4.

Focusing on Results

Effective leadership is not about making speeches or being liked; leadership is defined by results, not attributes.

—Peter Drucker

Organizations exist to produce collective results that individuals cannot achieve alone, whether revenues, profits, innovative products, or contributions to society. As a leader looking to make an impact, you need to take specific actions to ensure that those results follow from your team’s ongoing efforts.

Unfortunately, many leaders make the mistake of thinking that getting results is simply the by-product of the other leadership practices that we’ve described. They focus on creating a vision, building a smart strategy, and getting the right people on board and spend much less time considering whether those activities are adding up to the highest level of performance possible for their organization or team. But to achieve that high performance, you need to focus on results specifically. When you absolutely have to achieve results, it forces you and your team to work differently and discover new opportunities that you never would have seen if you were not under the gun to deliver.

Focusing on results is not a sequential step that happens separately, after you have done the other practices. Rather, you can approach many aspects of your work—including the rest of these practices—with a results focus. For example, to get results, you have to make smart decisions about how to execute your strategy, and having a results focus can also inform the strategy itself, as we’ll see in one leader’s story. Focusing on results can also help you determine what people capabilities you need, while at the same time helping you develop those capabilities. And for a leader, your results should always be calibrated against the vision that you and your people are trying to bring to life.

In this chapter, we’ll walk through the four elements that create a focus on results:

• Establishing high expectations for measurable business outcomes and holding people accountable for achieving them
• Reducing the organizational complexity that gets in the way of producing results
• Building your people’s capabilities to get results, particularly when it requires new ways of working
• Maintaining execution discipline through regular metrics reporting and operational reviews

None of this is easy, of course. For many leaders, the skills necessary for the achievement of results don’t come naturally, especially rigorously holding people accountable for their numbers and asking tough questions about operational performance. For anyone who is conflict averse, getting results involves mastering anxieties about confronting others and resolving differences. And to sell a set of high-performance goals, you need to be good at using a challenge to motivate people. Mastering this area, however, can be the difference between success and failure, not only for your organization or team, but also for your career—and theirs. The reality is that a track record of producing results will open up new opportunities for you more than anything else on your résumé.

To show you what it means to focus on results, we’ll use the case of Seraina Macia, during an earlier phase of her career when she was CEO of XL Insurance’s North American Property and Casualty Business. (She is now executive vice president at AIG.)

Focusing on results at XL Insurance

When Seraina Macia (then Seraina Maag) was recruited to become the CEO of the XL Insurance Group’s North American property and casualty (P&C) business in 2010, it was, in her words, “an underperforming and shrinking business” with just under $800 million in premium revenues and a mediocre combined ratio (a measure of insurance company profitability). Macia’s vision was not just to improve profitability but also to create a self-sustaining growth business that could win a significant share of the P&C market in North America, both of which would require an intense and unrelenting focus on achieving results.

Macia knew that she couldn’t do this on her own; she needed to get her team focused on achieving better results as well. But many of them had been at XL for a long time, felt that they already were doing the best they could, and were skeptical that rapid growth was possible. Furthermore, the insurance experts worried that the unbridled pursuit of new premium revenue would require them to take on more risk, something that they felt strongly was the wrong thing to do. So her first challenge was to get her own team in sync with her expectations—and her results-driven way of thinking.

To get started, Macia brought her team together to analyze the data of the business. Its work revealed that the national market share of one of her units was higher than the others, which gave Macia hard evidence that significant improvement was possible. If one business could do it, then others could as well. Macia then established an aggressive, companywide, market share stretch goal based on this analysis.

She then required each member of her senior team to create specific, measurable, strategic growth plans showing how they would deliver their portion of the stretch goal. Some team members struggled with this; they were so focused on thinking about how the core business already worked that they simply weren’t able to think creatively about how to redeploy XL’s assets to meet a specific growth target. When they failed to deliver a workable plan, Macia held them accountable, and in a compassionate but tough way, she took some of the actions we described in the last chapter for replacing senior team members who weren’t the right leaders for the organization.

Early in her tenure, Macia also recognized that there were some aspects of the organization’s structure that made little sense for a group focused on improving business results: for example, the staff functions were more powerful than the business leaders whose units would do the work of reaching the stretch goal. She reorganized the structure of the business to have the business leaders report directly to her rather than through others, which allowed her to better focus on the growth plans that they were developing and would be held accountable for.

Macia also knew that the growth she was demanding would require many parts of the business to work in new ways. For example, one part of XL’s growth plan indicated that new business would come in part from a change to a more proactive approach to finding new business rather than simply assessing proposals that brokers sent them. But that was a significant shift for underwriters and others. So to help them develop new patterns, she created five small teams (including underwriters) and charged them with winning new business in geographic markets that XL had not previously penetrated within 100 days, with thirty-day check-ins for all the teams. Through the process of trial and error, the teams learned about this new way of doing business and about the new geographical areas themselves. By the end of the 100 days, they had won their first new business and were well on their way to winning more.

