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How to Implement the Law of Execution

Theodore Levitt, known for creating and popularizing business terms like ‘corporate purpose’ and ‘globalization,’ understood the necessity for balancing an innovation agenda with the operational agenda. He also understood that this balance doesn’t come easy. The challenge is really two-fold. First,

Phil McKinney
Phil McKinney
4 min read
How to Implement the Law of Execution
Organizations, by their very nature, are designed to promote order and routine. They are inhospitable environments for innovation.

Theodore Levitt

Theodore Levitt, known for creating and popularizing business terms like ‘corporate purpose' and ‘globalization,' understood the necessity for balancing an innovation agenda with the operational agenda. He also understood that this balance doesn't come easy. The challenge is really two-fold.

First, business leaders have to be willing to do things that they've never done before; that's the only way to achieve something that has yet to be achieved. Second, business leaders have to change the organizational culture. The organization, and the people working in that organization, have a long list of tasks to accomplish simply to keep the business running. Adding innovation to this list can be overwhelming. But according to the Law of Execution, in order to innovate, a balance must be struck between business-as-usual and innovation. To help develop this balance, there are three keys steps to take:

Change the compensation structure.

One of the reasons that organizations fail to get the individuals in the organization behind innovative projects and goals is that they don't make it beneficial for the workforce. In other words, companies put short-term, operational milestones on a pedestal.

When workers hit a sales quota, they are rewarded. When marketers bring in a certain number of leads, they get a bonus. And this should happen. Employees should be recognized for achieving standards that will enable the business to keeping running.

However, if companies want innovation to be taken seriously, they need to reward the employees who are pursuing it. Ideally, the compensation structure should have a metric included that prioritizes a drive for both operational execution and innovative execution. Both need to be supported and rewarded equally if leadership expects the organization to pursue both equally.

Changing the compensation structure, especially if it requires the approval of the C-suite, can be a challenge. The current structure wasn't just chosen by chance. A lot of planning and thought went into it, so why does it need to be changed?

This is where a little work on the part of the pro-innovation leaders comes in. As someone pushing for organizational innovation, you need to provide a solid argument that supports the need for investing in innovation through altering the current compensation structure. A good place to start is by proving the value of innovation.

  1. Ensure everyone knows how to execute short and long-term goals effectively.

The entire organizational workforce needs to have the ability to execute short-term, operational goals, as well as long-term, innovative goals. This is especially true for those in leadership, managerial, or supervisory roles. If those who are leading others can't balance the pursuit of innovation with the ability to achieve business-as-usual, you need to find new people.

Before you get fire-friendly, though, consider training options. You already have highly qualified individuals who are great at their roles. With a little education and instruction, they could be able to expand their ability to encompass the perfect Law of Execution balance.

Some companies attempt to achieve this balance by creating an innovation team and an operational team. This doesn't work. It's siloing, and it goes against the Law of Culture by dividing your organization in unproductive ways.

Instead, everyone in the organization should feel ownership of the innovation agenda. This is what unites an organization and allows the best ideas to succeed, pushing better innovations out faster. By having organization-wide balance of innovation and operation, a clearer brand image will be sent out to consumers, the organization will communicate more effectively, and the workforce will be happier and more productive.

  1. Be patient.

Even when you have leaders who know how to balance the short and long-term operational and innovative agendas, even when the compensation structure has been adjusted to encourage a more equitable balance of the two agendas, you'll still run into problems.

Innovation isn't easy. No part of it is easy, from changing organizational culture to coming up with winning ideas to executing those ideas. These challenges come part and parcel with achieving innovation. But when innovation is actually realized and achieved, it's worth it.

The biggest hurdle to overcome is the pressure to give in when there is a quarterly challenge or when a short-term ROI isn't visible. Innovation rarely pays off in the same quarter, or even year, that it is executed. Stakeholders won't see profits for a while. This can be tough.

The best way to prevent push-back is to show the eventual ROI, when it should be expected, and what other benefits will come from the innovation. In addition, when an operational problem occurs, you can't just press pause on innovation. You have to maintain that balance. When a quarterly budget challenge pops-up, innovation tends to be the first thing to go. Don't let it be.

You need to also avoid the other extreme. This means that you can't neglect the operational side of the organization. This isn't a common problem, but sometimes leaders can get too farsighted. They get excited about a potentially industry-altering innovation, and they let the business-as-usual tasks pile up. When this happens, innovation cannot occur. To put it bluntly, operational success in the short-term is what allows organizations to achieve their long-term, innovative goals. It provides the funding and resources necessary for innovation. A balance is key.

The Law of Execution is the final Law of Innovation and, in some ways, the most crucial. Many businesses have found themselves on the brink of innovation, only to fall short in their execution or to pull back when it really counts. But by taking these three steps, you can ensure that your innovative ideas blossom into reality.

To learn more about how to execute your innovation goals, check-out how I and my team can help.

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Phil McKinney is an innovator, podcaster, author, and speaker. He is the retired CTO of HP. Phil's book, Beyond The Obvious, shares his expertise and lessons learned on innovation and creativity.


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