Long before personal computers and formal management information systems, Sam Walton instituted a strategy execution system that would endure for forty years at WalMart. Walton then owned 17 stores and the managers in charge of each store, along with the company’s eight buyers, would meet every week with an eight-point agenda. The first point in the order of discussion: how many customers visited the stores that week and how many left without buying anything.
While the first is a common measure, the second is uncommon, even today. The other measures discussed by the group: growth in sales and margins and the related product mix; out-of-stock items; overstocked items; price differentials with competitors. The 25 people who attended this meeting did not really think of it in terms of strategy execution and they certainly didn’t use dry terms like return on investment or velocity of capital, though that was really what it was all about. Their focus, from beginning to end, was the customer.
Management consultant Ram Charan, author of the book “Execution: The Discipline of Getting Things Done,” uses the Wal Mart example to illustrate how companies can effectively link strategies and goals to their operations and people. “Whereas most people cannot bear to attend monthly review meetings, Wal Mart managers actually enjoy their meetings, week after week, because their goals are essentially positive and close to their heart. And most importantly, it is a horizontal meeting of peers, not a vertical meeting chaired by a senior manager reviewing the performance of juniors,” he says.
Ram Charan is a big votary of well-conducted meetings, which he considers vital to execution. Why are such meetings so hard in the business world? “People are traditionally threatened by such transparent mechanisms because too often, their instinct is to withhold information,” says Ram Charan. “They are used to a sequential flow, where information flows from one individual to another, rather than a simultaneous flow where everyone gets it at the same time.”
Some consultants advise the head of large business houses to focus on strategy formulation and leave execution to their juniors. This finds favour in family managed companies, especially where the younger generations have little or no operational experience. It is different in professionally managed organisations, where the CEO is someone who has risen through the ranks and understands the nitty-gritty of execution. If required, they roll up their sleeves and dive into operations to get things done.
This is also the case in start-ups, where the founder is necessarily hands-on. “Execution is boring, since it is about practice and repetition, but it needs the right people, who are focused and understand that God is in the details,” says Ram Charan.
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