April 3, 2007

Announcing George Roberts!

Posted in Execution, VC Roles at 9:32 am by scottmaxwell

We announced this morning that George Roberts has joined OpenView Venture Partners. I have been working with George for about 3 years on the Board of Scriptlogic Corporation where George has been a great advisor to both the board and management team. Over time, we have found that we are extremely well aligned with respect to our beliefs around building great technology companies and it became clear that we should be working together more closely. After George spent some time getting to know the rest of the OpenView team over the last few months, we were lucky enough to convince him to become part of our team.

George has a fantastic background in Sales and Marketing (including branding, lead generation, inside sales, channel sales, and field sales), senior management, and managing for both growth and profitability. (George spent 13 years at Oracle Corporation and attaining the position as EVP North American Sales reporting to Larry Ellison…more details on his background are here).

We asked George to join the firm for several reasons:

  1. George truly enjoys helping emerging growth technology companies grow both quickly and profitably
  2. George has a great global network, which should help our portfolio companies tremendously
  3. George has and extremely rich background in all aspects of sales and marketing, a major aspect of both growth and profitability for expansion stage companies
  4. George has participated at the senior management level of a very well managed, high growth, highly profitable company, and he brings many proven process and organizational methodologies to our portfolio.
  5. George has an extremely rare and extremely good ability to help companies evolve with the strategic and operational approach that is optimized for their specific situation.
  6. George is a great guy!

George’s role at OpenView is that of a senior investment professional. In this role, he will be the senior point person on several companies and, at the same time, will offer his functional expertise and network to our entire portfolio.

You can drop George a line at groberts@openviewpartners.com

February 15, 2007

How to focus- an accidental approach…

Posted in Execution at 5:14 pm by scottmaxwell

I have written several times about the need for focus. ( Here, for example.) Since writing on the topic, I continue to notice that most people I meet need this advice.

Today I discovered a new approach to creating focus: Today most of my e-mail inbox disappeared from both my e-mail client and the server. User error? Bug? System out of capacity? I spent about 30 minutes trying to figure it out but then I realized that I didn’t have to keep struggling to catch up on e-mails (a constant and increasing source of frustration)…I didn’t have any e-mails to respond to…at that point I stopped trying to figure out how to fix the problem. Losing the e-mails solved a different, ongoing, and increasing problem that I am having with e-mail…that is, trying to be responsive to everyone that sends me e-mails.

All of a sudden, a tremendous amount of time freed up and I was able to focus a lot more of my attention on the core of what I like to do…work with my portfolio companies (spoke with 4 today), talk with entrepreneurs (spoke with 3 today), worked on longer term projects (2 today), and periodically write in this blog (first post in a long time)…it was a great opportunity to focus!

I have not figured out how to institutionalize this approach while still being responsive, but if you have any ideas please let me know…

***
endnote: I really did lose my e-mail inbox with about 8 weeks of e-mails that I have not caught up on. If you sent me one that I have not responded to, I apologize!

January 3, 2007

Announcing Mark Barry!

Posted in Execution, VC Roles at 9:02 am by scottmaxwell

We announced this morning that Mark Barry has joined OpenView Venture Partners. Mark comes to us from Microsoft’s Emerging Business Unit where he was a founder and Managing Director. We have been working with Mark for approximately five years and he and the entire Microsoft team have been extremely valuable contributors to many of our portfolio companies. We now have the opportunity to have Mark’s full time and attention focused on our portfolio companies, which will dramatically amplify his impact!
Why we asked Mark to join us…

We asked Mark to join us for five primary reasons, all relating to increasing our ability to add substantial value to the companies that we invest in:

