7

Bold and Unafraid

“The greater danger for most of us lies not in setting our aim too high and falling short, but in setting our aim too low and achieving our mark,” said Michelangelo.¹ The companies we celebrate in this book, and others like them, have managed to escape that fate.

They did it through leadership. Indeed, we would argue that the most critical quality in business leadership today is the ability to consistently close the gap between strategy and execution—or, better yet, to operate as if there is no gap. We are reminded of Warren Bennis’ famous comment: “Managers are people who do things right and leaders are people who do the right thing.”² This is often taken to mean, “leaders do strategy while managers execute.” But in our view, the best leaders do both together (and we think Bennis would agree).

Some executives, focused on “doing the right thing,” think they can delegate “doing things right.” But this isolates them from the source of their company’s strengths. Without that grounding, they may try many different approaches to strategy—growth strategies, M&A strategies, cost strategies, portfolio strategies, and innovation strategies—and never land one that truly fits their company. These are the executives who say, as we saw in chapter 1, that they have little confidence in their strategy, that their strategy is not understood across the organization, and that they lack the ability to execute it.

In our experience, great strategy and execution can’t take place in isolation from each other. The two are closely linked. Great execution leads to better consideration of strategic issues because top executives understand what their company does well, and where it can gain in prowess. Similarly, great strategy leads to better execution because everyone in the organization understands where it is going and has the focused support and collaborative guidance to develop the highly sophisticated capabilities they need to get there.

The most important single catalyst is leadership. In our experience, great business leaders embrace the idea of strategies that work—strategies that connect the right destinations with the organization’s current and future capabilities. They ask the tough but necessary questions about value creation:

Who do we want to be?

What is our chosen value proposition?

What can we do amazingly well that no one else can?

What other capabilities do we need to develop?

What path do we choose to get there?

By asking tough questions like these, top executives draw out an understanding of their company’s identity—and lead the translation of that identity into everyday practice. They foster it in the enterprise’s culture. They marshal resources in support of this identity. And they prepare the ground for taking their company to the next level. All this they do boldly, with the confidence that comes from having the right to win in the markets they have chosen and the modesty that comes from openness to the world at large.

This is an easier and more natural path than many people realize. It requires being bold and unafraid in the face of opposition. But that is a better way to live than always being chastened by conventional wisdom or the endless barrage of separate challenges from customers, investors, and employees.

Apparently, there are very few top executives who have mastered this type of leadership. In a survey of nearly seven hundred executives across a variety of industries, conducted by our firm in 2013, we asked respondents to rate the effectiveness of the top leaders of their companies. How many excelled at strategy? How many excelled at execution? The results are shown in figure 7-1. These responses are sobering: only 16 percent of top leaders are very effective at either strategy or execution (the combined top row and right-hand column). Only 8 percent were very effective at both (the white square), while 63 percent were rated neutral or worse on at least one dimension (the five darkest squares).³

But there is heartening news in one finding. More than half of the most effective people, that group of 16 percent at the top right, are skilled in both strategy and execution. This suggests that among the rest of us, those who become better strategists will probably gain skill at execution as well—and vice versa. Perhaps experience with distinctive capabilities expose businesspeople to both types of proficiency.

This correlation reflects the increasing recognition that great leaders must and can excel at both strategy and execution. And it suggests a way to develop that kind of leadership for your company. First, define the executive skills your leaders will require to win in your industry sector, given your company’s particular value proposition and capabilities system. Second, set up opportunities for people to learn to master those skills, individually and collectively. Third, put your leadership on the line, and master and model those skills yourself, for the sake of the winning position that your enterprise deserves.

The five acts of coherent leadership described in this book (commiting to an identity, translating the strategic into the everyday, putting your culture to work, cutting costs to go stronger, and shaping your future) provide an opportunity to accomplish this. Think of them as a chance to create an engine of growth both for yourself personally and for the company.

For each of the acts of coherent leadership, there is a personal analogue that applies to the individual leader. For example:

Commit to an identity. The company differentiates itself and grows by being clear-minded about what it does best and sticking to its choices. This identity comprises the value proposition, distinctive capabilities, and portfolio of products and services all fitting together.