Finally, Macia set up a disciplined system to monitor the ongoing operational performance of the organization. She identified the metrics to measure not only top-line results, but also aspects of the business that pointed to the health of her new initiatives and of the businesses’ growth in particular. She set up employee progress updates, senior team meetings, and one-on-ones with her direct reports to hold candid discussions about these numbers on regular schedules.

Macia’s focus on business results drove substantial growth. When she left XL after three years to take on a next challenge at AIG, the business already had climbed to around $1.8 billion in profitable revenue from premiums. Equally important, Macia had changed the culture of XL’s business so that striving for the next level of performance was something that every manager was expected to do. A year after Macia had left, the leader who succeeded her (one of her previous direct reports) brought the business over the $3 billion threshold, an incredible achievement for a business that just a few years earlier had been underperforming and shrinking.

Setting high performance goals and holding people accountable

The first element of focusing on results is to set aggressive goals for your unit’s performance, and to hold your team accountable for those goals. Whether you’re setting a vision or a strategy, or executing on those initiatives, focusing your people on a specific, tangible goal creates a more immediate sense of urgency, especially if they know that failing to meet that goal has consequences. By focusing your team members on a stretch goal—rather than keeping their thinking embedded in how the business currently operates—you also free them up to think creatively about what to do differently to achieve it. And you’ll learn quickly if they just don’t have the ability to deliver.

Pushing those performance expectations ever higher meanwhile is one of the key ways that leaders can drive their teams toward more significant impact. As the late professor C. K. Prahalad once told us, the job of the leader is not to be a “caretaker” who maintains a steady level of performance, but rather a disruptor who pushes the organization to deliver more. If the leader doesn’t play that role, according to Prahalad, they run the risk of becoming an “undertaker” for an organization that may not survive. Let’s look more closely at how you can do this.

Ratchet up expectations

We’ve seen that setting high expectations is a critical leadership step for developing a vision (remember the BHAGs), creating a strategy (moving into new territory), and getting the best out of people (stretch assignments). It’s also the essential starting point for improving results.

To set a challenging performance goal, start by identifying one or two key performance measures that can tell you whether your team or unit is moving toward your aspirational vision (or not). This could be a revenue or profitability number, or a measure of quality, cycle time, customer satisfaction, new product introduction, and so on. Then come up with a specific improvement target that will cause your people to gasp because it seems impossible. If you get that reaction, you’re on the right track. You want people to realize that just doing more of what they are currently doing, or just working harder and longer, won’t get them to the goal. Instead they’ll need to work differently, smarter, and more creatively, and they’ll have to figure that out along the way.

At the same time, of course, you shouldn’t make the stretch goal so high or outlandish that your people will give up and not even try. So support your stretch goal with some evidence that success is possible—that others have achieved similar results, or that customers are in need of what you are offering. (For other ways to develop stretch goals, see the box “How do you develop a stretch goal for your team?”)

For example, when Macia began at XL, she quickly brought her business and functional leaders together to look at the overall data about the business, which they had never done as a team. In that session, she pointed out that one of their eight P&C businesses had achieved a 3 percent share of the national market. Although modest, if all of the businesses could get to that level, their combined premium revenue would more than quadruple to over $3.2 billion. “Obviously,” she told them, “we won’t get to this number overnight. But significant growth is possible—we’ve proved it in one area—and we should aim for it over the next three years.”

Macia acknowledged that the goal was going to be hard to reach. But she also expressed the strong belief that her people and the organization could pull it off. This combination of empathy (“We know it’s a stretch”) along with encouragement is important to get people charged up and motivated.

Along these lines, Macia also pointed out that XL had a lot going for it—a good reputation in the market, solid products, a large network of brokers, and strong technical expertise. So it had a lot of assets to work with; they just needed to figure out creative ways of using them in the service of growth. Macia emphasized, however, that she was not talking about just any growth, but rather targeted opportunities that would meet XL’s under writing and risk standards and would improve the all-important combined ratio.

On the surface, it sounds perfectly logical, even simplistic, that in order for people to achieve exceptional results, you have to ask for them explicitly. But as Robert Schaffer pointed out in a classic HBR article “Demand Better Results—and Get Them,” the ability to establish high-performance expectations may be “the most universally underdeveloped” leadership skill in organizations. This is because human behavior often causes leaders unconsciously to shy away from making tough demands on their people for fear that they might be unable to succeed and you’ll have to fire them, or that they might argue with you about the goals, or that they might want to trade off one goal for another. Indeed, as Macia told us of her initial conversation arguing for the performance goal she set, “My direct reports and my peers thought that I was entirely mad.”

But making these tough demands can transform your organization or team. For Macia, the process of challenging her people to create a multibillion-dollar, profitable, and secure growth business was a seminal moment in the pursuit of results: if she had not pushed them to the next level with this seemingly crazy goal, the team would likely have continued doing what they had done before, with more or less the same results.

