Line of Sight - Fixing the "Execution Tax" of Your Strategy
Are you experiencing "profitless prosperity" and do you know how to "de-risk" your strategy? You will once you listen to this episode with Robert Courser and Olivier Aries as they walk us through their recently released book, Line of Sight: The Five Keys for Strategic Execution in an Age of Uncertainty. Just by reading this book and applying the principles within, your organization will experience immediate "lift".
Links and Resources from the Episode:
Click here to buy a copy of Line of Sight: The Five Keys for Strategic Execution in an Age of Uncertainty
Click here for Robert's LinkedIn profile
Click here for Olivier's LinkedIn profile
Click here for more about the Line-of-Sight
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The Bosshole® Chronicles
“Line of Sight - Fixing the ‘Execution Tax’ of Your Strategy
Original Publish Date: 3/5/2024.
Host: John Broer, Sara Best
Sara Best: Howdy John, how you doing partner.
John Broer: I'm good, Sara. How are you today?
SB: Good, so glad to be co-hosting another episode of the Bosshole Chronicles today. Who do we have?
JB: Well, we have friends of the firm, friends of Real Good Ventures and the Bosshole Chronicles, both of whom appeared here separately - Robert Courser and Olivier Aries and both of their episodes will be on the show notes. Go check it out. But Robert and Olivier have co-written a book called "Line of Sight, which is really based on the work that we do with the line of sight organizational health scan. This stuff is awesome and you know, we are all about our movement to reinvent the workplace and I think this is going to be part of that. I know this is going to be part of it, and so, um, that's what they're going to be talking about today.
SB: Well, I think it's essential, let's dig in.
JB: The Bosshole Chronicles are brought to you by Real Good Ventures, a talent optimization firm, helping organizations diagnose their most critical people and execution with world-class analytics. Make sure to check out all the resources in the show notes and be sure to follow us and share your feedback. Enjoy today's episode. Robert, Olivier, it is so good to have you both back on the Bosshole Chronicles. Welcome, thank you.
Thanks, Sara. It's good to have you here and everybody knows from the intro exciting news with Line of Sight, the book that the two of you co-authored. We're thrilled to have you here and I just want to remind everybody go into the show notes. Robert, Why don't you kick us off with just a high level understanding of Line of Sight? And why this book? Why now our listeners are familiar with it because you were here before on the Bosshole Chronicles, but take us back into it and why this is so critical these days.
Robert Courser: When Olivier and I wrote the book, I mean we wanted to be able to have people get lift just by reading it and kind of doing what it says around these five areas, their five keys to execution, the KSEs in the book, and they're scientifically validated. When you have alignment around them you get good execution. The most important and most statistically heavily weighted is under strategic understanding. Do we know what the strategy is? Do we know how we contribute to the strategy leadership? Does the leadership have credibility to lead the execution of change and strategy activities and structure? I mean, are we doing the things that matter to deliver on our unique value, prop, human capital, balanced metrics these are five statistical correlations that when you get alignment around them you get superlative execution.
SB: Superlative.
JB: I like that word well, our listeners love examples, so I just want to ask, Olivier, as we were getting ready to hit record, you said hey, we got some real poignant examples that we can share with your audience. Take us through one of those, or a couple of those related to the five KSEs.
Olivier Aries: Sure, First of all, I think it's worth mentioning that our approach, I think, works for all types of companies. We typically aim for SMB small, medium-sized businesses because this is where- and Robert loves to talk about this this- is where scale issues matter the most. Business owners and CEOs and executives can build their companies up to maybe 50 people, a couple of million dollars, but then scaling up, getting in place the organization, the execution capabilities to go beyond this is the challenge. Bigger companies typically have somehow overcome those challenges. Happy to give you two examples, one SMB and another one which I love to talk about because everybody knows them it's Boeing, the aircraft manufacturing company, and also it's an order company. The principles we add in the book, they're truly universal and so they also apply to large companies.
