Expert Voice: Larry Bossidy on Getting It DoneBy Paul B. Brown | Posted 06-17-2002
Expert Voice: Larry Bossidy on Getting It Done
Just Do It
A funny thing happened on the way to the new economy, the place where only ideas would matter and everything else would become a commodity. It turns out that by themselves, ideas are basically worthless. You need to turn them into reality. In other words, whether you are in the new economy or the old, you need to execute. Most senior managers, including CIOs, don't execute well, says Lawrence A. Bossidy, Chairman and CEO of Honeywell International Inc. Bossidy has seen the problem time and time again during his 40-plus years in business. From his earliest days in the financial management training program at General Electric Co. Through his rise to the top rankshe was vice chairman before leaving in 1991 to run Alliedsignal Inc., where, during his tenure, earnings per share rose at least 13 percent for 31 consecutive quartersBossidy has seen bright, technically capable managers who just couldn't do their jobs effectively. The most frequent problem? Poor executionor none at all. What does it mean to execute? That's simple, says the 66-year-old Bossidy, who guided Alliedsignal through its December 1999 merger with Honeywell, retired four months later, then came out of retirement in July 2001 to return to Honeywell. Execution is the ability to mesh strategy with reality, align people with goals and achieve the promised results. Here, in a conversation with Paul B. Brown, Bossidy expands on the ideas contained in his book Execution: The Discipline of Getting Things Done (coauthored with Ram Charan), which was published this month by Crown Business.
My job at Honeywell International these days is to restore the discipline of execution to a company that had lost it. Many people regard execution as detail work that's beneath the dignity of a true business leader, be he the CEO, the CFO, the CIO or the head of a business unit. That's wrong. To the contrary, it's a leader's most important job.
Oh, I understand why most leadersand again I am definitely including the company's CIO in that categorydon't want to do it. At the end of the day, what would you rather do, tell your spouse you got your hands dirty with the details, or that you thought great thoughts? Saying you get involved in the details makes it sound as if you do almost menial work, and who wants to admit they do menial work? Too many CIOs think that if they say they've been involved in tactical issues all day, it somehow means they are presenting themselves as economic morons.
But most often today, the difference between a company and its competitors is the ability to execute. This is the great unaddressed issue in business today. Its absence is the biggest obstacle to success and the cause of the most disappointmentsdisappointments that are mistakenly attributed to other causes. So execution is key, and many CIOs are not very good at it. They are no different than other managers in this regard.
Our CIO reports to me, and I hold him to the same standards as my other direct reports. You don't want the CIO ducking under the financial guy, or the engineering guy. If it's an important enough part of your business, then they should report to the CEO. I hold our CIO to the same standards as the rest of our senior managers and, as I said, many CIOs, like many managers, are not very good at execution.
Why? In part, because they think execution is something they can delegate. And if they are involved, they believe it is a one-time thing. All they have to do is execute the task at hand. That is wrong. Your job as the head of a department such as IT is to put tools and systems in place so that getting things done becomes a part of the culture. You need to identify, reward and promote people for getting things done, as opposed to being a philosopher, a conceptual genius or a master of the technology. Knowing the strategy and the technology are important, of course, but if you can't execute, ultimately your organization is going to fail.
CIOs have become critical to the operation and the enterprise. (That's why, by the way, they report to the CEO.) So they especially need to concentrate on execution. When they fall short, it is always for the same reasons: The project is late and comes in over budget. When they miss, they miss because they're late on software. They overestimated how quickly they could develop the software, or they overestimated how quickly they could put in a new system.
How do you get things done? It starts with your people. You need to have people in place who will execute. That is more important than where they went to school or what their technical expertise is.
I don't want a CIO who's ahead of his timesearching for what is going to be the next big thingbecause he's too expensive. And I don't want a CIO who's behind the times, because he's also too expensive. So I've got to find a guy who is carefully calibrated and practical, and I search for that all the time. I don't want to be catching up all the time, and I don't want to be a pioneer. So we try to calibrate that performance within that envelope.
Our CIO spends a lot of time on people. I hold him responsible for all the top IT positions around the company. They don't get hired unless he participates. So he knows a lot about the people, and therefore he develops a good understanding of what their capabilities are. So if someone comes in and says, "I want to put an ERP system in," he has some sense whether the guy has the capability, and the staff, to be able to do that.
This is also why you want to promote from within. I'd rather hire the person who has all the credentials early on and have him tested. I want to see him perform before I promote him. I don't care how good you are in terms of evaluating peopleand we work hard at thatif you hire a lot of people from the outside, you'll have a lower batting average than if you promote from within.
