Let's all open our new-economy hymnals and sing together: Ideas are the source of competitive advantage! You can outthink your competition! The team with the best ideas wins!
Amen! But ...
Isn't it also true that ideas are perilously short-lived? That even the best idea has a miniscule half-life? That your precious intellectual capital can easily be begged, borrowed, or stolen?
Now let's turn the page and join in singing the next verse: Nothing is more important than getting it done! Today, implementation is the real source of competitive advantage! Even the best idea is only as valuable as your ability to execute it! The team that executes first wins!
How important is the flawless implementation of a great idea? Well, just ask Kevin Ulmer, president and CEO of Pavonis Inc.
In 1987, federal scientists were struggling to launch the Human Genome Project, an ambitious mapping of the entire human DNA sequence. Ulmer, now 49 (and who, at the time, was a molecular biologist living in Cohasset, Massachusetts), knew that getting the DNA sequence right would translate into designer foods, drugs, and other enormously profitable products. He also knew that the federal project was hindered by terminal slowness. He came up with a brilliant idea: Start a private genome project, crack the code fast — and make untold amounts of money.
Ulmer's idea was a killer one, but his flawed implementation destroyed it. Instead of getting started fast by using off-the-shelf gene sequencers, Ulmer decided first to develop his own sequencing technology, so that he could crank out DNA code more efficiently. The decision proved his undoing: While Ulmer struggled to achieve perfection in his venture, SEQ Ltd., his rivals used existing sequencers to break the DNA code and win first-mover advantage. The result: Competitors such as Human Genome Sciences Inc. and Incyte Pharmaceuticals dominated the field, garnered venture capital, and made hundreds of millions of dollars selling their information to food and pharmaceuticals companies — while Ulmer barely limped along. Looking back, Ulmer, who left SEQ in 1997, sees clearly the flawed execution that unhinged his brilliant idea. "I should have used the technology that was available," he laments. "If I had done that from the start, I would have been years ahead of the pack."
Ulmer's tale is becoming more and more familiar. Ideas are critical. Innovation is the mainspring of the new economy. But as more and more companies compete in ideas, the game changes to competing in the implementation of ideas. In this next stage of competition, getting an idea gives way to getting it done.
So how to close the gap between thought and action, between idea and execution? As the following examples demonstrate, how you get ideas done is just as much a matter of individual style, company culture, and character as how you generate those ideas in the first place. What counts is your commitment to implementation. After all, an average idea brilliantly implemented always beats a brilliant idea left unexecuted. Just ask Kevin Ulmer.
HelloAsia: Planning to Get It Done
It's day three at the HelloAsia.com corporate retreat, and the crowd at the rustic Santa Cruz, California country club is not what you'd call celebratory. Since April 1999, the Redwood City, California-based startup has been smashing its way into the Asian e-market with an ingenious business-to-business Web strategy: By offering free email service, HelloAsia.com attracts subscribers, who are then lured to the sites of its Asian corporate partners through a program called "AsiaRewards." The program gives subscribers points for visiting corporate-partner sites — points that can be redeemed for such merchandise as books and electronics. Growth has been phenomenal: The one-year-old company has more than 500,000 subscribers, nearly 100 corporate partners, 95 employees, page after page of good press, and one of the largest first-round investments ever — $20 million — for an Internet company of its kind. And yet, in spite of all of this success, HelloAsia's employees will spend nearly every minute of their retreat not engaging in beer busts and team-building hijinks typical of Silicon Valley but working on the most mundane of corporate chores: grinding out precise business plans to guide the company's operation for the next six months.
Beaming like a proud Boy Scout troop leader, cofounder Henry Ellenbogen, 27, rattles off the "blueprints" that he's been handed by the company's functional teams. His marketing team, for example, has laid out exactly how many new customers — and in what markets — the company should reach in the coming year. The team knows exactly how many new local partners are needed to ensure growth and how to recruit those partners. Team members have scheduled promotional gigs, settling on each event's theme and time line. They've even scheduled a series of progress reviews. This, Ellenbogen says, is what execution looks like.
