105: Raise Your Execution Game with Alex Castro

18
Apr

Alex Castro is an execution alignment expert, best-selling author, and the creator of ReM Score. We discuss the role of an execution alignment expert, reasons why businesses struggle with strategy execution, and how the ReM Score drives innovation growth opportunities.

—

Listen to the podcast here

 

Raise Your Execution Game with Alex Castro 

Our guest is Alex Castro, the founder and creator of the ReM Score and an expert in aligning strategy and execution for digital transformation. Hey, Alex, great to have you on the podcast.

Fantastic to be here. Thank you so much for the opportunity.

Absolutely. So your topic is a pretty intriguing one, and we’ll get to it in a minute. But first, I’d like you to share with us how you got here to become an entrepreneur and what prompted you to explore this area of strategy and execution and digital transformation.

Yeah, for sure. But, you know, the entrepreneurial journey has been one really of learning, learning mostly where I work best. And you know, in listening to some of your previous podcasts, you know, there’s some that talk about how they saw a gap in the market or that there was this itch they had they had to fulfill. And for me, it was a little bit more straightforward from the context that I just didn’t like working for other people. And I found that that was too risky, you know, putting my future and my, sort of my ambitions in somebody else’s hands, whether they chose to support them or not. And so for me, it was a little bit of foundational is that I’m just a terrible employee.

So, but the, you know, the thing for a transformation that came around is both in the startups that I’ve done, as well as having worked in large companies like Raytheon and Transamerica, the missed potential is enormous. There’s a lot of very good thinking going on. And what you see in those roles, but especially as a consultant, is the fact that there’s a lot of good potential, a lot of opportunity that, you know, through the execution process and the transformation processes is not being realized. And the things to correct it are not as daunting as people think. And I think that they’re tightening the screws in the wrong places as it were. So that’s what really drives a lot of my energy on a daily.

That’s really interesting. So what does an execution alignment expert actually do?

Really what I focus on and what our brand focuses on is how do you translate that strategic idea, the strategic initiative into action so that you have the realized product on the other side. And we deal with things like integrating acquisitions. We help clients with rolling out artificial intelligence and machine learning or migrating to the cloud or transforming their back office, modernizing their back office, as well as either launching a new product, which we do internally, but also exploring new markets. And what you’ll see is that there’s a lot of emphasis in the validity of the idea, the analysis of the validity.

Sometimes you hear that analysis paralysis component. I experienced that in quite a few different businesses. Then there’s this very thorough deep review, and then what happens is that idea gets basically thrown over the wall to a delivery team, an execution team, and the executives sit there with their arms crossed going, okay, well, where is it? Are you done yet? That’s one of the typical misalignment things is assuming that as an executive that you’ve built a business and people process technology that can adapt to the next generation of transformation.

And what I developed about 20 years ago was a model that fundamentally spoke to the fact the more aggressive that transformation is, if you look, if you kind of have a graph in your bottom left-hand corner of that graph, you’ve got a line that goes from bottom left up to the right, right, growth, and you have a box and that’s your current state of people process technology. And as that box goes up that line up and to the right, that future state box, the amount of overlap to the current state box, is the amount of content that you are retaining, right?

So the more aggressive it is, the more you have to transform and look for new people, new processes and new technologies in order to fulfill that next generation of the business. And the biggest, I think, misinterpretation that leaders and executives have is that, well, I’ve hired well, we’ve refined processes, we’ve implemented good technology. And that’s true in many cases, and that’s been done for today’s state of operations. How adaptive that is to the future state is very limiting, especially in the velocity of today’s market. That’s where the misinterpretation of capability is.

The more aggressive that transformation is, the more you have to transform and look for new people, new processes, and new technologies. Click To Tweet

What we fundamentally do is we analyze for any given initiative, where are the gaps in the capabilities of your business to deliver that idea, to actually execute the idea. Now, once it gets to market or it’s implemented, was it a good idea? That’s all the work you do prior to hitting our process. But what we focus on is, can you actually accomplish the work? Can you roll out the product? Can you implement the back-office modern? Can you implement AI and machine learning and so on and so on?

