What is the number one challenge of business leaders worldwide? Time. We have more challenges than we have bandwidth. There are only so many hours in a day and even with all of our mobile and digital aids, we can’t get to everything we would like to—whether they are problems or opportunities. As a result, many leaders want a silver bullet—the one shot wonder that solves everything. Life and business isn’t quite that easy, BUT…here are three silver bullets that can transform the performance of your company.
- Maximize the performance of your people. One of the most under leveraged assets of a company is the “collective braintrust”—the intellectual capital of the workforce. Research by McKinsey and the Conference Board consistently finds that CEO’s worldwide see human capital as a top challenge and yet they rank HR as only the eighth or ninth most important function in the company. That disparity shows up in many ways. One of the most common is the desire to hire top people but not actively managing their work force to upgrade the company. Getting top players requires two things 1) a commitment to engaging them in creating value –a more inclusive leadership mentality and 2) being willing to reward results. In my experience larger organizations have more problems with the first issue because they have so many “systems, practices and protocols” it is hard for people to make as big an impact. In smaller companies being willing to extend salaries, offer bonuses and other perks may go against the cost management practices of an operation that feels under-resourced. Two clients I am working with currently have significantly altered their trajectory in the last three years and the most significant contributor to their growth has been people. One company has grown 500% over five years. It started with an upgrade in one position. Once the CEO realized the difference between an average performer and a great performer, he sought great performers in his other key leadership positions. Great people create great value. Another CEO has taken a different path. He is upgrading leadership by strengthening the layer of management that will be the successors to his top leaders. By ensuring key performers are assigned challenging positions that utilize their talents, giving them special assignments and taking a personal interest in their development, it allows his inner leadership circle to perform better with stronger employees to rely on, the ability to delegate more and to observe their peers to see how they develop their people. Working in a traditional and much challenged market space, this company is breaking records for customer acquisition and profit growth.
- Customer management. For any organization that has a complex portfolio of customers, recognizing they are not all created equally and managing them accordingly pays huge dividends. I have seen this bullet create significant short term profit growth for those companies committed to the concept. There are three key criteria for segmenting customers 1) which customers are most profitable 2) which customers are growing and 3) which customers’ best align with the organization’s capabilities. One of my clients, after establishing three tiers using the above criteria, realized that 37% of their customers generated 93% of their profit. It became clear quickly that they needed to focus sales on bringing in more of the top tier customers. The bottom tier, which was 53% of customers and generating less than 3% of profit, was eating up all of their resources. The business model, the sales system and customer service policies need to cater to tier one and tier two customers. By realigning with top customers, everybody wins—your best customers get what they need and the company allocated resources where they generate the best return.
- Strategy. The dirty little secret of strategy is most organizations say they have one when in reality they have dozens—it looks more like a list of to-do’s or projects. A list is not a strategy. In reality, a strategy is a single overarching concept, driven by the market or externally oriented, that drives the rest of the business decisions in an integrated manner, helping the organization achieve its desired future state. Most strategic plans hold no strategy. I just finished working with a distributor who was coming off of the last three year strategic plan. They are an excellent firm that has bright and dedicated people. They out- perform most of the 13,000 other distributors for this same product. When asked to help them craft their next three year plan, my focus was on helping them define a strategy–one that aligned the many initiatives they were putting in place and established a clear path to exceptional growth. At our last meeting, the CEO commented on how much a strategy helps to provide a clear line of sight to not only what needs to be done, the order in which things must happen but what NOT to do. It enables an organization to accelerate due to clarity and precision. A strategy that works is one that is outperforming the market. Are you outperforming the market? Do you have a strategy? Are you sure?
Any of these bullets will improve performance. All of them will transform the organization and help it achieve next stage growth. To learn more about any of these ideas, read Margaret Reynolds’ new book, Reignite: How Everyday Companies Spark Next Stage Growth. You can access a sample chapter along with many of the tools here.