Think of HelloAsia as a toddler in a business suit — more a mature, operationally focused one-year-old than a nimble startup with a monthly growth rate of 50% and a staff with an average age of 31. According to Ellenbogen, a tall, shambling man with dark hair and John Lennon specs, "fast planning" is no oxymoron. The key to HelloAsia's rapid implementation is distilling the company's plan into a highly detailed process that puts everything on paper before anyone makes a single move. "A lot of startups think they're too dynamic to plan," says Ellenbogen, who dreamed up HelloAsia with Harvard Business School classmate Chih Cheung, 29, who is also the company's CEO. "They say, 'We're growing too fast to follow a plan.' But we didn't feel that we had a choice."
The complexity of HelloAsia's product and the stakes that the company is playing for place a premium on execution — and on the careful planning of that execution. Asia's online base is ballooning at a staggering 80% a year, and by 2002, it should hit 50 million subscribers. By 2004, the Asian market will carry $32 billion in commerce. It's a delicate dance in any environment, but HelloAsia has made it even more dicey by setting its sights on four very different Asian markets: Hong Kong, Korea, Singapore, and Taiwan. That means creating and coordinating four different strategies around the same business model and core architecture. And, naturally, speed is critical: HelloAsia isn't the only startup to have recognized the potential of the Asian e-market. So Cheung and Ellenbogen have had to roll out four launches simultaneously — and flawlessly.
Like most fast-moving tech companies, HelloAsia relies heavily on a bright, motivated workforce that uses the usual startup formula: Solve problems, add value, earn equity. But unlike most startups, HelloAsia achieves effectiveness through a highly structured organization. Cheung and Ellenbogen are following a traditional — and therefore, by today's standards, a nontraditional — business model: HelloAsia channels its employees' boundless creativity and energy through a meticulous planning process — one that breaks every project into components and assigns each component to teams and individuals. Those teams and individuals know precisely how their pieces fit into the overall strategy, and they confer regularly to make sure that they are on task and on target. "Sure, we're decentralized, empowered, and all that," says Cheung, who spends much of his time in Asia pitching his company. "But we're trying to build an extremely complicated business, and without a central plan or vision, we'd be running amok."
Cheung and Ellenbogen aren't just spouting theory; they've learned the importance of careful planning the hard way. Before cofounding HelloAsia, Ellenbogen spent four years working with U.S. Representative Peter Deutsch, a Florida democrat, as the youngest, most Internet-savvy chief of staff on Capitol Hill. A born strategist, Ellenbogen quickly saw that lawmakers who didn't start planning their reelection campaign at least nine months before election day found themselves unemployed the following year.
Cheung, a former financial analyst at Goldman Sachs, learned a similar lesson while working with Ellenbogen at Crimson Solutions, an online-recruiting service. At Crimson Solutions, Cheung saw firsthand what happens when a bunch of overachievers go to work without a strong central plan. "Everybody ends up pulling in opposite directions, and nothing gets done," says Cheung. "You need a strong overarching vision and a plan to make things happen."
And how do you achieve that? In the course of ramping up HelloAsia, Cheung and Ellenbogen have uncovered five rules for successfully moving from idea to implementation.
Don't move until you know exactly where you're going. It may sound obvious, but these days, it's almost heresy: The new economy invites companies to set off with limited planning, relying instead on energy, brains, and flexibility to fill in the details later. That, say Cheung and Ellenbogen, is a recipe for disaster. They insist on having a plan for every detail, no matter how long it takes. Their employees — all of whom are energetic, smart, and flexible — establish two or three core goals and then list the elements, or "key results," that are required to meet each of those goals.
Strategize globally, but plan locally. In preparing for their first big rollout last year, Cheung and Ellenbogen knew that they couldn't prefabricate every detail for marketing events in four markets — especially markets as diverse as Korea and Singapore. Instead, they broke the central strategy into smaller plans, allowing each market to draw its own blueprint. To start the process, an executive team identified and refined common goals and themes, such as introducing the company and its concept. Local teams then took those goals back to their respective countries, where they worked with PR agencies that were familiar with local marketing practices.
Within weeks, the local teams had drawn up highly detailed strategies for their rollouts — covering everything from market goals and message themes to program budgets and performance measures. Those blueprints were then presented at a conference in Hong Kong, where they were analyzed and compared against the overall company strategy by the executive team before being approved by Cheung and Ellenbogen. Says Ellenbogen: "On the one hand, you need clear, functional goals with precise guidelines. On the other, you need local implementation, which means empowering people at a local level."
