Larry Bossidy is the former CEO and Chairman of Honeywell International and the author of the best-selling business books "Execution: The Discipline of Getting Things Done" and "Confronting Reality: Doing What Matters to Get Things Right"

Mr. Bossidy is leading the Special Management Program Larry Bossidy & Execution in Action on April 30 - May 1, 2009 which is part of the special 5-day intensive Executive learning program Management Week 2009 along with Best-Selling author and former Medtronic CEO Bill George and Southwest Airlines Co-Founder Herb Kelleher.

The Execution-Oriented Company

Three new realities

My partner, Ram Charan, and I are of the belief that business success, that is the shrewd instinctual feel for making money, relies on two primary abilities. One is to perceive reality correctly. The second is to execute a plan based on that reality.

There are three things that I am convinced will change your business life, three things that you have to both understand and then adjust to.

The first is the arrival of globalization. Globalization has been talked about for more than a decade. It’s here now. It has promoted outsourcing. It has provided excess capacity in industries. It has suppressed prices and margins. And, there is no question that it has changed the way you think about being cost competitive.

The second is the availability of credit. Today, businesses fail, but they don’t go out of business. Airlines are a good example. As a result, excess capacity never gets corrected.

The third is the arrival of the mega-merchants. The Home Depots, the Lowe’s and the Wal-Marts have, on the one hand, brought lower prices to consumers, but they have also left in their wake the destruction of many small businesses that were once vital and profitable.

The point of these three is simply this: Even if you don’t feel them today, you will feel them. They have brought about the need in business to look more carefully at the environment that you are in. They create the need for you to be more sensitive to the happenings around you, a lot more anticipatory and a lot more willing to make quantum change in your business. That means confronting reality.

The primary job of leaders

If you are able to confront reality, the question is how do you run the company so that it can be successful. If you look at history, it isn’t the lack of intellect, it isn’t the lack of vision, it isn’t the lack of strategy which causes so many companies to go adrift, but rather the inability to execute. What does execution mean? It is a discipline of creating, energizing and sustaining an integrated business system for actually getting things done. It is the primary job of the leader. If the leader of your business isn’t interested in execution, you can be sure that your company isn’t. But if you can execute on a continued basis year after year, you are going to command a higher price/earnings multiple than those in your crowd who don’t. There is a significant economic advantage if you base your company on sustained execution.

Three elements of execution-oriented companies

An integrated business system has three important aspects: strategy, operations and people. And you must think about them as being linked. By thinking of them in tandem, as opposed to separately, you get a far more productive and robust outcome. Strategy is more of a road map than a detailed plan. It gets more managers involved in its formation under the premise that these are the people that are going to implement the plan. And it has only four principal parts: an analysis of the environment, a plan for growth, a plan for productivity, and overview of the issues facing the business and their solutions. Operations starts with an operating plan which is full of detail, because the essence of an operating plan and the essence of execution is accountability. You assign accountability when you do the operating plan. You elicit the support of all the people in the business, you put a contingency plan in place, and when the plan is done, you follow up on it. Execution-oriented companies like follow-up. The third aspect of this troika is people. Not just in their selection or training, as important as that is, but in their development too. It’s remarkable how many companies tell you that people are their most important asset and yet, they don’t do follow-through in terms of the way they build, assess and develop that most important asset. But if all those things happen on a continual basis, then you begin to get a work force that you can depend on.

The qualities of successful managers

You want to have people who have some innate business savvy. There’s just no way to make up for people who have the ability to look around corners, who can anticipate oncoming events, and are prepared to deal with them if and when they occur.You want to have people who need to know, who have a wonderful thirst for knowledge and who are continually looking to the opinions of others to blend with their own. I also have always done better with people who understand what is required and do it as opposed to spending a lot of time protesting it. You should look for people who you can assemble into teams. You can’t afford to work with people who don’t want to participate in teamwork. I also look for people who are not pompous; people who are not captivated by their own thoughts. I like to have people who progress as the world
progresses and change as the world changes.

Six characteristics of execution-oriented companies

At the end of the day, I think there are six common characteristics of high-execution companies:

• They have leaders who know their business and know their people. They know their business to the extent that they can take a position on matters that come before them. They might give way to another position, but nonetheless, they can weigh in because they have a knowledge of what they are involved in.
• They constantly embrace realism. How many companies do you know that are chasing ideas that have no chance of success and are wasting both money and people’s time in that pursuit? They don’t look at the environment in which they are going to incorporate this idea and make sure that it can accept it, absorb it and be successful with it. That is just as important as the idea itself.
• They set clear goals — and not too many of them. Everybody in the organization knows what it is they are trying to accomplish. The clearer the goals, the more accountability, responsiveness and success.
• They reward the doers. In other words, they differentiate on salaries and on bonuses and on other perquisites because that is the mother’s milk of keeping great people.
• They coach their people. It is a responsibility of leadership to be coaching people who can someday replace you.
• Finally, they know themselves. The higher you go, the less likely it will be for someone to come in and give you a candid appraisal. So, you have got to be ever more vigilant on the things you do well and the things you can do better.

Being an execution-oriented company is exciting, dynamic and difficult. But you can be sure it will put you in the winner’s circle.

To learn more about Larry Bossidy and Execution as well as how to be part of Management Week 2009 with Bill George, Herb Kelleher and Larry Bossidy, visit http://www.hsmglobal.com/us/managementweek

To see the entire calendar of Upcoming HSM Events including the World Business Forum 2009, visit the HSM Corporate Homepage.