Mere Perfect Execution is no Longer Enough!
Mere perfect execution of your business plan is no longer enough! To be really successful a CEO must be able to make paradigm changes in his company’s business model. In today’s rapidly changing business environment incremental gains will not provide long term profitable growth. Unfortunately neither do most mergers and acquisitions. In fact continual focus on all the problems of M&A integration will inhibit focusing on true innovation.
Companies seam to fall into two broad camps, those who react to change and those who are continually reinventing themselves. Reactive companies focus on incremental growth or grow only by M&A activity. Examples are companies like AOL Time Warner(a perfect example of how a great M&A strategy can fail to deliver growth), or IBM ( a company trying continually to do the same thing but trying to do it better). Reinventing companies reinvent not only themselves but their entire market sectors. Examples are companies like Wal-Mart, Dell, and Southwest airlines. Clearly WAL-Mart has completely changed the retail sector. Dell’s supply chain management and manufacturing process have made it one of the few winners in the PC space, and Southwest Airline is the only long term profitable airline.
Much of my early management training and experience was at one of the best companies for continuous reinvention, General Electric. Working for leader such as Larry Bossidy (the champion of superior execution) and Jack Welch (the champion of market driven strategies) I learned a lot about what worked and what did not work.
What GE did was to constantly plan and implement a number of simultaneous, paradigm changing strategies designed to achieve high growth. Using a market driven validation and prioritization process, a number of the highest potential ideas were selected. These ideas came from a process which engaged the visionary and strategic thinking of a broad cross section of management and customers. Properly executed these ideas became the driving force of reinvention. Not every idea or plan works, however if you keep swinging you will eventually hit home runs.