The COO's vision: Execution starts with clarity

0:04Your company's future success demands customer-focused, agile, resilient and efficient operations. I'm your host, Daphne Luchtenberg, and you're listening to McKinsey Talks Operations, where the world's C-suite leaders and McKinsey experts cut through the noise to focus on how and where to power up performance. Across this series, we'll talk to leaders about what that looks like in practice, connecting boardroom strategy with frontline execution, fixing value leaks and scaling technology, management systems and capabilities that power up new ways of working. Every COO knows that the mission statement on the wall isn't enough.

0:40But what does it really take to turn a vision into action across every team and in every process? Today, we're joined by Dapo Ajayi, a COO who's led transformations at Fortune 500 companies and McKinsey partner Tony Gamble. Together, we'll unpack the hidden mechanics of vision setting, how to move beyond slogans, cascade purpose through the organization, and make sure that every person knows what it means for them. If you've ever wondered how to align your team when priorities compete or what happens when the vision falls flat, this episode is for you. Tony, thank you for coming back to our podcast series.

1:17By way of introduction for our listeners, you're a leader in McKinsey's operations practice and the firm's COO Excellence Initiative. We've spoken before about your experience of working with clients in highly regulated industries and the operations leaders in those businesses. You have some great stories about how they amplified their impact and unlocked new levels of performance and growth. Tony, welcome and thank you for inviting Dapo to be with us here today. Thank you, Daphne. It's great to be back. And Daphne, we're really fortunate that Dapo was able to spare some time and spend time with us today.

1:52She is the former vice president of supply chain for the innovative medicine business at Johnson & Johnson and has more than 30 years of experience working in the healthcare and pharmaceutical industry. Dapo is truly an experienced chief operating officer. Welcome, Dapo. We're excited to be speaking with you today. Thanks for inviting me, Tony. I'm delighted to be here also. This is going to be a really interesting conversation. Tony, help me first by setting the scene. So why is this such an important topic? Today, of course, COOs are facing a lot of different challenges. Geopolitical volatility, rapid advances in digital manufacturing and AI, increasingly complex global value chains, tariffs, all of these are forcing organizations to rethink how strategy gets executed.

2:35But the one thing that hasn't changed is the importance of having a North Star vision. And so we'd like to spend some time today to talk about how do you set a vision, how do you communicate the vision, and how do you execute the vision over time. So Dapo, I'd love to hear your initial thoughts on the importance of why we should be talking about setting a compelling vision. I think you summed it up really nicely in terms of saying we are living in very volatile times. And so it is really, really important for us to invest some time thinking about how do you define a vision that is going to weather some of the various external forces that are hitting us.

3:22So it needs to have a level of agility in it, but also has a constancy of direction so that the organisation feels that they're all pointing in the same direction to achieve an outcome. Let's start there. How do you do that? I think being clear in terms of what the overarching corporate strategy is. And so the question that we have to ask ourselves in operations is, what do we need to do that is going to contribute and enable us to deliver that overarching corporate strategy? We need to understand what the portfolio requires, what maybe are some of the new markets that the organisation is seeking to grow in, and then asking ourselves, what are our strengths that we need to make sure that we're harnessing?

4:10But also, are there some areas of vulnerability, weakness, or are there some areas where actually we need to build new muscle, new capability? And the way you do that, I think, is taking that step back and truly analysing your operations function. It requires you to go out, to see, to talk to the different functions that all make up operations. And from that, you have a plethora of areas that you can focus on. Right. And Dapo, and once you've done that, that's when you start communicating this to the wider leadership, but then also back to the shop floor. So what are some of the tactics that you've used there?

4:56So the first thing I would say to any COO is that this isn't a solo sport. Developing that operations vision has to be done with the operations leadership team. You have to co-create it. You also have to all own it. And it is therefore everyone's responsibility to be be so knowledgeable about it that they can articulate it consistently and effectively and in an energising and inspirational way through the organisation. And I'd like to tell just a little anecdote, actually. It was so impactful to me. I worked for a company. The chairman of the board came to talk to the top 200 leaders. And he talked about our role as leaders.

5:52And he said, your role as leaders is to be able to tell the story around the vision and to tell it every day. But every day that you tell it, you need to tell it with the same energy and inspiration as if you were telling it for the first time. But it's not just telling it within operations. It's also about telling it to your cross-functional stakeholders. And here's where I also say you've got to be multilingual. You need to be able to tell it to your colleagues in R &D or your colleagues in finance or in commercial in a way that they understand it, that it resonates with what they're trying to achieve and it excites them too.

