PDF Summary:Execution, by Larry Bossidy and Ram Charan

Why do some companies thrive while others fail? Better timing? Better ideas? Good luck? According to business leaders Larry Bossidy and Ram Charan, the difference is execution—the dynamic practice of linking a company’s people, strategy, and goals to achieve results. In Execution, they explain that great leaders drive execution by constantly seeking accurate information about company operations, assessing progress toward big-picture goals, and supporting free-flowing communication. When leaders execute effectively and are actively involved in the company at ground level, they create a performance-oriented culture and keep everyone’s efforts focused on the goals that matter most.

In this guide, we’ll review Bossidy and Charan’s principles for powerful leadership and consider other authors’ ideas that support (and sometimes challenge) their assertions. We’ll also connect their theoretical principles to actionable tools and techniques you can use to propel your company toward more success.

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(Shortform note: Bossidy and Charan don’t address creating sensitive memos specifically related to employee conduct violations or performance issues that emerge during reviews. You can guard against legal complications, such as accusations of discrimination or retaliation, by following standard protocol around documenting violations. Best practices include avoiding statements of opinion and providing concrete examples of violations.)

Become Masterful at Performance Reviews

Delivering good performance reviews takes practice, but you can train yourself to handle feedback conversations in a way that guides employees to pinpoint their strengths and weaknesses.

Instead of simply listing off an employee’s recent achievements and issuing directives, focus more on asking questions and engaging employees in thoughtful conversation. Invite them to consider their strengths and future goals and to identify opportunities they see to advance their career interests. Also, encourage them to share success stories from their work, such as an experience that left them particularly energized or inspired.

When an employee points to a challenge they’ve encountered, help them begin carving out a solution. Prompt them to consider their desired outcome, what they have tried so far, and what they think might help resolve the problem. This collaborative approach fosters trust and encourages employees to be active participants in shaping their path forward in the company.

Step #4: Reward people who deliver results and withhold rewards from people who fail to meet expectations. This will reinforce the standards you’ve set and incentivize people to optimize their performance.

(Shortform note: What types of rewards should you give your employees? Rather than offering a generic reward like a monetary bonus, you might consider impressing your employees with a more creative and thoughtful gift. Ideas for creative rewards include reduced prescription drug costs, a thank-you video, movie tickets, or a spa day.)

Safeguard Against Talent Shortages

Unfortunately, you can never guarantee that the talented people you hire will stay or develop as you thought they would. This can lead to staffing shortages, when team members either leave the company or get fired. Let’s examine some risks that could leave you vulnerable to staffing shortages and ways you can mitigate those risks.

Risk #1: Not having enough qualified people lined up to succeed current leaders—To manage this risk, Bossidy and Charan advise you to have solid talent development plans in place. This will give you a constant stream of internal candidates who can step into roles.

(Shortform note: Bossidy and Charan don’t provide clear suggestions for creating and implementing talent development plans. One-to-one mentorship can be especially valuable for high-potential employees who need support with particular skills, such as communication and leading a team. It may make more sense to pair them with mentors who’ve mastered those skills, even if they work in a separate department. Employees could also access external learning programs—online, in-person, or hybrid—that are not available internally.)

Risk #2: Vacant positions due to unexpected departures of key staff—Look out for red flags that someone might be inclined to leave. The authors recommend considering factors such as how marketable someone is to potential recruiters, their potential, and how long they’ve been stagnant in the same position. Also, assess whether people have been adequately rewarded for their contributions. If you spot any red flags, consider how you could entice the person to stay.

Risk #3: Not having people with the skills needed for the company’s next stage of growth—Your staff might be performing their current roles well, but that doesn’t mean they’re equipped to handle increased responsibilities following growth, such as a higher sales volume or launching a product overseas. Bossidy and Charan urge you to anticipate what skills you’ll need next quarter or next year, and be proactive in having qualified people ready to fill those roles.