Making these types of results-focused demands also applies to leaders of functions or teams throughout the organization, not just to CEOs like Macia. Every group has the potential to be more productive and create greater value, but it won’t happen unless they are challenged to step up their game by a demand-making leader.

Hold people accountable

Every leader talks about the importance of holding people accountable for meeting their measurable goals. Making it happen, however, is not so easy. Nobody wants to be viewed as (or feel) mean, unfair, unbending, or unreasonable, which is what often happens when you create meaningful consequences for not delivering, like withholding a bonus, slowing down promotions, moving a person to another role, or taking someone out of your organization altogether.

If you bend over backward to avoid these tough decisions, however, your people are less likely to deliver on the stretch goals. Human beings have an almost infinite capacity to take credit for good results, but avoid responsibility for failure: they are able to give any number of excuses. As an IT project manager once told us, “We can use one bad weather day for many months as an excuse for being late with our deliverables.” The trickiest thing about these rationalizations is that many are indeed true. Technology changes rapidly, and it’s hard to realize the gains that were promised from it; competitors make unexpected moves that affect results; new regulations constrain your people’s ability to take action; economic ups and downs make it impossible to plan; and the list goes on. The reality is that stuff happens. Holding your people accountable can feel like blaming them for things that are outside their control.

What makes it even harder is that most of the time your people truly are working diligently, putting in long hours and extra effort. Add in the fact that they probably are loyal and committed to you and the organization, may have been around a long time, and are critical contributors in lots of other ways. So, you rationalize to yourself, how can you take punitive action against such well-meaning subordinates? Instead, it makes more sense to give them another chance, empathize with all the difficulties, and reward them for effort rather than results.

As reasonable as this sounds, making this the standard way of dealing with your team will lead to a breakdown in accountability and likely failure in achieving your stretch goals. There may be some situations in which it might be the right thing to do, particularly with innovative, high-risk initiatives, new business startups, or truly unexpected situations. But on the whole, if some people are let off the hook, then everyone expects it. Eventually it becomes acceptable to try hard (or look like you’re trying hard) but not deliver results, which means that mediocre performance becomes the norm. This isn’t good for the organization and isn’t healthy for your leadership. As Gary Rodkin, the former CEO of ConAgra, explained, “I can sleep at night only if I know that the commitments my people make are set in stone and that they will indeed deliver.”

Instead, focusing on results means that you must evaluate your people on what they actually deliver. There is no A for effort. So you should be sympathetic to the challenges they are facing, the distractions they have to overcome, the organizational barriers, the bad weather, and everything else that makes it difficult to meet goals. And you should help them think through how to overcome these and what it will take to be successful. This is what Jack Welch called the “softhearted” part of making tough people decisions that we talked about in chapter 3. However, you can’t wait too long to shift into the hardheaded part of this process. If they can’t deliver, despite all the help, support, and encouragement, then you have to take action or they won’t take the goals seriously. This is also part of the social contract that we discussed in chapter 3.

You don’t have to don a Darth Vader costume and fire anyone on the spot if they don’t meet their goals. You can give the person a specific milestone to hit in the next two weeks to help them get back on track or give them a short-term test to see if they can achieve a different goal. Another alternative is to pair the person up with a colleague or coach for a next assignment to see if they can learn how to produce more effectively. You also can move the person to another role in your organization where they might be more effective. Doing nothing, however, should not be one of your choices. Letting poor performance slide without consequences sends your whole team—and maybe your whole organization—the message that you are not serious about achieving results.

In the XL case, holding people accountable was indeed a critical issue for Macia, particularly since her predecessor had not enforced the delivery of results to a great extent. Even though their past numbers weren’t great, she couldn’t assume that the existing business leaders weren’t capable of delivering, since nobody had ever held them to task. She had to give them a chance.

The first test that Macia laid out was for each of her senior business leaders to come up with a specific, measurable growth plan that would collectively move the business to her goal of $3 billion in high-quality premium revenue within three years. Asking them to work with their teams and figure out how to grow revenues profitably and without undue risk was a challenge in and of itself, something that the leaders had not done before. And as it turned out, a couple of the business leaders did not meet Macia’s expectations. They did not think creatively enough, spur their teams to come up with new ideas, collaborate with functional support areas, or really contribute to Macia’s overall team at the level she wanted. So instead of waiting, Macia quickly replaced them. As she said, “I saw what we needed and that some of the people weren’t right for these jobs. I agonized about it but realized that I can only be as successful as the team around me.”

