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5 Actions for CEOs Before Initiating a Major Launch

Writing in the HuffPost Small Business, Mohamed A. El-Erian, CEO and co-CIO of PIMCO, says leaders should ask themselves what they would do if they were in President Obama’s shoes. Product launches and new business roll-outs are a staple of business. But when a major botched launch of the recent inaugeration of the Affordable Care Act comes as a surprise to its leadership, this suggests that other things such as reputation for competence are also at risk. Here are five things to undertake before considering a major launch.

Given the execution failure, the CEO faces a situation where many undermining elements are in play. Some of these result, exasperatingly, on account of avoidable technical slippages. People within the organization are embarrassed and angry. Adversaries and competitors are energized and eagerly exploit the situation. The media sees disaster and mischievously has a field day.

What should a CEO do in such circumstances?

The PIMCO chief executive advises that the leader should quickly acknowledge the extent of the disaster, “taking clear public accountability and understanding the reasons for the competing public narratives are all necessary conditions.” He or she should immediately roll up one’s sleeves and get cracking in how to fix the failures.

“As important as these first steps are – and they are critical – they are not sufficient,” he adds. “CEOs must also rapidly find a way to re-anchor what remains a highly-valid and valuable strategic initiative. And that is an even more difficult task.” El-Erian says he is reminded of numerous cases, although not of the same magnitude, that were nonetheless visible. Some CEOs handled it well; others, not so much.

El-Erian offers the following five steps for CEOs who are confronted with such a challenge:

“First, ensure that the destination is unquestionably sound and visible – and do so by repeatedly reminding stakeholders (both internal and external) of the validity of the strategic initiative; and by making it crystal clear to opponents that key elements are non-negotiable.”

Second, “work backwards from the destination to specify and communicate the key steps in the journey of re-establishing comprehensively the credibility of the initiative.”

Third, “seek some quick wins in implementation to illustrate that the initial slippage, while meaningful, is indeed temporary and reversible.”

Fourth, “do not allow this whole issue to consume every other part of the business, activities, public interactions and internal discussions.”

Fifth, “be totally open with your constituents, including by recognizing that the initiative’s full recovery is probably months in the making. Properly managing what are now unanchored expectations becomes a key tenet of leadership and corporate strategy.”

There is a reason why all of this constitutes one of the CEO’s most feared challenges.

“Having worked so hard to deliver on the macro aspects of the initiative, it more than infuriating to see it tripped up by the micro. And it’s really annoying to see opponents use this type of micro slippage to unfairly undercut the macro.”

Yet, this is the reality of tough operating environments; and there tends to be quite a bit at stake given the extent of competition and of asymmetrical information.

“Having been put in such an unfortunate position, successful CEOs grasp quickly the magnitude of the setback, put aside issues of “fairness,” and swiftly re-assert strategic legitimacy. And the best way to deliver on this unexpectedly-difficult recovery road is to start by rapidly moving in the right direction.”

However, not everyone is in complete agreement with the above lessons. Mark Lunquist of Buffalo-based IT services company Inergex thinks El-Erian missed a key observation. “I’ve always felt one of the most important aspects of large project success is unilateral support and buy-in for the initiative itself, “ he writes in a company blog. “This includes not only those responsible for the project delivery but also those who will benefit directly by its success, not so easy for a monstrosity like the Affordable Healthcare Act for sure but still critical in my mind. Buy-in drives interest and interest drives accountability, accountability drives ownership and success. It’s a simple but yet critical formula.”

“I wonder, when you consider all the moving parts, how many of those entities looked at their deliverables and responsibilities as mandates vs. being solicited for their opinions regarding how to solve the most difficult of the problems along the way. I’m willing to bet it was the former in almost all facets of this implementation.”

The selling of a concept , Lunquist argues, is only the beginning. Securing buy-in at all phases is the job of the CEO who must attend to this at every phases of the initiative’s lifecycle. “In doing so, the initiative and all projects that wrap into it now and in the future will be taken seriously by all thus having a higher probability of success at each stage.”




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