – two managers. As a result, key strategic programmes do not get Page 2 of 7

the organisational visibility and experienced management they need. In fact, in this type of setting, the barriers to becoming a programme manager are so low that a turtle could jump them. Unsurprisingly, the “most affected” function occupies a privileged position in the business, at the expense of other functions. Eventually, interaction becomes tribal; critical dependencies are missed and a “finger pointing” atmosphere develops. Over time, the programme loses focus and priority with other functions, with predictable results. No Programme Manager worth a candle would consider a harebrained “mission impossible” setup like this. Not for a second. But, it happens across industry – over and over again with the same result. However well intentioned, the “Most Affected” Director appointment is a cop out - an ineffective top management device for dealing with a thorny organisational problem known as . . . “who do we have that is senior enough to run this programme?” Unfortunately, it is a deeply flawed management delusion. In every case I have seen, it leads to an execution debacle. It doesn’t happen overnight – but over time, it does. Unquestionably, this is the worst way to fill a leadership position on a mission-critical programme. Resource allocation is another chronic issue. Programmes always require more resource than can be made available. But, on a failing programme, there is one never-ending feature that magnifies this jam. That is, a plan based on a relatively small core execution team, supported by “parts of people” from other functions. It looks truly mesmerising in Powerpoint, but in reality it is unmanageable - a huge drag on the programme - causing massive friction, time-wasting and unproductive complexity between functions. Timesharing resource like this is a sure sign that the business has not done enough to convert strategy-speak into action. But, to understand why so many CEO’s wait for so long to take action, it is worth reflecting on the tricky position the CEO is in. He has a full diary with tons of competing distractions for his time. One of his direct reports “owns” the programme – probably the “Most Affected” director – a person he trusts and with whom he may have had a long business relationship. So, it is safe to say that there is a strong loyalty factor in play. Initially, the CEO is unlikely to think that this problem is anything other than a temporary setback that his colleague will swiftly deal with. But this is an “instinct” based on his colleague’s historical performance. It is rarely based on personal, in-depth experience of running complex programmes.

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This “experience” issue is of huge consequence – because what people do not know can really hurt them. Experience matters. By contrast, a CEO with a Sales, Marketing or Financial background will “know” that something is wrong in any of one of those areas. He will see a big red flag telling him that the story he is hearing does not make sense – and he knows he can remedy the problem before it gets out of hand. But, although he may have the knowledge, he does not normally have the experience to make comparable judgements about mission-critical programmes. Here, the CEO is utterly dependent on the “Most Affected” Director, who also may not have the experience to “know” when a programme is in deep trouble either. For example, they may have a proven background in Operations or Technology. In truth, when the various sponsors, owners and directors are peeled away, the person actually running the programme is probably one or two levels down the management chain. He is focused on the “mechanics” of the programme and he may be familiar with project management methods and terminology. But he has no organisational power, has not usually run a missioncritical programme before – and, significantly, is probably not regarded as a “superstar.” Almost certainly, he plays ping-pong in a wind tunnel with other functions and external suppliers all day long. His job is just impossible. This combination of CEO, “Most Affected” Director and under-equipped Programme Manager is, in a word, lethal. Together, they add up to one of top management’s biggest blind spots in delivering major programmes. Unlike the earlier Sales and Marketing example, where the CEO and one of his directors would clearly have a set of complementary experiences that allows problems to be quickly jumped on and fixed – this is hardly ever the position on a missioncritical programme. What normally happens next is the CEO asks for a drill-down on the plan to flush out “all” of the problems and to set recovery actions in motion. This exercise is taken seriously. No one wants to look bad - but even if people feel there are problems, there is a natural tendency to be optimistic and a reluctance to accept that there is an elephant in the room. There is always a healthy willingness to bend the truth – to view problems through terribly dark parochial glasses and to tell the CEO what he wants to hear. At the next CEO review, the revised plan - prepared through a “collusion of optimists” - is presented. A few new problems may be exposed but teams pretty much always come up with the famous words - “the situation is tight but achievable” - which is weasel-words for “we’ve already blown it.” But top management doesn’t hear the “tight but” half of the sentence. Everyone focuses on “achievable” – that’s all they hear. So, with huge relief, the revised plan is accepted. For the time being, the programme management team has bought some time. Page 4 of 7

Depending on the size of the programme, this picture repeats itself at intervals, typically for periods of 6-12 months. In some cases it may be a lot longer, before a sense of crisis and pain compels the CEO to admit that his programme team is out of its depth and that he needs to take exceptional measures to rescue the programme. This pattern was repeated time and time again on countless programmes in many companies before I arrived in a CEO’s office to discuss how I could help. The similarities between all programmes, many of whom were being run by well-known brand names, were truly remarkable. So, after an initial discussion with the CEO, the programme healthcheck quickly got underway. Senior managers, who have been marginalised by the programme and have a political agenda, can be a bit of an irritation at this point. Being wise after the event, they seize the opportunity to vent frustrations, and attempt to land a few metaphorical punches on the “Most Affected” Director and some of his key people. But this petty playacting is usually well telegraphed and pretty transparent. Otherwise, most team members are very supportive. There is nothing to be gained by holding back. If you are sick, there is not much point in playing a poker game and making the doctor guess what is wrong. What is significant is that many people in the execution team knew the programme had deep problems, had been “silenced” in one way or another – and had long ago recognised the hopelessness of their position. They had effectively given up and were now sitting on their hands, leaving the programme leadership team and top management to talk themselves to death. Following the healthcheck, it is usually clear there is a considerable mismatch between what the CEO was expecting and what the actual position is. Facts are compelling – the great thing about facts is that they destroy “opinion.” They clearly demonstrate that the programme team has been juggling soot for about 6-12 months – and, worse, that the programme has passed the point where full retrieval is at all possible. The programme now takes longer to complete. The budget is effectively out of the window and there is usually substantial lost or delayed revenue too. So, the programme must be replanned. The focus of this exercise is largely centred on “phasing” the programme - and preparing fallback options to salvage as much as possible of the original programme objectives. And to begin the process of mending the reputational damage that invariably comes with disappointments like this. There is normally some pushback when these options are discussed with the CEO and his team, revealing a lingering sense of denial about the seriousness of Page 5 of 7

