Best-selling business author and CEO Patty Azzarello is the founder of Azzarello Group, which works with CEOs and management teams as they drive business transformation. Ms. Azzarello’s latest book is Move: How Decisive Leaders Execute Strategy Despite Obstacles, Setbacks and Stalls. The M-O-V-E model that Azzarello details involves: M for middle, which is where progress typically stalls; O for organization, meaning you need the right team; V for valor, because leaders need courage to drive change; and E for everyone, because the entire organization must be engaged around the change.
We caught up with Azzarello recently to talk about how middle market companies can better execute their strategy. This is an edited transcript of our discussion, for the full conversation, listen to the SoundCloud podcast embedded below.
How might the insights you offer in Move about executing strategy apply to middle market companies in particular?
Azzarello: Move really gets at a problem shared by any project, any program, any business strategy, any initiative, no matter the size of the company. All of them share this: the initial kickoff, the beginning, has a lot of investment in energy and focus. The desired outcome, the end goals, are really well-defined and they have a lot of energy applied to defining them. But what every program also shares is that the middle (the M) is often completely undefined. All the energy goes into the beginning and the end. What Move gets at is how to start defining that piece in the middle, because it’s so often lacking.
Why do execution problems typically happen in the middle of strategic initiatives?
Azzarello: I think we can all look back where we're the one standing in the meeting or listening to the strategy phone call, and the executives are announcing the new exciting initiative. And your reaction is, “well, that's never going to happen. So many of these things come and go and I don't really have to invest.” As leaders, we need to realize that our organizations are skeptical and have a right to be skeptical. There are opportunities to stall right after the kickoff unless you do the next steps to engage your organization in moving forward.
What, in particular, can middle market leaders do to overcome this “stall” in the middle?
Azzarello: First, step back and admit to yourself that you have to define what happens in a clear way so that the organization can see the mile markers and the light posts. Because if you’re in an initiative that's going to take 12 or 18 months, the progress might not seem obvious in the first six months. You might be building infrastructure. You might be collecting information. If you're not charting the course all the way through, people can't see that you're going there.
And so you'll overhear conversations four or five months in like, "I remember something about that. Are we still doing that?" You need to make the markers so clear throughout the middle that every day when people come into work they can say, "Ah, we're two months into our 18-month initiative and here's what we did.” So create a timeline that actually shows all of the key points throughout the whole middle and use that timeline as a communication tool.
What are some of the leadership mistakes that can contribute to “stalling” in the middle of a strategic initiative?
Azzarello: One is simply the organization itself, the “O” part. Many times, leaders don't take a hard look and assess their team, asking “Is this the right team for the future?” Leaders might think their job is to make do with the team they have, instead of building the team they need. Organizations get stuck when they've never made that assessment and they've never created that new role or created the training and development necessary for the team to do the new things.
Another mistake relates to talking rather than doing. There’s a tendency for organizations to get stuck talking about the situation instead of the outcome. Situation discussions are about what's happening, what is the state of our products, what is the market doing, what’s the competition doing, why is this hard? This conversation will never move forward. What's important is to recognize that you're in a situation discussion and to say, “Let's pause. What is an outcome that we are trying to achieve?”
You say that business transformation doesn’t happen from the top. Can you dive into why everyone (the E) needs to be involved?
Azzarello: I’ll see executives announce the strategy one time and then they just assume, “Now, my organization will self-optimize and reorganize itself and redefine the workload to implement this strategy.” And that just doesn’t happen. The first time you announce your strategy, nobody believes you and everybody is skeptical. You can lead a strategy from the top down, but you can't do it. You need everyone in the organization to pick up the ball and go forward because if they don't move, you don't move.
So change the way you communicate. Go from “broadcasting” to conversations instead, which means “I'm sharing the strategy with you. What do you think about it? Let's have a conversation.” And create opportunities for that conversation to exist at all the levels in the organization. Only when people are talking about it amongst themselves are they starting to believe.
Why do middle market leaders need to have valor (V) to transform their organization?
Azzarello: Because sticking to a strategy throughout the long middle is a hard thing. Typically mid-market companies have some old habits and behaviors and processes that served them well when they were a smaller, scrappy company, but then they need to look to the future of being a larger company that needs to do different things. Those different things are typically longer-term strategic initiatives that involve creating scale, creating process, creating infrastructure. And in any moment those things never seem as urgent and important as that customer crisis, that customer opportunity.
I'll talk to a CEO of a $100 million company that wants to be a half a billion-dollar company. And they’re too busy being a $100 million company to ever be a half a billion-dollar company. I'll say to them, “When you're a half a billion-dollar company, will you do customer service and support the same way? Will you do product development the same way?” They’ll say: “Oh, absolutely not. That would never work,” Then I'll say, “Well, when? Between now and then, when are you going to do that?” It takes a lot of valor for leaders to say, “No. This scaling and infrastructure is vital and I'm going to protect that work with my life no matter what's happening on the urgent side.” That takes courage.