Improving Business Performance with BI

Confronting the Challenge

How to Improve Performance with Execution Built on Solid, Time-Proven Fundamentals.

The “situation”

(the combination of circumstances at a given time that produce a problem)

The leaders of America’s top companies face a serious

problem that affects every aspect of their performance.

Every year, these companies launch new strategic

initiatives aimed at growing the bottom line – and every

year, the majority struggle to deliver on the desired

expectations.

Multiple sources have observed that the vast majority

of these failures are not limited to leadership issues but

are often the result of both leadership challenges and a

corporate environment that breeds failure. Unfortunately,

an organization that is not focused on execution – even

one with the strongest executives – will rarely succeed.

At the other end of the performance spectrum, however,

there are companies that have created an environment

where their strategic intents succeed at a far greater rate.

In those cases, credit for success is often attributed to the

culture of the organization as a whole, and likely identified

and acknowledged enthusiastically by its leadership.

What is the difference between success and failure for these companies?

The usual “suspects”

(deserving to be regarded with suspicion)

Analysts have suggested that strategic failures are often related to one or

more of the following issues:

✦✦ “…the biggest factor of all may be executive inattention…”

✦✦ “…there is often surprisingly little follow-through…”

✦✦ “Less than 15% of companies routinely track how they perform…”

✦✦ “It’s the execution of the strategy that produces results…”

✦✦ “…not a ‘quick-fix’ approach…”

✦✦ “…the longer-term commitment required…”

✦✦“…requires leaders to stay engaged in the effort…”

✦✦ “…leaders must reinforce the importance…in their regular

communications and in the ways that they manage their business

and people…”

Wharton Business School, AMA, INSEAD/CIMA, and Motorola University

These observations point to a conundrum that prevents organizations

from focusing on, committing to, and managing strategic efforts

over time

The “conundrum”

(an intricate and difficult problem)

“There is a clear correlation between the tenure and role

of the CEO and the longterm performance of the

companies they work for….”

— Conference Board CEO

Survey: Why CEO’s Fall

and at the same time “There is a dramatic and catastrophic downward

trend in the tenure of our CEOs, and their terminations are attributed

to company performance.”

— Crist Associates

2007 Executive Survey

The role of leadership in the longterm performance of organizations

has always been a significant factor in success. No one can deny that

great leaders are an instrumental part of any great organization.

The “response”

(something constituting a reply or a reaction)

Unfortunately, there is an alarming downward trend of CEO and C-suite

tenure in corporate America. This declining tenure usually results in

leadership aggressively pursuing short-term, rapid improvements in

the organization – a pursuit that often fails to realize the desired

value and then leads to leadership turnover. Thus, organizations have a

real conundrum, a self-perpetuating downward spiral in performance.

The following data get at the heart of the conundrum.

Declining leadership tenure …

✦✦Average CEO tenure has dropped from 9.5 years to 2.5 years since 1995

✦✦ 60% of CEOs stay in the chair for fewer than 5 years

✦✦ 63% of CFOs stay for fewer than 5 years

✦✦79% of COOs stay for fewer than 3 years (with a trend toward fewer

COOs than ever before)

Crist Associates 2007 Executive Survey on Tenure and Volatility

… contributes to strategy execution failure

✦✦ 9 out of 10 companies fail to execute strategy

✦✦ 85% of executive teams spend less than one hour a month on the

management of strategy

✦✦Only 5% of the workforce understand the strategy

✦✦Only 25% of managers have incentives linked to the overall strategy

Balanced Scorecard Collaborative

You have likely lived through the typical response to the conundrum

multiple times – a series of urgent, reactionary decisions that can often

be more damaging than stabilizing. An everyday analogy is the tendency

of a driver to over-correct and jerk a car back into the road after it

suddenly veers in a slick patch.

As everyone knows, this quick desperation can cause great damage

or even complete catastrophe