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Why CEOs Fail

Fortune Magazine validated as early as 1999 that Business Execution is the key to success for Business Leaders, Entrepreneurs and Top Producers… And things haven't changed.


Article Summary

June 21,1999 Fortune, "Why CEOs Fail"

What are the pitfalls (public pratfalls) that have caused so many chief executives to fail in this unforgiving decade? It's an intriguing question and of great importance to boards, investors, customers, suppliers, alliance partners and employees.

"You must build a unified organization that is quick, bold, and knows how to execute."
—Tom Peters

Flawed strategy is seldom the sin of these failed CEO's. In the majority of cases - estimated 70% - the real problem isn't the high-concept boners. It's bad execution. As simple as that; not getting things done, being indecisive, and not delivering on commitments. Execution isn't the only reason CEO's falter, but it's clear that getting execution right will only become more crucial. Those executives who don't deliver are getting pushed out quicker.

So why do CEO's blow it? More than any other way, by failure to put the right people in the right jobs and the related failure to fix (take action on) people problems in time. They are unable to deal with a few key subordinates who sustain poor performance and deeply harm the company.

Quick Action on problems is imperative. Yet you needn't be ruthless to get things done. When Lou Gerstner parachuted in to fix IBM he famously declared "the last thing IBM needs right now is a vision"; he focused on execution, decisiveness, simplifying the organization for speed and breaking gridlock. Many expected heads to roll, yet Gerstner changed only a few of his top executives.

It's fascinating to watch what happens when a CEO who executes well brings these habits into a company where they don't exist. The whole tone changes. For great executives commitment is everything. As Dick Brown says, "Delivering on commitments is the most important thing." Great CEO's hold people accountable, always.

Often failed CEO's had remarkably aggressive plans to remake themselves (their companies), but they couldn't begin to make it happen because they had no plan for the execution. For many it has been the lack of leadership in making the plan work. Any way you look at it mastering execution turns out to be the odds-on best way for a CEO to keep his job.

The winning executives have what Bossidy calls "a drive to be competitive all of the time." They get a charge out of pushing, pushing, pushing to make change happen.

While strategies are vitally important, in reality, that's less than half of the battle.

Strategies quickly become public property. If you ask Michael Dell he would tell you their competitive advantage is their "direct business model." Every one has known about it for years. Yet it's still a competitive advantage because "We execute it. It's all about knowledge and execution." Southwest Airlines is the only airline that has made money every year for the past 27 years. Everyone knows its strategy, yet no company has successfully copied its execution.

A good clear strategy is necessary for success - but not sufficient for survival. The derailed executives are smart people who worried deeply about a lot of things. They just weren't worrying enough about the right things: execution, decisiveness, follow-through and delivering on commitments.

Are you?

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Barry Wishner
568 Eleanor Drive
Woodside CA 94062
Toll Free: 877-WISHNER
Phone: 650-364-2940
Fax: 650-367-0813

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