the position. Occasionally, there is extreme reluctance to make tough decisions about the future composition of the programme leadership team – and, despite the evidence, various organisational fudges are sometimes put forward to spare the blushes of the “Most Affected” Director or the Programme Manager. In many cases, it is quite wrong to criticise these individuals – since the mistakes are mostly to do with how top management sets out its stall to run complex programmes. The facts usually reveal an “impossible” challenge with not enough skills and resources - that would have been very hard for an internal executive to go up against in a “can do” culture. Frankly, putting executives in this unwinnable position has destroyed many careers. But if we were talking about a doctor who killed more patients than he cured or a teacher whose pupils got more stupid as the year progressed – and then discovered that this was the rule rather than the exception, people would be outraged and demand that something must be done. Given this, it is puzzling why sensible executives remain so hesitant when confronted with undeniable facts. The replan is essentially about getting everyone back to basics – and developing a realistic route forward that minimises damage. It is an expensive and time consuming exercise - to reconnect the strategy with execution; restructure the programme organisation to give it the visibility it needs; strengthen the programme leadership team; fill critical skill gaps; reconstruct plans; revise budgets and revenue forecasts – and revitalising control systems with some “bite.” Depending on the circumstance, we would then also normally complement the programme team with an experienced squad of up to 6 people. In many cases, this included a new “heavyweight” Programme Director. When all this has been done and approved, what happens next was usually quite astonishing. Finally, the CEO makes it very clear to the rest of the executive team the priority of the programme. He agrees that the new Programme Director will report to him or another board level sponsor. To give the programme the visibility and clout it needs, he agrees to chair the Programme Review Board personally. If required, he guarantees to remove speed bumps. Moreover, he commits substantial additional full-time resource to the programme to underpin the revised schedule. Naturally, these dramatic signals show that, in the end, companies do what is necessary to fix the problem - but it does prompt people in the business to ask “why didn’t we do all this in the first place – why did we have to endure so much pain?” Why indeed. The positive consequences of these actions are far reaching. The de-motivated programme team develops a new sense of purpose, performs way beyond Page 6 of 7

expectations and converts what initially appeared to be “impossible” into a rational proposition. Amazingly, over 98% of these people, typically, were the same people who worked on the previous “failed” effort and subsequently celebrated a fabulous “victory.” The business landscape is littered with expensive strategies that failed in the execution phase. The same problems are repeated year after year – and, unfortunately, many of the same people do it again and again. Businesses put enormous investments into crafting the “perfect” strategy and then screw it up with sloppy execution. Why don’t they make the same investments in making sure they have realistic plans, capable programme leadership and enough of the right skills and resources to get the job done? If a business is about to embark on a mission-critical programme, the CEO should ask himself some hard questions about “capability” - to give his business a fighting chance of winning through. If he is in the middle of a programme that he has doubts about, there is little point in waiting for an expensive “rescue” situation to develop. Most executive teams dawdle for far too long before acting – and, with hindsight, always wonder why they waited so long. How much sooner would problems be recognised and knocked on the head, if the initial plans were independently reviewed by experienced professionals – and if the ongoing control system had regular independent reviews built in? The answer is obvious – but in 20 years I have never seen these simple measures in place. It does not sit well with tough “can do” cultures. While it is not a cure-all for every situation, it unquestionably provides an alternative view to the “collusion of optimists” – and gets remedial action moving faster. William Nicholas, a former Managing Editor of Business Week put it this way: “It was very nice to be an executive, but on the other hand, to the extent that you climb up in your job, you tend to leave behind you the people on whom all power, influence and success depend. As you go up, you pass the timberline, the fog rolls in and you lose sight of the valley down below ………. If you are not careful, you will forget those plain people from whom all your strength must come. If you are not very careful, you will lose the wavelength that goes into their lives and thoughts. And if that happens, then all the gimmicks in the world will not help.”

David Hilliard is the Chief Executive of Mentor. David is a trusted advisor to many companies on strategy execution and a seasoned IT & Telecoms executive. His direct approach quickly helps clients get to grips with execution challenges. David is an experienced mentor, a top-class educator- and has a fund of real-life experiences that vividly illustrate the "do's" and "don’ts" of execution. Email David at:

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David Hilliard Reflections  
David Hilliard Reflections  

reflections on a life in strategy execution