6:43Yeah, well said. And Tony, you've worked with a number of COOs and, you know, what their greatest struggle is not just setting the vision, but keeping it very clearly visible as the North Star as the day to day operations get in the way. Yeah, that's right, Daphne. I think one of the hardest parts in bringing a vision to life is when there are a lot of other day-to-day circumstances that question the vision or maybe distract from the vision. The strategy on a slide deck isn't the same as an operational vision on the factory floor. And so you were able to say, look, the official strategy is this, but I need to translate this in a way that is more real day-to-day and helps my employees make decisions and and prioritize their day-to-day actions?

7:31Quite often in operations, it's about us talking about excellence in execution. That is a big part of what we have to do. You've got to help the teams in the operating units understand what good looks like in terms of operational excellence. For me, this is also where you need to make sure you've got the right set of performance metrics and KPIs and you're measuring those on a cadence, it's then about helping the teams understand how performance against those KPIs are going to enable realization of the vision and enable realization of the corporate strategy. One of the things that I really felt we gave momentum on was, you know, new product launches are always a big deal, right?

8:33But we got to the point where we really were successful in terms of helping our colleagues in R &D, in commercial, in finance, see the complexity associated with enabling a new product launch from an operations perspective. Being able to take pictures and share stories in terms of we've packed the stocks packed and it's just leaving the manufacturing operation or it's being loaded on the truck. It's arrived in the distribution centre and it almost became sort of like everybody wanted to get the pictures real time. It created a level of energy and excitement, not just in operations, but across the whole organization, so that when we then did launch and we had products available to patients, you know, within 24 hours of approval or 48 hours of approval, our colleagues in commercial understood the amount of effort that has happened in the operations unit.

9:39Doppel, the way you're describing that, it's almost like you're leading a movement as opposed to running the operation. You're really building energy and in getting people rallied around a movement. And that's exciting. And Tony, I bet that is really rewarding for the whole operations function when they can be seen as working together to drive success for the whole organization. But what happens when there are difficult choices that make delivering the vision challenging? Let's talk about the real life experience when trade-offs need to be made. Yeah, when I've had this conversation with CEOs in the past just around, you know, how do you handle the constant trade-offs?

10:15And the response I typically get is, well, look, that is the job. The job of the COO is constantly considering tough choices. And so I think the question I have for you, Doppo, is that oftentimes we say, well, in operations, we can do everything, but the hard part is actually deciding what do you choose not to do? And so could you talk us through how you think about trade-offs and how you think about delivering a vision, even when it seems like the trade-off decisions you have go against your vision? Yeah, I mean, I think you're right. So when you get the choice, the trade-off, an example could be you've got a vision which is about building capacity.

11:01It's about building resilience into your supply chain. So maybe it's requiring you to think about your inventory holdings. And then you get the CFO coming in and saying, we've got some really aggressive cash flow targets, which we all need to lean into. How do you think about that? And how I often think about that is to say, well, I could do anything. We can do that, right? If you want me to reduce inventory, I can do that. But let me talk about the consequences in the context of the vision that I've set out. If the vision I've set out is about building resilience, is about improving customer service, then the risk we run in terms of taking down our inventory holdings are X, Y and Z.

11:51And you've got to have that conversation with yourself, first of all, and also within your operations leadership team, because you've got to believe that. And quite often I find that, you know, when you really do look and scrutinise, you might find that there are some opportunities to kind of make improvements in that area just by, you know, having a greater level of focus, but without necessarily deviating entirely from your vision. But then what is even more important is having that conversation with your cross-functional stakeholders. So not being afraid to say, you know, I heard the target that you've given us in cash flow.

12:28Let me lay out what it would mean if we delivered that. And here are the risks associated with it. I found that if you can position it in a way that, you know, here are the choices that we have to make as a business, it changes the conversation. and quite often you find maybe some area where you do get some stretch targets or you know there's a better understanding in terms of the risk that we're going to run here and everybody's signed up to that risk in that we may have to compromise in terms of the resilience that we're building. Yeah Dapo look I'm curious about what specific things you use to communicate across the organization.

13:11What really worked for you? So a few things. I talked about, this isn't kind of necessarily the exciting stuff, but it's the important stuff, which is about making sure that you are measuring your performance to ensure that not only you as a leadership team, but all your teams can see whether or not they're moving the needle. That's really important. But let's be honest, right? If it's a multi-year vision, you're not going to necessarily see that movement immediately in some instances. So it's also about having success stories that can be talked about. Now, in my experience, the most powerful telling of success stories doesn't come from the COO.