Risk #4: Letting poor performers linger—Keeping poor performers on board in their current positions can destroy morale, sabotage the business, and send high performers running. Explore all options to eliminate this risk on a case-by-case basis. The authors suggest putting poor performers on a development plan, moving them to another position, or firing them. While all of these options can be emotionally challenging for both leader and subordinate, they’re necessary to keep your company strong.

(Shortform note: Bossidy and Charan acknowledge that handling poor performers can be emotional and difficult, but they don’t provide any guidance on how to deal with this challenge. In First, Break All the Rules, Marcus Buckingham and Curt Coffman provide practical advice on moving someone out of a role that isn't a good fit. When having these conversations, stay composed and consistent in your feedback, and remember that removing an underperformer will benefit the rest of the team. Also, be sure to acknowledge that the employee does have talent, just not the talent needed for this particular position.)

How to Define Potential and Incentivize Employees

Whereas Bossidy and Charan provide basic recommendations for preventing staffing shortages, they don’t provide much guidance on how to define potential when looking for staff to fill leadership vacancies or upcoming skill gaps or advice on how to reward and incentivize at-risk people to stay in their roles in a way that doesn’t alienate other high performers. So how do you know which people are capable of becoming future leaders? And what’s the best way to incentivize high-potential people to stay and continue developing with the company?

The best way to identify high-potential employees is through the regular performance reviews we discussed earlier. Alternatively, invite junior managers to nominate employees who show the most promise. To assess promising employees’ potential, weigh these five essential traits:

• Their desire to positively influence others—You want people who are passionate about the company’s mission and are motivated to see others succeed.

• Their resolve to engage others, discover new ideas, and create lasting solutions—You want people who are constantly seeking out deeper understanding through inquiry and feedback.

• Their sense of identity—You want people who think of themselves as leaders who create change.

• Their skills—You want people who are equipped to perform the necessary tasks so they can apply their knowledge to the job at hand.

• Their knowledge—You want people with the learning and awareness needed in their particular role.

Once you have your list of high-potential employees, inform those candidates that they have been designated as such. Research shows that this type of transparency improves employee productivity and retention. Then, develop your high-potential employees through a combination of mentorship, informal coaching, formal training programs, and on-the-job experiences that challenge and motivate them. Gradually expose them to more responsibility and tasks that require more advanced skills so they can integrate their learning without becoming overwhelmed.

Now, what about retaining these high-potential employees? It’s important to reward them for their commitment to developing and contributing at a higher level. But don’t go overboard with financial compensation, which could alienate employees who are not designated as high potentials. Instead, balance external motivators, such as money, with internal motivators, such as recognition.

Main Leadership Function #2: Set Realistic Goals

Once you have the right people in the right jobs at your company, the authors say it’s critical that you define goals that are grounded in reality and not just pie-in-the-sky aspirations. This involves creating a good strategic plan that will set your company in the most promising direction. Let’s look at the elements of a good strategic plan and how to finalize your plan so people stay connected to their part in fulfilling it.

Create a Strategic Plan That Makes Sense

A strategic plan outlines the future direction of a company and establishes its most important priorities and goals. As Bossidy and Charan note, leaders often neglect to do sufficient research before creating their strategic plan. They put together proposals based on secondhand reports, surface observations, and their emotions, then get frustrated when the outcomes fall far short of their targets.

(Shortform note: Why do some leaders put subpar effort into their strategic plan? It could be because some business leaders consider strategic planning obsolete and a waste of time. They might argue that even the best-laid plans are likely outdated before they have a chance at being completed. Instead of formal strategic planning, these leaders focus on two key choices: which customers to target and how to create unique value in their products and services to attract those customers. Advocates of this approach say that these two factors alone have the biggest influence on revenue and company success.)

It’s essential, say the authors, to base your strategic plan on grounded knowledge of your company’s true capabilities and resources, its strengths and weaknesses, risks in the external environment, insights on competitors, and the state of the market as a whole.

