How do middle market CEOs successfully execute on growth plans?

As a fan of Blue Ocean strategy, you already know how important it is to have the right strategy. But, a great strategy executed poorly produces lackluster results and missed targets. Unfortunately, most companies and top executives focus their efforts on developing a strong strategy but spend very little time converting those strategies into “execution ready” plans that clearly define the actual work team members need to do to bring the strategy to fruition.

A recent survey of more than 400 Global CEOs found that executional excellence was the #1 challenge they faced, coming at the top of some 80 other issues. [1]

Competitive barriers are eroding, and competition is stronger than it has ever been. As our expert partners at Blue Ocean Strategy advise, you must move away from the crowded red waters and find uncontested blue water to experience uncontested growth.

The market today is far less forgiving of execution blunders than in the past

  • Every established company today has far more competitors than ever before – and these competitors know no geographic, size, or industry boundaries.
  • Customers are far more demanding than ever before, and brand loyalty is at its lowest.

Companies not only have to move faster and faster, but they must be flawless in their execution.

Today’s demands vs future growth

Mid-market companies traditionally grow faster than respective companies in their industries. These high growth opportunities require companies to manage the demands of the existing business while creating strategies for growth three to five years out. Broadly speaking, there are two generic strategies for high growth—organic growth through product or market expansions and inorganic growth through mergers and acquisitions (M&A). Both are fraught with execution challenges.

Which one you choose depends on the industry you are in, how you differentiate your offerings, how well your business is running and your access to capital.

Companies drive organic growth by doing more of what they already do well, expanding their presence in their current market, gaining market share by way of securing additional customers that resemble their core customer and through new distribution channels. They may choose to launch new products or services for their existing market. They may also choose to expand into new markets with existing or new offerings. Unfortunately, 70% of new product offerings fail.

Another very common strategy is to grow by acquiring or merging with another company. Sometimes it makes sense to do this to gain access to a new market or technology rather than developing either. It sounds like an easy straightforward approach, although it is one of the most difficult ways to grow. 83% of mergers and acquisitions fail to pay off and show positive ROI in the first year, if ever.

Merging two cultures can be extremely difficult, and breaking down silos becomes an even bigger challenge. It is imperative that the acquiring company has a healthy culture, well-documented processes and additional bandwidth to make the post-merger acquisition successful. Having the right system in place to manage the acquisition and integration can be the difference between success and failure.

Mind the gap

Strategy and execution are very different things, as outlined in a Rhythm Systems’ research paper titled, “Intelligent Work: How mid-market CEOs confidently execute their growth strategies and win.”

Thinking about which new Blue Oceans to go after is a great strategic exercise, but you can’t stop there. As stated at the beginning, it is very important to have the right strategy, but that is only one part of the equation. Success will not be realized if it is not executed effectively, and that is where things break down most of the time.

The CEO has a vision where the company is going, but everyone else in the organization does not necessarily share that vision or know how they can help make it a reality. Traditional tools to manage execution— like using email, spreadsheets, and functional tools built specifically for one department— are lacking.

In order to avoid failure, you must do the following:

1. Break Down Silos

Getting everyone in the company rowing in the same direction is one of the most powerful things a company can accomplish. Unfortunately, not many companies achieve this holy grail of execution.

“This problem is bigger than most CEOs realize. In a study of 8,000 managers in more than 250 companies, respondents said they were three times as likely to miss performance commitments due to insufficient support from other units.”

It is one thing for the executive team to have a strong execution plan. It is a powerful thing when the functional departments also have plans that are aligned with the company plan and supporting each other in an intra-dependent manner like a well-directed orchestra. It takes a conscious effort to make this happen, and it’s magical when it does. Departments need to plan in alignment with the company planning and coordinate those plans with other departments in the company. Communicating priorities, resource needs and interdependencies ensures the whole company is successful. Everyone needs to understand what everyone else is working on to time phase the work and share scarce resources.

In a major study, when employees were asked how frequently they could count on others to deliver on promises fully, 84% said they could rely on their bosses and their direct reports (those within their departments) all or most of the time. However, only 9% said they could rely on colleagues in other functions (outside their departments) all the time.

2. Create the Right Culture for High Growth

It requires a high-performance culture built on trust, openness and sharing to execute like a finely tuned machine. It is also critical that the CEO shares a vision for the future that’s inspiring and rallies the team to achieve a shared vision. A healthy mission-driven culture which embraces learning and innovation and has the willingness to take risks sets the stage for successful execution. Defining and bringing to life the right set of core values can go a long way toward building and maintaining a healthy culture.

3. Intelligent Work Platform

As companies grow, things become more complex, and a better way to execute is required to be successful. A new approach is needed as the old ways of managing execution has led to consistent failure for too many organizations. It requires the entire company to be on the same page and have a common knowledge and understanding of what work to prioritize. Left to their own decisions, employees will work on what they believe to be most important, which is not necessarily aligned with the company’s goals.

Studies have found that two-thirds to three-quarters of large organizations struggle to implement their strategies (Harvard Business Review).

An Intelligent Work Platform seamlessly blends the latest cloud-based digital technologies with 21st century management thinking to close the strategy-execution gap by eliminating silos and fostering better execution of cross-functional growth priorities.

There are three components of a successful execution strategy:

To read more, you can download this free white paper “Intelligent Work”  on the Rhythm Systems website. Cindy Praeger, Co-Founder and Managing Partner will be speaking at IndEx 2019 alongside Randy Carr, CEO of World Emblem…they will be discussing how Randy successfully executed his growth strategy at a middle market industrial company. 

[1] All quotes taken from the white paper “Intelligent Work” written by Cindy Praeger, Eskinder Assefa, & Jan Wall.