  1. Mark has a deep passion for technology and its applications and an extreme desire to assist emerging growth technology companies meet their objectives.
  2. Mark has a global network and a proven track record of working with emerging growth companies around the world. Our model of investing is global in nature. Our belief is that all successful technology companies need to expand globally over time, so the location where they start is not as important as succeeding in the major technology markets around the world. Mark will be a major contributor to this effort and has shown no fear jumping on planes to meet and assist the best companies globally.
  3. Mark has deep functional expertise in both Sales and Customer Service. In Mark’s 16 years at Microsoft and 9 years prior to Microsoft, Mark grew professionally as a salesperson, sales manager, senior sales manager and as a senior customer support manager and won multiple awards in the process. This experience is invaluable to our portfolio companies as they work to scale during the expansion stage.
  4. Mark has substantial experience with extremely professional approaches to developing strategy, organization and processes as well as all of the ingredients associated with their successful execution. Microsoft is one of the best companies in the world at execution, and many of the tools that Mark learned and deployed successfully at Microsoft will be extremely valuable to assisting our companies as they scale.
  5. Mark is a great guy!

Mark’s role at OpenView is that of a senior investment professional. In this role, he will be the senior point person on several companies and, at the same time, will offer his functional expertise and network to our entire portfolio.

you can drop Mark a line at mbarry@openviewpartners.com

January 30, 2006

Show Me the Metrics!

Posted in customer service, Economic Model, Execution, management, Metrics, Sales at 11:57 pm by scottmaxwell

About 10 days ago I interviewed a VP Sales candidate for one of my portfolio companies. The more I think about our conversation, the more I like him. I walked out of our conversation thinking that he would be perfect for any B2B software or SAAS company. Why?

This particular candidate pulled out his personal operating report and explained to me how he knows what is going on every day (even when he is on the road with customers) and what he does when particular metrics drop below a certain level. He showed me the different levels of his report so that he could see his deals moving through the sales pipeline and how each salesperson and sales group was doing vs. their benchmarks. He also explained how predictable his system is in forecasting sales as well as determining when he needed to add resources at various stages of the sales process. Finally, he was able to explain how his system allows him to accurately predict the results of adding new resources and, just as importantly, how he is able to relatively easily recruit and train people to follow his system. Separately, he has relevant experience and success managing several models of distribution (including telesales, field sales, and channel sales), each of which has its own unique best practices. Also, we were able to get a reliable reference that echoed what the candidate had said.

He did not quite “have me at hello,” but he did have me about 10 minutes into our discussion. I knew going in that he had relevant experience and was known for making his numbers, but it was his approach of managing to metrics that got me. Why?

When you can accurately predict your results in each operating unit, it means less risk and a greater opportunity to scale your company without blowing your capital (missed quarters get more and more expensive as you grow!). Being able to make accurate predictions also means that:

  • You have an operating model (not just a collection of people), which allows you to scale better,
  • You understand the key drivers of output in your operating model,
  • You are consistently managing the unit to your operating model,
  • You have a set of early warning signs (your key drivers) that you can focus more attention on when they get below certain thresholds (i.e., it helps you to know where to spend your time),
  • You have a set of measures that you can benchmark against other companies to understand where you have opportunities to move to best practices, and
  • You know when you need to add staff or other resources well before you get caught short.

Finally, the understanding of the above gives you a solid platform for experimenting with new approaches and accurately evaluating the effectiveness of the new approaches (thereby allowing you to kill the approaches that don’t work and expanding the approaches that do work).

Over time, the nature of emerging growth companies is that they move from simpler approaches to more sophisticated approaches (more specialists, more channels of distribution, more products, more marketing channels, more approaches to customer service) and you want to make sure that you continue to evolve in the right direction (note: this is not an argument to get more sophisticated as an end to itself, just that getting more sophisticated leads to better operating results as you growl…you clearly need to keep your operation as simple as possible).

Metric driven management can and should be applied in every functional unit in an expansion stage company, from product development activities (e.g., project management, bug fix reports, usability testing) to marketing (lead generation ROI, website path analysis, shopping cart abandonment, number of daily quality leads) to sales (e.g., movement through the sales funnel, salesperson activity analysis) to customer service (response time, close rates, close times, etc.) to overall customer satisfaction measured both qualitatively (surveys, interviews, etc.) and quantitatively (usage reports, retention rates, etc.).