So what’s the limiting factor? What are the limiting factors in companies being able to provide the necessary resources to make these future states a reality? So they come up with a second initiative and you say that they don’t have the people process technology to execute it. So what prevents them from having the people process technology to execute? Is it a personal thing that the leader doesn’t hire people that are smarter than them? Or is there maybe a blind spot for the leadership in general in falling to traps? Or what is it?

Well, the root cause of it is in cognitive bias. We all have biases that we inject into our decision-making. You know, today’s world is very much about data-driven decision-making and analytics in that context. The data around successful strategic projects, strategic initiative execution is fundamentally half of all strategic initiatives fail or are abandoned. 30% of those that do make it through only deliver about 60% of the value initially estimated, and only about 20% of those initiatives actually complete the total value. So, fundamentally, if you really wanna look at it in a very cold light, one in five are actually gonna produce value.

The problem that then comes out from that is now you are working in a VC model of funding and progressive growth in your business. And your business is not a VC entity, right? The VC model is nine out of 10 are going to fail, but the one that succeeds is a mega hit. You can’t guarantee that in your core strategic initiatives, right? Because your core strategic initiatives may not all be big ideas. They may simply be, we need to tune operations to work better. We need to buy a company and merge it in to help us grow or something to roll out a new product or enter a new market. And many times those are incremental value creators.

So, I think I understand why VC funded companies generally oftentimes don’t succeed because they are just risky, right? It’s a high risk ventures. There is young entrepreneurial people that try to get it right, but they don’t have that much experience and not every idea pans out and a lot of competing solutions and so on. But most companies that are not fast growth businesses, but more mature industries perhaps, I don’t know if this exists anymore. And why would they have the profile of a VC type company? Is this normal? Is this a new normal that all companies have this kind of risk profile or maybe I’m missing something?

Well, you know, it’s not necessarily that you’re missing something because it’s one of those issues that is such a slow incremental change that you almost don’t realize that something’s adapted. Fundamentally, execution has been the bane of strategy for 100 years. Like you can find multiple books over generations that talk about the problem with execution. I think Thomas Edison said it at one point, he said, strategy without execution.

You said execution, calculation.

Yeah, exactly, right? So that’s 100 years ago. Right. That’s that’s not a new challenge. And what’s happened is that there have been all of these attempts to really get execution to work better. You know, we’re going to get better project managers. We’re going to get better methodologies. We’re going to really ratchet things down and control every step. And we’re going to progressively there’s this more and more draconian look at how do we do execution. And no matter what you do, the data doesn’t change. 30 years of behavioral economic data tells you that the results are the same every single year.

And no matter what you change in methodology or adding some kind of new type of resource is not changing the statistic. And so you can go on a strategy of hope, which is, well, my project is going to be different, where you can really take a step back and understand that your business is a continuous kaleidoscope of change. That kaleidoscope of change is continuously shifting its capability alignment to any strategic initiative you may have.

Your business is a continuous kaleidoscope of change. Understanding the conditions for how well your business is aligned to deliver the idea is critical. Click To Tweet

So as a result, you can’t say that something you did in January or let’s say you took a look at yourself and did an analysis on yourself in January, that in today’s world, that analysis isn’t valid anymore in May, right? Because your business is changing, the people are changing, the priorities are changing, the focus is changing, things are moving differently. Execution is about understanding the conditions of which, how well your business is aligned to deliver the idea. Then corrective action for those things that are out of alignment prior to engaging your project. If you’re going to integrate an acquisition, you’ve got to take a look at what are the factors that are going to diminish that return.

Execution is about understanding the conditions of which, how well your business is aligned to deliver the idea. Click To Tweet

Again, it’s eerie how consistent the data is. I mean, you know, it’s half of acquisitions detract value from the acquirer. 30% of acquisitions are neutral to the acquirer and 20% of acquisitions create value for the acquirer. That’s not my data. That’s 20 years of M&A post-mortem data. I didn’t create it. About 25 academic institutions have studied it. And that’s the bottom line. Are you going to shift it? Are you going to muscle it into production? No. Can you overcome those things when you’re in flight, when you’re in the midst of that integration of an acquisition? No. Right? You don’t have it. The project manager isn’t going to save you.

