Posts Tagged ‘CEO Advantage’

In 100 Words: Key Practice of a Level 5 Leader

Thursday, May 1st, 2014 by Troy Schrock

Alan Mulally’s upcoming retirement as CEO of Ford Motor Company is big news these days. All organizations, not just those in the automotive sector, should take note. Mulally’s leadership in turning around Ford highlights a key Level 5 Leader practice he, and the executive leaders, used to take Ford to the top of the industry.

A tight weekly executive team meeting (Mulally’s BPR – Business Process Review) was implemented to drive both business plan execution and building a strong leadership team. Candor, along with accountability around data, virtually non-existent in past Ford culture, have paved the way for consistent business performance.

“Running a business is a design job. You need a point of view about the future, a really good plan to deliver that future, and then relentless implementation.” –Alan Mulally

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Practices of a Level 5 Leader

Thursday, May 1st, 2014 by Troy Schrock

Alan Mulally’s upcoming retirement as CEO of Ford Motor Company is big news these days. All organizations, not just those in the automotive sector, should take notice. Mulally’s leadership in turning around Ford highlights a Level 5 Leader (a leader who places the success and results of the organization ahead of their own individual accomplishments and legacy). Here are some key practices he, and the executive leaders, used to take Ford to the top of the industry.

Most significantly, or simply, Mulally used a tight weekly executive team meeting (his BPR, or Business Process Review) to drive both business plan execution and building a strong leadership team. Candor, trust and accountability, virtually non-existent in past Ford culture, now form the foundation for the executive level leaders. With that foundation, a deliberate focus on data culminated in a dramatic turn-around (2007 – 2009) followed by years of consistent business performance.

Second, Mulally created a simple vision for the organization, repeated that vision all the time and didn’t change the course even when people outside were constantly looking for the next “new plan”. His view was, we have the right plan and we’re still working on implementing it.

Third, Mulally focused the organization back on the customer. Significant money was invested in new product development and quality initiatives even during significant cuts to operations. What mattered to customers was appealing designs, good fuel economy and cars that didn’t break.

Fourth, Mulally simplified the business. Ford reduced the number of brands (auto name plates) down to two. They also reduced waste and redundancy in operations by coordinating design, engineering, quality and manufacturing efforts across the entire global organization.

Mulally’s final step will be completing a deliberate and orderly succession. Here is a link to a recent article highlighting the transition.

For more in-depth understanding, see the book, American Icon: Alan Mulally and the Fight to Save Ford Motor Company by Bryce G. Hoffman.


Organizational Phase Change

Tuesday, September 25th, 2012 by Troy Schrock

As certified CEO Advantage advisors, we generally consider middle market organizations (50-2,500 employees) to be in our sweet spot.  As an organization matures, “midmarket” is an inflection point where entrepreneurial companies must become “professionally managed” entrepreneurial companies (a favorite Verne Harnish term).  The entrepreneurial edge is still vital, but the company will suffer without professional management.

Years ago, Peter Drucker nailed this transition, which he dubbed a “change of phase”.  In People and Performance, Peter Drucker writes:

“The change from a business which the ‘boss’ can run with ‘helpers’ to a business enterprise that requires management is what the physicists call a ‘change of phase’ such as the change from fluid to solid.  It is a leap from one state of matter, from one fundamental structure, to another…The English biologist D’Arcy Thompson showed that animals supported by a hard skin can reach only a certain size and complexity.  Beyond this, a land animal has to have a skeleton.  Yet the skeleton has not genetically evolved out of the hard skin of the insect; it is a
different organ with different antecedents.  Similarly, management becomes necessary when a business reaches a certain size and complexity.  But management, while it replaces the ‘hard-skin’ structure of the owner, is not its successor.  It is, rather, its replacement.  When does a business reach the stage at which it has to shift from ‘hard skin’ to ‘skeleton’?  The line lies somewhere between 300 and 1,000 employees in size.  More important, perhaps, is the increase in complexity of the business; when a variety of tasks have all to be performed in cooperation, synchronization, and communication, a business needs managers and a management.”

