This article is an excerpt from the Shortform book guide to "Execution" by Larry Bossidy and Ram Charan. Shortform has the world's best summaries and analyses of books you should be reading.
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What is business execution? Why must good business leaders learn to execute?
The term “execution” has a few different meanings when it comes to business. The definition we’re using is the one from Larry Bossidy and Ram Charan’s book Execution. According to the authors, business execution is a discipline that leaders must follow in order to advance the company’s goals.
Keep reading to learn about the meaning of execution in business, and why it’s so important.
What Is Execution in Business?
Contrary to what many people think, being a leader entails more than just casting a lofty vision, unveiling a grand strategy, and delivering inspirational speeches. Bossidy and Charan argue that effective leaders get their hands dirty through execution. Let’s explore what execution is and why it matters.
The Definition of Business Execution
So, what is business execution? Bossidy and Charan describe execution as a set of key systems and behaviors for a leader to implement at their company. It’s a discipline that requires leaders to constantly engage in actions and communications that advance company goals—not a checklist of tasks that a leader can delegate.
Ultimately, execution is the thread that ties together strategy, goals, and people in a successful company. In practice, it looks like motivated people collaborating, speaking candidly, and relentlessly seeking solutions to fulfill big goals, all led by their leader.
| Clearing Up Confusing Terminology Not everyone defines execution in the same way as Bossidy and Charan. By their definition, creating strategy, defining goals, managing people, and coordinating operations all fall under the “execution” umbrella. But, in The 4 Disciplines of Execution, Chris McChesney, Jim Huling, and Sean Covey differentiate between strategy (the big-picture plan) and execution (the actions needed to carry out that plan). However, McChesney, Huling, and Covey’s definition of execution doesn’t totally diverge from Bossidy and Charan’s. Similar to Bossidy and Charan, they describe people management as a key part of execution. This includes clearly communicating the company’s goals to all employees and identifying actionables so employees know what they need to do to achieve these goals. |
Why Execution Matters
We’ve explored what execution is—but, why does it matter? According to the authors, execution matters because it helps leaders construct strong, realistic strategies that lead to focused effort, bottom-line results, and motivated team members. When a leader is constantly assessing progress toward company goals, supporting free-flowing communication, and seeking real-time updates, they can create a strategy that reflects the company’s capabilities.
Bossidy and Charan note that execution also helps leaders to create strategies that mitigate known risks and advance the company’s interests. Leaders play a critical role in surfacing risks by staying vigilant and getting input and insights from people at all levels of the company. Leaders cannot possibly detect all risks from a single vantage point, so engaging with others through execution is essential to expanding their awareness.
As Bossidy and Charan caution, without execution, leaders often formulate strategies that look good on the surface but that their companies cannot realistically achieve. For example, imagine that before crafting a strategy, you research the competition, study market fluctuations, and analyze detailed financial data. The strategy looks sound and excites eager investors, but ultimately, the strategy fails.
Why? You didn’t execute effectively, meaning your view of your company’s capabilities and weaknesses wasn’t accurate. The production and sales teams were not in communication, the production team couldn’t fulfill the high volume of new orders that the sales team generated, and delays ruined the customer experience. And nobody told you there was a problem until it was too late to adjust.
When leaders and their companies fail to produce promised results as a result of poor execution, the consequences can be devastating. People can lose their jobs, investors might give up their stocks, and team members can become demoralized.
(Shortform note: That said, no matter how thorough you are in gathering information, assessing risks, and constructing realistic strategies through execution, failure is an inevitable part of doing business, which Bossidy and Charan don’t address. Failure may not be fun, but it can produce valuable benefits, such as sharpening your focus and boosting your credibility. Why does failure lead to those positive outcomes? When we fail, it often prompts us to revisit our purpose for being in business, which gives us an opportunity to ensure the trajectory of our company still aligns with our authentic vision. Also, when we’re forthcoming about our challenges and stories of perseverance, we become more relatable and trustworthy.)
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Here's what you'll find in our full Execution summary :
- What execution in business is and why it matters
- The three core functions that leaders must perform to execute well
- The three important qualities leaders must have to execute well
