February 5, 2015
Dan King is the Founding Principal of Close Reach Consulting. Using his proprietary organizational prowess model, he helps senior management teams create strategic clarity, and execute with speed and precision. He is the author of The Scorecard Solution: Measure What Matters and Drive Sustainable Growth, and recently sat down with AMA for an exclusive interview. This post is an adaptation from that interview.
AMA: In your new book, you introduce the concept of an organizational prowess scorecard. Do you mind spending a little bit of time describing that?
DK: Sure. The scorecard essentially is a tool to measure the capabilities required to grow a business, and at accelerated pace. The scorecard provides a numerical benchmark for what I call the three big drivers of growth, which are strategy planning, execution framework, and talent.
Arguably, those three capabilities are the what, the how, and the who of organizational performance. And what I’ve learned in my research is that leaders love numbers. So really, the scorecard on a scale from 20 to 100 provides a very precise calibration as to where the weakness resides when it comes to those three macro capabilities. And then, the scorecard is broken into quartiles. So a leader is able to look at their business from the standpoint of are we lagging; are we vulnerable; are we resilient; and ultimately are we agile.
AMA: Dan, so many businesses struggle with stringing together successive years of growth. You know, this year’s up, next year’s down. Next year might be a little bit up. It seems that consistency ends up being a real challenge here. Why is it so difficult to deliver those sustainable results year on year?
DK: That’s a great question. I think this is something many, many leaders struggle with, particularly leaders of what they would define as a growth business.
There is clearly a tendency to cling to the status quo on the heels of a great year. You know, I actually had a CEO tell me after success in a given year ‑‑ he said, and this is pretty much a quote ‑‑ just two more years of this type of performance, and we’re going to consider an IPO. And he unfortunately adopted a “cross the fingers” management posture, which you might call, if it’s not broke, don’t fix it, but in business things never stay the same. What I’ve learned is smart leaders will work on the business in the good times. In other words, don’t wait for the crisis. This means really that when you are enjoying good results, that’s the time to apply the scorecard and identify the areas for continuous improvement. Good times don’t last without preventive maintenance, and a great year rarely repeats itself if you cling to status quo – because things change constantly.
AMA: Since research has shown that less than 20 percent of companies actually achieve their strategic goals in any business cycle, what are they missing when it comes to execution? You’ve got this great plan. You’ve got these goals. But where are people coming up short on the execution side?
DK: This is so prevalent. I mean, the research has shown that even companies that really invest deeply in building a strategic framework, very few truly can get to the end of a business cycle and say they’ve completely achieved everything they intended to. And when it comes to achieving ambitious goals, hope needs to be replaced with a framework of execution. This is probably the most critical of the three big components of the scorecard. By definition, a framework is multidimensional. I think this is why for many senior teams execution is a bit elusive, because you have to be so good at so many things. It starts with the great strategy, but then you have to have ownership ‑‑ who will own that strategy; and then, secondly, what I refer to as the execution team. This is typically in most businesses a small, cross-functional group of experts. They’re in the trenches. They have very specific skill sets. They drive that strategic execution on a daily, weekly, monthly basis. And they’re held accountable. And the work they do is incredibly visible, and one of the obligations that a senior team has within the execution framework is to hold that execution team accountable and to have frequent reviews. Most businesses, this is the 30-day review looking very specifically at what’s been done, the metrics, where help is needed, so that the senior team and the executives can step in and remove barriers to help that team get done what has to get done at a tactical level.
So it’s putting all that together. It’s multidimensional, as I say, and it’s paying very close attention to execution on a daily basis. When the rigor is applied and the accountability is there, these are the companies that achieve what I call the hyper-growth realm, where they’re overachieving their budget. They’re not just hitting the goal, they’re going beyond, and that plays into the whole question around sustainability and delivering excellent results in multiple years.
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