what really works

7/21/2019 What Really Works

http://slidepdf.com/reader/full/what-really-works 1/26

What Really WorksWhat Really Works

What Really Works: The 4+2 Formula for Sustained Business SucceWilliam Joyce, Nitin Nohria, and Bruce Robertson, Harper Business,



The book The book What Really Works:What Really Works: The 4+2Formula for Sustained Business

Success is based on a !e"year,is based on a !e"year,intensi!e research pro#ect $ith theintensi!e research pro#ect $ith the

help o% &0 leadin' academics andhelp o% &0 leadin' academics and

consultants to analy(e the e)perienceconsultants to analy(e the e)perience

o% *+0 o% companies o!er a ten"yearo% *+0 o% companies o!er a ten"yearperiod.period.



What WorksWhat Works

The researchers identied ei'ht elements The researchers identied ei'ht elements

%our primary and %our secondary that %our primary and %our secondary that

directly correlated $ith superiordirectly correlated $ith superiorcorporate per%ormance as measured bycorporate per%ormance as measured by

total return to shareholders.total return to shareholders.

Winnin' companies achie!ed e)cellenceWinnin' companies achie!ed e)cellence

in all %our primary elements, plus t$o o%in all %our primary elements, plus t$o o%the secondary ones hence the -2the secondary ones hence the -2

%ormula.%ormula.



What Doesn’t Work What Doesn’t Work

The research %ound no correlation The research %ound no correlation

bet$een a company/s in!estment inbet$een a company/s in!estment in

technolo'y and its total return totechnolo'y and its total return toshareholders o!er the decade o% theshareholders o!er the decade o% the

study.study.

The research %ound no correlation The research %ound no correlation

bet$een corporate chan'e pro'ramsbet$een corporate chan'e pro'ramsand achie!in' superior results in totaland achie!in' superior results in total

return to shareholders.return to shareholders.



The research identied %our types o% The research identied %our types o%

companies %rom *1+"*+companies %rom *1+"*+

WinnersWinners limberslimbers

Tumblers Tumblers

4osers4osers



The 4+ 2 Formula forThe 4+ 2 Formula for

Business SuccessBusiness Success

5our primary elements5our primary elements 6trate'y6trate'y

7)ecution7)ecution

ultureulture

6tructure6tructure

5our secondary elements5our secondary elements Talent Talent

4eadership4eadership

8nno!ation8nno!ation

9er'ers and partnerships9er'ers and partnerships



WinnersWinners

Had hi'h scores in all %our primaryHad hi'h scores in all %our primary

elements.elements.

6trate'y, e)ecution, culture, and6trate'y, e)ecution, culture, andstructurestructure

:nd hi'h scores in at least t$o o% the:nd hi'h scores in at least t$o o% the

secondary elements.secondary elements. Talent, leadership, inno!ation, and Talent, leadership, inno!ation, and

mer'ers and partnerships.mer'ers and partnerships.



Primary Element: StrateyPrimary Element: Stratey

;e!ise and maintain a clearly stated,;e!ise and maintain a clearly stated,

%ocused strate'y.%ocused strate'y.

Whate!er the strate'y, it $ill $ork i% it isWhate!er the strate'y, it $ill $ork i% it issharply dened, clearly communicated, andsharply dened, clearly communicated, and

$ell understood by employees, customers,$ell understood by employees, customers,

partners, and in!estors all stakeholders.partners, and in!estors all stakeholders.

<ne o% the key mandates o% $innin'<ne o% the key mandates o% $innin'

companies $as a %ocus on 'ro$th.companies $as a %ocus on 'ro$th.

7nablin' a doublin' o% the e)istin' core7nablin' a doublin' o% the e)istin' core

business e!ery !e years.business e!ery !e years.



Primary Element: E!ecutionPrimary Element: E!ecution

;e!elop and maintain =a$less;e!elop and maintain =a$lessoperational e)ecution.operational e)ecution.

Winners consistently meet the e)pectationsWinners consistently meet the e)pectationso% their customers by deli!erin' on theiro% their customers by deli!erin' on their!alue proposition.!alue proposition. Bad >uality $ill hurt. : company cannot a?ord toBad >uality $ill hurt. : company cannot a?ord to

be in the bottom hal% o% the percei!ed >ualitybe in the bottom hal% o% the percei!ed >ualityrankin's, but it is sa%e as lon' as it remains in therankin's, but it is sa%e as lon' as it remains in the

top third.top third. Winners consistently slash operational costsWinners consistently slash operational costs

$hile increasin' producti!ity by + to @$hile increasin' producti!ity by + to @percent e!ery year.percent e!ery year.



