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The Secret To Success: Execute Better Than The Rest

Louis Vincent Gerstner, Jr is the man famed for IBM’s turnaround, a company on the brink of bankruptcy when he became CEO in 1993. Let’s look at how Gerstner succeeded in creating the transformational change needed to turn the company around:

It wasn’t his technical know-how: Gerstner initially didn’t want the job because he believed he was under qualified

It wasn’t his in-depth institutional knowledge: as an outsider Gerstner was unfamiliar with “IBMer” language

It wasn’t his charismatic and outgoing personality: Gerstner was described as reclusive, rarely giving interviews or making public appearances.

So how did Gerstner turnaround the failing organization?  He was disruptive, he was unconventional and executed the heck out of his strategy. But most importantly, he took massive and consistent action.

I love a good strategy, but it doesn’t matter how exact your strategy is if you fail in the execution.

In his memoir: Who Says Elephants Can’t Dance? Gerstner describes how he executed the company’s transformational change:

1. He Sent A Clear Message About Change

Gerstner disbanded the Management Committee in his first month as CEO, which signalled to employees that there were going to be major changes to the managerial culture at IBM.

2. He Focused On Strategy And Delegated The Rest

Gerstner then announced that his committee “would not accept delegation of problem solving. It would not sit through presentations or make decisions for business units. Its focus would be solely on policy issues that cut across multiple units.”

3. He Held People Accountable

Gerstner believed that ‘people respect what you inspect’ and that executives should not assume that the agreed upon changes are actually taking place. He told his executives that they must understand – people will do ‘what you inspect, not what you expect’.

4. He Brought The Outside In

One of the most revolutionary changes Gerstner implemented was reducing the size of the Board of Directors from 18 (many of which were IBM employees) to 12, a number he considered more manageable. Only 8 of the original board members remained, with Gerstner being the only IBM employee.

5. He Rose To The Culture Challenge

Reflecting on the strategic changes he implemented at IBM Gerstner recalls, “The hardest part of these decisions was neither the technology nor economic transformations required. It was changing the culture – the mindset and instincts of hundreds of thousands of people who had grown up in an undeniably successful company, but one that had for decades been immune to normal competition and economic forces.”

He likened the transition to “taking a lion raised all of its life in captivity and suddenly teaching it to survive in the jungle.”

6. He Focused On Execution

Gerstner recognized the importance of following through on his strategy saying, “Execution is really the critical part of successful strategy. Getting it done, getting it done right, getting it done better than the next person is far more important than dreaming up new visions of the future.”

Attributes of Effective Execution

Gerstner believes that execution is the most unappreciated skill of an effective business leader and maintained that effective execution is built on three attributes:

World-class processes: every industry has five or six success factors that drive leadership performance. The best companies build processes that allow them to outperform their competitors on those success factors.

Strategic clarity: “Companies that out-execute their competitors have communicated crystal-clear messages to all their employees: “This is our mission.” “This is our strategy.” “This is how you carry out your job.”

High-performance culture: “Superb execution is not just about doing the right things. It is about doing the right things faster, better, more often, and more productively than your competitors do…it calls for a commitment from employees that goes way beyond the normal company-employee relationship.”

Remember you don’t have to be the most qualified, with the most technical know-how, or be the most charismatic person in the room to experience incredible success.

Take a lesson from Gerstner and dare to be disruptive, unconventional and take massive and consistent action on your strategy! Be relentless, it will pay off in the long run!

To your continued success,

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