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MBA First Year, Trimester 1, Session: 2014-15

Individual Dynamics and Leadership

Book Review

Execution: The Discipline Of Getting Things Done

- Larry Bossidy & Ram Charan

Submitted By:

C004 Rohith Aravalli C015 Karan Dedhia C021 Rishi Jain C037 Vineet Mishra C047 Priyesh Saurabh C058 Yashowardhan Swami C068 Krati Rathi

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Table of Contents

Introduction and summary of the book ......................................................................................... 3

Statement of Objectives of the Study ............................................................................................. 3

Method of Study ............................................................................................................................. 4

Chapter wise Summary and critical analysis................................................................................. 4

Theoretical Frameworks ................................................................................................................ 8

Relating theory to practical aspects of human behaviour ............................................................. 9

Learning and Conclusion……………………………………………………………………………11

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Introduction and summary of the book

Lawrence A. ("Larry") Bossidy is a businessman and author. He is a retired CEO of

AlliedSignal (later Honeywell), and has also spent more than 30 years rising into executive

power at General Electric. Ram Charan is an Indian-American business consultant, speaker

and writer. He is highly sought after advisor to CEOs and senior executives of companies

such as GE, KLM and Bank of America.

Organizations face many challenges in today’s shaky economy — competitive battles,

increased costs, decreased margins, and a host of other internal and external forces. In order

to shore up their companies’ responses to these factors, today’s leaders must be able to take

the goals they set for their organizations and turn them into results. Unfortunately, too many

companies struggle to bridge the gap between goals and results — they create solid, logical,

even bold plans, but are unable to execute properly.

Honeywell CEO Larry Bossidy and management advisor Ram Charan contend that the

reason for this gap is that business people do not think about execution as a discipline or a

cornerstone of a business’ culture — and they must. From middle management all the way up

to CEO, a company’s leaders must recognize execution as the most important collective set

of activities in which they can engage. No more is there room for leaders who rely merely on

their vision to get from goals to results. In order to survive, they must get more involved in

the details of execution. There is much work to be done, and Execution shows you how to do

it.

Statement of Objectives of the Study

The purpose of this writing is to understand the reasons behind companies' successes and

failures and analyse the various behavioural characteristics of the key people responsible

for the same in different companies as per the examples cited in the book.

Observe personality traits of CEOs of various Multinational Companies and apply

models to it.

Study how they motivate the employees at grassroots in order to synchronize their

goals with those of the organization.

Examine the different emotions and moods experienced by leaders and how to tackle

the discrepancies.

Critical analysis of the authors’ responses and feedback on the measures taken by

CEOs to execute plan

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Method of Study

For reviewing the book, the following method was adapted

1. Different behavioural models of Perception, Leadership, and Motivation were studied from

the Organizational Behaviour course book.

2. The book 'Execution: The Discipline of Getting Things Done' was thoroughly read

keeping in mind the theories which can be applied.

3. For each Chapter the incidents which signify different personality and behavioural traits

were noted down by each of the group members.

4. The chapter-wise points were consolidated and similar points were grouped under a

common behavioural trait.

5. Chapter wise summary and critical analysis was done as a group activity.

6. Relative theoretical frameworks and practical aspects of the theories were discussed.

7. Individual learning experiences were compiled and a common learning and conclusion

was arrived upon by group discussion.

Chapter wise summary and critical analysis

Chapter 1: The Gap Nobody knows

When a company’s strategies fail it is not because that CEO’s strategy was wrong but

because mostly that strategies are not executed well. The reason may inability of

organisations to execute them or due to mismanagement of challenges by leaders or both.

The so called breakthrough thinking or big thoughts are pointless if it doesn’t transform into

concrete steps for action. The learning from these thoughts adds no values neither people are

able to meet their goals. Meaningful change or taking organisation to next level comes only

when organisation’s people come together and discuss specific things that need to be done.

Execution will just remain a word if it is not incorporated in organisation’s culture and is not

integral to its strategies. Also majority of the onus for execution lies on business’ leader.