Macia didn’t just arbitrarily move people aside. While her business leaders were working on their plans, she held a series of candid discussions with each, talking about what she expected and what they were able to deliver. And when it became clear that a couple of them couldn’t deliver, she took action. She then continued to do this as the direct reports executed their plans, very much like a short-term, turbocharged version of the performance feedback process that we discussed in the previous chapter. As she conducted these dialogues, during the next year, she ended up replacing a number of the business leaders because they couldn’t achieve her ratcheted-up expectations for the organization. But that didn’t mean she fired them; some she just moved to roles more suited to their skills. As Macia explained, “They weren’t the right people for these jobs. But that doesn’t mean that they weren’t good people, or capable contributors, just that they didn’t have the skills needed to deliver against the higher growth expectations.”

Again, the process of holding people accountable for results is not just the purview of a CEO or senior executive. Leaders at all levels need to do this in order to create a culture of accountability and results delivery. If the people on your team don’t achieve their goals, you won’t succeed. And if you don’t learn how to hold people accountable early in your career, you’ll be less likely to advance. So while you might be unable to move team members elsewhere in the organization, you can conduct tough performance conversations, withhold bonus or promotion recommendations, shift people’s roles and responsibilities within your team, and generally make it clear that delivering on results is nonnegotiable.

Reducing organizational complexity

As your people strive to meet the high goals you have set, they may uncover organizational barriers that get in their way—a reporting structure that means a team isn’t incentivized to work with them or an outdated process that doesn’t take into account new technologies, for example. Your team members will deal with some of these on their own; that’s one way you’ll find out how good they are and how much ability they have to be resilient and creative. But sometimes the barriers they uncover will require you, as their overall leader, to resolve or mitigate them because they cut across many groups and need someone with higher authority to resolve. Clearing away these barriers is the second element of focusing on results because it helps your people work together more simply and efficiently toward achieving those high-performance results and leading your organization to more significant impact.

In the HBR article “Simplicity-Minded Management,” Ron describes four kinds of organizational complexity. It’s up to you as a leader to simplify these types of complexity when they appear:

• Structural mitosis: changes in organizational design that get in the way of getting things done. You can address these by periodically examining your department’s or unit’s structure and adjusting it to make sure it serves the strategy you have set as simply as possible.
• Product proliferation: adding new products and services without taking any away or creating multiple variations of products or services. Run a portfolio review of your department’s or team’s offerings. Which are the most profitable or have the highest growth potential? Which best meet your customers’ needs? Which yield diminishing returns? Which can be standardized? Eliminate or change those that no longer fit.
• Process evolution: ways of getting things done that are outmoded. To simplify overwrought processes, bring together many business stakeholders at different levels to redesign them from the ground up.
• Managerial habits: behaviors that get in the way of results. Invite your own team members to suggest how they could streamline their interactions with you. Perhaps you could delegate cross-functional issues more clearly, run meetings more effectively, or simplify your pattern of daily reporting.

All organizations suffer from different degrees of complexity in these areas. Your team may uncover some, but you should also do your own diagnosis of which need simplification, and in what order.

At XL, for example, Macia identified two key areas of complexity in her first months at the company, one having to do with the organizational structure and one with the evolution of the underwriting process. Because they both cut across the two divisions of the business that reported to her, property and casualty, Macia was the only person at XL who could do something about them. As a relative newcomer to the company, she was also uniquely able to identify them, since they had become part of the landscape over time and therefore were invisible to most of her team.

The structural issue emerged during Macia’s very first meeting with her new direct reports. At the meeting, Macia realized that only two of the organization’s eight business leaders (the heads of the property and casualty units) were represented at the table. Her other direct reports were all leading the company’s support areas such as operations, finance, and human resources. “This is upside down,” she recalls thinking. “While support functions are important, they aren’t directly accountable for getting results.” As she considered the issue further, she recognized that the organization’s structure made the staff functions more powerful than the business leaders, so those support functions in effect were making decisions for the enterprise instead of enabling profitable growth. More concerning, the other business leaders, who oversaw auto, home, commercial, and other business units, reported to Macia only through the property and casualty heads. Based on this insight, Macia consolidated the support functions under a newly created chief operating officer position and elevated the other six business leaders to report directly to her along with the COO, the head of distribution, and the head of underwriting. This de-layering allowed her to focus more directly on the business leaders and the growth plans that they were developing and executing.

On the underwriting side, Macia also saw a major institutional barrier. The underwriting group had excellent technical skills in risk assessment and pricing. But Macia saw that the group’s core process was focused inward: the underwriters waited for coverage proposals to come from brokers and then evaluated them using their strict technical criteria. Because of this process, XL ended up writing a very small percentage of the proposals that came to it and invested a lot of time assessing and rejecting the opportunities that weren’t right for it.

Macia recognized that there were opportunities to improve this process. She organized a Work-Out session (like the one described in chapter 3) for underwriters and businesspeople to jointly figure out how to streamline the process so that they could instead spend their time moving into new territory to grow policy revenues, without creating undue risk for the company. The dialogue during the session revealed that the key was to get the underwriters away from their desks to actually work with brokers in the field. By doing this, they could jointly look for targeted new business that would meet underwriting standards in a more efficient way. So instead of underwriters waiting to see what the brokers would bring and then passing judgment, the underwriters could help develop standards about what brokers should look for regarding types of business, markets, geographies, and products.

