1: Panera founder and CEO Ron Shaich looked out over Boston’s beautiful public gardens.
He was having breakfast with his friend Bill Allen, who had recently been named CEO of Bloomin’ Brands, the company that had created the Outback Steakhouse restaurants.
Bill wanted Ron’s advice: “How the hell do you run a public company like this?”
“I didn’t pull any punches,” Ron writes in his book Know What Matters: Lessons from a Lifetime of Transformations.
“Leading a large public company is an exceedingly difficult task,” he said, “and everyone approaches it differently. But in the end, there’s a simple test to see if you did it right, which is: Did you get what matters done?”
According to Ron, it’s that simple. And it’s that hard.
“It’s amazing to me how many CEOs fail that test,” he writes. “They talk the talk; they give speeches; they design impressive strategies; they launch initiatives.
“Yeah, they do a lot of stuff—they’re busy, busy, busy—but somehow, they miss doing what actually matters. They get distracted chasing shiny new pennies or looking sideways at what competitors are doing. They obsess over the stock price (as if that’s something they can control, rather than a by-product of getting what matters done).”
Ron would later sell Panera for $7.5 billion, one of the largest deals in restaurant history.
He observes: “When people ask me the secret to Panera’s success, or that of any business I’m involved in today, I’ll say it’s not really the innovative concept or the great products or even the fantastic people who work there. It’s that we got done at least 80 percent of what we told ourselves would matter.”
2: What’s the difference between management and leadership?
“Management is about ensuring the company delivers the plan,” Ron explains. “Leadership is about ensuring the plan is right.”
Which one is more important?
Both.
Leadership requires us to decide what matters most to build competitive advantage.
Then, to be an effective manager, we must ensure we spend our Time, Talent, and Treasury on activities that will allow us to attain and sustain long-term competitive advantage.
Time, Talent, and Treasury are all limited, Ron observes, “so we want to make sure we’re spending it on what truly matters. If we do this well, we can consistently deliver what we’ve set out to do. That’s the hallmark of a great company in my book.”
As the leader of an organization, it’s easy to fall into the trap of being in reaction mode: “We just get up in the morning and do whatever is on our plate that day,” he notes. “We lose sight of the bigger picture—of where we’re trying to go, and why it matters. A good, focused executional system gives us traction.
“Vision is great, but without execution, vision won’t amount to much,” Ron surmises. “Vision plus execution generates transformation.”
3: “If I were to boil execution down to the essentials,” Ron observes, “I’d describe it the same way I described it to Bill Allen that day over breakfast: It’s about getting the right people in the room at the right time, focusing on the right stuff, and then measuring our progress on the journey.”
The doing of the doing. Do we get it done?
We begin by imagining where we want the organization to be in two to five years, our long-term vision for the impact we want to have.
“This is an outcome we can envision, but we can’t create directly,” Ron writes. “It’s a by-product, so the next question is, Of what?”
We work backward after defining our long-term vision. Ron suggests asking: “What would the company have needed to do to achieve the impact we just described? What specific initiatives were pursued and completed? What smart bets were made along the way?”
The answers to these questions will guide us in identifying and prioritizing the specific Key Initiatives (KIs) we will pursue over the next 1 to 3 years.
Once we identify these Key Initiatives, they become the organization’s strategic priorities. Everything we do should align with and support these initiatives.
“They’re not just things we happen to be doing,” he explains. “They’re the central focus around which we organize the activities of our whole company for the next year. They’re our work plan.”
At Panera, Ron would solicit input on KIs from throughout the organization. Then, he would personally write the first draft. “And often the second and third as well,” he notes.
“The fact that we sometimes created thirty or more versions speaks to how important it was to get the KIs right. Every word mattered when we drafted them.”
Key Initiatives can be multi-year in nature. But they also inform us what we must accomplish in the coming year.
“Each KI was color-coded,” Ron shares. “Gold KIs were the limited number of initiatives (two or three) that we had decided the company (and its CEO) must ensure got accomplished in the next year.
“I often thought of our gold KIs as initiatives that, if we failed to accomplish them, I should fire myself. They were that important.”
In addition to the Gold KIs, they would have also three or four Red KIs, other areas where they wanted to make progress, as well as black KIs, which were those programs that mattered but were not as important.
“For each KI, we delineated the specific projects that served as the work plan that would allow us to deliver on the initiative,” Ron writes. “As we drafted our KIs, we tried hard to be clear about which project came first, which came second, and which came third if we hoped to accomplish the initiative.”
Once each Key Initiative is agreed upon, the next question is “Who’s responsible for getting this done?”
More tomorrow.
___________________________
Reflection: Am I spending most of my Time, Talent, and Treasury on what truly matters for long-term advantage—or just staying busy and reacting to whatever shows up today?
Action: Clarify two or three “Gold” priorities for the next year—initiatives so important that, if I fail to deliver them, I’d say I failed in my role—and begin mapping the first concrete projects and owners needed to get them done.
What did you think of this post?
