7 things CEOs should do to turn strategy into great performance
Source: Rakesh Shah – RVR Management
Being named as the CEO of a company means big responsibility. No longer are you responsible for day to day tasks, instead, you are in charge of creating success for an entire organization. For many CEOs, this type of role change can come as quite a shock.
In the manufacturing industry specifically, CEOs have many unique challenges to face. According to a recent article by Cranfield University, suggested that finding dedicated skilled employees, producing a product that will bring the company a profit, and maintaining ethical standards is now more difficult than ever thanks to technology and skill shortages.
Despite all of the challenges they face, CEOs of manufacturing companies are still required to perform above average. If they don’t, they will lose their jobs.
If you are losing ground fast as a CEO, it’s time to take charge and improve your performance. Taking note of these seven tips will get you off to a great start.
Have a vision – keep it simple
All of the top executives across the globe have a strong vision for their company, and they had it from the day they took the reins. Mark Zuckerberg envisioned a world where everyone could be connected and creating a product that would do so. Jeff Bezos saw a world where people could have everything they need at their fingertips, and he certainly delivered.
As the CEO of your company, you have to understand and have a vision for the end goal. And, once you have that vision, you have to share it with your employees. Ensure all key functional leaders (sales, marketing, finance etc..) are talking the same language in line with overall goals of the business. Explain to them the importance of their role in making that vision come to life. We explain this importance in our article about creating sales vision.
Have a very clear communication process that clearly states “what you will do and what you will not do”. Keep the language very simple so that everybody in the organisation fully understand the direction the company wishes to go in. Avoid drawn out descriptions of lofty goals, in simple terms state your end goal.
Understand your customer base
Understanding your customers goes hand in hand with creating a vision for your company. You cannot have an idea of what your ultimate success will look like if you don’t know what your customers needs are. Therefore, one of the first things you should do when trying to improve your performance is to revisit your customers.
As outlined in a previous article, to be successful as a CEO, you must know…
- What represents ‘value’ to your customers?
- Who are you up against (as in who is meeting their needs right now)?
- Who are your strongest allies (partners, suppliers, etc.)?
By asking these questions and understanding the answers, you will be able to gain a picture of the hole in the economy that your business needs to fill. A company with an important job to do for their customers is always the most successful.
Identify key issues in your business early
As the CEO of a manufacturing company, you will never be able to create success for your business if you keep using the same methods that have caused problems in the past. Issues that prevent business from flourishing can take place at every level, therefore everything needs to be examined.
Do your employees have bad morale? Are your customers not getting their products in a timely manner? Are you paying too much for certain supplies? All of these things are like a kink in a garden hose and cause the business to back up. If you aren’t sure what’s preventing your business from taking flight, you should read the article 5 Warning Signs Your Business Needs a Strategic Plan.
Create a strategic plan
Once you come to a realization of what you need to fix in your manufacturing business, it’s time to create a strategic plan. A strategic plan identifies what your problems are, what your goal is, and a plan for getting there. Furthermore, every strategic plan includes a description of how the problems were diagnosed, definitions of the issues that need fixed, details to overcome the obstacles in your way, and differentiation—or a way that your business will set itself apart from the rest.
Having created a plan ensure you put together a cross functional team to challenge assumptions made in the plan. Ensure that the assumptions underlying your long-term strategic plans reflect real market economics and your organization’s actual performance relative to rivals’.
Example: Tyco Electronics Corp commissioned cross-functional teams in each business unit to continuously analyse their markets’ profitability and their offerings, costs, and price positioning relative to competitors’. Teams met with corporate executives biweekly to discuss their findings. The revamped process generated more realistic plans and contributed to Tyco’s dramatic improvements in its performance.
From the strategic plan identify few key improvements priorities that is going to deliver major step change in delivering performance in line with your strategic plan. From these priorities develop a detailed action plan and KPI to track the performance. Ensuring these priorities, KPI and action plan are cascaded down into every functional areas.
Discuss resource deployments early. Challenge business units about when they’ll need new resources to execute their strategy. By asking questions such as, “How fast can you deploy the new sales force?” and “How quickly will competitors respond?” you create more feasible forecasts and plans.
Empower your employees to carry out your strategic business plan
Just like you need to share your vision with your employees, you need to empower them to carry out your strategic plan. Give employees the ability to bring issues to your attention, offer suggestions on improvement, and create new methods for achieving a goal creates an engaged workforce, and an engaged workforce is the best kind.
Monitor and adjust your plan regularly – manage performance gap
With the right tools in place, it doesn’t take long for a well-rounded strategic plan to get rolling. However, your work as a CEO does not stop there. In order to create sustainable improvement as a CEO, you need to constantly monitor your strategic plan and where required adjust to address new issues and new customer needs.
One of the biggest failing is CEO not measuring the performance of the business in relation to the original strategic plan. Many companies that I have worked with do not track performance against its long term strategic plans. They measure against previous year performance, as oppose to comparing the results against previous year strategic plan projections. Therefore, year after year there is under performance in relations to the strategic plan. Since there is no one held responsible for under performance, or there is no review process/tools in place, the cycle of underperformance continues year after year. Due to not having a robust review process it makes it difficult for top management team to discern weather strategy to performance gap is due to planning, poor execution or both.
Celebrate your successes
As you are putting in all of the hard work that it takes to improve as a CEO, don’t forget to realize when you have achieved something great. One of the key components to staying on a path towards greatness is realizing your successes. So, don’t be afraid to celebrate the little things.
If you need help in refining your adjustment skills, you can always work with RVR management. We specialize in providing CEOs with the tools and support they need to succeed and deliver results. In my next blog I will cover one such tools that will help you convert strategy into reality.
Rakesh Shah – RVR Management provide Interim Sales and Marketing support, as well as SME business consultancy for the engineering and manufacturing sectors to assist with their growth activities.