At the dawn of a new year, it is essential for all business owners to step back, breath and contemplate the future of their business and the wildly important goals they hope to achieve in the coming year. Every business has a strategy. Even the “no strategy” approach is, in essence, a strategy. I tend to believe the perfect strategy executed poorly will most likely yield mediocre results, while a mediocre strategy executed perfectly will most likely lead to excellent results. With that said, I would like to spend just a few moments in this article talking about executing on strategy.
Before determining business strategies for the given year it is wise for the business owner to get “big picture” and think about the long-term “Vision” of the business. Where is the business going? What are growth opportunities in new markets, new products or new service lines? How will the business impact the communities it serves? Business owners thinking in this way will be able to hold fast to the core values and core purpose (the foundational elements of the company) and springboard into lofty long-term goals requiring the company to change and adapt to an ever evolving market and economy. Vision involves painting a vivid picture of what the company will look like five, ten or twenty years down the road. Without Vision, it will be more challenging to engage the company’s employees and key stakeholders in executing on shorter-term, ground-level strategies. Simply put, all strategies/goals should somehow connect to the longer term Vision of the company.
One of the best books I have read on executing strategies is “The 4 Disciplines of Execution®”(4DX) co-authored by Chris McChesney, Sean Covey and Jim Huling. The concepts in 4DX make practical sense allowing for an easy-to-understand framework to implement with individuals and teams throughout an organization. I am pleased to say I have seen the 4DX methodology in action and – it works! The remainder of this article will touch very briefly on each of the four disciplines described in the book; however, I highly encourage reading it yourself to get a deeper perspective.
Discipline 1: Focus on the Wildly Important. Instead of giving mediocre effort to many goals, focused effort on only one or two goals will produce better results. Leaders of all types of companies struggle to narrow their focus and find themselves with two many competing priorities. The fact of the matter is this: a company’s most important goals will always go head-to-head against the “whirlwind”. The whirlwind is referred to as “the day job”, or the daily demands of the business needed to keep the business running. Don’t get me wrong, the whirlwind is important as it represents all of the urgent and critical things that must be done to keep the lights on. The whirlwind cannot and will not go away. The trick is being able to execute the company’s most important goals in the face of the whirlwind. Research has shown that when teams within an organization focus on more than three goals the chances of achieving any of the goals diminishes significantly. There will always be more good ideas than there is capacity to execute, therefore it is vital to focus on only the most important of goals. Simply put, Discipline 1 is about applying more energy against fewer goals. Once the goal is determined, a clear finish line is necessary to help keep the organization focused. It is not enough to say, “We want to improve customer satisfaction”. It is better to say, “We will improve customer satisfaction by increasing our customer satisfaction index from 78.3 to 85.0 by December 31, 2019”.
Discipline 2: Act on the Lead Measures. There are two differing measure indicators, “lag” and “lead”. Lag measures represent the goal you are wanting to achieve. For example, the lag measure for the goal of “I want to lose 10 pounds” is getting on the scale, closing your eyes and hoping the scale shows a lower reading than the last time you got on the scale. A lag measure tells you if you have achieved your goal, however a lead measure tells you if you are likely to achieve your goal. Lead measures are within your immediate control. The classic lead measures for the goal of “I want to lose 10 pounds” is diet and exercise – two measures within you control on a daily basis that, when focused upon, should lead to a positive movement in the lag measure (weight loss). Determining and defining your lead measures is one of the more challenging aspects of the 4DX concept. Continuing with our example from Discipline 1, if a wildly important company goal is to increase the customer satisfaction index from 78.3 to 85.0 by December 31, 2019, then a lead measure may be to decrease average wait times at the counter from 5 minutes to 3 minutes. A key to lead measures is they must be tracked, even if it means developing a new system.
Discipline 3: Keep a Compelling Scoreboard. Ok, this one won’t take long. All employees within an organization like to know if they are winning. Keeping a scoreboard which tracks progress on lead and lag measures will keep your employees engaged. Don’t make the scoreboard too complex. Keep it simple, clear and engaging.
Discipline 4: Create a Cadence of Accountability. This is where execution actually happens. Disciplines 1, 2 and 3 set up the game, but until you apply discipline 4, your team isn’t in the game. Discipline 4 requires your team to meet at least weekly to discuss what they had accomplished in the past week and what specific actions to do this week to make an impact on the lead measures. The meeting should not last more than fifteen to twenty minutes. Remember, there is a whirlwind. The weekly meeting allows each team member to be held accountable to their specific actions for impacting the lead measures all while facing the daily whirlwind.
We have found “The 4 Disciplines of Execution®” to be a valuable tool for our Firm’s Vision planning. As a business owner, 4DX will also give you the knowledge and skills to reignite the passion of your team, to bring focus and discipline to their efforts, and ultimately, to help them see that they are winners.
Chris West, CPA, is a tax principal with Dalby Wendland in Grand Junction. He has over 20 years of experience in public accounting. He specializes in mergers and acquisitions, real estate tax issues, real estate development, cost segregation studies, small business taxation, and consulting, tax, and estate planning for high net-worth individuals.