For the underwriters at XL, this was a major cultural shift as well as a process change, but it was a critical factor in helping Macia achieve her aggressive revenue targets. Over time, as early results started to come in, underwriting became an enabler of growth instead of an anchor creating organizational drag.

Every organization, of course, has undue complexity that limits performance. Sometimes the complexity is baked into the culture and becomes invisible, as with the barriers that Macia dealt with at XL. At other times, the complexity is visible, but considered to be like a sacred cow that people can’t do anything about. How well you eliminate or simplify it will dictate how quickly you can reach your business goals.

Building capabilities while growing results

High goals and organizational simplification won’t help you improve your business results if your staff doesn’t know how to do the work you need them to do. Increasing sales, for example, could be straightforward enough: make more sales calls, target different customers—these require the same skills. But more often, improving business results is not just a matter of working harder and doing more. Rather, it requires new approaches and smarter ways of working that may not be obvious. Increasing sales could also mean that your team should do more cross-selling, team selling, consultative selling, shifting to indirect sales, creating online or outbound sales, or some combination of them all. But what if the team has never done those things? It actually requires the sales teams to develop new capabilities.

The third element of leading with a results focus is to create opportunities for dozens, hundreds, or even thousands of people in the organization to learn how to work differently in order to get better results. Many leaders are tempted to dictate capability-related changes from the top down, which may sound like a logical approach. You can launch training programs to teach everyone new ways of working, and you can change compensation and promotion plans to provide the proper motivation, as you learned in the last chapter. Because you’re the boss, you might assume that they will do what you say.

Unfortunately, it doesn’t work that way, even in top-down organizations like the army. For example, General Stanley McCrystal, former head of Special Operations, emphasized, in the HBR interview “What Companies Can Learn from Military Teams,” that effective operations in the army require clarity of mission, trust, and the continual development of team capabilities. It’s not just about top-down direction. That doesn’t mean that leaders can’t provide resources and tools for learning. As we saw in the last chapter, Darren Walker gave his Ford Foundation program managers access to technology fellows to help them learn about the digital world. But the program managers themselves had to figure out how to take what they were learning from the fellows and apply it, in their own unique ways, to the social justice challenges in their programs. Building capabilities is not a paint-by-numbers exercise.

This is all the more true in nonmilitary settings. After years of research, Russell Eisenstat and colleagues concluded, in the HBR article “Why Change Programs Don’t Produce Change,” that the most effective change in organizations comes from bottom-up experiments in which managers and their people learn new capabilities and experience success, and then spread the new approaches to others. The leader, however, can stimulate the bottom-up experiments by demanding the achievement of stretch goals. When teams realize that they can’t reach those goals by continuing to do what they did in the past, it forces them to search for new approaches.

To trigger these experiments intentionally, you can use an approach like one we’ve used called “rapid results initiatives,” or RRIs, pioneered by Ron’s former firm, Schaffer Consulting. In this approach, a leader sets up a structured process for empowering small teams of managers and employees to take an element of the company’s growth strategy and generate real results in 100 days. As they do this, the teams figure out on their own what it takes to execute the strategy and achieve results. They experiment, try things, fail fast, and iterate toward what works. In the course of doing that, they build their own capability and the company’s to make it happen.

As an example, at XL, one of the key elements in Macia’s growth strategy was to target specific geographic markets that would be fertile ground for its P&C products. To carry out this strategy of proactively finding new business rather than letting business come to it, the organization had to develop new capabilities: how to identify key market opportunities; how to educate brokers about XL’s products and partner with them in finding new business; how to collaborate across business lines; how to better leverage underwriting time and cost on the best opportunities instead of assessing everything; and more.

To develop these capabilities at scale and deliver results at the same time, Macia commissioned five RRI teams. She gave each team the challenge of winning new business in a geographic market that XL had not previously penetrated, such as Kansas City or St. Louis, and to get first results (measurable premium dollars) in 100 days. The team members included underwriters, representatives from the eight business lines, distribution people (who oversaw the broker network), and others.

During the 100-day period, the teams experimented with different approaches to achieving their goals and quickly began to learn what worked and what did not. To capture and disseminate these learnings, Macia brought the teams together at thirty-day intervals to check in on progress and share insights. These sessions also helped inject urgency and competition into the process as the more successful teams shared their early results with pride (for more on the power of these early victories, see the box “The power of small wins”). As Macia described, “We had the check-in conference call at thirty days, and one team was way behind. You don’t want to be behind if you see everybody else succeeding. So there’s a bit of competition going on, and at the next checkpoint the lagging team moved out in front.”