14:02It's if those success stories are being told by the CEO or other peer leaders. And I had an instance where there was a corporate town hall and the CEO was talking about the strong performance of supply chain. The energy was palpable. Coming from the CEO was so, so very powerful. It was truly, you know, what he'd seen and what he believed. There's an important element here about the importance of leadership style, which sits at the core of what Dapo has shared with us so far. That is, it's not only what you say as a leader, but what your actions demonstrate. Tony, I know leadership style often comes up in your conversations with COOs.

14:49What styles have you observed in the most effective COOs? Consistency is really important, but it can be hard under pressure. And so I'm curious, Dapo, So, you know, your team is always watching. And as I always say that, and you're in the COO role, you are dinner conversation for hundreds or thousands of people. Your name comes up over the dinner table with spouses and family members. I'm wondering if you have any situations that you can talk to where in a moment of truth and everyone was watching you, you knew your actions were going to speak louder than your words. But what did you do and how did your team react?

15:23I'd start by saying I think your comment is really important. And we as leaders need to recognize that, you know, people are constantly looking at how we're saying what we're saying in terms of signals. So what we say and how we work with other functions or within our team need to be consistent with the vision. So that vision, you really need to own it. You need to believe it. You need to internalize it. it's not just some words on a PowerPoint or somebody gave it to me. You really need to own it. And the test is, are you going to be prepared to stand up for it in a moment of challenge and adversity?

16:14I think also being a COO requires you to build some resilience as a leader. It also requires you as a leader to be prepared to show your vulnerability because you don't have all the answers. And sometimes things won't go according to plan. Sometimes things will go wrong. And, you know, when things go wrong, that is when you're really tested. And I had an example where we had a miss in the function. and it was going to have an impact to the business. And in that instance, although everybody had been working really collaboratively with us, suddenly it was, well, it's operations that got it wrong.

17:02You know, some of the kind of defensive play came in and the finger started pointing. And I knew at that point that I had a choice to make. I could either, you know, play defense, play the blame game or seek to be the bigger leader. And I knew what was important was to be the bigger leader. It meant admitting that we as operations, you know, had identified that there was something that hadn't gone right. and that we needed to, in the moment, focus on solving what had gone wrong and that we could only solve that cross-functionally. So let's work on that together. I needed to reinforce to the teams within operations that I was going to provide them with the support that they needed because what I needed them to focus on was solving the problem.

18:04What was important for them was to tell me what they needed for me to reinforce to them that they had my support. I was also able to tell them that they had the support of my leader as well. And I think that then it was a case of having solved the issue, then truly having the vulnerability to say, okay, we as operations now need to learn from this. So what do we need to do differently? How does this inform our vision going forward? Do we need to course correct? Do we need to modify our vision in any shape or form to make sure that we're also building this and strengthening this vulnerability into our operations vision going forward?

18:53Thank you, Dapo. Tony, we could speak about this topic for hours, couldn't we? You and I. Yeah, this has really been a fascinating Dapo, so thank you. I take away a few things. First and foremost, you really emphasize the importance of knowing your business. And being in this role means you need to know the business strategy to be able to drive a compelling operations vision. Second, you talked about getting out to the front line so you can understand your strengths and vulnerabilities, so you know where to focus to build capabilities to deliver the vision. Third, you talked about over-communicating the vision.

19:28And every time you communicate the vision, communicate it as if it's the first time. And I thought that was inspiring. And you described being multilingual because you need to be able to speak to the different groups of people in different language, whether they're your employees or your peers. You mentioned the phrase, which I was inspired by, the supply chain can do anything. But then you also reflected that perhaps supply chain shouldn't do everything. And so it's important to frame the trade-offs in the context of the vision. And so it helps your employees make decisions and prioritize. You also commented on a moments of truth.

20:03It's important to be the bigger leader. And as a leader, that means you are admitting your vulnerabilities, but also reinforcing with your team and helping your team solve the problem in a way that's productive and positive going forward. And lastly, like you just talked about, when things do change, you should be humble enough to reconsider your vision and understand that your vision needs to be agile and resilient over time. And Tony, I bet that can be the hardest part. I know that a lot of us will have taken away things that we can immediately put into practice in our day jobs. Many thanks to our guests, Dapo Ajayi and Tony Gamble for being with us today and sharing such inspiring reflections.

20:44You've been listening to McKinsey Talks Operations with me, Daphne Luftenberg. If you like what you've heard, subscribe and stay tuned. Another great episode starts now.