Chapter 2: The Execution Difference

Three examples are given; two of them were from Xerox and Lucent of which poor

execution is described. It shows that judging a person’s intelligence is generally easy but

assessing their past performance is difficult. It is even difficult to assess whether will be able

to ask right questions to right people at right time to enforce execution. The third example is

of good execution at EDS where its leader transformed the company’s performance and

regained its image. The whole difference was of Execution.

Chapter 3 – Building Block One: The Leader’s Seven Essential Behaviour

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1. Know your people and your business

Authors highlight the importance of leader's personal understanding, involvement and

commitment necessary towards the progress of the business. A leader should have an

open mind and a positive demeanor to have personal connections at all levels of the

organization. Jack Welch learned the attitudes, skills and resources needed to get

necessary changes rolling quickly throughout General Electric.

2. Insist on realism

According to Larry, embracing realism means always taking a realistic view of your

company, internally and externally, and comparing it with other companies. It is the

heart of execution, but it often makes people uncomfortable. People prefer to hide

mistakes or buy time to find solutions rather than to admit their mistake.

3. Set clear goals and priorities Leaders should set few, simple, clearly realistic goals and priorities so that others can

understand, evaluate and act of them to produce best results from the resources at

hand.

4. Follow through Authors discuss how a high tech company which was hit hard by recession of 2001

revived. The CEO surfaces a conflict that acted as a hindrance in achieving goals and

created a follow-through mechanism to ensure that everyone does what they are

supposed to do.

5. Reward the doers

Larry emphasizes on the fact that a good leader ensures that the organization makes

distinction on the performance of the employee and reward them accordingly.

6. Expand people's capabilities through coaching A leader who has already gained knowledge and experience should disseminate the

learning’s and coach the group by giving useful feedback. Honeywell's learning

strategy is based on the organizing capabilities people need by mastering tools like

six sigma, digitization.

7. Know yourself

Good leaders build on their own strengths and delegate their weaknesses providing a

foundation of good people's skills. Emotional fortitude comes from self-discovery

and self-mastery.

Chapter 4 - Building Block 2: Creating The Framework For Cultural Change

The chapter states the importance of software (beliefs and behaviors) in an organization. It

discusses the social operating mechanisms to change the beliefs and behaviors of people,

which will further lead to change in the work culture of an organization. The beliefs that

influence specific behaviors are more likely to change. Hardware (organizational structure)

and software (beliefs and behaviors of people) in combination create the social relationships,

the norms of behavior, the power relationships, flows of information, and flows of decisions.

A key component of software is Social Operating Mechanisms. These are formal/informal

meetings, presentations, memos or e-mail exchange. These mechanisms are integrative and

expand the leaders’ behaviors, beliefs and mode of dialogue throughout the organization.

Linked to one another and to the measurement and reward systems, the Social Operating

Mechanisms collectively become what we call the Social Operating System of the

corporation. This chapter has very beautifully cited the example of the operating system of

GE.

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Chapter 5 - Building Block Three: The Job No Leader Should Delegate – having the

Right People in the Right Place Leaders proclaim that their people are their biggest assets. But do they really put thought

behind whom to hire, where to hire and why to hire. The quality of their people is the best

competitive differentiator. The results of right people in right role might not be evident

immediately but in the long run this is what makes the biggest difference.Leader’s of

consistently successful business focus intensely and relentlessly on people selection.

Why the right people aren’t in the right jobs:

Lack of knowledge and commitment

Lack of courage and decisiveness

The psychological comfort factor

What kind of people are you looking for?

They energize people

They’re decisive on tough issues

They get things done through others and follow up

Hiring and developing people should be one of the topmost priorities of a company. A

person who is equipped to take the business to the next level should be the company’s search

criteria.

Chapter 6: The People process: Making the Link with Strategy and Operations

The people process is more important than strategy or operations processes. It is

recommended that to fulfill a business’ potential one should get people process right. A

robust people process does 3 things - it evaluates individuals accurately and in depth. It

provides a tool for identifying and developing leadership talent and it fills the leadership

pipeline which is the basis of a strong succession plan. However, very few companies

accomplish all of these since they evaluate people on basis of what they are doing today and

not whether they can handle the jobs of tomorrow.