The key to getting the right metrics program in place is to eventually understand the minimum number of measure that give you an accurate understanding of the state of your company.

Some Caveats:

  • Many (most?) very early stage companies can get by without metrics-based management, as there are very few people in the organization, the processes you have are quite simple, and you can manage staff a lot easier. But as soon as you start getting any measurable number of users/customers, metrics-based management starts becoming useful, and as you grow more metrics become difficult to live without.
  • There is no sense building systematic operating models and a set of metrics if you are not going to manage to them. I have met many intuitive managers who don’t get (or don’t want to get) this approach. If you don’t believe in the approach, shoot me a note or comment to this post. If you don’t completely get the approach, hire someone to work for you who does (I have done this multiple times at my portfolio companies).
  • Once you lock into a set of metrics (it will take some time to determine the best most simple metrics), you should try to use the same metrics over time. I am amazed when I go into certain board meetings and see a different set of metrics each quarter…sometimes managers feel the need to present the metrics that show off the accomplishments of the company…I would rather see the metrics that show the improvement opportunities for the company…this is where the real upside is!

***

If you want to tell me about your results from or projections for your operations, my preference is that you show me the metrics!

January 3, 2006

Sales is Humming!

Posted in CEO, culture, Execution, Sales at 10:08 pm by scottmaxwell

In my last post, I described how the CEO, like the drummer, sets the overall beat of the organization. This post is meant to show how the sales group taps with the CEOs beat.
The chart below shows how a VP Sales manages within the context of the overall beat. Again, the horizonal axis is the day of the year (the full chart is one year) and the vertical axis is time horizon of the VP Sales focus (i.e., a 10 day time horizon means the VP of sales is focused up to 10 days out on that day of the year).
CEOSales

Some thoughts:

  • As with the CEO beat, the VP Sales graph has the distinguishing characteristics of the strategic review in the August timeframe, the annual planning session in mid-November, and the quarterly meetings that review progress from the prior quarter and make adjustments for the remainder of the year.
  • Somewhat smaller on the chart above (see the close-up of the first two weeks of each quarter on the chart below for this point), the VP sales starts every week looking out over the remainder of the quarter (roughtly 90 days the first day of the quarter and 83 days one week out) and then focuses in on the executing near-term for the rest of the week (note that the time horizon of focus is 4-days on Tuesday, 3-days on Wednesday, 2-days on Thursday, and 1-day on Friday).

closeup
Finally, I superimposed the CEO chart from my prior post so that you can see how the CEO focal points fits well with the VP Sales focal points (the two are in rhythm!). There are two key differences with the graphs. First, the VP Sales focuses on very tactical accomplishments each week (gets the work done) and only steps back to examine the rest of the quarter once a week. Second, the VP Sales spends some extra time before and after the CEOs quarterly, annual, and strategic sessions to both prepare and to incorporate feedback into the plans.

CEOVPSales
The point here is not to debate exactly what the focus is at any point of the year (every company will be different), but to point out that there is a regular rhythm set by the CEO that the rest of the organization fits into, in this case sales. Also, it is meant to show that most of the time the VP of sales should be extremely tactical, but also step back at different points to take a longer term view and make adjustments to the plan (similar to the way I swim…I swim for a while and then need to poke my head out of the water and make corrections to my path).

As with the CEO, the two mistakes that VP Sales seem to make is either tactically executing all the time (thereby missing the larger context and opportunities for adjustment) OR spend too much time on the longer-term plans and waste time that they could be executing. It is difficult to get it exactly right, but perhaps thinking in terms of a rhythm helps.

My next post is on the marketing rhythm…

December 31, 2005

When Should CEOs Focus?