Everybody knows that Boeing is struggling right now mostly with quality issues that have translated into a sort of trust crisis and financial, significant financial liabilities. But if you break down their appearing model along our five KSEs, you start to find root causes for their challenges. Because, as Robert was saying, we look at five KSEs, or keys for successful execution. If we take those five and look at Boeing's operations, we really understand what's going on. So the first one, as Robert was saying, is strategic understanding. Do employees understand the strategy across the entire organization? And I would say on this one surprisingly, I think in the case of Boeing the answer was yes, they do really well, and maybe too much, because one of the challenges in this company is that they underinvested for many years and decided to postpone development of new planes because they wanted to maximize their financial performance, and that's the message that percolated down the organization. If we have Boeing employees listening to this, we'd love to get their perspective. I enlarged the message was we have to maximize profitability. So that became the motto and people started to make individual decisions based on this. What do I have to optimize? Well, it looks like I have to minimize costs and maximize production volume. So I'm going to behave to do this leadership trust.
Well, I think, going really notes of internal communication that showed that there was very little trust with the leadership of the organization. In fact, I think somebody called another team monkeys. I mean, it was crazy. So what happened? When there's little trust in an organization, as Robert was saying, the risk is people start to doubt that the message and the direction coming from the top is valid and people start to make their own decisions and you to see deviation from the norm, deviation from the standards, deviation from the processes, because people think they know better. So low trust results in more deviation from the processes. Then metrics well, we know that they had gaps in metrics because many metrics around production, stability and quality were not there. As a result, people maximized volume at the expense of quality and as a result, you know, planes started to lose parts in flight. Clearly there were gaps in metrics and gaps in the areas that were tracked to make sure that production worked.
One of the other cases is organization and activities. Do we have the right organizational model to succeed? Well, in the case of Boeing, they subcontracted a lot of their production to another company called Spirit Aero Systems, which actually was a spin off of Boeing. I've done a lot of work in outsourcing and of showing when I was a management consultant, and it's incredibly hard when you have two organizations versus one. You have challenges with communication, challenges with system, challenges, with metrics, and you can barely be surprised that they had manufacturing issues when you know that actually they were subcontracting manufacturing to another organization. The order of magnitude of difficulty is really significant. And then the last case see that we know matters.
A lot in good execution is human capital, and at Boeing, there's a massive difference with their major competitor, Airbus in Europe, and that is that you know.
You know that the aerospace industry is highly cyclical, it's highly tied to economic cycles, and Boeing, I think, pride itself in their way to hire and fire people to adjust their capacity to economic cycles. I think it's great from an economic standpoint, because you don't have to carry human capital costs when the economy is down. The challenge, though, is that it's really hard to sustain excellent technological mastery and knowledge when you have high turnover in your workforce, and, as a result, it's not totally surprising that they've been struggling with the excellence and the consistency of their manufacturing process because they don't really have a stable workforce. In summary, you look at those five elements. You know how well the strategy is communicating in the organization and how do employees internalize this daily, how much trust they have in the leadership, what matrix are they using to drive their activities, how are they organized and how well they're maximizing the value of the talent. All this does directly influence, ultimately, the quality of the execution of the organization, and in this case, we have an example of where it can be done at work.
SB: Mm, hmm.
RC: If I can piggyback on that. One of the things Olivier said was for Boeing managing costs and maximizing profit. This is something that I'm seeing with a lot of my medium to small businesses, and it kind of gave proof to a term called profitless prosperity. I'm seeing a lot of clients that are showing incredible top line growth. They're not making any money and when we really kind of drive down to the root cause of that, it's an execution issue. There's a gap. When you don't have good execution, you pay the tax, and execution tax now, with the cost of doing business much higher, is all your profit.
SB: That's right.
RC: So having alignment within the organization will help these small to medium sized businesses capture more of the market and be more profitable.
