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    Measure, Execute, Win: Avoiding Strategic Initiative Debacles and Knowing What Your Business Can
    Measure, Execute, Win: Avoiding Strategic Initiative Debacles and Knowing What Your Business Can
    Measure, Execute, Win: Avoiding Strategic Initiative Debacles and Knowing What Your Business Can
    Ebook125 pages1 hour

    Measure, Execute, Win: Avoiding Strategic Initiative Debacles and Knowing What Your Business Can

    By Alex Castro

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    About this ebook

    There's no lack of good ideas in today's business world, yet 50% of them are doomed to failure. Executives will often greenlight a strategic initiative based on a business case and financial analyses alone, with no idea whether their company has the ability to execute it successfully. But there's a better way to make corporate decisions.

    Alex Castro has developed the ReM Score™, a data-driven measurement for determining a company's execution capability (or readiness) for each strategic initiative it is considering. Using this groundbreaking approach, business leaders can effectively evaluate potential acquisitions, new product concepts, new market expansions, and back-office optimizations by separating ideas that will actually work for them from those that are great in theory alone, while continuously measuring a business's adaptability to evolving strategies.

    You don't get two or three chances to make a strategy work in our rapidly shifting business environment. Measure, Execute, Win will help your company proceed on initiatives with full confidence that they will deliver the results you want.
    LanguageEnglish
    PublisherBookBaby
    Release dateJul 23, 2019
    ISBN9781544513348
    Measure, Execute, Win: Avoiding Strategic Initiative Debacles and Knowing What Your Business Can

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      Book preview

      Measure, Execute, Win - Alex Castro

      Avoiding Strategic Initiative

      Debacles and Knowing What Your Business Can and Can’t Do Well

      copyright © 2019 alex castro

      All rights reserved.

      measure, execute, win

      Avoiding Strategic Initiative Debacles and Knowing What Your Business Can and Can't Do Well

      ISBN 978-1-5445-1335-5 Paperback

      ISBN 978-1-5445-1334-8 Ebook

      Cover design by Michael Nagin

      Book design by John van der Woude

      To I.C., R.C., and M.M. Just think of all the time you could get back in your lives if only I had written this book sooner. Love you.

      Introduction

      Part one: The Power of Measurement

      Chapter 1. Good Strategy, Bad Execution

      Chapter 2. Bias in Decision-Making

      Chapter 3. Measure to Win

      Part Two: Measuring Execution Capability

      Chapter 4. Measuring What Matters

      Chapter 5. Why Current Decision Practices Don’t Work

      Chapter 6. Domains of Measurement

      Part Three: Finding Your Golden Ticket

      Chapter 7. Becoming a Strategy Execution Accelerator

      Chapter 8. Harvesting Data Gold

      Conclusion

      Appendix

      Acknowledgments

      About the Author

      Vision without execution is hallucination.

      —Thomas Edison, Henry Ford, and literally every ceo after them

      It’s only by saying no that you can concentrate on the things that are really important.

      —Steve Jobs

      Fifty percent of all strategic decisions fail.¹

      Think about the top ten initiatives in your organization today. How confident are you that your teams can move forward on them? Is that confidence, or lack of confidence, based on opinion, past performance, or a hunch?

      Great leaders are no longer differentiated by having a vision for the future, innovative ideas, disrupting markets, understanding their customers, or having the courage to do what others have been afraid to do. These days, the differentiator comes from understanding their ability to execute.

      This book is intended to help leaders identify those activities and initiatives that might have great potential but no real chance of delivering on promises.

      To do that, leaders need an entirely new kind of metric, one that provides an execution capability (or readiness) score for each initiative being considered. With this information, leaders can balance their decision-making processes toward those initiatives, which they actually have a good chance to execute successfully.

      This metric is called the ReM Score™.

      You will discover the power and purpose of this game-changing measurement in the coming chapters.

      Why Strategic Decisions Fall Short

      Leaders create a strategy, identify its potential, and largely justify their ability to realize it with biased beliefs that support their vision. Imagine a bank making a loan based solely on your loan application and financials without bothering to check your credit score. Imagine a university that looked at your high school transcripts but didn’t bother to check your sat score. Imagine buying bonds based solely on the reputation of a municipality without ever looking at the bond rating.

      When executives don’t measure their company’s ability to execute on strategies, they lack the necessary data in decision-making to avoid the debacles that slow the growth of their business and erode their return-on-invested-capital (roic) ratio, investor and customer confidence.

      To thrive in today’s one shot to get it right market, companies must integrate an execution capability score as a core decision-making metric, articulating their ability to implement a strategy—no longer relying on opinion or feeling.

      All too often, leaders put out a vision and strategy and then start producing products, buying companies, or moving into new markets with no clear sense of whether or not they actually have the ability to execute on that vision. They tell themselves, This will take us three, six, or nine months to achieve.

      But eighteen months, twenty-four months, or thirty-six months pass, and they haven’t achieved their goal. The product misses the window of opportunity. The acquisition falls short in its performance because it failed to integrate into the culture. The company struggles to find footing in the new market. The initiative ends up costing two, three, or four times what they budgeted, and leaders have no idea why.

      Suddenly, they are forced to rob Peter to pay Paul in order to bolster earnings because the strategy isn’t performing at the level they anticipated. Consequently, they end up piling even more new things on top of the previous strategy in order to create additional growth to meet expectations.

      What if, instead, an executive could decide on an initiative with complete confidence because they knew their company had the capacity to deliver? What if leaders, as part of the decision process, measured their ability to execute on each of the initiatives necessary to realize a vision and knew exactly where the gaps were and exactly where the company was vulnerable? What if leaders could approach an analyst call or media event and show that they’d fully measured everything they invested or plan to invest in?

      Is such confidence possible? Absolutely, but it requires a shift in thinking. Leaders aren’t struggling from a lack of great business ideas. The struggle comes from a gross misunderstanding about their own companies’ execution capability of those ideas.

      The Dangers of Decision Bias

      Over the past twenty years, evidence indicates that decision-making biases are killing big businesses.² Executives believe they have some special insight—the secret sauce—that enables them to see what others don’t see. In reality, they’re no more insightful, and no better at predicting success, than your average stockbroker. In other words, they’re mostly crossing their fingers and hoping their existing resources can get them there.

      However, in many cases, the next acquisition, product launch, new market expansion, or back-office optimization not only has to increase their current numbers, it has to make up for past strategies that did not meet predicted targets. Failing that, common go-tos such as stock buybacks take their place.

      In an era of ever-changing strategy and market evolution, companies are struggling to meet expectations. They’re falling short on earnings per share (eps). As of this writing, eps calculations are negative for more than half of the s&p 500. It costs almost twice as much to get a dollar of earning as it used to.

      In many of the companies that are struggling to make their numbers, leaders attempt to fill in the gaps in their understanding. In the absence of data, they bridge those gaps with their own biases, often based on past experience. As a result, they are held back by the very decision-making process that is intended to help them make progress.

      It’s not the fault of a product manager, or an acquisitions team, or a project management office. By the time the initiative gets to those people, it’s already too late, and the company is doing damage control, whether they realize it or not.

      The heads of many companies are not skilled in capital allocation. Their inadequacy is not surprising because most bosses rise to the top because they have excelled in an area such as marketing, production, engineering, administration or, sometimes, institutional politics.

      —Warren Buffett, 1987 letter to Berkshire Hathaway shareholders³

      In the end, the company bleeds money in its attempt to execute a strategy that

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