It’s been said that managers do things right and leaders do
the right things. The former is about efficiency
the latter is about effectiveness. It is
easy to be busy but hard to work on the right things. Leaders must focus on doing the right things
-- those things that matter most to the success of the company. In short, effective leaders must drive the
focus of the organization. Leaders must
channel the time, talent, energy, and resources of the organization on tackling
key priorities and goals. Owners must
ask constantly, “What’s Important Now (WIN)?”
In today’s fast-paced, technology connected world, it’s easy
for people to lose track of what is most important to the enterprise. They get so caught up in the day-to-day
minutia and distractions (email, voice-mail, cell phones, PDAs, etc.) that they
must be re-directed, re-focused, re-oriented continually. Owners need to rein in their employees’
focus. Do not let your employees waste
energy, time, talent, and resources on trivial matters; keep them focused on
the company’s vision and its mission-critical priorities.
To help you manage the attention and concentration of your
team, consider focusing them on six primary areas:
Satisfying your customers/clients
Getting results, not excuses
Improving continuously (innovation)
Maintaining profits
Keeping a long-term perspective
Having fun
1) Focus on satisfying your customers
Your company’s primary focus should be squarely on exceeding
the expectations of your customers/clients.
Begin to establish a culture whereby your team falls in love with your
customers and their needs/wants and not your own company’s products or
services. You are in business to
attract, delight and retain customers in a profitable manner – period. The real value of your business is tied
directly to the future, predictable cash flow from your highly satisfied and
loyal customers. Without customers, you
do not have a business.
Again, your focus should be on your customers and solving
their needs and wants. It should not be
about your company or your services and products. Teach your employees to value your customers,
serve them well, and sniff out any customer problems or complaints. Keep your customers delighted and coming back
for more! As leader, have the courage to
create an environment in which the customer is your enterprise’s primary focus.
As CEO, set the tone by visiting regularly the top 20% of
your customers and keeping them satisfied.
Find out what is on their minds.
Aside from creating clarity of direction for your business, there is no
better use of your time and talents.
2) Focus on getting results
Next, focus your team on achieving results for your
company. Establish the climate whereby
activity is not confused with accomplishment.
Where thinking and planning are admired.
Where actual results are valued more than busyness. Where effectiveness (doing the right things)
is rewarded more than efficiency (doing things right). Insist on intelligent, meaningful action and
detest procrastination (paralysis-by-analysis) and excuses. As a leader, one of the most important jobs
you have is to establish a goal-oriented environment with a solid expectation
of performance. Insist on results; do
not tolerate excuses.
3) Focus on continual improvement
After satisfying customers and insisting on results, the
next focus area should be on continuous improvement. If your company is not improving, it is
declining. If you aren’t getting better,
your competitors may well be. Therefore,
establish a climate where continuous improvement and innovation thrive. Do not let your employees fear failure or
making mistakes. Just eliminate repeated
mistakes. Failure is not fatal, but
failing to change might be.
As CEO, you must drive out fear from your organization. If your company is not failing occasionally,
either your goals are too low or your rate of innovation is too slow. Have your employees adopt the attitude that
failure is not painful or shameful.
Failure is merely valuable feedback on what not to do next time. Failure is fertilizer for future
success. Failure is an incredible gift
if properly viewed and used. If we are
moving closer to our goals, we are winning.
The quicker we fail and modify our approach, the quicker we get to our
desired outcome.
Insist that your employees continually improve what they do
and how they do it. Focus them on
thinking about how to improve their roles, responsibilities, and contribution
to the cause. Have them also improve
your systems and processes. Remind them,
“Good enough never is”. Refer back to
the theory of optimization for powerful questions to ask yourself and your
team.
Encourage employees to try new things. Experiment, experiment, experiment! Insist that “we can always do better – let’s
find the way”! Take small steps to test
ideas and learn more in the process. If
something works better, keep it. If it
doesn’t, lose it. Know when to cut your
losses. Admit mistakes and let go of
failed ideas fast. Fail fast, fail
cheap. Keep your ego in check.
Once a week, facilitate a one-hour business improvement
workshop. Release the brainpower of your
organization. For every good idea
surfaced, assign a champion, due date, and key action steps to take. Good ideas not fully implemented are
worthless. Reward employees for
successfully implementing ideas that increase revenues, cut costs, improve
operations or morale, or improve customer satisfaction.
Also, encourage healthy debate amongst your team. Allow everyone, in a constructive manner, to
challenge ideas, policies and strategies.
Even allow for productive and constructive conflict. When ideas are put to the test, they improve.
4) Focus on profits
Next, focus on growing your revenues and most importantly,
your profits. Focus on both top line and
bottom line growth. Focusing only on
revenue growth is ego-driven and not too smart.
Cash flow and profits are your lifeblood. Keep your gross margins strong.
Also, while cost containment is important to the health of
your company, do not over-emphasize slashing costs. Stay on the offensive, not the
defensive. Revenue growth is nearly
endless, cost cutting is limited – you can only cut so much before you do real
damage. Some costs are really strategic investments in the future of your
business (new equipment, advertising, training & development, etc.)
Give yourself a blessing.
Hire the best CPA you can afford and one that not only understands
numbers well, but the issues we are discussing in this book. An entrepreneurial-oriented CPA that
understands the needs of a growing business and owner is invaluable – worth the
premium!
5) Focus on the long-term
After profits, focus everyone on the fact that you are in
business for the long haul. Do not be
short-term oriented. Business is a
marathon, not a sprint. Do what is
right, always. Maintain the highest
integrity and ethics. Your reputation is
everything. Business is about sustaining
lifelong relationships with customers, employees, investors, suppliers,
advisers, etc. Repeat business is
absolutely critical to the very life force of your company. Do not take shortcuts.
To help with this concept, consider the Lifetime Value of
your customers. On average, how much
profit does a typical customer provide you over the average service life (# of
years) of such a customer? For example,
if a typical company buys from you several times a year, yielding you a total
annual profit of $1,000, and you generally retain such a customer for 5 years,
the Lifetime Value for a typical customer is $5,000. Stated another way, every time you attract a
new customer and serve them well, odds are that customer will be worth $5,000
to your business over time.
Once you know this number, you and your employees should
think twice about upsetting and/or losing a customer. This Lifetime Value also validates that you
should spend money (acquisition cost) to attract new customers. As long as you break-even on acquiring a
customer and know with certainty that there is considerable back-end/repeat
business, it makes sense to spend money on marketing/selling. Invest a little to make a lot! That’s leverage.
6) Focus on having fun
And lastly, focus on making business fun. Celebrate worthwhile progress toward your
goals. Celebrate your company’s
successes often and reward your employees for superior performance. Come up with excuses to praise your team and
recognize success. Share the joy. Make coming to work a meaningful and
fulfilling event. In fact, appoint a CFO
(Chief Fun Officer). Empower this person
to come up with clever ideas, based on employee feedback, which will put some
excitement and fun into the work environment.
Never forget, often as important as a paycheck, good
employees want to learn and grow, be challenged and rewarded, and fulfill their
cravings to be social beings. Make your
culture an enjoyable place to work.