A robust people process provides a powerful framework for determining the organization's

talent needs over time and for planning actions to achieve those needs. It includes developing

the leadership pipeline through continuous improvement, succession depth and reducing

reduction risk, deciding what to do about non-performers and transforming the mission and

operations of HR to be better aligned with business goals. Finally, there is no single system

for creating and maintaining a robust people process, but it should follows certain rules such

as integrity, honesty, a common approach, common language and frequency. Thus this

chapter summarizes the importance of 4 basic skills: functional, business, management and

leadership skills. It is essential to consider these competencies when considering people in

the organization and what is next for them.

Chapter 7- The Strategy Process: Making the Link with People and Operations Goal of a strategy is to win the customer’s preference and create a sustainable competitive

advantage while leaving sufficient money for shareholders. Author believes that a good

planning process requires the utmost attention to the ―hows‖ of the executing the strategy.

While explaining importance of ―hows‖ the author gives the example of AT&T Company

and reasons for the failure of their strategy. According to the author, a strategy has to be

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constructed and owned by those who will execute it, namely the line people. Staff people can

help by collecting data and using analytical tools but the business leaders must be in-charge

of developing the substance of the strategic plan. For strong strategic plan one must address

the following questions:

What is the assessment of the external environment?

How well do you understand the existing customers and markets?

What is the best way to grow the business profitably, and what are the obstacles to

growth?

Who is their competition?

Can the business execute the strategy?

Are the short term and long term goals balanced?

What are the critical issues facing the business?

How will the business make money on a sustainable basis

Chapter 8: How to conduct a Strategy Review

Author believes in Jack Welch’s style of business strategy review where the big fat strategy

books are banned and get everybody thinking and talking about reality .He also believes the

business unit strategy review is the prime Social Operating Mechanism of the strategy

process. It provides the last chance to get things right before the plan faces the ultimate test

of the real world. He believes strategy review should be a creative process not a drill where

people regurgitate data. The strategy review is also a good place for a leader to learn about

and develop people.Author feels before doing a strategy review certain questions have to be

discussed

How well versed is each business unit team about the competition?

How strong is the organizational capability to execute the strategy?

Is the plan scattered or sharply focused?

Are we choosing the right ideas?

Are the linkages with people and operations clear?

The strategy review needs to analyze the competition. Far too often, competitor analysis is

focused only on past history: industry dynamics, cost structure, market share, brand

differentiation, and power in distribution channels. Author also emphases that organization

should take into account of their capabilities to implement the new strategy.

As businesses pursue growth by expanding their offerings, they often end up trying to

provide more goods and services than they can handle comfortably. Author feels that this not

the right way to do the business. No matter how well is the execution, risk of failure

increases markedly when the ideas developed don’t fit with existing capabilities. At the end

of the strategy review, write a letter to each of the leaders to solidify and confirm the

agreements made so that later can use them as the basis for reviewing progress.

Chapter 9: The Operations Process: Making the Link with Strategy and People

The chapter talks about how managers may make their operating plans based on budgets

which defeat the very purpose of planning. It talks about how a manager should be involved

in every stage of planning and execution and must make sure that his team is aligned. While

making an operating plan it becomes necessary that all the segments of thebusiness are

synchronized and all assumptions both positive and negative, are clearly communicated at

the beginning. There will be situations during which the manager will have to make trade-

offs between options that are available to him and select the option that is best suited. The

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most important aspect of an operating process is to identify targets that clearly reflect not

only what business wants to achieve but what it is likely to achieve. An operating process

should be such that it should link both strategy and people to results.

Theoretical Frameworks

There are several theories which one will encounter while reading the book. Listed below are

some of the theories which form the framework of the book:

Mintzberg’s Managerial roles

Managerial Activities

Traditional Management: Decision making, planning and controlling.

Communication: Exchanging information and processing paperwork.

Human Resource Management: Motivating, disciplining, manage conflict, staffing and

training.