Further, create a strategic plan that functions as a loose framework for action, not a rigid formula. A good plan, Bossidy and Charan state, allows room for adjustments over time. You need to know what direction you’re heading in, but resist the urge to fill in specifics. For example, maybe you plan to cut costs, and you initially consider doing so by moving plant operations overseas—you don’t yet commit to that specific course, though. When a competitor does the same a few months later, they get horrible press coverage and their clients flee. Instead of going down the same path, you have a chance to adjust. How else can you cut costs? And how can you capitalize on your competitor’s stumble?

As you craft your strategic plan, cut out the fluff. Bossidy and Charan emphasize that you should be able to capture your strategy on a single page. If you can’t do that, go back and simplify. Identify the top two or three goals that your company is going to prioritize this year. Everything else should fall under those big goals.

(Shortform note: A concise strategic plan has the benefit of keeping the plan simple, accessible, and easy to understand. Another benefit is that you can easily post the plan in your office, on your internal website, and in shared spaces throughout the company to keep it top of mind.)

Lastly, make sure the people who will be responsible for implementing the strategy are involved in creating it. Throughout the strategy sessions, invite and encourage people to speak freely about challenges they anticipate, resources they’ll need, and opportunities they see. Bossidy and Charan explain that this decreases the chances of being blindsided by a problem down the road. The process also builds buy-in and ownership from the key players. When they’re involved in creating a plan, they’re more invested in seeing it through. And bringing together the key players strengthens relationships across the company and fosters collaboration. Even when people disagree—which they will—the process of finding a solution is instructive and useful.

(Shortform note: The authors extol the virtues of including people in strategic planning who will implement the plan. However, they omit a major drawback to this approach that could outweigh the benefits: Discussions could become cumbersome if you have a large company and many managers who need to implement the plan. To manage this situation, use effective meeting time-saving techniques like having managers share written notes before they meet so they devote meeting time solely to reaching decisions. You can also take the simple approach of curbing the number of participants. Some suggest that limiting meeting attendance to 12 to 14 people will keep discussions productive and purposeful.)

How to Get the Most Out of Strategic Planning

The authors discuss strategic planning in general terms but don’t provide guidance on key features that it must include (and that you must therefore have “grounded knowledge” of)—or how to keep it current. Here are some steps you can take to extract the most value from your strategic planning efforts.

First, use a cheat sheet to confirm that your strategic plan includes all the necessary components. These components include:

• Your mission statement, vision statement, and core values—Declare what your company wants to accomplish and why, and what principles guide the company’s actions.

• A SWOT analysis—Define the strengths, weaknesses, opportunities, and threats related to your company’s current position.

• Your competitive edge—Clarify what your company does better than anybody else.

• Long-term and short-term goals and priorities—Specify what your company needs to focus on, as well as what measurable targets you must achieve and when.

• Key initiatives and programs—Identify what methods your company will use to reach your goals.

• A scorecard—Use this to measure and track progress toward short-term and long-term goals.

• Financial reports and projections—Use this data to formulate realistic plans.

If you’re unable to define or explain any of these features, return to the authors’ recommendation and collect more knowledge of your company’s operations until you can confidently address each component.

Furthermore, make the most of the flexibility that the authors recommend and continually keep your strategic plan current by staying alert to emerging opportunities for your company, both internally and externally. External opportunities include acquiring a new company, expanding into a new customer base, and marketing new products to existing customers. Internal opportunities include investing in research or equipment and restructuring departments to improve efficiency.

Wrap Up, Summarize, and Monitor Progress

When you meet with your team to finalize the creation of the strategic plan, make sure people leave with a clear picture of what they’re accountable for. Then, Bossidy and Charan advise, follow up by sending a memo to each leader that lays out their individual goals, commitments, priorities, and next steps. Thereafter, assess progress at regular intervals and make adjustments as needed.