JB: And Robert, when you say alignment through the organization and our listeners know we are an implementer of Line of Sight the organizational health scan. It is designed to diagnose that level of alignment in the various strata within an organization. So we love to ask our clients. They say, well, we got a great strategy, everybody knows what we're doing. Our question is how confident are you of that and can you prove that? Because we can and we can use this as a way to diagnose that. I love that term, by the way profitless prosperity. When you talk about smaller organizations, Olivier gives us a great perspective on a massive global organization. I think a lot of our listeners are from small organizations. You have a term founders trap. Say more about that, because I think that's really relevant when it comes to whether or not strategy even begins to get executed.
RC: So what we found is most companies never get past 50 employees. That seems to be the first big hurdle and what it is is the founder is running his organization or her organization super flat. Everything's got to go through them. They are the constraint. They are the only ones that know the strategy. It's not pushed down through the organization and through. Maybe they have a mutual three stratum organization. They've got the executive team, managers and employees.
But if they're not sharing and people don't feel how they're contributing to the execution of this, you lose mind share of your employees. They'll have that minimum threshold like look, I have to do this or I'm going to get fired. When they know how they contribute to it and they gain a sense of purpose from that, you capture more of that discretionary mind share. So they'll give you more. But in the next big hurdle is about 150 employees. At 150 employees you lose mutual name face recognition. You have to rely on another stratum of managers to maintain that and hold accountable to get things done.
When we have alignment around these five keys, especially strategic understanding, you know I mean how do we differentiate ourselves from our competitors? What is the strategy? How do I contribute to it? You gain that sense of purpose and you don't have to pay that execution tax. The goal is to be 100% aligned. We're going to get close. We're never going to get to 100%, but when there's gaps from the stratums, from the executive team to the managers, the employees, I mean, those gaps are your profits.
JB: Oh, for sure, Right, sir yeah.
SB: Robert, you've conducted many, many, many scans. You've been inside many different organizations. You've taken a close look at where alignment is diagnosed as a problem. Can you share a practical example? This sounds so impactful and powerful. Can you put it into the language that we use each and every day? You know?
RC: Sure, I'll tell you the most common thing that I see. Yeah, I talk to an executive team and I'm like, what's your guys' strategy? And they look at me and they go to grow. And I've got to kind of chuckle a little bit and be like, well, team, that's more of a desired outcome, not your strategy. So then I've got to kind of take them through a basic framework of what are our goals, our desired outcomes, and then that will dictate everything else. That will dictate the strategy that we need to achieve those desired outcomes.
SB: think that's a great example. So the leadership team starts to develop a better strategic understanding, like, hey, we don't have a strategy, we have an end game goal. Let's figure out what we need to do. Where do you see the most common challenge when it comes to alignment with the people out there doing the work?
RC: It's that they don't know what it is. It's communication issue.
SB: Yeah.
RC: Once we get that leadership team aligned on what is the strategy to achieve the desired outcome, then they've got to communicate it through the organization. That's the first big hurdle that we always see. So recommendation do a town hall, tell them what it is.
JB: Don't leave it a mystery, or even times yeah.
SB: Is this where things like operational excellence, customer intimacy, where those things become what we're doing to accomplish that end game goal?
RC: Yeah, so market discipline has three basic go-to-market strategies. It has operational excellence, customer intimacy and product and service innovation. Yeah, when you look at operational excellence, it's all about mitigating variances and it's all about getting your price, because you're going to be commoditized on price. Customer intimacy the answer is always yes. We're going to build customized solutions that solve our customer's unique needs. And then product and service innovation is. We're building the coolest, newest stuff. Sometimes it's cutting edge, sometimes it's bleeding edge.
SB: Right.
