The Business Excellence Model we’re describing is not about company size. It is, however, very useful in helping leaders of businesses of any size to understand where they are now.

When we put this Model in front of business leaders, they quickly point to where they think their company is today.

The ultimate goal is to get to cultivate the capability in your organization to stay in Quadrant II for longer and longer periods of time.

Now, you can do the same by taking the Execution Revolution Challenge. Visit our free interactive tool at www.SixDisciplines.com/Challenge.  Have your entire organization take the Challenge as well, and you’ll be surprised to see how differently people view how your organization is balancing the two dimensions of strategy and execution.

Quadrant II of the Business Excellence Model (the upper right-hand quadrant) is all about being able to balance growth with profitability and performing predictably and consistently.  This requires a disciplined organization, one that’s learned to execute its strategy well enough to address the needs of today, while building for tomorrow - at the same time.

Sustainable excellence isn’t possible unless an organization learns to systematically increase its capacity to execute, and to do so faster than the rate at which its challenges are growing.

The Growth Paradox

It’s ironic that the better an organization executes today, the bigger its challenges will be tomorrow. That’s the reason it’s so difficult to balance strategy and execution over the long-term. Without an aggressive, proactive approach, organizations cannot identify or address their challenges in sufficient time, to avoid drifting into one of the other quadrants.  The good news is that the sooner these challenges are caught and addressed, the lower variability the business undergoes.

Performance in Quadrant II is difficult to sustain. Few companies are able to achieve this kind of performance for long periods of time. But this is what the Execution Revolution is all about:  the process of changing the game by focusing on how to successfully plan and execute strategy more effectively, while managing the inevitable surprises along the way.

When an organization in Quadrant IV becomes so focused on operational issues, it can get it a rut and slip into the weak state of Quadrant III, where it has neither strong growth nor good profitability.

It’s easy for a company to flounder in Quadrant III for quite a while, before leadership accepts they’re really there.  In my experience, a company in Quadrant III is very reactive and frequently in chaos, operating daily in “fire-fighting mode” without a clear path out of their circumstances.

It takes tough decisions to get out of Quadrant III. While in it, the team members are overworked, confused, frustrated - sometimes even a feeling of hopelessness creeps in.

Unfortunately, by the time an organization recognizes that it’s operating in Quadrant III, it can take up to two years to fix the problem!  But, the picture doesn’t have to be this grim. It takes courage, determination and the willingness to change the behaviors that landed the organization in Quadrant III to begin with.

Typically, the best exit plan for moving out of Quadrant III is to aggressively reallocate resources from low-profitability areas - to the growth areas. This sounds easy, yet most organizations don’t possess a framework, the will, or the persistence to make the hard choices it requires.

As businesses grow and change, the focus of the organization and its priorities change, and they tend to drift between quadrants on the Business Excellence Model.  Especially for smaller organizations with fewer resources, it’s difficult to maintain focus on tweaking the strategy, looking for the next growth driver, while everyone else is concentrating on executing the current strategy.

A company usually lands in Quadrant IV because it’s experiencing the pains of growth. Often times, sales outpace capacity, so the organization’s leadership become singularly focused on strengthening and streamlining internal operations, to address issues like quality, responsiveness, scheduling, hiring, order processing, and so on.  In other words, moving into Quadrant IV is a natural reaction, as a result of success in Quadrant I.

Interestingly, this singular focus causes another problem to sneak up unannounced: the loss of the original competitive advantage, gained while operating in Quadrant I.  Sometimes the focus on execution becomes so intense that a company doesn’t make the investments required to protect and sustain its strategic advantages.

We’ve developed a free, interactive tool that enables organizations to rate how well they execute their strategies.  The Execution Revolution Challenge only takes one minute to complete, but the results will cause you to begin thinking and acting differently about how you address the biggest challenge in business: execution.

The purpose of the Execution Revolution Challenge is to prove whether everyone in your organization is on the ‘same page’ or not, in terms of the strategy execution capability of the organization. Businesses are not alone in their struggle to grow predictably and profitably.  Very few businesses have this mastered.  Taking the Execution Revolution Challenge is the first step in understanding what you need to do differently to solve the biggest challenge in business.

I encourage every person within an organization to take the Challenge.  When completed, the tool provides CEOs with a crystal clear view into the level of strategy and execution alignment within their organization.
After an organization takes the Challenge, most CEOs come away with a sense of urgency that something needs to be done differently, in order to execute strategy more consistently and predictably.

The Idea Behind The Execution Revolution Challenge
The idea behind the Execution Revolution Challenge comes from my new book, Six Disciplines® Execution Revolution – Solving the One Business Problem that Makes Solving All Other Problems Easier. The Challenge brings the Six Disciplines Business Excellence Model™ to life. The model illustrates that every organization, during its life cycle, moves around on a four-quadrant matrix, characterized by weak and strong strategy and execution, which indicates consistent operations and profit potential.

The Execution Revolution Challenge illustrates that there is a revolutionary new way for businesses to move to the upper right hand quadrant, where strategy and execution are balanced and predictable, indicated by profitable growth. Every CEO aspires to perform profitably and consistently and the Challenge helps CEOs start the baseline to begin.