(Shortform note: Following up with everyone multiple times is another task that may take one person far too long, which the authors don’t acknowledge. You can fix this problem by delegating. Some consultants recommend forming a strategic planning core team or designating one person as your accountability partner who will be responsible for tracking outcomes and progress.)

Main Leadership Function #3: Create Tactical Plans That Work

By this point, you know how to find the right people for your company and create realistic big-picture goals. Next, you’ll learn how to translate your strategy into reality using a tactical plan. We’ll discuss the factors that make a tactical plan work well and the basic steps to follow when putting it together.

The Key Elements of a Tactical Plan

Your tactical plan specifies both short-term and long-term goals aligned with your strategy and describes how you’re going to reach those targets. Bossidy and Charan explain that it includes the major programs and projects that are lined up for the coming year, such as a new marketing initiative, a product release, or a sales force reconfiguration.

(Shortform note: Whereas Bossidy and Charan speak of tactical plans generally, some people distinguish between two main types of tactical plans. A single-use plan is designed for a special project that’s not likely to be repeated, whereas a standing plan is used multiple times for projects that occur regularly.)

There is no strict formula for creating a tactical plan. It requires deep engagement, rigorous truth-telling, critical thinking, and much give-and-take between team members. That said, the general flow in creating your tactical plan, according to Bossidy and Charan, is fairly straightforward. Implement the following steps to create a plan that is ambitious and realistic—and that facilitates learning and relationship-building with key players in your company:

Step #1: Give leaders from each segment of the company the big-picture targets (for example, revenue and operating margin). Then, let each leader develop a tactical plan for their particular division to help the company reach those targets.

Step #2: Convene everyone to stress-test the assumptions built into each plan. For example, if you increase prices, will it turn customers away? Is demand for this product merely a short-term trend, or is it worth additional investment? The authors instruct that you—as the leader—must engage everyone by asking pointed questions to determine what’s most likely to produce the intended outcomes.

Step #3: Revisit and adjust plans based on how they fit with every other part of the company. Bossidy and Charan explain that everyone must constantly assess what give-and-take is necessary in the pursuit of big-picture goals. Devoting attention and resources to one opportunity or business unit inevitably comes at the expense of another. For instance, if you allocate additional resources to your European market, then you need to cut expenses elsewhere. Does it make more sense to do that in your North American market or your Asian market? After this vigorous back-and-forth discussion among the key players, the basic tactical plan is set.

(Shortform note: Although some give-and-take is inevitable when creating a tactical plan, as when a company must choose how to allocate limited financial resources, recent developments have made some trade-offs less significant. For example, Just-in-Time production—a method in which a company produces just enough goods, precisely when customers require them—can help reduce lead times while also sustaining high quality, thereby reducing the usual trade-off between efficiency and quality.)

Step #4: Identify contingency plans that can accommodate shifting circumstances. For example, if the European market goes cold, you’ll need to make up that anticipated revenue another way. Where will it come from? Robust contingency plans, Bossidy and Charan contend, can accelerate decision making and help you avoid costly delays.

Step #5: Wrap up discussion and secure commitments from everyone to ensure alignment with the tactical plan.

Step #6: Follow up after the meeting with the key players, just as with the strategic plan. The authors recommend sending a memo that summarizes each person’s commitments and short-term benchmarks.

Step #7: Assess progress toward those benchmarks at quarterly review meetings.

Tools and Techniques for Stellar Tactical Planning and Follow-Through

Bossidy and Charan provide a solid basic framework for tactical planning, but they don’t provide more specific guidance on how to implement each step. The following suggestions can help you navigate the planning process smoothly:

Consider hiring an external facilitator to help your leaders create their segment’s plan. This offers many benefits, such as a more objective outsider perspective.

Look into project management software to help you plan projects, assign tasks and due dates, track progress toward agreed benchmarks, and make timely adjustments. Digital solutions like this can help you cut down on lags in communication by enabling all the people involved in a project to see what everyone else is doing, as well as what next steps are needed and when.