JB: In keeping with strategy, and what we have learned in terms of being an implementer for line of sight is that it's never just one exclusively. There's probably one predominant market discipline followed by a secondary, but if anybody tries to say, well, we're all three, you really need to revisit what your market discipline needs to be. But of course, we can measure that. But regarding strategy, I'm going to share, olivier, something that you said in a meeting that we all had yesterday. The term you used was de-risking your strategy. I think that's powerful because, Robert, to your point, do you really have a strategy? And once you really do it, how do we keep the risk out of it? So, Olivier, can you speak more to that?
OA: Sure, from my days as a management consultant, I used to do a lot of strategic planning and we would spend months working with clients to develop plans in excruciating detail and then, once he was done, the leadership of the company was like, all right, well, let's just do it. In reality, half of the challenge and half of the risk comes from how you're going to execute, not just how balanced, rational, ambitious the plan is. The plan is just an idea. That is how you execute the idea and the numbers vary, but I think there's been decades of research on what trips organizations. I think the common number is that about half of any significant transformation project or ambitious plan fails at the execution level. So, essentially, the coin toss you have 50% chance that it's going to work. So how do you maximize the chances that you're going to get the result you want to have? That's where focusing on execution and understanding how ready your organization is to execute is paramount, and that's going to increase your chances beyond 50% that you're going to get the return you're expecting from your investment.
Now, we're not discounting the difficulty of doing this. In fact, we wrote this book because many founders are overwhelmed. They have to run their business daily. They also have to think about the business, working in the business, working on the business. Everybody's maxed out. No one has any time to pause and breathe and look at what else could be improved. We hope that the very simplicity of our framework is one way for leaders to appreciate where the gaps and issues are in the organization without any onerous investment. In many ways, our survey process is very simple. It takes literally a minute to take. For employees and for leaders, it's a relatively light lift and you're going to get amazing visibility into where the issues are. I'm actually applying this approach to a SMB company, about 70 employees, reasonable growth, although it has slowed down and they are not exactly sure what is holding them back. We've started to run the Line of Sight framework to identify what is preventing the organization from growing. It's exactly the textbook example of the type of company that Robert was talking about. Founded, think about 20 years ago, but ambitious founder, very successful, great culture, amazing culture. But they're starting to struggle and they're not exactly sure where the issue is, and they're realizing that to grow they're going to have to operate differently, but then not quite sure how different.
I'm still running interviews with employees. One question I ask is "Well, why don't you describe in your own words what you think the strategy of the organization is? I don't think that. So far, I've talked to about a dozen people. I don't think that those 12 people give me I don't have two answers that are similar. Everybody hears the strategy in different ways. For some people it's, I think, as Robert was saying. I think we want to grow. Another one is I think we want to serve our clients. Another one will be quality empowerment. No fault to the leadership team. They just have so much to do that and they think they're communicating, but they just don't communicate enough, or maybe not in the words and simplicity that will help people internalize what the message is. One thing that is interesting, too, is that one of the long-term goals of the leadership team is to win through innovation, and I haven't heard one employee talk about innovation. That message how is it flowing down?
JB: Yeah.
OA: So our approach helps identify those areas of disconnect, and once you know where the issue is, it's much easier for the leaders to have the confidence that this is where they have to apply their very immediate bandwidth.
SB: Yeah, I was thinking about two things. One is a while back, John and I were debriefing an organizational health scan and we made, maybe it was a mistake at the time, I don't know but we brought up the idea of innovation, the go-to-market strategy that created the most raucous conversation, because people believe that they were innovating in their work. And actually, when we think of innovation, we think of Apple, a company that turns what we do upside down on its head like totally new ways. They weren't doing anything new. They were adding in some cool things, but we lost them at that point.
I think it's helpful. I hope that some of our listeners could take a moment to reflect like hey, we think we're innovative and, of course, to have innovation, you have to have a safe environment where people are able to make mistakes and challenge the status quo, and there has to be some level of psychological safety to have innovation. But most of our organizations are not creating some new category or some new product or some new way to solve a problem. There are some that are. I just thought it was helpful to use that example.