I will tell you that if we have to go outside, we check the person's track record for execution very carefully. For a senior hire like a CIO, I myself will check references. You have to know if someone can get the work done. I don't care if they have elite educations. I mean, that's helpful, but I don't care if they don't. And I don't care if they've had experience with more than one company. What I really want to know is, can they perform?
Once you've put the right people in place, you have to put in a companywide system that encourages executionand penalizes failure. The system is made up in part of agreeing on goals ahead of time, making sure there are resources and coaching available to achieve those goals, and accountability. Let's take them one at a time.
People want to know how they are going to be judged. And they should. I sit down with each of my direct reportsthe CIO, for instanceat the beginning of the year, and he puts down some goals and objectives. He'll make the first pass at that. Then I'll look at those goals and objectives, and I may change them, modify them, and then we have iteration. When it's complete, we both sign it, and then at the end of the year I measure him against the completion of what is written down.
This is an extremely important part of making sure things get done. We want to get down goals that are fair and honest, and ones he can reach. I think I have a pretty good handle on what's supposed to get done. I don't want him to have goals that are unrealistic and can't be attained.
And we make those goals very specific. For example, this year our CIO has a major digitization challenge. In other words, we're trying to get rid of all the paper. So we're very specific about what his goals arewe want to eliminate half the paperwork companywide by this date, and all of it by that one. And I'll make sure he will have enough time, people and money to get the job done. (Remember, we both agreed to this upfront.) And then I'll sit down with him during the year and see how he's doing against those goals. If he isn't going to make it, I want to know beforehand and see if I can help him.
Can I teach you to execute better? Yes, if you want to learn. I can give you a discipline that would make you improve if you were to follow it. The discipline involves the same six principles I use to try to do a better job: Know your people and your business, insist on realism, set clear goals and priorities, reward the doers, expand people's capabilities through productive dialogue, and know yourself. And I would help you through each of the steps by showing you, for example, exactly how to insist on realism.
Here's one way. You never accept a personal evaluationwe call them management resource reviewsin which someone says one of his direct reports is doing "wonderfully," and under the heading of Development Needs he puts "none." Who is this manager kidding? Even Michael Jordan has some development needs. How can a leader help a person when he tells her she has no development needs?
Would my coaching make you the best ever, when it came to execution? No. Would it make you better at it than you are now? Yes. You know, what people do at the end of the day is basically what they want to do. And if people find that leading an organization or concentrating on execution is a bore, they're not going to do as well at it as they are at something they have a higher level of interest in. So coaching can only take you so far.
But the bigger point is that there is a clear identification of what the performance goals are, and therefore what the execution requirements are. The targets are laid down against a vocabulary that everybody shares. And I think that's the key here.
And one of the goals you are definitely going to be judged on is how many people you develop. You're supposed to be identifying people with potential, you're supposed to be giving them growth opportunities, you're supposed to be working with them on development needs. Whether you do these things will determine in large part how far you go in the organization.
Praise and Punish
Praise and Punish
The final step is to see how well people are executing against their objectives.
I try to be very pointed in my own appraisals. I don't mean destructive, but I try to be as precise as I can be on people's development needs, and if I go back the next year and find out they have got the same development needs, I don't feel very good about myself.
But again, it is not a one-off. There is constant feedback and coaching. We have an intense personnel process in which we are constantly evaluating people to see not only how well they are performing in terms of executing what they have agreed to do, but also their behaviorare they open with the people who report to them, working well with others in the organization and the like.
We basically graph their performance on a simple grid with performance on the vertical access and behavior on the horizontal one. We want them to score on the far right-hand side of the grid, and we work with them extensively to help them get there. And we have an intense budgetary process where we look to see whether people meet their commitments or not. So it's reinforced almost every day, although in different ways.
We're always calibrating against those three processes and looking to see how people are executing against them. Eventually, it becomes part of the culture. For example, people know we don't want a strategic plan without seeing how it can be executed.
And if they execute, they are rewarded. We differentiate in pay, options, promotions, bonuses and everything else, based on performance. The differentiation occurs by virtue of an honest appraisal system where we determine if people are executing.
I think our approach tends to attract better people, and that's what you want to have happen. I think it builds a culture where people look and see that the company is rewarding people who perform, people who execute. That's what I think Jack Welch did at GE, and that's what I've tried to do. Good people want to be a part of cultures that differentiate.
Paul B. Brown is the author of 13 business books, including the international bestseller Customers for Life. Doubleday will publish an updated version of the book, written with Carl Sewell, this fall. Please send comments on this story to email@example.com.