Networking: Socializing, politicking and interacting with others.

Personality and Values

Personality

Definition: The sum total of ways in which an individual reacts to and interacts with others.

Big 5/OCEAN model

Openness to experience: A trait that characterizes someone who is gregarious,

assertive and sociable

Conscientiousness: A trait that characterizes someone who is responsible, organized,

dependable and persistent

Extraversion: A trait that characterizes someone who is gregarious, assertive and

sociable

Agreeableness: A trait that characterizes someone who is cooperative, warm, and

trusting

Neuroticism: A trait that characterizes someone who is nervous, anxious, depressed

and insecure

Perception and Individual Decision Making

Perception

Definition: A process by which individuals organize and interpret their sensory impressions

in order to give meaning to their environment

Overconfidence Bias: Believing too much in one’s own ability to make good

decisions.

Definition: All managers are required to perform

duties that are ceremonial and symbolic in nature

(Interpersonal). They collect information from outside

organizations and institutions (Informational) and are

required to make choices (Decisional).

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Availability bias -Availability bias is a human cognitive bias that causes people to

overestimate the probability of events associated with memorable or vivid

occurrences.

Anchoring Bias - The act of basing a judgment on a familiar reference point that is

incomplete or irrelevant to the problem that is being solved.

Bounded Rationality (decision making) - Bounded rationality is the idea that in

decision-making, rationality of individuals is limited by the information they have,

the cognitive limitations of their minds, and the finite amount of time they have to

make a decision

Learning

A relatively permanent change in behavior that occurs as a result of experience.

Operant Conditioning: A type of conditioning in which desired voluntary behaviour

leads to a reward or prevents a punishment.

Punishment -Something unpleasant added. You can use punishment as a means of

decreasing the probability of an undesired behaviour happening again.

Schedule of Reinforcement - A schedule of reinforcement is basically a rule stating

which instances of behaviour will be reinforced. In some case, behaviour might be

reinforced every time it occurs. Sometimes, behaviour might not be reinforced at all.

Leadership

Transformational Leadership - Transformational leadership enhances the motivation,

morale, and job performance of followers through a variety of mechanisms. These include

connecting the follower's sense of identity and self to the project and the collective identity

of the organization; being a role model; challenging followers to take greater ownership, and

understanding the strengths and weaknesses of followers.

Relating theory to practical aspects of human behaviour

Some leaders make decisions based on Availability bias when they avoid taking the

initiative to analyse the problem in depth and deal with the superficial information delivered

to them through reports by staff which is gathered with their perceptions and limitations

gathered.

It is described in book that Jack Welch admitted his Overconfidence bias that he made

several mistakes in hiring people in his early career as he was too confident about his

decision and never thought of the problems, which could have risen.

Dick Brown’s personal level of connection at all levels of organization at EDS fostered a

sense of belonging in the employees. His employees had strong Perceived Organisational

Support showing greater organisational citizenship behaviour and better customer service.

Jack Welch displayed deep Job Involvement when he personally visited Emmanuel

Kampouris, the CEO of American Standard instead of sending the manufacturing team to

investigate about the powerful tool for faster inventory turnover and greater cash liquidity.

After spending hours and involving himself deeply with the subject, Welch learned the

attitude and skills required to run the same at GE.

When it comes to Big Five Model, Larry Bossidy while working at Honeywell International

displayed Extraversion as he reviewed the business activities personally and promoted the

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ability to intellectually intense debates with the employees to find best solutions for a given

problem. Being highly emotionally expressive, he used to write personal letters to employees

appreciating the efforts put by them. Openness to experience was displayed by

boundarylessness that Jack Welch introduced assures a constant exchange of ideas and best

practices among diverse business managers, significantly multiplying the company’s

intellectual capital. As described in the book, Bob Lutz, vice chairman of General Motors is

example of conscientiousness. Lutz is not only has great understanding of customer needs

but is a cost-conscious team player. During his stint at Ford and Chrysler he developed new

products with shorter development cycles.

It is described in the chapter that to get things done we need to utilise positive

reinforcement theory. One needs to change people’s behaviour so that they produce results.

