During my 33-years working for The Procter & Gamble Company, it often seemed that business people wanted to be associated with the strategy of the Company but not its execution. Being involved in strategy seemed more fitting for leaders, and graduates of the world’s best MBA programs. I once joked with Larry Bossidy, the co-author of the book Execution – The Discipline of Getting Things Done, that his book may have sold more copies if he had put the word strategy rather than execution in its title. Yet, in my opinion, it is excellence in execution over a long period of time that has kept The Procter & Gamble Company (P&G) on the Fortune 25 list since its inception in 1950. It is that kind of executional excellence I sought to create and develop at the Department of Veterans Affairs (VA) as Secretary from 2014 to 2017.
A High Performance Organization (HPO) is comprised of six essential elements. At the bedrock level is the organization’s Purpose, Values, and Principles. P&G is known for its strong culture based upon its Purpose, Values, and Principles (PVP); which are endemic in everything the Company does. I have argued for years that the best organizations are those where the PVP is ubiquitous. When I got to the VA after a scandal in Phoenix where employees were “cooking the books” while Veterans were waiting for care, I discovered the employees were violating VA’s PVP. The PVP was not ubiquitous. We immediately started training the VA PVP and required employees to certify their adherence annually.
The next layer in the HPO Model is Technical Competence. If you are in Marketing, do you have the technical competence to market? If you are at P&G, does Research & Development have the innovative capability needed to improve the way P&G improves lives? On top of that, an HPO must have Passionate Leadership, Sound Strategies, Robust Systems, and a High Performance Culture. Perhaps the least appreciated of these pillars is the importance of Robust Systems, in particular, the organization’s Operating System.
I thought that Larry Bossidy and Ram Charan’s book Execution – The Discipline of Getting Things Done was indeed about the leader setting up the Operating System of the enterprise so it delivered predictably outstanding results repeatedly. Similarly, the Noel Tichy did with Jack Welch at General Electric was about setting up the right Operating Systems that would lead to sustainably excellent results. At P&G these Operating Systems included organization Innovation Reviews, Talent Reviews, Financial Reviews, and Strategy Reviews. There was an annual calendar of interactions, a format for preparation, collaboration of all organizational partners on these focused events, and more. It was this discipline that forced the tough decisions, the tough discussions, and the surfacing of issues before they became urgent. For example, during our Talent Reviews we would work on assignment planning at least one if not two assignments out for top performers.
In my case the leadership of the Company demonstrated their prescience in assignment planning for my development. In 1988 the leadership of the Company asked my family and me to move to Toronto, Canada the next year to lead our Canadian Fabric Care business. My immediate reaction was, “What did I do wrong? Why wasn’t I in the succession plan of my U. S. organization?” At the time I joined P&G only one-third or so of our business was outside the U. S. From Toronto my family and I moved to the Philippines, Japan, and Belgium before moving back to Cincinnati fifteen years later. Multiple international assignments were necessary for development to lead a global company. When I retired in 2013, two-thirds of P&G’s business was outside the U. S. We could not develop our future leaders properly without a robust Talent System.
The top leadership of the organization must integrate these somewhat disparate systems. For example, we may learn during the Innovation Review that we have a great need for innovation in the Hair Care Category. We may also learn during the Talent Review that we have a scientist in Fabric Care whose knowledge of surfactants would help innovation in the Hair Care Category. Integration of these Operating Systems is some of the most important work of the organization’s leadership team. Only they have the visibility to “connect the dots.” I call this the horizontal connections in the organization.
At the same time the leadership team needs to connect the PVP of the organization down, vertically, to the individual work plan of each individual in the organization. A truly HPO has inspired employees who understand how their work each day (and their annual performance work plan) connects to the organization strategies and back to the Purpose of the organization. The best example of this is the custodian at the Kennedy Space Center pushing the broom, who when asked what he is doing, reports that he’s “putting a man on the moon.” For P&G the factory technician must know how their work each day improves the lives of the world’s consumers (P&G’s Purpose). At VA the worker who cleans and sterilizes the medical center rooms must know how they are “caring for those who have borne the battle” (VA’s Purpose). It is the leaders’ job to make this connection clear and inspiring.
The Operating System of an organization provides the disciplined systems that enable the leadership of the organization to make these horizontal and vertical connections to deliver sustainably excellent results over time. When something goes wrong in an organization, use the HPO Model from the bottom up to understand where to focus, and then look at these horizontal and vertical connections.
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