Letter to the CEOby Antonio Nieto-Rodriguez
I believe CEOs are facing the most challenging era in management history, far beyond the great depression. The past decade has seen fierce competition arising due to highest levels globalization, combined with geological instability in a sluggish economy, aggravated by a lack of engagement by a growing size of the workforce; and an unprecedented pressure to deliver short-term results.
To become better equipped for competing and surviving in this new era, organizations have moved into a reactive-mode; investing and launching a vast amount of projects: from acquisitions, to digitalization, to new products; going through several reorganizations, ruthless cost reductions up to the breakup of long standing businesses into several smaller ones.
The reality is that organizations are struggling to reap the benefits of all these projects, but not only that, they have become highly unfocused. Senior executives that lack a shared vision and are not aligned on the top priorities, end up working in silos. All this has a devastating effect in the culture and the capacity of implementing the organization’s strategy.
The massive increase in projects introduced by organizations in the past decade has created confusion amongst managers and employees. In addition, this leap-forward strategy, many businesses have moved away from their “core”, spreading too thin their resources, making it very hard to understand where the organization is going.
The number of priorities has also increased, being customer centric or innovative, is not enough, organizations have to be that, but also efficient, entrepreneur, intrapreneur, mindfulness, compliant, nimble, lean… every new priority added to the existing ones, increases the complexity of the organization and the environment managers have to operate and lead their teams. At the same time, employees have reached a state of “change-fatigue”, tired and demotivated from non-stop changes in their organizations, not knowing whether they have to work on the day-to-day activities or to spend their time in long-term projects.
This current state of play makes it tough for manager to see through the clutter and understand the most important activities to focus their time and effort; hampering the ability of organizations to execute their strategies successfully and keep engaged and motivated their employees.
Today CEOs have much less time to act than a decade ago. Markets, shareholders and even their executive teams have become less patient; they look for clarity of direction with immediate results. Yet, many are still dragging along, unable to take the tough decisions.
If value creation, or at worst, value preservation, is the number one responsibility of any CEO and Board of Directors, they have to take immediate action now. The longer it takes you to make the difficult choices, to prioritize your priorities, to stop projects and products that are far from your core, … the more chances you have to destroy value and risk going out of market.
The following seven questions will help you determine how big the gap is.
- What is your organization’s purpose and is it the same for all the organization?
- Are our priorities clear and aligned to your purpose?
- Can you list your top 10 strategic projects?
- Do you regularly cancel projects?
- Is your executive team a group of individuals or a “real team”; fully on-board and 100% engaged in delivering your organization’s purpose and vision?
- Do you have the right people to deliver your purpose? Are they working where they are best at?
- How do you know if you are on track implementing your strategy?
I propose to adopt the Project Revolution, composed of three simple concepts, proven successful in other organizations, such as Lego, Western Union, and Microsoft. They are easily understood, and have a profound impact on your organization culture and ways of working. They do however require CEO’s sponsorship and full involvement following through till completion. The engagement of the entire executive team, cascaded through the organization is also required. If seriously taken, you will experience significant improvements in 9 to 12 months.
- Implement the “Hierarchy of Purpose”
- Purpose: is the alma matter of your organization that the strategic vision should support
- Priorities: what matters most to the organization now and in the future
- Projects: invest in projects that align with the purpose, vision and priorities; stop up to 50% of the rest.
- People: choose the best people to execute on those projects
- Performance: identify precise targets that will measure real progress
- Adopt the “Projects Manifesto”
- Think Projects when delivering and growing your business
- Increase your Projects capabilities to drive execution
- Create Project teams instead of working in groups
- Sell Project instead of products or services
- CEOs are the ultimate Project Managers
- Break-through silos through Projects
- Become a “Focused Organization”
Focused Organizations have a culture of getting the right things done, achieve their strategic goals, have high performing teams, and employees are fully engaged. Their hierarchy of purpose is very narrow, often based on one or two priorities well know but all the individuals. They apply the “Less is More” principle: less priorities, less projects, more benefits, more results.
Working on the previous two concepts will help you become a Focused Organization and join Apple, Ryan Air, Amazon, …
Antonio Nieto-Rodriguez (antonionietorodriguez.com) is Director of the Program Management Office at GlaxoSmithKline Vaccines and past chair of the Project Management Institute. He is author of the The Focused Organization.