And so it just turns into an exercise in damage control. And so what we try to do is look at the factors that are really affecting root cause around why is the alignment off? How do you correct that before you engage your activity, your strategy, which is often more, it’s a more tempered way of correcting things. It’s a less expensive way to correct things. Rather than what’s happened over the years is, you know, the mantra of fail fast, right? Oh, we’re gonna try this. And if it goes off and skews off, we’re just gonna dump that and move on to the next thing.

Well, if you had maybe corrected some of those things prior to the execution process, you would have gotten through that. But this mantra of fail fast, the mantra of invest and hope that 20% of the investments are actually gonna produce value for the company, that’s that slide we’ve seen over the last, I’d say, two decades, where I think most leaders have in some way given up in the idea that they can get most of their potential through the execution process. And just simply try something, abandon as fast as they can, if it’s not gonna work and move on to the next.

So Alex, just to stop you there, but isn’t that the entrepreneurial process? Isn’t that minimal that people have to, by trial and error, and this is how most entrepreneurial companies actually discover things that, you know, you just iterate yourself to a successful conclusion. Is it possible to completely engineer a strategy on paper so that you just go in and you definitely going to execute it? Is this a reality that it’s possible?

What’s possible is that you have to, like, there’s some different factors. You know, one is that you have to differentiate whether the idea is good, the strategic, you know, initiative is good, right? So I’ll give you an example. Dell, you know, about a decade ago, tried to sell some of their high-end products in a kiosk in Walmart. They had this agreement with Walmart, right? When I talked to certain industry analysts, they’re saying, well, that was an execution failure. I’m like, it was not an execution failure.

It was just a really bad idea because the customer persona going into a Walmart is not a $2,500 desktop buyer, right? That’s not your persona. So you missed the mark on the idea. That’s not an execution problem. That’s an idea problem. And so you have to really begin to bifurcate and say, is my idea not going to meet the market need? In which case, yes, you’re absolutely right. You have to iterate through. Is the idea the right idea? Execution is, I’m going to build Twitter, and I have to get the platform up and running and deployed on Android and Apple products, and it has to work.

Like the feed has to work, people have to be able to use the product and so on and so on and so on. Right? Now, do people like to use Twitter? Well, luckily for Twitter, yes. They like to use it. Right? Execution is can you build the product and put it into production and get it into the hands of the users? Now, if the users decline it, that’s an idea problem, not an execution problem. And I think that’s where the largest misunderstanding happens. And so, yeah, do you have to iterate product? Absolutely.

We iterate constantly. Iteration is the active refinement of good product, right? I mean, you know, but I really don’t agree with the current operating model that you put together an idea and analyze it as much as you can, put the pro forma together, run your business case modeling, and then you live on a strategy of hope that you can actually get it to market or you can get it to work.

Alex, so let’s move on from here. So there’s the idea problem, there’s the execution problem. So we have to isolate what is the execution problem and then we have to solve this. And I think this is what you are doing. You’re solving for this issue of a high degree of failure in execution. So how do you solve for that? What is your solution to avoid that?

Well, I think you touched on it a little bit earlier, is that there are blind spots in every single business. It doesn’t matter what the scale is. And being able to see those blind spots and run a corrective action against that blind spot so that you can get the alignment to the specific initiative in that moment of time is really the key to increasing success rate in your potential and the ideas that you’ve got going to market.

Being able to see those blind spots and run corrective action against that blind spot is the key to increasing the success rate of your potential and ideas. Click To Tweet

So, you know, in an age where we are, you know, healthcare is trying to implement the digital front door, right? Self-service, the ability for customers to see and engage with a healthcare system, right? That is going to rely fully on execution in the sense that can you roll this out in a way that is systematically working well? Because as consumers, we don’t have tolerance for things that don’t work. We get an app, it kind of doesn’t work, we let it go, we never go back.

