It is that time of year where we give thought to what will be different, new and exciting for the year to come. We make promises to ourselves in the form of resolutions that we will be happier, healthier, smarter or more productive. We also know that in 30 days we will likely have gravitated back to old habits. Change is hard and the more things we change the harder it is.
Change That Has Impact
One of the reasons I have always liked strategy is that by focusing on that one thing, many things can change for the better. If you have the clarity of strategy, it provides focus, simplifies decision making, unifies departments, and eliminates distractions. If you came to work every day and asked “What can I do today to move us the furthest the fastest toward our desired future state?” how would you be spending your time? Would it change what you worked on, who you worked with, and what projects you funded? What could you stop doing that someone else can take on or just stop altogether because it isn’t working? In other words, what if your New Year’s Resolution was to maximize the return of your time?
Invest Your Time Wisely
Time is the one thing that none of us have enough of and can’t get more of—no matter how much influence or money we have. So we have to manage it wisely in order to get the best possible return. Investing our time in growth initiatives driven by clearly defined strategy is rarely at the top of the list of urgent priorities. Yet, it offers a 5x return over more traditional executive efforts.
To Grow, Invest in Growth
In an article published in the Harvard Business Review in September 2017, Michael Mankins of Bain and Company, a large multinational consulting firm, said, “We hear CEO’s describe one or two bets –at most– on growth while devoting most of their time to showcasing the results of restructuring, offshoring, and other cost-focused initiatives.” Yet the data shows that the rise in intrinsic equity value from a 1% increase in pretax operating profit is 4-5% while a 1% increase in long term growth yields an 18-19% rise in intrinsic equity value—or almost a 5x better return. So why, at the top of the house, do we spend so much time focused on operational returns over growth?
Resolve to Focus on Growth This Year
If you want to have only one New Year’s Resolution that is meaningful and will make a huge difference in your business—focus your year on long term growth. And if you need help– ideas on where to start, an evaluation of your current strategy, or identifying what is getting in your way– please give me a call. Happy New Year!