Use creative ideation techniques to bring hidden assumptions to the surface. People tend to take for granted that things must be a certain way, especially if they’ve been in the same role or industry for a long time. They may, for example, assume that television advertising will produce the best customer response to a product upgrade because that’s what has worked for years. But what if there’s actually a better marketing approach? Blasting through faulty assumptions can bring forward innovative ideas to take your company to a new level.

One technique for highlighting assumptions is Worst Possible Idea, which involves team members intentionally bringing forward the worst solutions for problems facing the company. This helps people relax so they’re more likely to think creatively.

Create visual models like mind maps, risk probability matrices, and flow charts when discussing contingency plans. This organizes and categorizes information clearly, which supports participants in comprehending, evaluating, and prioritizing risks that could jeopardize your company.

Foster psychological safety in your follow-ups. This means ensuring people feel secure, valued, and safe to speak up in the workplace, even when they disagree with you or the rest of the team. Rather than simply detailing agreed-upon commitments, make an effort to create psychological safety by affirming people’s roles and contributions to the company and acknowledging them for sharing new ideas among your team. This is especially important in times of uncertainty.

Thoughtfully plan and coordinate quarterly reviews to get maximum value from the meetings. Proper preparation includes scheduling the review well in advance, having a pre-meeting briefing, and creating an agenda. Topics should include identifying lessons learned and ways to apply those lessons to future activities. Participants should leave with clarity about the previous quarter’s successes and failures and what factors influenced those results—as well as confidence about achieving benchmarks for the coming quarter.

Three Important Qualities of a Leader

You now know how to set a direction for your business, how to choose the right people to chart the course, and how to craft a tactical plan that gets you where you want to go. Now, we’ll look at qualities you must embody for all of these moving pieces to work in sync. According to the authors, without these qualities, you will simply not be able to execute and succeed.

Quality #1: Be Curious and Engaged

Good leaders break through the celebrity facade that often accompanies rank. They don’t smile and wave from a platform at annual gatherings. Instead, they remove their sunglasses, have real conversations, and listen more than they talk.

Bossidy and Charan encourage you to abandon the comfort of your office and get out and talk to people at all levels of your company. Get to know them. What’s working well for them? What’s not working as well as it could? What ideas or requests do they have? You’ll probably be surprised by what you discover. Their insights could inform your next big decision or inspire a breakthrough innovation.

Also, be sure to extend your curiosity beyond company walls to gather intelligence on consumers. Observe consumer behavior so you’re in touch with what’s happening and what risks are on the horizon. Your discoveries, the authors explain, will guide you around pivotal decisions that could either accelerate or hamper growth.

Once you have sufficient knowledge and data, Bossidy and Charan encourage, apply the insights you gain. The more aware you are of what’s happening in and around your company, the better decisions you’ll make. Then, when one of your subordinates says, “That goal isn’t possible. There’s no way,” you’ll be able to have an informed discussion about the capacity across the whole company that does make it possible.

How to Surface Valuable Information You Can Use

How do you get people to open up to you? What should you be listening for when they do? Further, how can you possibly keep track of all the information you gather? Let’s expand upon Bossidy and Charan’s recommendations so you feel confident as you engage with others.

Talking face-to-face with your employees—Having authentic, unscripted conversations with subordinates comes easier to some than others. To make conversations easier, learn to overcome barriers to good listening by asking clarifying questions and staying attuned to nonverbal cues.

Furthermore, whereas Bossidy and Charan focus on discussing work-related matters with staff, Bill Campbell in Trillion Dollar Coach describes the value of getting to know your staff as human beings—talking to them about their personal lives helps foster connection and reinforces job satisfaction.

Gathering consumer data—What consumer data or information should you gather specifically? Consider looking into the psychology of consumer behavior to align your company’s actions with consumers’ typical behavior patterns. For example, learning what motivates people to select one product over another can help you design marketing that highlights the particular features in your product that customers desire.