In most businesses today, digital transformation is key to growth. Well, digital transformation isn’t just buying software and doing a project. Digital transformation is changing the way you do your business. So there’s a strategic element to that, and then there’s an execution element to that in the sense that how are you going to now transform to a self-service model? Or how are you going to roll out PLG, product-led growth? How are you going to gamify or change your GDM motion, your go-to-market motion? So there are all these functions in there.

Now you have to assess, do you have alignment to execute that? Or are you going to, every time you turn a corner, run into another obstacle of something that in your business wasn’t ready to do that work? And it’s our position that the majority of those elements are fixable, and they are fixable before you execute or begin that execution process.

But more importantly, understanding the depth of complexity of how much you have to fix yourself before you do that can actually avoid strategic debacles where you’re investing in initiatives that, you know, really you had four months, you know, I’ve talked to some executives in a Fortune 12 company about four months ago, they have four months to implement a full portal. And they ran a REM score and they were like, they needed at least nine to 10 months to get it to go. And there was just, the timeline did not match the desire. And so that was a no-go.

So Alex, so we talked on our pre-call, we talked about the four phases that will help you establish what would be the right execution framework, whether it can even work. You talked about strategic planning, swarm intelligence, vulnerability, domains, and so on. Can you speak to that? What that looks like?

For sure. So again, it’s a two-part model. So one, you have to develop in some way a way to process, or we felt we had to develop a way to process the information that was coming in, in the sense that how are you adaptively capturing and tuning information as more and more input comes in. So swarm intelligence as an example is a machine learning model that is largely used in automation from the context that self-driving cars use swarm intelligence to learn when I come to this situation, what decision do I make? What it comes from is the input of many, many, many people on one specific topic and getting to a conclusion.

And what we did is we adopted that modeling into our product, ReM Score, where we are taking in the data, right? And so the question I always get is, well, what data set are you using to calculate whether or not we can execute this thing? Well, I’m not using another data set because prior success does not indicate future success. And so what we do is we created then a process of harvesting data from the participants that would be part of that strategic initiative in real time.

The REM model then uses swarm intelligence to shape the types of questions in the dynamic interview process to extract and elicit more information so that we’re actually capturing the current situation in the current environment around the current need and adapting what is that sort of sentimental analysis that then produces an outcome in the 14 domains that we measure to understand where the vulnerabilities exist. So now you’re not doing whack-a-mole. You’re not trying to figure out where it is. We tell you exactly where it is and you can run corrective action.

So, it’s essentially a modeling exercise.

It’s a model.

Scenarios through the 14 lenses that you had, the 14 domains and see.

That’s right. And we’re doing it in an automated way. So, I mean, the interview for any individual participant takes about 15 minutes. So this is not like having to do any manual lifting. Like what we’re doing is stripping out the cognitive biases. We’re looking at the data for what it is and then modeling to where are those key vulnerabilities. So now you can target those, correct them and then move more aggressively in execution. And we see that people who use this approach with ReM Score tend to execute in half the time at two thirds of cost. That tends to be the average.

So, what are the 14 domains that need to be addressed? I could go through them, but we’re dealing with things such as alignment.

We’re dealing with technical capabilities. We’re dealing with vision, decision-making, organizational adaptability, operations capability or business capability, governance. We’re dealing with priorities and different elements like that. And so for the listener right now, for me to rattle them off, they’re like, okay, I can’t really retain it. Yes.

How does the ReM score is used by companies? Someone comes to you, you do the analysis for them, you come up with a RAM score. You mentioned this other company that turned out, it indicated a much longer execution cycle. How do companies use the RAM score? What does it look like? Then what do they do with it?

Fundamentally, it’s a cloud-based platform that you get a token for. You, in essence, set up your initiative based on the type, one of the six types that we do. Again, acquisition, integration, back-office transformation, cloud migration, new product, new market, or AI and machine learning. So you pick that, you begin to onboard it with some basic information, takes about 15 minutes, 20 minutes to onboard an initiative.