First you tell people clearly what results you’re looking for. Then you discuss how to get

those results, as a key element of the coaching process. Then you reward people for

producing the results. If they come up short, you provide additional coaching, withdraw

rewards, give them other jobs, or let them go.

Negative behaviour from senior personnel prevents their teams from working together

effectively. An executive vice president of a company was removed and punishment

became imperative since his behaviour was very poor. He cursed his people openly on an

intercom connected to several offices in different locations, used vulgar language with CEO

when asked to restructure his unit to meet certain performance targets.

The book points out that you cannot have an execution culture without robust dialogue— one

that brings reality to the surface through openness, candour, and informality. Robust dialogue

starts when people go in with open minds and let go there perceptions. They’re not trapped

by preconceptions or armed with a private agenda.

Leaders sometimes focus too much on planning instead of execution. In a market scenario

there is no situation that is constant so what is true today may not be the same tomorrow. The

approach is to start working with simplified models and adapting as per requirements. That

clearly explains the Bounder Rationality decision making process

CEO of a $4 billion US chemical company invested to build a plant in Indonesia and

assigned it to a Brazilian plant manager, a technical professional. However, he failed since he

did not understand relationships with customer, markets, pricing and relationship with

various government authorities in Indonesia thus proving the importance of conceptual

skills.

Book altogether describes Mintzberg’s managerial role of Leader. Execution happens

when employees work in a group, guided by a leader who has a comprehensive

understanding of the business and its environment, and by using the robust dialogue that’s

central to the execution culture, they all can contribute something—and all will benefit from

being part of the dialogue.

All in all, authors of the book focuses on Transformational Leadership to achieve execution of

strategies by evoking self-efficacy in employees and giving the teams and group a ―can-do‖ spirit. In

this way employees of the organisation are more likely to pursue ambitious goals and agree on strategic goals of the organisation by actively involving in the business. These attributes can be

achieved only if the leader of the organisation makes effort to stay deeply connected with company

and its employees.

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Learning and Conclusion

Conclusion

Leadership without the discipline of execution is incomplete and ineffective. Execution

oriented leader devotes an inordinate amount of time and energy to hiring, providing the

right experience for, and developing the leaders. Thus execution has to be embedded in the

reward system and norms of behaviour that everyone practices.

Bossidy and his co-authors capture one of the fundamental shortfalls in modern business and

in many other areas of life. Getting things done requires a level of commitment to execution

that is often missing. Know what to do and how to do it not doing. It re-enforces that idea

and offers the leader a number of options that can be used to improve individual, team and

business performance.

Learning The ideas and examples presented in this book are extremely informational. Below are the major takeaways from the book:

1. Execution is not tactical side of business or delegation. It starts with bottom-line of any strategy which leader should be delving into.

2. When strategies don’t work, start inspecting from the basics of action and plan rather than attributing it wrongly to other external aspects.

3. In an execution culture, leaders design strategies as road maps rather than rigid paths as

described in thick planning books.

4. Company closer to an execution culture doesn’t suffer from change shocks and adapt quickly

than others because they are closer to the situation

5. Leader of the organisation should be deeply and passionately involved to the organisation

which includes knowing realities and limitations of the organisation.

6. For execution three process needs to be in place – people process, strategy process and

operations process.

7. People process includes selecting great talent and appraising them constructively. Strategy

process includes defining goals and carving out plans fundamentally to realise it. Operations

process ensures that strategy gets converted into proposed specific actions.

8. People process should be interlinked with strategy and operations processes so as to be

effective in achieving business goals.

We would like to conclude the review stating that this was a great learning experience for all the

group members. It not only enhanced our knowledge of behavioural models and theories but also gave us a practical and first-hand experience at it. While discussing the case study different

behavioural traits of the group members were also seen which further lead to a deep understanding of

the theories and also the group members. We worked our way to understand everyone's point of view and reach consensus by discussion which proved to be the greatest learning curve for everyone.

Towards the end, we hope that we imbibe in us the qualities which make a person successful in

today's business world.