Don't make a move until all of your people know their places. At the start of each new project, Cheung, Ellenbogen, and other managers make sure that all employees know precisely what their role is — and isn't. Employees have considerable leeway in meeting their goals as creatively as possible, but they must stay within their roles. For example, David Chen, VP of sales and marketing, had free rein when designing the marketing plan for the Hong Kong launch. But he was not responsible for — or even allowed to work on — projects that fell outside of his role: designing the site's technology, recruiting local partners, or implementing product delivery.
Rigid roles allow for a surprising degree of creativity. At the same time, they keep expectations clear, encourage productivity, and, perhaps most important, reinforce a companywide sense of focus. "All of our people are overachievers," says Cheung. "Their natural tendency is to try to do whatever needs to be done, regardless of whose job it is." That may be an admirable tendency, but acting on it can throw off a schedule and create delays — a fatal weakness in an industry where speed to market is just as important as product quality.
Write it down. For all of HelloAsia's cutting-edge communications technologies, the company is a memo writer's haven. Every aspect of the company's strategy is put down on paper and distributed, as are all tactical, day-to-day operations. Meetings cannot begin without a specific, written agenda and do not end without an equally specific action plan that clearly outlines who is doing what and when — which is then put in a memo and sent to all meeting participants.
The best-laid plans may need to change. Cheung and Ellenbogen have no problem modifying plans — or changing them altogether — provided that it's done right. Every week, the four markets' team leaders conduct a teleconference with their executive teams to assess whether new developments justify midcourse modifications. And twice a year, the entire company gathers to assess company progress, to analyze successes and failures, to adjust the next year's goals, and, of course, to put the following year's plan in writing.
But discipline, planning, and foresight don't always come naturally to a workforce steeped in the spontaneous just-do-it attitude of the high-tech world. So Cheung and Ellenbogen spend a lot of time reinforcing a culture of planning. The result is a startup that seems mature beyond its years. "We decided to take care of the basics up front," says Ellenbogen. "That way, all of that energy that you get from being a startup is just a bonus."
BGI: A Model of Effectiveness
On the 30th floor of a San Francisco high-rise, Bill Drobny, 37, is performing managerial psychoanalysis. The manager of strategic projects at Barclays Global Investors is on the phone with project manager Angela Page, 30, who is in Toronto supervising the online launch of a huge new financial product. Things are going well, she says. She's hitting all of her deadlines, and the launch date is a go. But something is bothering her.
In a soothing, friendly voice, Drobny begins asking questions about the project. He starts with some of the standard items on the project checklist — easy-to-gauge items, such as scheduling and team rosters — and then gradually shifts the conversation.
"How does it feel to you?" he asks.
"I'm totally stressed," Page admits.
"Why?" asks Drobny.
"I don't know," she says. "I'm under all of this pressure, but objectively, everything is going smoothly."
"Maybe not," says Drobny. "If a project feels uncomfortable, then something's probably wrong."
When it comes to getting things done, every project and every task consists of equal parts objective metrics and subjective feelings — a lesson that is deeply ingrained at BGI, one of the world's largest and most conservative managers of indexed mutual funds. At a company that prides itself on its superb financial skills, top managers also appreciate the fact that a flawless execution requires a doctorlike sense of every project's shadowy innards. Over the past two years, BGI's managers have developed a model of a successful, healthy project — a kind of Gray's Anatomy for getting things done. By applying that model to their own projects, managers can diagnose problems, gauge whether talent is being correctly deployed, and, says Drobny, "even determine whether someone has a project at all in the first place."
The key to BGI's approach is a sharp and well-defined separation of responsibilities. According to BGI, any project can be broken down into five functional roles, each of which represents a specific task: the project sponsor (the company principal who holds the project's purse strings), the business owner (the day-to-day decision maker), the project manager (the deadline expert), the technological and functional staff, and the support staff.
BGI managers are quick to acknowledge that, on first glance, their model looks like a parody of a management-seminar handout. But, they say, don't laugh. It works. Most successful projects have followed this model, Drobny says, and most failed projects have violated it — by trying to eliminate a functional role or, more commonly, by trying to combine two different functional roles. The model's power, he says, "comes from letting people step back and see their projects from the outside."
