Six Big Things: A framework for thinking about your business
Through years of observation, I’ve concluded that most successful companies have these 6 components nailed down and those who are successful but don’t understand these components are just temporarily lucky!
Why and how do you do business? Not just you as CEO but your co-workers as well. If someone violates those values, do they get fired? If they model them well, are they rewarded? Are they written down? Can everyone on your team say what they are? I would like to tell you that only firms with “good” values succeed, but we all know that isn’t the case. My experience, however, is that those who model “good” values have a strong advantage in attracting and retaining customers and employees. Every firm has values (just look at your actions) but only some clearly identify them and use them as an advantage. By the way, you may find some values that you want to discard.
Here is my definition: A clear, compelling picture of the future that allows you to make decisions and align the organization. It is the answer to the question, “Where are we going?” Some firms have mission statements (i.e. “What business are we in?”) which can be very helpful in alignment. However, I am much more interested in where a business is going. Alignment is impossible without a clear target. Everything from who you hire, to what capital expenses you make, to marketing tactics should be driven by your vision. What is yours and can your team (and perhaps your customers) tell you what it is? Lastly, does your vision focus on a market need? If not, you might have fun, but you’ll go broke.
Definition: An integrated set of actions designed to create a sustainable advantage over competitors. (Courtesy of McKinsey—couldn’t come up with a better one myself.) What is yours? If we looked at your actions over the last year and your budget for the coming year, could we identify your strategy? If we were to ask your people, “How do we win around here?” what would they tell us? Do you make capital expense decisions on financial ROI only or do you ask, “Does this fit our strategy?” There are a number of ways to craft and describe strategy, but don’t let that confuse you into thinking that it is O.K. that you cannot articulate yours!
This is not just a group of people with impressive degrees and great resumes, but rather a group of people who are focused on a common vision who can passionately disagree with each other, reach a decision and then support it and execute like crazy. Do your people work this way? A great teamwork model (Lencioni) says that successful teams must have trust, healthy conflict, commitment, accountability and results. By the way, teamwork starts in the CEO’s office.
How do we do what we do? Are we efficient? Do we have well defined processes to support our strategy? Do they facilitate our business or slow it down? Do our front-line people agree? Or…do we continually make it up as we go and encounter the same problems over and over? The more you grow the more processes you’ll have. Just make sure that they are effective.
Do we clearly measure success and are we truly accountable—both top down and peer to peer? Is your business set up as a meritocracy or is it like Garrison Keillor’s fictional Lake Wobegon where all the women are strong, all the men are good looking and the children above average?
I guarantee you that if you take an hour and ask yourself these questions—or better yet, have an open discussion with your team—you’ll have a better understanding of your business. Just make sure that you have an evidenced-based conversation so that you are not just breathing your own exhaust!
Todd Ordal is President of Applied Strategy®. Todd helps CEOs achieve better financial results, become more effective leaders and sleep easier at night. He is a former CEO and has led teams as large as 7,000. Todd is the author of, Never Kick a Cow Chip On A Hot Day: Real Lessons for Real CEOs and Those Who Want To Be(Morgan James Publishing, 2016). Connect with Todd on LinkedIn, Twitter, call 303-527-0417 or email firstname.lastname@example.org.
Todd coaches CEOs to higher levels of success. He is a former CEO and has led teams as large as 7,000 people. Todd is the author of, Never Kick a Cow Chip On A Hot Day: Real Lessons for Real CEOs and Those Who Want To Be (Morgan James Publishing).