At the same time, of course, the teams were learning what it took to drive growth proactively: how to identify the right brokers to work with, how to triage quotes that they had little chance of winning so that they had more time available for the business that they could win, how and when to bring underwriters and distribution people to the field, which materials would be most helpful for brokers, how to help brokers sell different lines of insurance to the same customers, how to work with brokers remotely when they didn’t have a physical presence in the market, and more.

In addition to their newfound knowledge and skills, the teams achieved significant early results in the first 100 days, bringing in millions of dollars in new premium revenue. The teams then built on these initial successes and expanded them in the target cities, while Macia commissioned new RRI teams for other markets. As the process evolved, she asked one of her business leaders, Gary Kaplan, to oversee this effort and apply the RRI approach to other aspects of the growth strategy such as creating a new business to insure construction projects. In a two-year period, Macia launched over thirty RRI teams, engaging hundreds of XL people and generating hundreds of millions of dollars in new revenue while building new capabilities across the company.

Creating this kind of iterative learning cycle—with rapid tests of what works and how to fit pieces together—is a low-risk way of ensuring that your people really do deliver results. As Macia noted to us in our discussion about the RRI process at XL, “It won’t fail. It’s just not an option. We would take corrective action at the check-ins. We’ve had situations where teams have struggled in thirty days, but then you catch up with them so you can correct it.”

Still, the iterative process can yield some challenging leadership dynamics: you can’t completely control the outcomes because the teams will learn as they go along and most likely will come up with solutions and approaches that may be somewhat different from the original strategic plans. Fight your instincts and let this happen—in fact, encourage it. If you and your direct reports merely give teams rote instructions about how to proceed, they won’t use their brains or reflect on their experience along the way. By empowering them to experiment as they learn, and learn from both failure and success, you’ll allow them the flexibility to actually improve and enhance what was called for in the strategy.

Maintaining organizational discipline

The fourth element of focusing on results is to create and maintain a disciplined approach to monitoring the ongoing business performance of your unit. This involves choosing the right kind of metrics, establishing an effective operational cadence, and holding candid discussions about the results.

These activities may seem like standard managerial fare, but in a results-driven environment, they are particularly critical for leaders to attend to. Demanding adherence to high goals, removing complexity, and giving staff freedom to experiment and build their own capabilities can create a lot of energy and initiative. But without regular, disciplined attention to operational performance, you may find that individuals are reaching for their high goals in destructive ways, or that simplified processes aren’t actually working as expected, or that changes to the strategy from the results of early experiments are getting out of control. A regular and rigorous system of diagnostic activities will help you monitor and maintain the health of your unit and make course corrections along the way.

Get the right metrics

At XL, as we saw, Macia and her team developed growth strategies for the eight P&C businesses. Metrics, however, made those strategies operational. As Macia described to us, “Behind the strategies we put specific plans in place and then we measured everything—old business, new business, cross-sell, and much more. What gets measured gets done.”

Macia’s comment about measuring everything is a bit of an exaggeration. Your real challenge as a leader is to make sure that the right things get measured, not everything. Organizations create lots of data: numbers, reports, trend lines, heat maps, graphs, spreadsheets—and these are complemented by external resources on call to produce onetime studies and answer specific questions. Most of the time, however, it’s not clear that all this data is worth the cost and indeed leads to better business decisions and better tracking of performance progress. An important part of your job as a leader is to provide guidance about which measures and which data will make it possible for you and your team to know what’s happening in your part of the business at any given time, while also acknowledging that there are times when you just won’t have all the data and will still need to act anyway (see the box “Making decisions when you don’t have all the data”).

Part of this decision depends on your own inclinations. Some leaders want to base their decisions on as much hard data as possible. Others want just enough data to either reinforce or challenge their intuition. Still others may prefer a combination of hard, analytical data with anecdotal and qualitative input. But you’ll also want to ask yourself and your team the following:

• Are we focusing on the right questions? Many companies collect the data that is available rather than the data needed to help make decisions and run the business. So you need to be clear about what questions you want your data to help you answer and then focus the data collection around that rather than everything else that is possible. Consider the key leverage points in the business or in your unit—the ones that will make the most difference between success and failure—and what data you need to track progress on these. Also think about changes that you are trying to foster and what data will tell you whether you’re on track or not.
• Does our data tell a story? Most data comes in fragments. To be useful, these individual bits of information need to be put together into a coherent explanation of the business situation, which means integrating data into a “story.” While enterprise data systems have been useful in driving consistent data definitions so that things can be added and compared, they don’t automatically create the story. Instead, you should consider in advance what data you need to convey the story you need to tell—whether to your team, executives, shareholders, or customers—and give your team some direction about how to pull it together. Make sure, however, that you don’t start with a preconceived story (or conclusion) and then look for data to support it, but rather let the data paint the picture.
• Does our data help us look ahead rather than behind? Most of the metrics that leaders review are retrospective. They tell you about performance in the past, but are less effective in predicting future performance. Therefore, it is important to ask what data, at what time frames, will help you and your people get ahead of the curve instead of just reacting.
• Do we have a good mix of quantitative and qualitative data? Neither quantitative nor qualitative data tells the whole story. For example, to make good product and pricing decisions, you need to know not only what is being sold to whom, but also why some products are selling more than others.