BGI has learned that the perspective that its model provides is almost as important as the model itself. Over the years, the 29-year-old firm, which manages $786 billion in retirement funds, gradually developed an extremely conservative culture, one that favored lengthy, in-depth analyses. "We're not a culture of risk takers," concedes Diane Lumley, 37, the company's manager of client relations. "We don't think that it's a great thing to make mistakes and learn from them, and we do punish failure." But BGI's "risk control" produced a crippling paralysis: The firm became so cautious that projects weren't getting out of the blocks, and the firm met its deadlines only when it hired outside consultants to serve as project managers.
So Drobny began probing the anatomy of BGI projects, and he soon discerned a pattern: In case after case, two job functions — project manager and business owner — were being lumped together and handled by the same person. Sometimes, that person was the business owner — a firm principal with financial expertise but with few specific skills in managing projects. In other cases, it was the project manager — an employee who, though efficient, lacked the necessary qualifications or authorization to make expert decisions.
In both cases, the result was the same: inaction. As soon as a project hit a snag, Drobny says, business owners tended to default to their professional comfort zone — expert analysis — and, in doing so, delayed the project. And when project managers needed to make a tough decision, they either made the wrong decision — because they were operating beyond their expertise — or they slammed on the brakes until they could find a qualified decision maker.
The firm was losing time — and the confidence of its teams. "When you're just a 'project manager,' and not an 'expert,' no one believes that you know what you're talking about or trusts that you'll make the right move," says Jennifer Campbell, 30, a principal and project manager at BGI. "So everything takes longer."
It was clear to Drobny that a successful project needed both a business owner and a project manager. Separating those two roles would free up business owners to analyze options and would allow project managers to focus on deliverables and deadlines "without worrying about having to make decisions," Drobny says.
Although initially Drobny focused on project managers and business owners, he soon discovered other functional roles — such as sponsors, technological staff, and administrative staff — whose contributions were also overlooked or misunderstood. Take, for example, sponsors. Sponsors ensure that a project has adequate funding. Just as important, they make sure that the project fits with the firm's strategic objectives and is therefore less likely to be abandoned after it is launched. Yet Drobny discovered that many projects were being started without a clearly defined sponsor. The same was true of business owners and project managers. "You'd ask who was filling these roles," says Drobny, "and people would say, 'No one.' "
BGI's project taxonomy has given the firm a model that it can use as both a proscriptive and a diagnostic tool. Managers with an idea for a project can use the model as a sort of checklist to make sure that they have all of the necessary elements before beginning implementation. Those with a failing project can match their experience against the model to figure out what went wrong. "You can walk right through the chain," Drobny says. "Running out of money? Maybe you don't have a strong sponsor. Missing deadlines? Perhaps you don't have a distinct project manager."
Not surprisingly, BGI is trying to do a better job of cultivating project managers and of keeping their function "clean" of other work. "People who do well in their jobs are asked to manage projects, but too often, they're also expected to keep working on whatever it was that they were doing before," says Heather Davis, 29, BGI chief of staff and a former project manager. "So you need an owner who can be your advocate when day-to-day business gets in the way."
Finally, the model adds an important time element to project work: Managers can use the model to judge where they are in a project's life span. Each role has not only specific duties but also a specific duration, and sometimes that time line can be the source of anxiety as a project progresses. In the case of Toronto project manager Angela Page, for example, Drobny determined that she had no exit strategy — no one to take on her duties after the product was launched. "She knew that she had met her deadlines," Drobny says, "but what was bothering her was that she also knew that there was no one to step in and take over her duties after she left. Projects don't last forever, and if you don't have an exit plan, you don't really have a project."
Intel: Implementation Keeps on Rolling
In a crowded conference room at Intel Corp.'s Hillsboro, Oregon facility, Sandra Morris, 45, is overseeing a weekly ritual called "Go-No Go." As VP of finance-and-enterprise services and director of e-business at Intel, Morris is responsible for wiring the chip maker to hundreds of customers and for automating $15 billion dollars in sales each year. It is, perhaps, Intel's most important project ever, and today, Morris is checking its status by asking managers from each group — from IT and sales to quality assurance and customer support — whether they will have their part done by deadline. "We're a go," says one manager. "Go," says the next. The word is repeated as Morris goes around the table. Then it happens: The manager for the tech group says, "No go." There's a brief silence, but Morris smiles and nods. "Okay," she says. "What do you need to make it a go?"