Posted in CEO, Execution, management at 3:21 pm by scottmaxwell

I wrote a recent post on the benefit and practices of focus, but wrote more about how to focus than when to focus. The chart below (of a successful product/company) is meant to expand on that post by showing the stage aspects of focus. Generally, prior to starting a company, and during the initial stages of determining exactly what you are trying to achieve in your product market, you will have a relatively broad scope (so that you can understand the landscape of the various product markets that you are considering as well as the technologies and distribution models that you might deploy). Once you nail down what you are trying to accomplish, you should move rapidly to a pinpoint focus on executing against your goals (i.e., keep your head down and execute). Extra thinking outside of your extreme focus will slow you down, perhaps considerably. As you begin to complete the product and get a few paying customers, you can expand the focus slightly. Finally, as you move up the S-curve for your product, you will need to once again expand the scope of your focus to better understand the market opportunities for continued expansion.

CEOFocus.gif

Three possible traps…

There are three possible traps that you can fall into if you are not careful:

  1. You do not have a broad enough scope before you are clear on what you are trying to achieve. Thoroughly understanding the product market, competitors, technologies, and your capabilities is important to determining where and how you want to play in the market and should give you a greater probability of success.
  2. You do not narrow the scope dramatically once it is clear what you are trying to do. Like focussing the sun energy through a magnifying glass, the right focus will lead to execution and lack of focus will lead nowhere.
  3. You do not broaden the focus once you nail your product market. While this is much less critical than the first two points (I almost left it off the list), you will probably want to continue growing and will need to start looking for new opportunities. (better to err on the side of being late with this point.)

Most emerging growth company CEOs fall into the second trap at some point, so take a careful inventory of your how you spend your time and what you think about…you may be in this trap right now!

Finally, as companies get larger and the company enters multiple product markets, this graph is still valid for the individual unit management. From the CEO perspective, these multiple graphs get superimposed and the CEO’s role naturally gravitates toward the broader scope.

December 28, 2005

Top 10 New Year’s Resolutions for CEOs

Posted in CEO, culture, Execution, management at 12:02 pm by scottmaxwell

As the year draws to a close, I thought that I would offer up my top 10 possible New Year’s Resolutions for Emerging Growth Company CEOs:

Choose the most appropriate (maximum of 3) from the list below:

  1. Customer Focus– Telephone or meet with at least 3 customers that you don’t already know each week, for 12 weeks. There is nothing like customer conversations to truly understand the perceptions of your organization (and perception is truly reality). Then, do something useful with the information!
  2. Product Focus– Choose the 1-3 most important areas of improvement to your product that you have known about for a long time (hint: ease of use is one of them), and spend the first 90 days of the year helping your product groups both building the improvements AND build the processes, organization, and staff to make ongoing improvements. Set and meet measurable progress goals by the end of Q1.
  3. Marketing Focus– Choose a (simple) message, and make sure that by the end of Q1, everyone inside your organization recites the message when prompted (this is not as easy as you think and should be measured by random prompts at the end of the quarter).
  4. Sales Focus– Put in place 1-2 new approaches that significantly improve the efficiency and/or effectiveness of your sales funnel, with noticeable improvement by the end of Q1. (for example, pure channel sales can improve their online channel partner support or improve training of the partners. E-commerce distribution could put in web analytics or use what you already have to improve page abandonment or put in a program to reduce shopping cart abandonment. Telesales distribution companies could put in place or improve e-commerce. Field sales distribution could put in place telesales or telemarketing.)
  5. Service Focus– Sit with your customer service staff answering incoming customer service requests for a half day each week for 4 weeks. Use the knowledge you gain to make 1-2 significant changes (e.g., product feature, product usability adjustments, building help into your product, customer self help tools, customer service process step, etc.)
  6. Employee Focus– Take one employee to a one-on-one breakfast or lunch each week for 12 weeks (or until you run out of employeess to take out). Use the knowledge that you gain to make 1-2 significant changes by the end of the quarter.
  7. Strategy Focus– Create 1-3 initiatives from this list, make considerable progress on implementing by the end of Q1 to help increase your competitive advantage.
  8. Financial Results Focus– Take your current plan for Q1 and figure out how to outperform it by 10-15% on the bottom line in the first quarter, by raising the bar on hiring, focussing on better cost management, or getting involved in closing more sales.
  9. Execution Focus– Make sure that each of your direct reports has 3-5 major goals for Q1 with objective measures for success. Make sure that your direct reports do the same thing with their employees. Ask for a regular (at least weekly) review of progress against the activities to nail the goals as well as the results relative to objective measures.
  10. Have Fun– While nailing your goals are important, waking up every day passionate about your work is at least as important. Implement 1-3 initiatives that will improve the amount of fun that you and your employees are having (do it right and your productivity will improve as well).