Clearly, business data and its analysis are critical for your department or organization to succeed, which is underscored by the fact that the business intelligence and analytics space is becoming a billion-dollar industry. But even the best-automated tools won’t be effective unless you are clear about these four questions.

The challenge of establishing the right metrics applies not only to C-suite leaders, of course, but also to leaders of divisions, units, and teams, because without the right measures, it’s like trying to fly a plane in the dark without an instrument panel. For example, the leader of ad sales for a digital marketing company was concerned that sales numbers had plateaued, despite the fact that her salespeople were still as busy as ever making calls. When she began to get some qualitative data from her team and customers, she found that most client companies were just experimenting with digital placements once and then not buying again. So the salespeople couldn’t build a book of repeat business that they could keep adding to. She then stepped back with her team and asked how they could measure the likelihood of repeat placements and found that “page views” (a measure of how many people actually looked at a digital ad) were a good predictor and something that the operations team (another part of the company) was already tracking. She then added page-view data to the regular metrics, which enabled her team to identify the probable repeat buyers and the types of ads that were most likely to succeed. Armed with this data, the team was able to increase sales significantly in the following months.

You will need to track a number of metrics simultaneously. That’s why the outcome from answering these questions should be some form of dashboard or what Robert S. Kaplan and David Norton call the “balanced scorecard” in their HBR article “The Balanced Scorecard: Measures That Drive Performance.” The basic idea of a balanced scorecard is to construct the right suite of measures to help you drive results for your team or organization—financial and operational, retrospective and prospective, quantitative and qualitative.

Having the right measures is only the beginning, however. You also must check in regularly with your team: that’s where operational cadence comes in.

Set an effective operational review cadence

The thirty-day check-ins that Macia instituted for her rapid-results teams were critical forums for assessing progress and making midcourse corrections. But they were only part of the overall operational review cadence that Macia used to ensure that everyone’s efforts added up to the results she expected. These regular reviews also included quarterly all-employee progress updates, weekly senior team meetings, regular one-on-ones with direct reports, and more. Despite the fact that much of her schedule was variable—filled with traveling to customers, meeting with her XL bosses, and handling unexpected events—the internal rhythm of meetings that she created allowed her and everyone on her team to keep the work on track.

Holding regular operational reviews creates a structure for knowing what results you are achieving and a regular forum for deciding how to systematically improve them or correct course. Your job as a leader is to establish this kind of cadence if it doesn’t already exist, refine an existing cadence if it needs to be improved, or integrate the cadence for your team or division into that of the company. Think about how often you want to review progress, who else you need to involve, and what kinds of issues you want to highlight. Then put your operational reviews on the calendar, for you and for all the participants, and make sure that everyone honors these meetings as real commitments. You also should establish a regular agenda for the reviews, with some flexible space for unanticipated issues that might emerge.

For example, when Mark Benjamin was president and COO of NCR, he organized his review cadence around a weekly Monday morning virtual meeting with his team (located worldwide). As they went around the “room,” each person gave updates on key performance goals and on issues that needed attention. “It’s a major commitment to do this weekly,” Benjamin admits, “but in a big company like ours, if we did it only once a month, there wouldn’t be time to go deep enough on issues, and the lag time between updates would get people out of alignment with each other.” Jane Kirkland, a senior vice president at State Street Corporation, also emphasizes the need to have regular reviews and disciplines. “Make sure you have a review process for everything that touches you,” she advises leaders.

You can use the operational cadences to integrate your work in many areas of the business—and in many of the practice areas discussed in this book, from strategy and innovation to employee performance. In one classic example, Jack Welch of GE organized the various processes for his company in a rhythmic, interconnected sequence, which he depicted as a circular racetrack that he and his leadership team would regularly lap. The year began with a strategy discussion and update. Three months later, Welch and the team moved to business reviews raising issues out of the latest strategy. At midyear, there was course correction and talent check-ins, then more business reviews and performance management. By the end of the year, fresh issues and objectives set up the next year’s strategy refresh. As the company kept going around the track, everyone involved shared learning and discussed and agreed on improvements to keep raising the collective performance and impact of GE. Based on this corporate cadence, each business unit and subunit throughout the company created cadences that matched and supported the overall rhythm.

Consider some of your team’s own processes: can they be more tightly linked, with the learnings and decisions of each feeding directly into the next? If so, as your unit goes around the track, more and more managers and leaders will practice and learn about vision, strategy making, people recruitment and development, sustainable growth, and so on. And if you are not the CEO and don’t control the enterprise cadence, think about how you integrate the cadence of your team into the broader framework. When do you need to prepare for reviews with your bosses, and how do you become confident that everyone is ready?