Management by checklist may sound like yet another symptom of Intel's famous obsession with control. But for Morris, and for others whose job it is to get things done, such a seemingly rigid protocol is actually the key to making this big, layered company move with the fluidity of a startup. When it comes to execution, says Morris, effectiveness is less about getting people motivated and projects started than it is about keeping the process moving in the right direction — no matter what unanticipated obstacles may arise.
Intel calls this "rolling implementation," a productivity juggling act that requires the company to practice constant managerial vigilance and flawless communication, and to have the capacity to adjust short- and long-term goals quickly if necessary. Indeed, when Morris and her team began, they had no idea what much of the final product would be like. "We knew that some large portion would be very, very right," says Morris, "and we also knew that some portion would be wrong and would have to be fixed. And we had to be able to live with that."
The results are impressive. In January 1998, Morris was given six months to Web-enable a secure, customizable ordering system that, by year's end, would handle $1 billion in annual sales. Morris's team not only made the July 1 deadline, but it also met the $1 billion goal — within 15 days of launch. By the end of 1999, Morris and her team had automated one-half of Intel's $30 billion in annual sales.
So how do you roll out rolling implementation so that it doesn't get away from you? Follow these basic rules that Morris and her team have come up with.
Constant supervision. To succeed, Intel's e-commerce strategy required the company to coordinate dozens of internal groups across various geographic zones. To make that happen, Intel created a "program office" — a central headquarters that is run by a senior manager and "staffed" by managers from all involved internal groups and regional offices. For the e-commerce rollout, the program office had 15 managers, covering everything from sales and marketing to IT, and a total staff of nearly 300.
The program office not only planned the project and determined each participant's role; it also ensured that the groups were communicating with one another. As a result, Morris says, "what the people in the trenches were doing lined up with the executive vision." As the project moved forward, the program office gauged progress, sized up all developments and obstacles, and determined whether changes needed to be made and what those changes were.
Constant awareness. For Morris, the more team members know about the project, the more they can focus on essentials, ignore noise, and do whatever it takes to maintain momentum. "These are huge, complex products," says Morris, "and everyone has to understand what's going on to keep them moving forward."
Most high-tech companies divide projects between two groups: a customer-focused sales-and-marketing team and an internally focused engineering team. Intel's program-office approach ignores old boundaries and reassigns territories. Engineers become partners with sales-and-marketing people — a cross-fertilization that yields real benefits. Engineers gain a marketer's sense of which Web features are important to customers. At the same time, marketers don't pitch products that Intel engineers can't build. Says Morris: "Now our businesspeople can say to our engineers, 'I have an idea for a new feature, but I want to know whether it's going to be easy or hard for you guys to do.' They learn to look for ideas that have the lowest technical impact and the highest customer impact."
Constant action. At the core of rolling implementation is seamless activity, which Intel achieves with a nonstop stream of meetings. At the outset of the Internet rollout project, for example, the program office held a "Map Day," during which it laid out overall goals and communicated what those goals would require from each group. "Map Day is the first time that all of the groups gather and everyone hears about the project's ramifications on everyone else's area of expertise," says Morris. "Mostly, what you find out is everything that you don't know yet."
As the project develops, the meetings continue. The program office hosts regular Go - No Go sessions, at which group leaders report their status on mission-critical tasks. And weekly — or, during the project's final stages, daily — each group holds a GOST ("get our stuff together") meeting, during which members discuss progress and obstacles, ask questions, and, if need be, send up a help flare.
According to Morris, Intel workers dislike meetings as much as most people do, so the company has developed techniques for running meetings that are themselves models of effectiveness. For Map Day and Go - No Go meetings, team leaders determine what will be discussed. More important, participants aren't penalized for saying things that others don't want to hear. "Honesty is critical," says Morris. "People need to see that when they say they've got a 'no go,' the response isn't 'Why not?' but 'What do you need?' "