Happy New Year!

December 21, 2005

How Can David Beat Goliath?- Strategy #9: Execute against Execution!

Posted in culture, David vs. Goliath, Execution, management, Metrics at 6:01 pm by scottmaxwell

Up until now I have focused on how the emerging growth company can gain strategic advantages and minimize the large company advantages. If you have taken the best of the ideas, distilled them to their essence, and applied them to your emerging growth business, then you should have a very clear idea of what you are trying to achieve (a.k.a. your vision) at this point.

This post is about how you best execute toward your vision, which I think of as punching the fast forward button (like you do on your DVD player) so that your organization moves rapidly toward nailing a series of short-term goals and, ultimately, your longer-term vision.

Quite a bit has been written on execution (I list my favorite books on the subject at the end of this post). If you have been studying the topic, you have found there are many possible inter-personal and inter-group issues, many different types of people and situations, and lots of advice on leadership methodology for approaching each situation.

What I have done with this post is to boil away all of the tactical details and present what I believe are the most important skeletal components for execution (you will find these components in all companies that have been high achieving for a long period of time). If you get the skeleton right, you should be 80% of your way toward optimal execution. Get these wrong, and your results will be significantly lower that they could be (you still might get lucky with a unique product or a unique product market for some period of time, but you will regress toward the mean over a longer period of time).

The essence of execution is fourfold:

  1. Genetically engineer your organization. You need the right people doing the right activities in each position. Recruiting, training, motivation, reward, and separation systems that are 100% aligned with performance are key.
  2. Create challenging focal points. Every group and individual in your organization needs 2-4 short-term, challenging focal points that are aligned with the company milestones and interdependencies.
  3. Measure progress and make adjustments to close gaps frequently. Every individual and workgroup needs to review progress, understand gaps, and get help closing the gaps on a regular basis. Weekly, monthly, and quarterly reviews are a necessity.
  4. Be flexible. Adjust your longer-term goals based on short-term results. The world rarely turns out the way you expect.

These skeletal ingredients are very similar to agile software development principles applied to the entire organization (although I have tried to make the key ingredients more black and white for the purposes of clarity). If you have just these ingredients, you will execute at least 80% well against your game plan. Each of these four ingredients is discussed in more detail below.

Genetically engineer your organization…

Genetically engineering your organization means getting the right people doing the right activities, with a management approach that is merit based (a.k.a., the meritocracy). Each of these is outlined below:

