Leading Multinational Companies: The Difference between Execution versus Action

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Some time ago this executive team contacted me. They were dealing with important market changes that affected their business. There was an urgent need for change in the organization and they had defined a set of strategic objectives that would be the key focus for the organization. They were doing their utmost to roll out these objectives throughout the organization, but it did not deliver the needed results. They were constantly in contact with their managers to make sure the right focus and actions were carried out. They had put together a road map with all the necessary actions and they monitored it on a weekly basis. But somehow the road map resulted in a list of issues and problems that only grew bigger while the expected results lagged behind more and more. What was going wrong?

A recent global study by the Conference Board found that the top two concerns amongst top executives were as follows (Conference Board, 2009):

  • Excellence in execution
  • Consistent execution of strategy by top management

Why this concern? As I described in an earlier article Leading Multinational Companies: Three Significant Changes in the Role of Senior Leaders the leadership challenges have changed over the past decades. Or as Gary Hamel says in ‘The Future of Management’: ‘Right now, your company has 21st-century Internet-enabled business processes and mid-20th-century management processes all built atop 19th-century management principles.’ The 21st century business reality requires from leaders that they are able to execute their most important goals in a fast changing, globalized, and increasingly cross-cultural environment. Leaders who fail to mobilize and motivate the organization to consistently execute the organization’s most important goals are ultimately ineffective.

The point is that many executives struggle with creating effective execution. Getting from clear aligned strategic priorities and goals at C-level to focused execution throughout the organization seems to be a problem. One of the key reasons I witness: companies can suffer from a culture that is action-oriented instead of execution-oriented. And there is a clear difference between the two! Like the team I described at the beginning, executive teams are not always aware of the fact that they are sustaining an action-oriented culture. And in the 21st century this can seriously hinder successful execution.

Let’s take a closer look at what differentiates an execution-focus from an action-focus, and what leaders who drive effective execution do differently. Below I list 6 important differences.

Execution-oriented leaders:
  • Focus on the WHY and WHAT. On the vision, the road ahead, and the results the company wants to accomplish. They do not underestimate the HOW, but see it as their role to create the right circumstances for their people to figure out the HOW.

Action-oriented leaders: spend a significant part of their time and energy in figuring out the HOW. They feel the need to define the HOW for their people. By doing this they tend to lose the broader perspective. Ticking of action lists becomes more important than creating desired results.

  • Stimulate people early in the decision-making process to contribute their experience/ideas bottom-up. They invite people to think along in creating the vision and strategy. They make them co-owners of the vision and strategy.

Action-oriented leaders: define vision and strategy at the top and roll it down into the organization as a given. They fail to create ownership in the organization. People will wait for them to say what needs to be done. They will have to invest lots of time and energy in keeping everybody moving in the right direction.

  • Maintain a longer-term horizon. They focus on creating consistency in the direction of the company. This longer-term view allows them be more pro-active in their decisions.

Action-oriented leaders: focus more on short-term solutions and tend to be much more reactive in their decisions. In a fast changing environment it will be extremely hard to keep up and to keep the organization aligned. Action lists tend to explode and focus gets lost.

  • Try to avoid a ‘command and control’ style. They focus their energy on facilitating management and employees to achieve the desired results and they build the company’s success by delegating accountability as low as possible into the organization.

Action-oriented leaders: feel they have to control the situation. They hold on to hierarchy. They want to have all the information. They won’t hesitate to use their power to get things done.

  • Maximize cross-boarder collaboration and teamwork. They break down structures and processes that hinder this.

Action-oriented leaders:  Rely on functional and hierarchical segmentation. They unintentionally stimulate ‘tribal’ behavior (read this nice article on culture and tribal behavior)

  • Stimulate flexibility. They value pro-activeness, agility, and resilience to change. They try to maximize these skills in the organization.

Action-oriented leaders: try to excel in planning and expect everyone to stick to the plan. This will cause less flexibility and increased risk avers behavior. The organizational responsiveness to external influences will deteriorate.

In closing I come back to Gary Hamel and like to recommend this video of him explaining his interesting take on the future role of managers (click picture to play).

How do you create an execution-oriented culture? Please let me know your ideas on the list above by leaving a comment below.

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Photo familymwr/Flickr (Creative Commons)

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Aad is an international business advisor, business transformation & alignment expert, leadership team facilitator and executive coach. He works with executives and leadership teams of multinational companies and focuses specifically on four topics: ‘leading complex change’, ‘cross-cultural leadership’, ‘post-merger integration’, and ‘amplifying business performance’. Find out more about Aad and his services. Feel free to contact Aad for more information.

2 Comments on “Leading Multinational Companies: The Difference between Execution versus Action

  1. In the 21st century, at multinational corporations business requires that leaders execute their most important goals in a fast changing, globalized, and increasingly cross-cultural environment. Leaders who fail to motivate the organization to consistently execute the organization’s most important goals can ultimately lose in the race. Competitors can take over the weakness and put in a challenge. So creating an execution-oriented culture is an essential factor to be considered.

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