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Usually this column has a personal focus when it comes to discussing performance improvement. This month, however, I want to address “performance improvement” from an overall corporate perspective. For clarity, let’s use a new label – I suggest Competitive Advantage. Every activity within a company should be evaluated based on whether or not it adds competitive advantage. If it does not, serious questions should be raised about why it is being done. There are three critical questions every CEO, every leader, must ask about their organization. These three questions will drive your organization to that most illusive of goals – profitable competitive supremacy. 1) What don’t I know? I’ve hit an age where one begins to think much more about health. I feel great, run four miles a day, take my supplements – no presenting problems at all. But I started to wonder, “What don’t I know?” So I went to one of those clinics that do MRI body scans because what I didn’t know could kill me. Got some brutal news for you – what you don’t know could kill your company too! Every CEO likes to think that they have a totally informed grip on all that’s going on in the company. Got more news – you don’t. Please, that’s not at all a negative comment on your leadership skills; it’s a comment on the way human systems work. We’d all like to think that our employees will freely risk their careers to communicate difficult news to those who need to hear it. Yup, we’d all like to think that. Time to get real! On top of that, our organizations are just too complex to know and understand the competitive implications of every component. What don’t you know about the $2 million software package your IT guy wants you to buy? What don’t you know about which products/services are actually profitable? What don’t you know about your supply chain that may be hemorrhaging revenue faster than you can earn it? It only takes one critical thing that you don’t know about
to bring the whole ship down. The first step – to not only
competitive supremacy, but to your peace of mind – is knowing
what you don’t know. Based on your new level of knowing, decisions need to be made as to what you need to do right now to move the company significantly toward profitable competitive supremacy. This is not as straight forward as it first seems. The first move, if necessary, is to “Stop the bleeding!” If you discover that some activity is decimating your profitability then you’ve not much choice but to pull the plug until you have the chance to reassess its value. Beyond that it is a matter of prioritizing necessary changes. Trouble is that what is a high priority depends on who you ask. This is where a wise third party can be most helpful because they have no interest but your overall competitive advantage. Make sure this third party isn’t in bed with certain vendors, however, or they can do more damage than good. “Prioritizing” isn’t a matter of what is most important. Prioritize in a way that gives you the most leverage toward competitive supremacy. Is it better to spend the money on reorganizing and automating your Distribution Center or to spend it on doubling the sales force? Which will give you the most leverage? Which puts you in a better position to make the next decision? Finally, one important aspect that is usually overlooked is something called ROI. It is beyond me why companies do not calculate the return on investment before they make the investment! It is absolutely possible to do so. Something could be a pet project, have new bells and whistles, and maybe even draw headlines – but if it doesn’t bring added profitable competitive advantage why on earth would you do it? 3) What’s coming next? Most of us would give almost anything just to feel ‘caught-up’ with the current situation, let alone get ahead of the game. In every industry, those who lead are those who see what’s coming just a little faster than others. Everyone else runs around playing ‘me too’ and looking for ‘best practice’ because they can’t figure things out for themselves. This is where leadership activities like competitive intelligence and market signaling come into play. Unfortunately most companies get their competitive intelligence from the newspaper, which means it is already too late. Not only should you know as much about the competitive plans of your competitors as you know about your own, you need to build in a ‘brain trust’ component as well. Every leader complains: “I don’t have time to think!” Who on earth would follow a leader who doesn’t have time to think? Build into your leadership activities a scheduled time where the best minds in your company sit around and creatively talk about things that haven’t happened yet, about things that aren’t real, about ideas. If all your leadership meetings focus on solving
last month’s
problems – you will spend your life in last month! Meanwhile
your competitors are focusing on tomorrow’s market. The following quotation must be printed at the conclusion of
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Confession: the Latest in Corporate Strategies 3 Most Important Performance Questions 7 Signs That Your Company is Selling Its Soul It's Not the Place, It's the Purpose 360° Evaluations Will Take You In Circles It's All About the Customer, Stupid I Once Was Blind But Now I See Organizing A Conference, 3 Principles Might Help Balancing Your Spiritual Center Three Guidelines For A life-Changing Conference Looking for the "Best Practice" May Not Be The Best Practice Get
a Life! Principles For Making The Most Out of Long Drawn-Out and Difficult Experiences If You Don't Quit Re-Engineering, You'll Go Blind What's All This Stuff About Spirituality in the Workplace? Does Your Company Have a Soul? Does Your Corporate Vision Make You Tremble? Get Irritated and Change the World On the Issue of Change
- Get a Grip!
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Ian | Newsletter 11558 E. Buckskin Tr.,
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