  • Right people. I have already posted on the topic of recruiting best practices for hiring “A” caliber people. There are two additional thoughts that I would like to make here. First, if you want to get something done quickly, you need to hire a person that both knows how to do it AND has done it before successfully. Additionally he or she needs to be passionate to do it again (not people who have read a book or watched someone else do it, but rather people that have managed the activities that you are trying to set up). Even better, if you can find people who have both set up and managed the activities before, you will have much better execution as the skill to set up the group in the first place is much different than the skill to manage a group once it has been set up! For example, if you are developing a database application on SQL server in C++, getting a person that has been developing successfully in SQL server and C++ makes sense. Likewise, if you want to start a telesales group, getting a manager that has been highly successful setting up and managing a telesales group makes sense (rather than hiring a field sales manager to manage telesales). This is a simple point, but not followed as closely as I would expect. Second, you need to hire people that fit with the culture that you are trying to set. Either you need to hire experienced people that have the culture, or you should hire entry level people (“A” caliber!) directly out of schools and train them into your culture (this is the best long-term approach in my view, especially if you supplement the entry level people with the managers that have the direct experience. However, it will be less effective in the short-term, so you need to determine the trade-off you are willing to make).
  • Right activities. Just to reinforce my point above, you need to hire people that know how to do the right activities into the leadership positions of your company. If you supplement the leaders with entry level “A” caliber people, then you will form a team that should generally be doing the right activities. The major point is that the right people should know the right activities and naturally set them up and proper oversight will make the activities even more “right.” You need to be EXTREMELY careful that you are sure your hires know exactly what they are doing, however, as good people will do a good job executing what they think is right. If they do not know exactly what they are doing, you will end up with the wrong activities and it will be much more difficult to changeover to the right activities!
  • Meritocracy-based management system. If you want a management system to maximize execution, you need to set up a culture that makes it so that top performers that want to win will love working for your company (and lower performers won’t like working for your company). Generally this means compensation and advancement goes to those that perform and separation goes to those that can’t or won’t perform. The trick here is to start at the point of recruiting and let the recruits know that you have a performance-based culture that rewards top performance and does not have time for underperformance (this will both set expectations and help to attract the top performers and reduce the attraction from the underperformers). Once people are hired, set up goals (more on this point below), and then reward the performers in various ways (rewards can include the obvious compensation and advancement, but other rewards are in many cases more valued, such as publicly thanking people, giving them awards of various kinds, and giving them challenging new opportunities and leadership roles). For the non-performers, moving them into less critical positions and/or helping them find jobs outside of your company will help you maximize your execution while doing the right thing for your underperforming employees.
  • Prevent “bad behavior.” Finally, you must make sure that “favorites,” “sacred cows,” “politics” and other management approaches that are not merit-based do not creep in your organization. These approaches not only hurt execution short-term, but also dramatically impede your ability to build a long-term sustainable execution advantage. Merit-based approaches get high-performers focused on results, non-merit-based approaches disengage high performers and get everyone else focused on issues other than results. Managing for high performance will significantly reduce the energy focused on “bad behavior”, but you will also need to manage away these behaviors (and potentially the people exhibiting these behaviors!) before they breed in your organization (this is particularly difficult as you grow into a large organization, as their are more places for these behaviors to breed).

Create challenging focal points…

Given your staff is in place, you need to disaggregate your longer-term vision into a series of goals for each department, group, and person in your company. Overall, this gives everyone in your organization a focal point to think about and act on when they come into work every day. Generally, the more they focus on the goal, the more their activities and actions will be aligned with the goal. The goals need to be:

  • Specific. It is very important that the goals are very specific. For example, “have the best product” is not at all specific and very difficult to take actions against. However, product download speed, installation time, alignment with specific use cases, and user satisfaction are all much more specific.
  • Measurable. Measurability goes hand-in-hand with specificity. If you can measure your performance against your goals, you can determine that pace of improvement. For example, product download time from a broadband connection, number of “clicks? to install, install time, number of clicks to complete a given action, wait time for a given action, and user survey results are all measurable and repeatable so that you can both benchmark yourselves and measure your progress against your goals.
  • Short-term. Having the goals be short-term is highly important, as an immediate goal creates a sense of urgency in the business. Forget goals that are one year out, and set goals that need to be accomplished this month, this week, or today. This is probably the most important factor in execution!
  • Stretch. The goals need to take real work to meet, as goals that are too easy to accomplish will create a sense that “this can wait until tomorrow.” You want your staff to be working toward the goal every day!
  • Achievable. Ultimately you want everyone to build excitement around achieving the goals AND you want everyone to know that you are serious about everyone meeting their goals. The only way to do this is to set goals that can be achieved if people work hard (if you truly work on this, then you will get better at setting your goals over time so that they are both stretch goals and achievable goals). The more people think that the goal is not possible, the less they will work toward achieving it (why work hard if they are going to miss nailing the goal anyway?)

