|There are many changes occurring in today’s economy: globalization, speed, technology, virtual workforces, generational value differences and labor market tightening. All of these forces are changing the world of work, but the basic principles of effectively leading organizations remain unchanged. These basic principles are clouded by a multitude of management fads and new packaging. An analogy in the Health field is the principle of weight loss – ‘consume less calories than you burn’. This principle is very simple at its core, but as it gets packaged and marketed differently its complexity becomes dizzying.
Based on our 16 years of working in and studying diverse organizations, we conclude, “The problem with today’s executive is not a lack of knowledge of how to effectively lead a company, but rather a lack of application of that knowledge”. In essence, there is a knowing-doing gap. The basic dynamics of organizations have not really changed over the years; therefore, we should focus on turning our current knowledge into action rather than “inventing” new ways to lead.
This Report distills the myriad of management trends and principles into 7 timeless, well-known ‘secrets’. These ‘secrets’ help polish executive effectiveness and boost company performance. We cut through the clutter and breaks down the 7 ‘secrets’ into simple actions that an executive can immediately apply to his/her company. Leaders who apply actionable steps and use simple tools create competitive advantage for their companies.
The 7 “Secrets” are interrelated, as are any factors in a complex system. These ‘secrets’ also address the TOP 10 Risk Factors for Growing Companies that we have gleaned over the past 16 years:
|Top 10 Risk Factors for Growing Companies|
|Here are the 7 ‘Secrets’:
SECRET #1: FOCUS
The Effort-Impact Grid enables you to quickly assess activities worth streamlining, automating or outsourcing. This assessment will help you focus your intellectual, financial and physical resources on the core competencies of your business – those things you do better than anyone else.
Your top priority to streamline, automate or outsource should be those activities that fall into Quadrant I (Low impact, High resource demand). You should also consider alternate ways to accomplish Quadrant III activities (Low impact, Low resources demand).
Those activities with High Business Impact (Quadrants II and IV), are not necessarily immune to outsourcing. They may not be as high of a priority for modifying as other activities because:
Performing an 80/20 Analysis will help you identify the most profitable services, plants, products, salespeople or regions in your business. Since there is substantial evidence that the 80/20 Rule is alive and well in most facets of life (e.g., computer CPUs, engines, sales, internet content), it is safe to assume that some variation of the 80/20 Rule applies to your company (possibly 70/30 or 90/10).
Therefore, if the 80/20 Rule exists in your company, it means that most profitable 1/5 of your company is 16 times more profitable than the remaining 4/5. There may be good business reasons for your remaining 4/5 (e.g., new technology, market expansion, loss leader), but often times these less profitable areas are just leftover and have never been assessed for profitability.
A quick and dirty 80/20 Analysis can be easily performed with any spreadsheet.
SECRET #2: PLAN FOR SUCCESS
Although the time horizon is shorter in today’s fast economy, planning at all levels within your company will still significantly improve your chances of hitting your targets. Your planning should trickle down through your company. Each level of Planning provides the context for the next level, resulting in organizational alignment:
A solid strategic plan is important, but remember, “The devil is in the details”! Companies who are diligent about translating strategies into specific, individual performance objectives tend to operate more effectively and efficiently. Since most planning sessions end with just a plan, creating SMART goals is a simple way to instill Action and Accountability into your planning process.
SECRET #3: SELECT & TRAIN RIGOROUSLY
Since Employee Selection is the LEAST effectively executed management activity, you may want to read our report on “TOP 10 Employee Selection Mistakes… and Solutions”.
SECRET #4: DEFINE PROCESSES
Although it is always easy to say, “we need a new system”, we recommend streamlining your manual systems before you change your technical systems. Many companies who reverse this order simply end up automating their inefficiencies.
As an acid test for how well your processes are defined, documented and consistently used by employees, ask yourself, “How easily could I franchise my business?” Effective processes will enable you to work ON your business rather than IN your business.
SECRET #5: DESIGN YOUR CULTURE
All of these systems must be aligned with your Business Strategy (vertical alignment) and with each other (horizontal alignment).
SECRET #6: COMMUNICATE LAVISHLY
Communication sounds intuitive enough, but many companies miss the mark. In spite of all of the employee communication efforts, lack of communication is predictably the #1 complaint resulting from employee opinion surveys. A closer look at these data show that employees really want to know 4 things:
Ensure that you are answering these questions before communicating about other topics. Leaders from today’s most successful companies argue that “Leadership is Communication”. Therefore, to be an effective leader, ensure that your communication is:
SECRET #7: MEASURE
In summary, here are the 7 ‘Secrets’ to boost your company’s performance.
Turning these ‘secrets’ into well-known principles in your company will create a sustainable advantage over your competitors.
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