Welcome to the April issue of A New Leaf!  With the 2014 first quarter just finished, leaders are now confronting how well their organization has been executing. This edition highlights insights from two bestselling books by Larry Bossidy, former Chairman of Honeywell, and Ram Charam, leading business advisor.

“Confronting Reality" and "Execution" each address critical leadership shortfalls that plague many organizations today. Each book serves as a helpful tool to assess how you are addressing these critical success components, neither of which can be delegated from the corner office. 

Best of luck in the upcoming quarter as you celebrate your execution successes and confront the reality that you, and your organization, need to continue to change to build your organizational sustainability. 

- Mike

Book Review: “Confronting Reality: Doing What Matters To Get Things Right”

 “Reality” begins its introduction stating that “It is time to radically change the way you think about your business”. The need for this change arises from a world moving faster than ever combined with the following three questions rarely being asked, or adequately addressed, by most organizations:

• What’s the nature of the game you’re in?
• Where is your business going?
• How do you make money?

The authors believe the reason these questions go unanswered is “that established methodologies for defining the purpose of the business and planning have steadily drifted away from realism”.  More than ever, leaders fail to address the “dysfunctional practices and habits that more often than not obscure reality rather than expose it”. The habits of “unrealistic leaders” include:

• Filtered Information
• Selective Hearing
• Wishful Thinking
• Fear
• Emotional Overinvestment
• Unrealistic Expectations of Capital Markets
  

 As a means of implementing this radical change, Reality sets forth an integrated “business model” approach to looking at the health and profitability of your business.  The three key components of the model include an ongoing assessment and linkage of the environment your business is in (the “external realities”) with your financial targets and the activities of your business (including strategy, operations, people and structure).

Continuous examination of the relationships between these three components is required. This is accomplished through a process of “iteration” which Reality defines as the harmonizing of the three components by repeatedly reviewing and assessing the changes in their relationships as new information becomes available.   

Reality provides numerous examples of the application of its business model approach as it assesses the challenges and actions of companies such as EMC, Cisco Systems, Sun Microsystems, 3M, Home Depot and Thompson Corporation.

In all cases, leadership is ultimately responsible for the process of iteration and organizational responses to the changing environment. The following two qualities are considered absolutely necessary for successful leaders today:

      Business savvy - the knowledge and ability to make money.  Leaders with
      business savvy are constantly evaluating and assessing new business models
      and understand the importance and relationships of the model components

     A need to know - the relentless pursuit of critical information that can
    make all the difference in arriving at the best business decisions. Absent this
    quality, risk associated with not making the “best” decisions is significantly
    increased

In addition to leading, the book addresses how to condition your culture for reality. This is necessary for any successful transformation as the authors note that “the usual reason for a failure of an initiative is that it was launched halfheartedly or was beyond the ability of the organization”.

Reality concludes with a personal note from the authors to an entrepreneur on successfully confronting reality for growth and opportunity. The letter concludes “Move quickly, be positive, sensitive and unrelenting. The time is now!”