Senior Client Partner
The business of business is... purpose
Korn Ferry Institute’s Signe Spencer and Guangrong Dai explain how the way organizations frame their purpose can impact their performance.
Execution—not just having a plan, but carrying it out—is what separates businesses that prosper in hard times from those that go under (Raffoni
2003). The ability to drive execution is thus essential to every CEO’s repertoire.
As a measurable competency, driving execution comprises three core skills: establishing accountability for hitting business targets; tracking progress on key metrics; and balancing long-term strategic objectives with short-term tactical goals. An analysis of 58 executives who have been through Korn Ferry’s CEO in-depth assessments of CEO readiness finds that those with general management experience are, on average, more skilled at driving execution.
Our data analysis contrasted those who were strong/solid performers in driving execution against those for whom the competency was an area needing improvement. We found that 18 out of 31 (58%) executives with general management backgrounds were rated as skilled in driving execution, compared with 10 out of 27 (37%) executives with functional backgrounds, such as in finance, operations, or marketing.
This study was based on a qualitative analysis of archival data from Korn Ferry’s CEO n-depth assessments of CEO readiness (see sidebar).
Content analysis, a qualitative research methodology, was used to code notes and comments made during the simulations. Those were then
categorized by themes and statistically analyzed.
Tracking information and monitoring progress. This requires systematically staying on top of important organizational metrics from various departments/processes and monitoring them closely against business goals. Many executives possessed the ability to integrate data, absorb detailed information, and arrive at conclusions about the state of the business, but others worked in generalizations. While useful, generalization is not the level of detail necessary for a CEO to develop a clear picture of the health of the business. More executives from a general management background were able to track key metrics at a detailed level compared with those from functional backgrounds.
Korn Ferry CEO Readiness Assessments are designed to represent a year in the role, focusing on hyper-realistic business challenges that elicit
the specific competencies crucial to success. Executives are required to familiarize themselves with industry and company data to complete, among others, an operations review of a business unit, an analyst meeting, a town hall meeting, and a financial review of the health of company. Several executive assessors interact with and score candidates, and scores are compiled algorithmically. Also included are psychometric assessments and in-depth interviews. The process is standardized worldwide so that executives get the same experience and receive the same rating for the same level of performance.
Balancing short- and long-term goals and objectives. Driving execution demands balancing short- and long-term tactics and goals. Executives need to actively pursue both immediate results and longer-term strategic initiatives without sacrificing one for the other—and they must recognize the situations in which one may be more important. Again, more executives with general management experience exhibited the ability to balance short- and long-term goals.
Establishing accountability for results. Clearly communicating expectations for performance and consequences is an integral part of achieving organization goals. Among the more difficult aspects of this skill is holding people accountable for achieving their business goals. Executives must ensure that barriers to performance are being addressed and provide people with necessary resources to meet their goals. A minority of executives (from both functional and general management backgrounds) held people accountable, which may also indicate a slowness to address poor performance. This is an acknowledged weakness for many executives.
Executives working as general managers often hold profit and loss responsibility and have complete ownership of the business unit’s successes and failures. That seems to give them an edge when it comes to driving execution. Among the important insights they derive from this experience is which “levers to pull” and the ability to identify specific opportunities for cost savings or revenue generation. They might have somewhat greater accountability for their own decision making, but that doesn’t completely translate in to holding others accountable.