Implementation Is Key To Equity Growth—Part 1 of 2
Exploring the 4 Disciplines of Execution
by Chia-Li Chien | Dec. 16, 2013
Over the years, I have often seen a disconnect in the goals and objectives the business owner sees for the business and what the business can actually produce. This is often because the owner, due to leadership skills and entrepreneurial spirit, is unable to focus on one important, achievable goal and instead is prone to picking up any shiny new penny that happens to appear. It’s only natural.
When that happens, in terms of time, money and effort, the return on investment (ROI) of any business may greatly decrease and the ability to grow the business in value diminishes.
Or, the goals become too big, and over time, instead of accomplishing anything, nothing is accomplished. It’s the Law of Diminishing Returns—the more you try to do, the less you actually accomplish.
The key is to make goals smaller and more achievable.
For example, if you decide you can increase revenue through the development of a new product, you must first:
• Go through product development (Goal #1)
• Set small time frame and test to see if product will mature (Goal #2)
• Launch product (Goal #3)
But how can a business owner change and accomplish what is big in small, doable stages? There are three areas of research that may help.
1. The 4 Disciplines of Execution (http://the4disciplinesofexecution.com/)
I once worked with a young client who set out to develop a brand new product. He had all kinds of numbers and projected revenue to support the project. But by the time I saw the actual plan, I had one question—aren’t these projections two years old? You see, the owner had terminated the product about a year ago and had now decided to resurrect the product. So I asked him, “Why is it different now? Did you make any tweaks? How?” Every little reason they terminated the product were the same reasons they were moving forward today.
You see, on the first try, on a smaller scale, the product didn’t work. They tried again and again. The resulting outcome? The tremendous pressure to increase revenue remained, causing them to dig themselves into a hole because of their 1) perception 2) the roll out that didn’t change, and 3) the team and people working on the product didn’t change. It was painfully predictable that this latest attempt also would fall apart and not work.
The 4 Disciplines of Execution are precise rules for translating strategy into action at all levels of an organization. (http://www.forbes.com/sites/danschawbel/2012/04/23/the-4-disciplines-of-business-execution/)
Discipline 1 is the discipline of focus.
Extraordinary results can only be achieved when you are clear about what matters most.
I had another client who developed three brand new products to roll out at same time. “Why?” I asked her.
From the very beginning, I suggested that she focus on the first product and give it attention before jumping to the second and third products. But “No,” she told me, “I want to launch all three at the same time.” Again, to me, the results were already apparent:
1) The resources did not change
2) No one launch could be done perfectly
3) All three products did ultimately fail
In the end, it hurt the company not to launch each product one at a time in the strongest way possible, and it also damaged their brand reputation and the total sales of their existing products as well.
Discipline 2 is the discipline of leverage.
With unlimited time and resources, you could accomplish anything. Unfortunately, your challenge is usually the opposite: accomplish more with less.
Focus and face the fact that you have existing customers and products. Know how you will handle those aspects of your company while launching your new product. How will resources be allocated? And remember, don’t overuse and overwork your people.
Discipline 3 is the discipline of engagement.
You have the authority to make things happen, but you want more than that – you want the performance that only passion and engagement can produce.
Consider staffing for your product launch. Any new people will have a ramp up time you must be aware of. Most cannot hit the ground running. Most have to build up to and “catch” your own passion.
Discipline 4 is the discipline of accountability.
No matter how brilliant your plan or how important your goal, nothing will happen until you follow through with consistent action.
Be cautious about rolling out new product. Look at efficiencies, processes, costs and expenses to increase revenue before launching product. Target your customers and know your audience profiles.
Roll out the product in a way that can be measured over time. Be willing to close it down before it hurts your business if the numbers start showing failure.
I had another client who insisted on introducing a product knowing a competitor already had it. His company had been slow to respond to consumer demand, but their competitor was able to make it happen. My client even put in two production lines, but by that time he was ready to go, the market had shifted. Remember, trying to catch up with the competition puts you at disadvantage.
Stay tuned for Part 2 of this article in which we explore two other ways a business owner can change and accomplish what is big in small, doable stages—Agility and Little Bets.
About Chia-Li Chien
Chia-Li Chien, CFP®, CRPC, PMP; Chia-Li “like JOLLY,” Succession Strategist of Value Growth Institute, dedicated to helping private business owners increase their company equity value. She is the award-winning author of the books Show Me The Money and Work toward Reward and a faculty of the American Management Association. Her blog and newsletter was named a Top Small Business Resource by the New York Times You’re the Boss blog. Contact her at firstname.lastname@example.org or (704) 268-9378 .