With such an impressive track record, Mr. Skinner had all the makings to lead a growing organization into the next era of growth. His experience of handling size, scale & diversity and his ability to overcome cultural barriers was seen as his greatest asset.
The board at Nate Electronics saw him as their first choice to replace their retiring and very successful CEO Mark Weiner. Headquartered in New Jersey, Nate Electronics was a growing consumer durables company. Ranked number three in the pecking order of the best in the world in terms of sales, Nate Electronics was seen as a progressive organization, always at the forefront of bringing game changing products to the marketplace. Mark Weiner was seen as the chief architect of this success story and Skinner was seen as a capable successor to usher in the next phase of growth at Nate and make it number one in the world.
Mr. Skinner took over from Mark and promised to carry forward the legacy of innovation and fast growth.
Before his first meeting with his team, Skinner spent time reviewing the numbers and outlined the targets that he wanted them to chase for the next year. After all, he was a fast tracker and nothing excited him more than to see that sales graph move upwards and it had to move very quickly for him, to showcase to the board that they had made the right choice.
After a round of customary introductions and a brief download on the progress in the various departments, Skinner outlined his vision for the organization for the next year and put forward the figures he had worked out for his team. There was a silent acceptance of what was put forward for them to chase and Skinner felt confident of his ability to achieve the aggressive target he had set for himself and the team.
At the quarterly leadership team meeting the numbers showed a significant drop in sales, the PE ratio also had taken a beating and the customer satisfactions scores were also witnessing a not so healthy movement in the wrong direction. Something was seriously wrong with the way things were looking, Skinner was fairly confident of the numbers and plans he had laid out for his team and he was not sure what was it that was going wrong. Every time a division head got up from his/her seat to share his/her report he/she got crushed for what he/she was putting forth.
What was it that was going wrong with Mr. Skinner’s ambitious and aggressive plans?
He had a successful track record and illustrious educational pedigree to back him. His experience with the best in the world had taught him all the tricks of trade that were to be learnt, his marketing acumen was considered to be the best in the industry. In fact, Times magazine had ranked him as the 5th most promising young CEO in USA in their last edition.
One of the worst quarters in the history of Nate, right at the outset was not a pleasant sign. He had joined Nate amidst much fan fare and he was sure that one more such a quarter and he would be soon packing his bags.
So what was it that had led to this sudden demise of Skinner’s plans?? Is it the market, is it the people in his team or is it his ability to execute.
In my opinion, the program plaguing Nate Electronics is very much similar to what most of our modern day organizations are facing and i.e. lack of effective execution.
Before outlining the numbers and plans for growth of the divisions, Mr. Skinner never took into account the organizational capabilities to achieve those numbers and execute those plans. Organizational capability to produce the required number of products, service the customers, hire the right people and manage their expectations etc. was never considered.
I talked about aligning critical business levers for successfully achieving business results in my last post and that is one critical aspect of execution. Same plan could have been made into a success story with a focus on aligning business levers and achieving effective execution at the outset.
He would have benefited greatly, if he would have spent time with each of his division heads reviewing the ongoing activities and taking their progress and pace of growth into account before devising the organizational roadmap for the next year. This would have also given him a peek into the capabilities of people leading those divisions and thereby enabling him to better plan for effective execution keeping in mind the leaders strengths and areas of improvement.
In addition to defining the outcomes, Skinner should have worked with his team to identify critical in-between milestones and frequencies at which those will be tracked to ensure that the teams were on target to achieve their goals or not. Herein also, fixing accountabilities amongst his team members would have helped him to pin point responsibilities and track progress to avoid unpleasant surprises at the end of the year.
Furthermore, he would have gained significantly if he was not only tracking the outcomes that his team was achieving (or not) but also by asking “Why” outcomes were not being achieved. This would have gone a long way in ironing out the hurdles that were holding back the progress.
Most CEO’s consider themselves to be responsible for devising strategies, interpreting complicated strategies and planning smart moves. They assume execution to be the job of the next line of leadership. This however, could prove to be a grave misconception as was proved in the case of Mr. Skinner. Hence, if a CEO wants to see results he better brace himself up for bringing execution capabilities to the table because without execution focus and ability to execute a strategy is simply “no good”.
Learning's for Mr. Skinner (and for all of us):
- Take into account the organizational capabilities at every level before devising a strategy
- Buy-in of the team is critical to ensure successful execution
- Have right people in the right roles and fix accountabilities
- Define critical milestones on the road to achievement of outcomes to avoid surprises
- Why and how of achievement/non-achievement provides critical lessons for improvement
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