Tracking employees’ output—How can a leader realistically track employees’ productivity and workload across the entire company so they can make good decisions? Creative employee monitoring methods can help you stay informed in a way that’s practical and sustainable. Time-tracking software, for example, will allow you to see how much time employees spend on each task and what tasks they’re currently focusing on. You could also conduct a morning huddle where everyone shares their top priority for the day and, if necessary, requests support from other team members.

Quality #2: Be Humble

Next, keep your ego in check, and never assume you have all the answers. Simply put, you don’t know what you don’t know. Look to others who can complement your abilities and expand your awareness. As Bossidy and Charan emphasize, there is tremendous value in seeking multiple perspectives on important issues. Others’ unique experiences and knowledge will allow you to make more informed decisions—about business strategy, someone’s potential, or a critical business move. Furthermore, you can’t correct mistakes and make the best decisions if you close yourself off to others’ ideas and insights.

(Shortform note: There are many other benefits to listening to other people’s perspectives that are arguably just as vital as those the authors describe. People with different personality types—introverts versus extroverts, for example—can share how likely they are to respond to a particular product, marketing approach, or communication strategy, which will allow you to see the probable impact of key decisions from multiple angles. Also, people who represent a diversity of races, genders, cultural backgrounds, and sexual orientations can offer valuable insights from unique perspectives. Research has shown that diverse groups foster more innovation than homogenous groups.)

To ensure you bring forward the best ideas, don’t assume others will contribute their thoughts without prompting: Be proactive. Request and be open to candid feedback. Encourage people to challenge you, and reward those who do. Make it safe for people to disagree—with you and each other. A workplace without occasional conflict should be a red flag that people aren’t telling the truth.

How to Navigate Power Dynamics to Take Advantage of Feedback

Bossidy and Charan don’t go into detail on the effect of power dynamics when it comes to giving and receiving feedback. As the leader, the way you respond to critical feedback will likely have an outsized effect on people’s willingness to approach you in the future, given the power differential between you. If you react negatively—even once—people may not make another attempt, fearful of repercussions.

So how can you put employees at ease so they feel empowered to freely share their ideas and speak up when they have a problem? Here are some steps you can take:

Request feedback confidentially through a third party. In What Got You Here Won’t Get You There, Marshall Goldsmith says that people are likely to share only positive feedback if you ask them for feedback directly. However, when you request feedback indirectly through a third party, people will be more inclined to share their honest opinions because their identities will not be linked to their specific comments.

Explicitly request public criticism from your employees. In Radical Candor, Kim Scott says that receiving critical feedback in a public forum, like a company-wide meeting, fulfills multiple goals. First, you display the value you place on critical feedback. Second, you establish yourself as a strong leader who is committed to constant improvement. Third, you save time by fielding each critique once rather than multiple times.

To break through people’s initial discomfort at delivering negative feedback in public, ask a team member you trust to disagree with you or share a critique at an upcoming meeting. Others will likely follow their example. Also, ask questions during meetings that solicit critical feedback, such as “How can I better support you?”

Quality #3: Be Confident and Make Clear Decisions

Finally, people look to you for guidance, so be sure you’re not missing in action. No matter what happens—inside your company or in the external environment—it’s your job to create certainty by projecting confidence and making clear decisions. If the stock market crashes, if power outages shut down operations, or if new regulations impact the bottom line, be sure your voice is the one your people hear loudest. As Bossidy and Charan warn, if you don’t provide clarity, rumors and misinformation can take hold. Then, people may get nervous and start looking for a different company that seems more stable.

(Shortform note: How can you create certainty in uncertain times? It’s important to be transparent about challenges the company is facing. Your employees will easily see through manipulated attempts to gloss over obvious challenges. You can acknowledge people’s fears and retain their trust and commitment by focusing on two main factors: the strengths of your team and what you’re doing now to provide stability. To address rumors and misinformation, add rumor-busting to your meeting agenda and empower junior managers with the authority to quash rumors.)