As a leader, you become a symbolic figure, a model of that commitment. You have something powerful to sell: a message about identity and a fundamental conviction that you need to stay with this identity over time. You demonstrate the courage of those convictions, recognizing that many will see this strategy as a leap of faith and that they will require your leadership to stay the course and see the benefits along the way.

Translate the strategic into the everyday. People blueprint, build, and bring to scale the capabilities that will deliver the company’s value proposition. They do this in an original and effective way that transcends functional boundaries.

As a leader, you translate the strategic into the personal. You allow yourself to “get your hands in the mud,” as Starbucks CEO Howard Schultz puts it.⁴ You become the architect of the blueprint and the chief of builders. In these roles, you operate at a fine-grained-enough level of detail that you can see, sense, and touch the details of your capabilities system. But you also raise your view high enough that you clearly see how all your global capabilities fit together. Two kinds of perspectives, farsighted and nearsighted, are needed from you personally, and you can only develop them—and teach others to follow your example—if you are directly involved, at least to some major extent, with building and deploying your company’s most important capabilities.

Put your culture to work. The company continually celebrates and leverages its cultural strengths. The people of your enterprise find it easy to think and act strategically because doing so fits with the “way we do things around here.”

As a leader, you are infused with your company’s culture. You are a primary champion of emotional commitment. You practice mutual accountability; everyone’s success is important to you. Through teaching and learning, you devote yourself to the cultivation of collective mastery. You do all this in a way that matches the unique cultural attributes of your company, the attributes that set it apart, which are grounded in its capabilities system. You don’t act like you come from a remote corner office; you act like you are one with the company’s culture.

Cut costs to grow stronger. Your company prunes what doesn’t matter to invest more in what does. It consistently allocates its resources with an eye toward strategic priorities.

As a leader, you do the same with your personal resources, particularly your time and attention. Are you devoting enough to the strategy and its requisite capabilities system? Or are you squandering too much time and attention on immediate demands, responding to everybody else’s idea of what is important?

Shape the future. Having reached maturity, the company regularly reimagines its capabilities, creates demand, and realigns its industry on its own terms. Rather than being defined by external change, it has become a supercompetitor, in a position that attracts others to a world that it controls.

As a leader, you are one of the first to experience the constant challenge of external change. You can muster the fortitude (and humility) to recognize when change in yourself is required. You build an extremely capable team, knowing that ultimately the future will depend on developing the next generation of leaders.

In all of this leadership development work, your primary constraint is your own skill, and that of your colleagues. The next tool provides questions and behaviors that can help you and others in your company further develop these skills.

You will, of course, find many barriers, making it difficult to get answers to these questions or pursue these behaviors. You might be held back by ingrained incoherence: well-established capabilities that don’t fit together, with champions who weren’t involved in developing the strategy and compete with each other for investment. Another impediment may be an operating model where functions provide similar support or technologies for a wide range of businesses, which all demand different capabilities. Some members of the executive team or board may think that focusing on a single capabilities system or identity is too risky or difficult. Your company’s established rewards and incentives may not yet align with your value proposition, or with the need to close the strategy-to-execution gap. And most of the time, there are probably too many things to do. In the melee of activity and requests, you can easily lose sight of the most important goal: to commit to an identity that can sustain your company and enable it to win, time after time.

But all of these barriers can be overcome—in fact, the five acts of unconventional leadership naturally lead an organization to overcome them. It may not be easy to start on this path, but it’s a very rewarding path, and we know of no other path as reliable as this one.

Ultimately, the question of leadership is personal. Nearly every CEO that we’ve met has great aspirations to change the game, move beyond the constraints that his or her organization faces, and build the legacy that leaves years and years of growth.

Living with these five acts of leadership will no doubt turn people into well-rounded leaders—people who are comfortable with strategy and execution. They encourage a certain amount of curiosity about the world and are willing to think about strengths and weaknesses: their own and those of their enterprise. The practice of these five acts is an act of leadership development in itself.

We recognize that this approach represents a leap of faith. You have to be bold and unafraid to make it. It requires the courage of your convictions. But it is not a leap into the unknown; there is a great deal of precedent, and you have a lot of company.

This chapter is a call to action—an invitation to become a better leader through the alignment of strategy and execution. Coherence makes every aspect of leadership easier in the long run. It continually focuses your attention on the most important things your company does. It enables you to define a world that your company can help to create.

That is a worthwhile legacy for any leader in any enterprise.