OA: I have the feeling that you were listening in in my interviews with the client who just described.
SB: Because they were like no, we are innovating, we're amazing.
OA: You're so right. And when we talk about innovation, there's hardcore innovation, like for these clients, it's investing in very sophisticated measurement machine that will allow them to do more sophisticated diagnostic and things like this. So there's the Apple type innovation. But what I found was striking in my conversation in this particular company is and I would nuance what you just said, sarah there actually is psychological safety, but the way innovation should work is people feel safe, making suggestions.
Hey what if we were doing this thing differently, what about we were coordinating our schedule? Because right now it's very quick and innovation comes from saying, hey, you know what that's interesting? We should pay attention to this. Let's try something that is innovation on a daily basis, small increments of improvement, but in this particular organization they have a little bit of a risk aversion that makes them very slow to actually pay attention to those ideas. That is tifling innovation in a very concrete way, although very small. But that is innovation in most SMBs incremental improvements, and it won't happen unless the leadership appreciates that they haven't necessarily come across as being overly open to that sort of suggestions.
SB: Right, well said, we've talked about execution tax. I think what I understand about the book is you want leaders to know the whole story, not just one half of the story, which is we need to have a strategy. No, we need to execute on that strategy very effectively, and I'm thinking about how to give very practical examples. The one that keeps coming up for me personally is when P90X came out. John, you've heard me talk about this before. Oh, yeah.
You buy the DVDs, this great little set of DVDs, and you get to work. I had a strategy, which was to use this program to get healthy, and in my mind, I was already healthy, because I bought the program but it was on the shelf, like the right hand was not aware that the left hand wasn't doing the program. I was wondering why I wasn't getting results. Now, mind you, this is a pretty extreme or dramatic example, but is that what we're talking about? When execution fails and there is an alignment that we've got a group of people who are doing something, but it's not even related to the desired outcome, nor is it implementing the strategy. Is that really what we're talking about?
RC: It can be one of the things that the way that we measure, when we actually do the assessment, is we use something called confidence-based marking. Yeah, so not only do I agree the statement is accurate, but how confident am I that it's true? You can have people making aggressive decisions and mistakes that fly in the face of strategy, right, because they're not aligned on it, right? I've seen this in some businesses where it was like I'll give you an example there was a printing company. They made a tremendous investment. They bought this giant printer the size of a house. It was meant for long print runs. It was very, very efficient. They could produce things much cheaper. But in a large batch, leadership of the company they bought that machine. They pivoted away from, they tried to do more customized short-run solutions and it was like they were very confident that they wanted to minimize the cost on this machine. But the strategy pivoted away from these long runs and big productions to short runs and it didn't make sense and they got stuck with this like $48 million machine.
SB: Yeah, it makes a lot of sense. So if I'm a leader, what are the kind of things I should be watching out for? That I'm probably even doing? That would bomb my strategy. That would fail the execution not relentlessly over communicating.
RC: I mean your people should know mission vision, strategic intent. They should know the strategy and how they contribute to it. It should prioritize day-to-day work for all employees.
SB: I think that's helpful. I know you give some good examples in the book, but it's the day-to-day work, when not in alignment with the strategy, that is not going to achieve the outcome. I don't want to make it so simple, but I think it is that simple, would you?
RC: Agree, I don't want to be super reductive either, but there's examples in the book. I mean the methodology, it's nothing like revolutionary out there, it's just, when it comes down to it, it's the discipline to actually do it. Yeah, I mean, we give you a way to look at where the gaps are, and then you actually have to do it.
JB: You got to do something with it, and really quick. I mean. As we start to pull this into the station because I want to talk about the book launch, the book tour, I want to give a quick example of where we've seen this work firsthand. All four of us know this client, great client, here in our great state of Ohio. They employ about six or 700 people, but we did every level. We looked at every strata CEO, executive team, senior leadership, more broad leadership team.
