When Hurricane Katrina made landfall near New Orleans on 28 August 2005, no one believed that it was about to become the worst natural disaster in US history. By the time the city's levees and flood walls failed, killing 1,200 people, the federal organisation charged with the rescue and response effort, FEMA, soon became overwhelmed by the task. As the devastating break in the 17th Street Canal levee widened to 500 feet and water from Lake Pontchartrain spewed into New Orleans, residents were left scrambling to deal with dead bodies and the 22 million tons of debris strewn around the Louisiana coast, including 350,000 automobiles and 35,000 boats destroyed by the storm.
While FEMA was fumbling for resources in Washington DC and trying to decide whether it was safe to send supplies into New Orleans, its sister agency inside the Department of Homeland Security, the United States Coast Guard, rose to the occasion and immediately deployed 5,600 personnel from every Coast Guard district, from Alaska and Maine, to New Orleans. Working non-stop in gruesome conditions, Coast Guard rescue workers saved more than 24,000 lives and evacuated 9,400 people to out-of-area medical facilities. In one week, the Coast Guard rescued more people than it had in the entire previous year!
Under Vice Admiral Thad Allen's leadership, the Coast Guard demonstrated what I call ‘creative execution': the ability to adapt to difficult or unpredictable circumstances, and mobilise an organisation to win against the odds. Allen brought together a clear plan of action to deal with the crisis, identified clear priorities for search-and-rescue teams, took bold action to cut through red tape and organisational boundaries, and was a visible on-scene commander. The Coast Guard showed New Orleans that it was possible to clean up and rebuild, supplying both the material and the emotional fuel required for the city to have the confidence to move forward. It achieved a decisive victory against a backdrop of total destruction and loss of hope.
The same slow, confused reaction that characterised FEMA's response to Katrina took place at the Fukushima Dai-ichi nuclear plant when it was hit by the tsunami that struck Japan in March 2011. Unable to make a quick decision about venting the building pressure inside the reactors, the plant's operator, Tokyo Electric Power Company (TEPCO), quickly lost control of events. Three of the plant's six reactors experienced a partial meltdown, and a hydrogen gas explosion damaged the containment core. We now know that it will take 30 years to decommission the plant, which will be entombed in a sarcophagus similar to the one built over the Chernobyl plant.
There is nothing that TEPCO could have done to prevent the earthquake that triggered the 14-metre tsunami waves, but the company's attempts to downplay the impact of the emergency and refuse the advice that was being provided by the Japanese government and global experts was a catastrophic human failure on a scale that hadn't been seen since Katrina. With all of Japan's 54 nuclear reactors now shut down and prevented from restarting due to public outcry, TEPCO effectively crippled an industry that was supposed to provide 50 per cent of Japan's energy by 2030.Is creative execution for you?
Is creative execution for you?
The same behaviours that TEPCO and FEMA displayed in their attempts to respond to their respective crises are duplicated inside organisations every day. According to the Boston Consulting Group (BCG), 61 per cent of mergers and acquisitions (M&A) sealed between 1995 and 2001 reduced shareholder value. If you consider the fact that an average of 21,000 M&A transactions take place every year, and that the average value of deals has doubled since 2002 to more than $110 million, a 60 per cent failure rate adds up to US$1.4 trillion worth of deals that fail to meet expectations each year. The figures only start to improve in 2010, the first year since 1988 when BCG estimates that acquirers are, on average, generating positive returns from their acquisitions.
Why does this pattern of large-scale organisation failure repeat itself so often? Because an organisation's success hinges not on the strength of its strategy, but on its leaders' ability to craft a realistic view of how the strategy will be implemented, and empower its people to get engaged in its execution. Without this ability, the fog of change quickly turns execution into a value-destroying lip service that reduces the organisation's effectiveness.
From my work with dozens of leaders and organisations from Toyota to Google, I have determined that creative execution requires five ingredients:
- A unique strategy
Without a compelling, visionary and unique strategy that you can explain to your board members, customers or employees inside of two minutes, execution is a doomed enterprise.
- Candid dialogue
Jack Welch called lack of candour “the dirtiest little secret in corporate America”. As CEO of General Electric, he made a point of letting people know exactly how he felt about them and their performance.
- Clear roles and accountabilities
Leaders, managers and employees need to match the candid dialogue that led to the ownership of the strategy with roles and responsibilities that link individual and team goals to the strategy.
- Bold action
Like Google founders Larry Page (left) and Sergei Brin's decision to download the entire content of the internet from their dorm room computers, bold action provides a tangible taste of how the strategy will be deployed. It transforms doubters into believers and passive bystanders into active participants.
- Visible leadership
At Trafalgar, Nelson refused to remove his decorations or cover his Admiral's uniform while pacing the upper deck of HMS Victory. He was convinced that his presence on deck would encourage his sailors to fight harder. He was shot and killed while leading England's greatest naval triumph; that's visible leadership!
New Manager Barometer by Odgers Berndtson shows high approval ratings for the still young leaders...
By Paul Butterworth MNI, Global Head of the Maritime & Shipping Practice at Odgers Berndtson