Some examples (note that these may or may not apply to your business):

For Product Development, make the next build by Friday, release the next version of the product to customers by next month, work toward builds every other day by the end of the quarter, work toward customer releases every 6 weeks by the end of the quarter. Build specific use cases into the product by a certain date, improve download time to 1 minute by a certain date, etc.
For Marketing, create 100 qualified leads (with a specific, measurable definition for “qualified”) a day by the end of the quarter with an average cost of $10; generate at least one featured article in a trade magazine this month. Generate at least 30 customer referral leads per week by the end of the quarter, etc.
For Sales, Make 50 new customer contacts each day, create $1 million in bookings this month and build a $20 million of qualified pipeline by the end of the quarter, etc.
For Customer Service, pick up the phone by the second ring 95% of the time and don’t leave anyone for more than 2 minutes. Resolve 95% of customer issues while they are on the phone and the remaining 5% within 3 business days. (Of course, you would expand this into e-mail support, self-help tools, VRU approaches, etc.)
For Finance, reduce days receivable down to 50 days by the end of the quarter (and many other possibilities depending on your current situation).
For Business Development, create and propose at least 3 partnership proposals to the 3 our of the list of targets by the end of the quarter, close on one deal that generates a specific revenue stream in a specific time period.
For (insert the right department) increase pageviews per visitor by 10% within 30 days, reduce customer churn by 15 percent by the end of the quarter, increase.

These are just meant to be thought starters. The more your goals disaggregate to specific people across your organization, the more the people know the dependencies with other parts of the organization, and the more your people help each other to meet their goals, the more setting these focal points will drive execution.

Measure progress and make adjustments to close gaps frequently…

The focal points are only words on paper (or e-mail?) until you put the proper management model in place that reviews progress against goals and make adjustments as you determine gaps in progress against the goals. Your management model should give everyone the opportunity to review their results vs. their goals and also has the opportunity to hear the ideas of others to help them improve on their goals both during the review meetings and in between the review meetings. Everyone should have review sessions at least weekly (more likely daily or intra-day for some of your work groups), and less frequent, more in depth meetings as well (I think about weekly reviews that are short and to the point unless there are gaps emerging, monthly in-depth reviews for everyone to get a detailed understanding of what is going on and to offer their ideas and assistance, and quarterly meetings to have even more in depth reviews and to set up the next set of goals. These time periods are rough, but the nature of the work week/weekend cadence requires at leas one checkpoint each week).

As a separate point, these review sessions are better when they are not meant to put people on the spot or to create unhealthy stress, but rather to be collaborative sessions to truly understand progress and to help people nail their goals. If they are set up in the right way, the combination of individual and group accountability, problem solving/idea generation, and resource adjustments based on results, will make the sessions an extremely important part of your execution program and something that people will look forward to (would you rather feel like you are being judged in a session or feel that you are going into an environment where people are going to acknowledge your hard work and help you achieve your goals?)

Be flexible…

Most emerging growth companies are working in extremely dynamic markets and their companies are extremely dynamic as well. The nature of the business is such that sketching out the long-term and then focusing on the short-term is a necessity. But sticking to the longer-term when market opportunities change or execution challenges become apparent is not a good idea.

This brings up the issue of annual budgeting and planning sessions. My view is that thinking through an entire year and sketching out a plan and budget are very important to making sure that you are rethinking the big picture at least once a year. However, the annual planning cycle in my view is more of a starting plan rather than the last plan for emerging growth companies each year. Each day, month, and quarter will bring its own surprises, and reviewing and adjusting your plan each quarter is totally appropriate (you will have plenty of time for long-term planning when you are a large public company that must implement these approaches as control systems!)

