In My View: John Spence on the 4 biggest challenges facing industry leaders
By John Spence on July 31st, 2012
During the past eight years, I have had the opportunity to present leadership and business improvement training sessions to more than 1,200 CEOs from firms worth between $2 million and $500 million, as well as dozens of similar programs for senior leaders at a number of Fortune 500 companies. During these intensive workshops, I force the participants to make a critical self-examination of the current operational strengths and weaknesses of their organizations through a combination of audits, benchmarking and highly focused discussion questions. One of the key questions I ask in every session is “What are the three or four biggest challenges you’re facing in your business right now?” Even with an incredibly diverse sample of businesses from every imaginable industry, it has been fascinating to see a clear pattern emerge of four specific issues that the vast majority of these leaders identify as the things that are holding their organizations back and keep them up at night.
1. Lack of a vivid and extremely well-communicated vision
Even though these leaders are personally obsessed with the vision and direction of their company, they reluctantly admit that if you were to go just one or two levels below them in the organization, you would likely find very few, if any, employees that truly understand the vision, mission and core values of their organization. One especially frustrated CEO asked me, “John, when do you know that you have communicated these things enough?” My reply was “When you have talked about the vision, mission and values so much that you feel like if you have to say it just one more time you’ll get nauseous. … It is at that point that the lowest person in your organization just heard it for the very first time.” A major job of every leader, whether you lead two people or 20,000, is to relentlessly communicate an exciting and ennobling vision for the future of the organization. In one-on-one meetings, town halls, e-mails, voicemails, team meetings … the goal is to help people clearly see where the business is headed and what they need to focus on to make sure you all arrive there together successfully.
2. Lack of open, honest and courageous communication
The inability or unwillingness to put difficult, uncomfortable and awkward topics on the table for candid and transparent discussion was identified by these leaders as a major inhibitor to their ability to build strong teams and get their organizations fully aligned. As Patrick Lencioni points out in his superb book “The Five Dysfunctions of a Team,” in large part this lack of candor stems from a fundamental absence of trust that leads to unwillingness by people on the team to be vulnerable and completely honest. However, the desperate need for courageous communication and high levels of transparency is powerfully demonstrated in Kouzes’ and Posner’s seminal book “The Leadership Challenge,” which unequivocally shows that honesty is the single most important driver in establishing credibility as a leader. Especially in times of great turmoil like we are facing now, employees crave as much information as they can get about how things are going in the company and what they need to do to keep it moving forward. Where there is a lack of a well-communicated vision mission and values, you quickly see fear, politics, rumor-mongering rushing in to fill the void.
3. Lack of accountability
As a direct result of the lack of honesty and courageous communication mentioned above, one of the difficult conversations not occurring is a frank discussion about tolerating mediocre performance. After taking a good, hard look at their business, many of the participants in my sessions realize that they have a few mediocre performers in key positions in their organization and that every day they leave them there is another day they are in effect saying to the rest of the company,” we were just kidding about pursuing excellence.” For example, I am currently working with three large companies that have long-established reputations for being exceedingly “nice.” On one hand, people that work in these organizations are very proud to be part of such wonderful and kind company, yet on the other hand, they realize that major issues and serious problems continue to go unaddressed strictly because people don’t want to “hurt someone’s else’s feelings.” The truth is it is not “nice” to let someone jeopardize the organization and destroy their own career because their leader did not have the courage to tell them the truth about their poor performance. Here is a test will bring this into sharp focus: Think of a person in your organization that consistently delivers subpar work, turn things in late and has a poor attitude. … Now realize that, because they still have their job, this individual is the person who establishes the level of acceptable work for every other employee in your company. How does that make you feel?
4. Lack of disciplined execution
For the last five years, I have been a guest lecturer on strategic thinking at the Securities Industry Institute at the Wharton School of Business. Each year, I have about 120 executives in my session and I always ask the same question, “What percentage of the time do companies that have a solid plan for how to succeed in the marketplace … actually effectively execute to plan?” The answer has remained the same year after year: 10 to 15%. That number is shockingly low, but unfortunately my experience indicates it is accurate. What is even more devastating is to realize the monumental waste of talent, resources, opportunity and money that terribly low number represents. Because this was such a serious issue for many of my clients, I decided to do a “deep dive” and really study the topic. After more than 5,000 pages of reading and dozens of interviews, I discovered the process for ensuring effective execution was really very straightforward and simple. Just a handful of key steps need to be applied with vigor and total accountability. I also discovered that nearly every leader pretty much knew what the process was, they were just unable or unwilling to impose the level of discipline needed to drive higher levels of execution in their organization.
So if you had the chance to talk to nearly 2,000 senior leaders and ask them what the four most important things they need to focus on right now to fix their business, their answers would be:
- Relentlessly over-communicate a clear, compelling and focused vision for the future of the organization to all stakeholders.
- Foster an environment that demands honest, transparent and courageous communication in order to develop high levels of trust and respect.
- Be clear about establishing specific and quantifiable standards of performance and then be rigorous, but never ruthless in absolutely holding every single employee 100% accountable to meeting or exceeding the agreed upon standards.
- Develop a culture of disciplined execution by establishing the systems, processes and checkpoints to ensure consistent flawless execution of all critical initiatives.
At the end of the day, none of the things I have listed here are particularly new or revolutionary. Actually, I am sure that most of us will recognize them as well-established fundamentals for leading a world-class organization. However there is a huge difference between knowing something … and living it every day in your organization.
John Spence has twice been recognized as one of the top 100 business thought leaders in America and is the author of “Awesomely Simple: Essential Business Strategies for Turning Ideas into Action.” For more information on John and his work, visit www.johnspence.com.
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This note was posted by Nan on the SmartBrief site:
Nicely written article and great points that definitely need to be applied in every organization. I typically would term your point#2 as setting and communicating clear expectations. It also sets the work standard for every member of the team. It’s nice to see the emphasis on building trust and respect for all. In my opinion, the only way to do this is by “walking the talk” and straight-forward communication. Lastly, your point of accountability is so true and one thing I would add to it is to address under/non-performers immediately. The longer they are allowed to under/non-perform, the more respect, engagement, morale and motivation will be lost from high-performers.
Nan – thank you for the comments. I am still amazed at the lack of accountability in most organizations — the loss of revenue and potential market share from poor accountability is staggering. I just did a video blog on this exact topic — it has some very good ideas and suggestions — here is a link:
https://johnspence.com/2012/07/biggest-problem-business-today/