Lead candid dialogue at operational reviews

As a leader, you can’t just set up reviews at which your team reports on metrics and results: you must use those meetings as opportunities to push on every aspect of your team’s work—often brutally. By having regular, aggressively candid dialogues with your team about the business, you’ll be able to quickly respond to performance misses and determine quickly what to do about barriers, problems, and opportunities that inevitably emerge.

In the XL case, we saw that Macia had candid discussions with her business leaders and direct reports. She extended that behavior to her reviews with project teams and on overall performance indicators, with the intention of modeling this candid dialogue so that it would become part of what had been an overly polite culture.

Unfortunately, encouraging and modeling this kind of dialogue can be difficult. You must avoid letting the candor lead to blaming, cover-ups, or distortion. To address any challenges standing in the way of delivering results, your team must confront the realities of the organization, not an airbrushed ideal.

To make your reviews fruitful, your questions should be tough and direct, but always clearly in the spirit of accelerating progress, illuminating unconscious assumptions, and solving problems. That way you’ll not only advance the work, but build relationships and help the people involved learn and develop. Avoid becoming the leader who (perhaps out of their own insecurity) asks review questions only to prove that they are the smartest one in the room or to make someone squirm. Asking questions well should actually have the opposite result: many of the best leaders we’ve seen have an uncanny ability to engage in Socratic dialogue that helps people reach their own conclusions about what can be done to improve a plan or project or operation, which, of course, leads to much more ownership and learning.

When in an operational review, first ask probing questions about the team’s or individual’s current results, plans, and projects. What’s working well? Where are you struggling and why? Has anything surprised you so far? Where do you need help, guidance, fresh ideas, or resources? Asking these questions not only teases out what’s really happening and what needs to be done, but also gives you insight into your people.

Terra Firma CEO Andrew Géczy emphasized to us that sometimes his questions force his people to think about the business differently. For example, in his previous role at ANZ bank, his people served thirty-five markets with many products, and he found that reviews were filled with “big spreadsheets that didn’t address the issues.” He asked his operations leaders instead to answer a few simple questions on one page: How hot is the transaction engine running? What is our cost per transaction? What is our aspiration for cost in three years? Over time, those questions converted ANZ’s thinking about its operating platform and put the organization on a path to delivering products to clients much more efficiently.

Don’t stop with just a review of the business unit itself, though. Move on to questions about the broader context in which your team operates. One of a leader’s most critical tasks is to help everyone connect their projects, results, and measures with the work of others so that they don’t look at each individual issue or problem in isolation (remember the “team of teams” discussion in chapter 3). Otherwise, the individuals on your team will not recognize how their work might affect other projects or operations, or how to prioritize various initiatives. Only the leader—who must think about the connections with these groups all the time—can spur this kind of thinking.

For example, a few years ago, one of us was working with the senior leadership team of a major hospital network. Its regular reviews included updates about all of the organization’s individual projects related to operating results, patient outcomes, technology introductions, and other critical shifts in the health-care landscape. But there were so many of these updates in each review that it was hard for anyone involved to tell which projects were most critical and where to designate the most resources. The team was so deep into the weeds that it had lost sight of the garden.

After several months of this, the president asked the team to create a diagram of all the projects included in the review and how they mapped against the organization’s strategic priorities. This stark question forced the team to put the projects into context, and it was quickly apparent that many of the initiatives didn’t advance the overall strategy. The president’s question also encouraged the team to see just how little sequencing or sense of prioritization it had assigned to these efforts. Because everything was deemed important and had to be done right away, everyone, particularly the top 100 managers of the hospital network, was stretched thin and struggled to bring almost anything to completion. By asking these context questions, the president forced the leadership team to prioritize and streamline its efforts, which allowed it to better focus on the most important efforts to deliver results.

Of course, not every question you ask in a review will be a game changer. But if you have the courage to challenge assumptions and put initiatives in context, chances are that some of them will indeed make a difference, sometimes in surprising ways. And if you avoid asking tough questions, you’ll start simply making assumptions about why projects may be off course or results different than expected. And when those assumptions are wrong, you’ll create all sorts of dysfunctional patterns. In a financial services firm, for example, a major product upgrade was delayed for months because the product and IT managers had different assumptions about what was to be delivered by when, and kept blaming each other for delays. It took a senior sponsor finally stepping in to help them ask each other the right questions. Then they were able to come up with a plan that satisfied both and quickly produced incremental revenue for the product.

The leadership difference in achieving results

In summary, improving your organization’s business results doesn’t happen by itself or by random chance, and a focus on those results is not a onetime set of activities. It takes hard work and courage and, most importantly, has to be done again and again to eventually create a culture of high performance (see the box “Culture and results”). Without your leadership, people will rest on their laurels, avoid dealing with difficult barriers, use available measures instead of the right ones, and not confront each other about the reality of how they are doing. So driving for significant results is a never-ending process, and it’s up to you to make it happen. That’s what it means to be a leader.