Wake Up to Your Current Situation
The four skeletal ingredients for execution are pretty obvious, perhaps too obvious. I can’t tell you how many companies and mangers think that these points are obvious, unnecessary or think that they are doing these things well, but actually are quite average at execution (roughly half the companies are actually below average!!). Every once in a while, however, I meet a senior manager or a team that has implemented these principals and the results are truly phenomenal.

When I was a young McKinsey & Company Consultant, I had an assignment working with a senior manager at a client that was extremely capable at execution. He had just given a similar framework to one of his junior staff members and the junior staff member said “any monkey could do this!” The senior manager’s response was “yes, any monkey could do this, but no monkey does do this!” It takes a capable leader to manage execution, even though the steps are very basic.

How do you determine where you stand with respect to execution right now? Start by taking a baseline audit of your current approach. The best approach that I have found is to ask a cross section of employees several questions:

  1. What are the short-term goals of our company? What are the measurements? Are they easy for you to measure? Are the measures objective?
  2. How does your group (or team or department) contribute to those goals? What are the measurements? Are they easy for you to measure? Are the measures objective?
  3. How do you contribute to your group, thereby contributing to those goals? What is the deliverable that you are currently working on? When is it due?
  4. How does your supervisor, team members and/or other groups review progress and assist you in achieving your goals? Do they know this? Do they have measurable goals against this? Are they easy to measure?
  5. What are the rewards for nailing your goals? What happens if you don’t nail your goals?
  6. Do you think that everyone in the company understands their goals and is working hard to achieve them?

If you are like most companies, the results will be awakening. You will probably find a complete lack of consistency in the answers, which is the key indicator that they ingredients described above are not in place (or if they are in place, they are not being executed against). If you are a high performing company with high performing teams and individuals, you will both see a consistency across answers and see a clear enthusiasm for the processes that have been established.

Summary
Execution is not rocket science. It is all about getting the right people, telling them what is expected in the short-term, reviewing progress, making adjustments, and making sure success is rewarded and the less successful processes and people are managed out of the organization.

The approach outlined here takes some level of management discipline. I find that a lot of people lack the discipline to either implement these items or to continuously executed against the items. You may want to make someone responsible for making sure that the processes are followed and/or sit in on conversations periodically and give friendly reminders to all of the managers responsible for execution.

I left out mention of interpersonal behavior as an item above. There are several very good books on the subject if you need them. In my experience, if you take the steps outlined above, then people will not have a lot of time for bad behavior and that some combination of 360 degree reviews and one-on-one feedback will help you both determine the issues and help you address the issues. Ultimately, there is some level of interpersonal behavior that is acceptable and you will need to separate the people that tend toward extreme unacceptable behavior, even if they have high performance.

Reference Books
There are a lot of details beyond my outline above that will help bring you from 80% to 100% in terms of execution. The first three books below are some of my favorite books long-term that I keep as references. The fourth is a quick read and has some good ideas as well. My strong advice is to focus your attention on the outlined points above, as all companies can move the needle quite a lot by executing against these points. If you have the time and inclination, pick up one or more of these books:

  1. The Breakthrough Strategy by Robert Schaffer is my all time favorite book on execution. Robert does a great job of distilling execution down into what you need to do and what you need to look out for. Summarized here.
  2. The Wisdom of Teams by Jon Katzenbach and Doug Smith is getting to be a classic on building high performing teams. I was lucky enough to contribute to the book when I was a McKinsey & Company consultant, working with the authors. Summarized here.
  3. Double Your Profits in 6 Months or Less by Bob Fifer. While this book is not directly about execution, Bob has some great ideas that are completely aligned with getting things done in the short-term.
  4. Execution: The Discipline of Getting Things Done by Larry Bossidy and Ram Charan. This book also has some great ideas, although it is probably a bit too heavily weighted toward large companies (rather than emerging growth companies). PDF Summary here.