How the Execution Revolution Challenge Works
Any individual can initiate the Execution Revolution Challenge for their organization by visiting www.SixDisciplines.com/Challenge, and answering five simple questions.  This individual can then plot where they think their company is on the strategy execution matrix.  Doing so generates an email which includes a Challenge ID unique for the rest of their organization. By forwarding this email to every person in the organization, each employee gets to plot where they think their company is relative to executing strategy. Once everyone has taken the Challenge, team members can return to the interactive tool, and collectively see how each person rates the organization’s overall ability to execute strategy.

To sign up and take the Execution Revolution Challenge for your organization, visit www.SixDisciplines.com/Challenge.

In Quadrant I of the Business Excellence Model, we begin with a company that has developed a strong strategy, which typically means they’ve crafted a stategy that offers them a competitive advantage.  This competitive advantage may be the result of offering premium products or services, or more convenient availability, or an advantage in price.  The advantage could also be rooted in other key elements: technology, distribution channels, manufacturing expertise, or even a major innovation over existing solutions.

What happens to companies with strong strategy is that it usually leads to a growth in sales, a “growth wave” occurs. An organization with a strong strategy grows because it has something that people want/need, with some advantage over the competition.  Perhaps the advantage is easy to copy - or maybe it’s not. One thing’s for sure:  if it works, the competition will follow!

The focus and capability of an organization can be understood in two dimensions: strategy (deciding what to do) and execution (getting it done). The Business Excellence Model below shows these dimensions using four quadrants of performance. Quadrant I is strong strategy with weak execution, Quadrant II is strong strategy with strong execution, and so forth.

Leaders who build organizations with the ability to balance strong strategy with strong execution over long periods of time achieve enduring excellence.

Let’s now explore the topic of excellence more completely.  First, let’s start with strategy. In particular, I recommend Michael Porter’s profound and comprehensive views on strategy, as explained in his well-known article, “What is Strategy?” which is available from Harvard Business Review.

In the article, Porter summarizes strategy as choosing a set of activities, a different and unique set of activities that sets one apart from the competition. Porter summarizes, “the essence of strategy is choosing what not to do.” In other words, creating a distinctive strategy is all about making good choices, as well as good trade-offs.

While strategy is about combining best choices and similar activities, execution is all about continual improvement in those chosen activities.

This combination of strategy (the choices of what to do versus what not to do) and execution (how well the choices are carried out) becomes the field upon which the Execution Revolution occurs in any given company.

In my experience, most leaders of small and midsized organizations do not have a clear understanding of the relationship between strategy, execution, and business excellence.

This is easy for me to believe because, as a CEO of a successful company for twenty years, I didn’t understand these principles myself. Most business leaders are so consumed by their businesses they don’t take the time to develop such perspectives.

So, let’s define strategy, execution, and their relationship to business excellence, which will provide a common framework for a meaningful dialogue about where you are in terms of your business, how you got there, and how to develop a vision of where you’d like to go.

What is business excellence?  Whenever I meet business leaders, I take the opportunity to ask them two questions: 1) What does excellence mean to you? and 2) Do you think you’ve achieved it?

Two truths emerge. First, no two people define excellence exactly the same way. Their definition evolves as they learn and as circumstances change. Second, nearly everyone agrees that excellence is a journey, not a destination. As a result, no one who’s serious about excellence believes he or she is “there” yet.

After many years, I’ve finally come to see that excellence requires on-going balance between strategy and execution. Strategy requires choosing what promises to make to all stakeholders and a roadmap for delivering on those promises. Execution requires getting there while overcoming an unending number of surprises.  Of the two, execution is far more difficult to achieve, but it is impossible without solid strategy.  Learning how to continually balance these two is the key to excellence. This is why excellence is a journey that never ends.

The conclusion is that business excellence is an enduring pursuit and, therefore, requires an enduring approach.

In the next post, I’ll be introducing The Business Excellence Model™, which I’ll use as a common model to understand the relationship between strategy, execution, and business excellence.

Where is your organization, in terms of strategy vs. execution?

We’re developing a free, interactive tool that enables organizations to rate how well they execute their strategies.  This new ”Execution Revolution Challenge” only takes one minute to complete, but the results will cause you to begin thinking and acting differently about how you address the biggest challenge in business: execution.

The purpose of the Execution Revolution Challenge is to prove whether everyone in your organization is on the “same page” or not, in terms of the strategy execution capability of the organization. Businesses are not alone in their struggle to grow predictably and profitably. Very few businesses have this mastered. Taking the Execution Revolution Challenge is the first step in understanding what you need to do differently to solve the biggest challenge in business.

We’re encouraging every person within an organization to take the Challenge. When completed, the tool provides the CEO with a crystal clear view into the level of alignment within their organization. Most come away with a sense of urgency that something needs to be done differently, in order to execute strategy more consistently and predictably.

The Challenge brings the Six Disciplines Business Excellence Model™ to life. The model reveals that every organization, during its life cycle, moves around on a four-quadrant matrix, characterized by weak and strong strategy and execution. The breakthrough idea is there is a revolutionary new way for businesses to move to the upper right hand quadrant, where strategy and execution are balanced and predictable, indicated by profitable growth.

(Check back here soon - I’ll let you know when the Execution Revolution Challenge is “live”!)