Primary Element: "ulturePrimary Element: "ulture

;e!elop and maintain a per%ormance";e!elop and maintain a per%ormance"

oriented culture.oriented culture.

Winners embrace corporate cultures thatWinners embrace corporate cultures thatsupport hi'h"per%ormance standards,support hi'h"per%ormance standards,

$hich employees uni!ersally accept.$hich employees uni!ersally accept.

Winners dealt >uickly $ith poorWinners dealt >uickly $ith poor

per%ormers, especially those $ho don/tper%ormers, especially those $ho don/tabide by the !alues o% the or'ani(ation.abide by the !alues o% the or'ani(ation.



Primary Element: StructurePrimary Element: Structure

5ound Astructure %ollo$s strate'y.5ound Astructure %ollo$s strate'y.

Build and maintain a %ast, =e)ible, =atBuild and maintain a %ast, =e)ible, =at

or'ani(ation.or'ani(ation. Winners create and adapt structures thatWinners create and adapt structures that

reduce bureaucracy and simpli%y $ork.reduce bureaucracy and simpli%y $ork.

6impler is %aster and better.6impler is %aster and better.



Secon#ary Element: TalentSecon#ary Element: Talent

Hold on to talented employees andHold on to talented employees and

nd more.nd more.

The most important indicator o% the depth The most important indicator o% the depthand >uality o% talent in an or'ani(ation isand >uality o% talent in an or'ani(ation is

$hether it can 'ro$ its o$n stars %rom$hether it can 'ro$ its o$n stars %rom

$ithin.$ithin.

Cromote %rom $ithin.Cromote %rom $ithin.



Secon#ary Element:Secon#ary Element:

$ea#ershi%$ea#ershi%

Deep leaders and boards o% directorsDeep leaders and boards o% directors

committed to the business.committed to the business.

7<s, on the a!era'e, contributed only *&7<s, on the a!era'e, contributed only *&percent o% the !ariance in corporatepercent o% the !ariance in corporate

per%ormance, %or better or $orse.per%ormance, %or better or $orse.

Eood 7<s are chosen by 'ood boardsEood 7<s are chosen by 'ood boards

on $hich the board memberson $hich the board membersunderstand the business and areunderstand the business and are

passionately committed to a company/spassionately committed to a company/s

success.success.




&nno'ation&nno'ation

9ake inno!ations that are industry9ake inno!ations that are industry

trans%ormin'.trans%ormin'.

9ost important is to anticipate rather than9ost important is to anticipate rather thanreact to disrupti!e e!ents in an industry.react to disrupti!e e!ents in an industry.




(erers an# Partnershi%s(erers an# Partnershi%s

9ake 'ro$th happen $ith mer'ers and9ake 'ro$th happen $ith mer'ers and

partnerships.partnerships.

ompanies that do relati!ely small dealsompanies that do relati!ely small dealsFless than 20 percent o% their e)istin' si(eGFless than 20 percent o% their e)istin' si(eG

are likely to be more success%ul thanare likely to be more success%ul than

or'ani(ations that do lar'e, occasionalor'ani(ations that do lar'e, occasional

deals.deals.



What Winners Do inWhat Winners Do in

StrateyStratey

Build strate'y around a clear !alueBuild strate'y around a clear !alue

proposition %or customers.proposition %or customers.

;e!elop strate'y %rom the outside in. Base it;e!elop strate'y %rom the outside in. Base it

upon $hat customers, partners, andupon $hat customers, partners, and

in!estors ha!e to say and ho$ theyin!estors ha!e to say and ho$ they behavebehave..

9aintain antennae that allo$ them to ne"9aintain antennae that allo$ them to ne"

tune strate'y to chan'es in the marketplace.tune strate'y to chan'es in the marketplace.

learly communicate their strate'y to alllearly communicate their strate'y to all

stakeholders.stakeholders.

:re $ary o% the un%amiliar.:re $ary o% the un%amiliar.



What Winners Do inWhat Winners Do in

E!ecutionE!ecution

;eli!er products and ser!ices that;eli!er products and ser!ices that

consistently meet customers/consistently meet customers/

e)pectations.e)pectations. 7mpo$er %ront lines to respond to7mpo$er %ront lines to respond to

customer needs.customer needs.

onstantly stri!e to impro!eonstantly stri!e to impro!e

producti!ity and eliminate all %orms o%producti!ity and eliminate all %orms o%

e)cess and $aste.e)cess and $aste.



What Winners Do &n "ultureWhat Winners Do &n "ulture

8nspire all to do their best.8nspire all to do their best.

Re$ard achie!ement $ith praise andRe$ard achie!ement $ith praise and

pay"%or"per%ormance, but keep raisin'pay"%or"per%ormance, but keep raisin'the per%ormance bar.the per%ormance bar.

reate a $ork en!ironment that isreate a $ork en!ironment that is

challen'in', satis%yin', and %un.challen'in', satis%yin', and %un.