Then ReM takes over from there and then sends out invitations via e-mail to the participants that you’ve indicated, and then in essence virtually interviews them leveraging the swarm intelligence model to correct and adjust to and adapt to those things. That takes about two to five days in total. This is typically an analysis that would take anywhere from a month to six months in many companies at, you know, a tenth of the cost. And so it’s very accurate data.

It’s data that’s delivered in days, not months, and it’s at a fraction of the cost. So now you can invest more time. That time that would be generally spent in the corrective process. And now this creates a much better aligned team for the execution of the idea. You’ve removed those vulnerabilities and that collaboration and trust is built into that process. And now you have a team that can execute much, much faster because they’ve removed those landmines, as it were, those blind spots out of the process.

That’s amazing. So if I’m the CEO of a small to medium-sized company, let’s say a $5 million company, and let’s say I’m in software development, how can I use your product?

What should I do? We had one of our early on customers is a company by the name of TaxAudit.com. Tax Audit is the insurance for whenever you go to Intuit and you do your taxes and into it, you can pay for a tax audit insurance. And so that’s what these folks do. They are dominant in the market, fantastic group of people, very, sharp group of people. And they needed to modernize their platform, right? They needed to really become, or drive next gen, more self-service in the process of what they did.

And so they ran a REM score to understand where were the vulnerabilities and their ability to execute this next platform because they didn’t have a failure option, right? They, this is their core business, the system by which they use to run both workflow analysis and all those kinds of things. And so in that case, they leveraged REM score in a very successful way to understand where the vulnerabilities were, spent a few months correcting them, and then did the modernization of their platform based on some of that ultimate alignment and came out with a very, very successful component.

So to your question, if you’re a software company and you’re looking for your next-gen product, or you’re looking to enter a new market, or even produce a spinoff product, you’re going to want to run that REM score over a couple of days, get your baseline to understand where you’re vulnerable, where has your bias, your cognitive bias made assumptions that, oh yeah, we got this, only to reveal, well, you’ve got some hidden blind spots here, here, and here, correcting those and then engaging your team that’s going to allow you to realize the success that you need.

That’s awesome. If someone would like to check out the REM Score, like to maybe test it out or learn more about it, find some information, where should they go and how can they engage with you?

Well, there’s a lot of different ways. Obviously, you can look me up on LinkedIn if you want to connect or a little bit more one-on-one information but around the product you can go to REMScore, R-E-M-S-C-O-R-E remscore.com, get some more information there. There’s stuff on YouTube, there’s stuff published in articles. You can read my book, Measure, Execute, Win, Amazon Bestseller. And take a peek and sort of get that, it’s designed to be what I call an airplane read. Something you can get on an airplane, have a nice quick read on something and get some insight. And I go through all of the mechanics of why this is happening, what the case studies are, what the academic research, the industry research is, and just gives you a good framing on, like, what is this thing that keeps tripping you up in the ability to realize your potential as a company?

That’s very interesting. Well, if you can avoid a big percentage of the failures, that’s a fantastic, that would double the number of successful companies. So definitely.

And imagine how we would benefit as potential consumers or B2B partners with those companies that are now actually realizing some of those incredible, well thought out ideas. You know, that’s at the heart of it. That’s where it is. You know, these are people who have done really great work. And then this allows them to raise to that next level of being more capable on the execution side so that they can get more of that to market. And that’s, I think, where everybody benefits. Sorry to interrupt you.

So basically, you’re putting the creativity and the inventions to use so they don’t die on the vine, basically.

Exactly.

That’s exactly right. They go through and get manifested. That’s fantastic. So definitely check out Measure, Execute, Win by Alex Castro. And also check his LinkedIn page, go to the remscore.com and see what the ReM Score is about. And generally raise your game, raise your execution game to the next level. Don’t, you know, don’t make do with 20% of projects reaching full potential, get to 40%, 60%. That’s gonna double and triple your company going forward. So Alex, thank you very much for coming to the show. Enjoy talking with you and those of you out there who are listening to the show, please don’t forget to rate and review and stay tuned because next week I’m gonna come with another great entrepreneur who will share their management blueprint. Thank you.

 

Important Links:

This entry was posted in . Bookmark the permalink.