It's so interesting as you start to drill down and at cascades you see the alignment break apart. It was transformative because they took of the five KSEs, they took strategic understanding, leadership and human capital. Those were the three and we met with them several times. Their team came up with, they created their own strategy for creating that alignment around execution. A year later they pulsed it and you saw I mean we all worked through this we saw the increases. It works. But it doesn't work if you're just guessing at it and you don't have that objective data to see where are we aligned and where are we misaligned. We're talking now about one of the big themes that we're rolling out at Real Good Ventures is reinventing the workplace. I think this is instrumental in reinventing the way we work and certainly how we execute on our strategy. Let's talk about the book launch, the book tour. What do you guys up to tell us what the world can expect around line of sight?
RC: We're doing local book events with all of our implementers. We're coming in. We're doing book signings and kind of like a, some of them are going to be panel-based. Some of them are going to be more TED Talk style. We're going to be traveling around. We have implementers all over the country, so pretty excited about that.
SB: Yeah, we're having an event here in our area or up here in Northwest Ohio in the next month or so, very excited, going through our local university and the family business center located there, which is powerful.
OA: I think we're all also practitioners into behavioral analytics and we all use this platform called the Predictive Index. I think one thing that we like to say about that sort of tool is that it contributes to self-awareness. I like to say that self-awareness is a gift. I think the good leader is primarily a self-aware leader. So, really, what we're doing is nothing anything different than saying if a good leader is a self-aware leader, the good execution leader should be also one who's aware of the strengths and weaknesses of the organization. Think of this as self-awareness for organizations with the same degree of simplicity. Therefore, we'd like to share this gift of good execution simple execution principles. That's why we wrote the book. We think that it's a little bit of a gift that we should give to company founders and executives, because it's really paramount. It's fundamental to success self-awareness and awareness of your strengths in terms of execution.
JB: Well, I just want to remind all of our listeners go into the show notes. You'll find a link to not only Line of Sight but also Robert's information and Olivier's information. Get the book. There's a link in there. It's available right now in all places where you buy your books. Sara, give us the full title. I love the title. We happen to be inside baseball while this was being written. The process one, Robert and Olivier, I think you would agree it's a grueling process, right, yeah, but you survived. I think the fruits of your labor are going to be recognized. But, Sara, just share the full title with everybody. I love the title.
SB: Absolutely, "Line of Sight the five keys for strategic execution in an age of uncertainty. I think that we only got to highlight a snippet of the insights both of you offer here and your infinite wisdom. I find both of you to be incredibly smart and savvy when it comes to just making things better and more effective and more efficient. So this is really about outcomes. It's about getting to where you want to go and removing some of the friction that we might not even know is in the way.
RC: One of the lenses that Olivier and I looked through as we were creating this book was simply just by reading this, you're going to get left.
SB: Yes.
RC: And then it was like our North Star the entire time we were writing this book. That's powerful.
SB: So you don't have to go out and buy a system or engage in a software. You can, but this will transform the way you approach execution. There's a line, "Strategy is taught, execution is not, and I think that's true when you talk about managers and leaders that don't have, never gotten the skills or the education. This is an elusive deal, this execution, so you make it pretty simple and straightforward in its education.
JB: Well, listen, guys. This is great. We are so thankful to be associated with both of you and, as Sara said, your expertise, what you bring to elevating who we are as professionals, is felt at real good ventures. But thank you for being part of the Bosshole Transformation Nation. Let's have you back again and talk more about how Line of Sight is literally reinventing the workplace. How does that sound?
RC: Awesome.
JB: All right, we'll see you next time on the Bosshole Chronicles. We'd like to thank our guests today on the Bosshole Chronicles and if you have a Bosshole Chronicles story of your own, please email us at mystory@thebossholechronicles.com. Once again, mystory@thebossholechronicles.com. We'll see you again soon.