7stablish and abide by clear company7stablish and abide by clear company

!alues.!alues.



What Winners Do WithWhat Winners Do With

StructureStructure

7liminate redundant or'ani(ational7liminate redundant or'ani(ational

layers and bureaucratic structures andlayers and bureaucratic structures and

beha!iors. 6impli%y, simpli%y, simpli%y.beha!iors. 6impli%y, simpli%y, simpli%y. CromoteCromote cooerationcooeration and the e)chan'eand the e)chan'e

o% in%ormation across the $holeo% in%ormation across the $hole

company.company.

Cut their best people closest to theCut their best people closest to theaction and keep their %ront line stars inaction and keep their %ront line stars in

place.place.



What Winners Do WithWhat Winners Do With

TalentTalent

5ill mid" and hi'h"le!el #obs $ith5ill mid" and hi'h"le!el #obs $ith

internal talent $hene!er possible.internal talent $hene!er possible.

reate and maintain top"o%"the"linereate and maintain top"o%"the"linetrainin' and educational pro'rams.trainin' and educational pro'rams.

;esi'n #obs that $ill intri'ue and;esi'n #obs that $ill intri'ue and

challen'e the best per%ormers.challen'e the best per%ormers.

Top mana'ement becomes personally Top mana'ement becomes personally

in!ol!ed in $innin' the $ar %or talent.in!ol!ed in $innin' the $ar %or talent.



What Winners Do &nWhat Winners Do &n

$ea#ershi%$ea#ershi%

8nspire mana'ement to stren'then its8nspire mana'ement to stren'then its

relationships $ith people at all le!els o% therelationships $ith people at all le!els o% the

company.company.

8nspire mana'ement to hone its capacity to8nspire mana'ement to hone its capacity to

spot opportunities and problems early.spot opportunities and problems early.

:ppoint a board o% directors $hose members:ppoint a board o% directors $hose members

ha!e a substantial nancial stake in theha!e a substantial nancial stake in the

company/s success.company/s success. losely link the pay o% the leadership team tolosely link the pay o% the leadership team to

per%ormance.per%ormance.




&nno'ation&nno'ation

8ntroduce disrupti!e technolo'ies and8ntroduce disrupti!e technolo'ies and

business models.business models.

7)ploit ne$ and old technolo'ies to7)ploit ne$ and old technolo'ies todesi'n products and enhancedesi'n products and enhance

operations.operations.

;on/t hesitate to cannibali(e e)istin';on/t hesitate to cannibali(e e)istin'

products.products.




(erers an# Partnershi%s:(erers an# Partnershi%s:

:c>uire ne$ businesses that le!era'e:c>uire ne$ businesses that le!era'e

e)istin' customer relationships.e)istin' customer relationships.

7nter ne$ businesses that complement7nter ne$ businesses that complementtheir company/s e)istin' stren'ths.their company/s e)istin' stren'ths.

With a partner, mo!e into ne$With a partner, mo!e into ne$

businesses that can use thebusinesses that can use the

partnership/s talents.partnership/s talents. ;e!elop a systematic capability to;e!elop a systematic capability to

identi%y, screen, and close deals.identi%y, screen, and close deals.



WinninWinnin

7)ceptionally dicult #u''lin' actI7)ceptionally dicult #u''lin' actI

must keep all si) plates F-2G in the airmust keep all si) plates F-2G in the air

spinnin' at the same time. 8% one %allsspinnin' at the same time. 8% one %allsdo$n, they all %all.do$n, they all %all.

The -2 %actors are all interrelated and The -2 %actors are all interrelated and

must al$ays %unction at the hi'hestmust al$ays %unction at the hi'hest

le!el to continue to be a $inner.le!el to continue to be a $inner. 6tayin' on top is more dicult than6tayin' on top is more dicult than

'ettin' there.'ettin' there.



But $inners mana'e it byBut $inners mana'e it by

Ha!in' a %ocused strate'yHa!in' a %ocused strate'y

5la$lessly e)ecutin'5la$lessly e)ecutin' Ha!in' a per%ormance"based cultureHa!in' a per%ormance"based culture

Ha!in' =at, simple structureHa!in' =at, simple structure



Clus, ha!in' t$o o% the %ollo$in' %ourClus, ha!in' t$o o% the %ollo$in' %our

Talent Talent

4eadership4eadership 8nno!ation8nno!ation

9er'ers and partnerships9er'ers and partnerships

:nd ne!er, ne!er, ne!er, ne!er lettin':nd ne!er, ne!er, ne!er, ne!er lettin'

up.up.

what really works

Documents