In today’s environment, with global supply chains and competition, instant communication, more complex compliance requirements, and knowledge workers increasing relative to administrators and technicians, companies hit the complexity inflection point with fewer employees than in the past.  Rather than 300 employees, the line is probably crossed at 100, if not 50, employees.

This inflection point is an exciting place to be as companies grapple with the changes that accompany growth, but it can be a particularly challenging time for the owner/entrepreneur.  Owners should only manage to the extent that they’re able to do so effectively.  Where necessary, they must be willing to concede control to capable managers and a management team.


Summer 2011 CEO Advantage Advisor Meeting: Video Excerpts

Friday, August 5th, 2011 by Troy Schrock

Last week, the Professional Community of CEO Advantage advisors met for our 2-day summer meeting.  What a wonderful time of professional growth with some of my favorite people!  Collectively, we have spent thousands of hours working with CEOs and executive teams on strategic issues, so we grow in our effectiveness as advisors by sharing insights, suggestions, and experiences with each other.  Not only is it a fulfilling time for us, but it also enables us to provide greater value to our clients. 

On the second day, each advisor presented an educational topic to the group.  I have posted below a few excerpts from those presentations.  (Unfortunately, due to complications with the camera, we were not able to capture clips from each advisor.  I hope to introduce more “advisors in action” following future meetings.)

In this excerpt, Jim Woods talks about techniques he uses to help executive teams engage in constructive conversation about strategic issues.

John Anderson talks about Stephen Covey’s “The Speed of Trust” and its relevance to his advisory work with CEOs and executive teams:


John Anderson answers a question about how organizational discipline depends on the personal discipline of the CEO:


If you are interested in joining our Professional Community of certified advisors, click here.  If you would like to learn more about how a CEO Advantage advisor can help your organization, click here.   


5 Pitfalls in Setting and Executing Quarterly Priorities

Monday, January 31st, 2011 by Troy Schrock

In my mind, nothing is more critical to successful strategy execution than setting priorities.  In The CEO Advantage process, we call quarterly priorities “rocks.”  Setting quarterly rocks is a simple process; yet, I have found that executive teams are susceptible to five potential pitfalls in setting quarterly rocks. 

1: Bad Rocks

There are four kinds of bad rocks: 

  • Non-Rocks, as the name applies, are not really rocks at all.  This usually becomes apparent once the work on them begins. 
  • Mountains are legitimate objectives, but they are way too big to be quarterly rocks. 
  • Pebbles are wimpy rocks – the opposite of mountains.  It may be something that is more appropriate for a weekly task than a quarterly priority. 
  • Amoebas are squishy rocks.  These priorities are so nebulous you don’t really know how to measure their progress, much less recognize when they are complete. 

2: Rock Champion Flies Solo

When the rock champion tries to do everything on his own, things usually do not turn out well.  Resources are wasted, information is incomplete, and when the rock is debriefed at the end of the quarter, important questions and insights are found to have been missed by the rock champion. 

3: Rock Creep

Rock creep occurs when the scope of the rock expands during the course of implementation.  As the team fleshes out what needs to be accomplished, it can quickly grow beyond the initial objective.  T

4: Selfish Use of Resources

Once rocks are set, individual executives might choose to withhold some of their resources for non-rock purposes. 

5: Great Mental Exercise

Some executive teams enjoy setting rocks but not working on them.  They find the strategic discussions invigorating – a form of mental exercise – but they shy away from the “mundane” work of actually executing the rocks. 

Each of these pitfalls can be avoided, and it’s important that you and your team learn how to do so as this is the fundamental discipline of strategy execution. 

To learn more about these pitfalls, how to avoid them, and real-life examples of each, read my recently published article: “Rock Rules.”  You can also purchase an online course we have prepared on how to set and consistently execute quarterly rocks.