Success is not a place at which one arrives but rather the spirit with which one undertakes and continues the journey.” – Alex Noble, author
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’s easy to be busy but hard to work on the right things. Leaders must focus on doing the right things – those things that matter the 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 toward tackling key priorities and goals. Owners must ask constantly, “What’s Important Now (WIN)?”
In today’s fast-paced, technology connected world, people easily lose track of what’s most important to an enterprise. They get so caught up in the day-to-day minutia and distractions (email, voicemail, cell phones, PDAs, etc.) that they must continually be re-directed, re-focused, and re-oriented. 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
• Getting results, not excuses
• Improving continuously (innovation)
• Maintaining profits
• Keeping a long-term perspective
• Having fun
• Focus on satisfying your customers
Your company’s primary focus should be squarely on exceeding the expectations of your customers. Begin to establish a culture whereby your team falls in love with your customers and their needs and wants, not your company’s products or services. You’re in business to attract, delight, and retain customers in a profitable manner. 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 don’t 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 regularly visiting the top 20 percent of your customers and keeping them satisfied. Find out what’s on their minds. Aside from creating clarity of direction for your business, there’s no better use of your time and talents.
Focus on getting results
Next, focus your team on achieving results for your company. Establish a climate in which activity is not confused with accomplishment, in which thinking and planning are admired, in which results are valued more than busyness, and in which effectiveness (doing the right things) is rewarded more than efficiency (doing things right). Insist on intelligent and 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.
Focus on continual improvement
After satisfying customers and insisting on results, the next focus area should be on continuous improvement. If your company isn’t improving, it’s declining. If you aren’t getting better, your competitors might well be. Therefore, establish a climate in which continuous improvement and innovation thrive. Don’t 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 isn’t painful or shameful; it’s merely valuable feedback on what to not do next time. Failure is fertilizer for future success. Failure is an incredible gift if properly viewed and used. If we’re moving closer to our goals, we’re 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 that surfaces, 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.
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, don’t over-emphasize slashing costs. Stay on the offensive, not the defensive. Revenue growth is nearly endless; cost cutting is limited – you can cut only so much before you start to do damage. Some costs are really strategic investments in the future of your business (new equipment, advertising, training and 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’re discussing in this column. An entrepreneurial-oriented CPA that understands the needs of a growing business and owner is invaluable – worth the premium!
Focus on the long-term
After profits, focus everyone on the fact that you’re in business for the long haul. Don’t be short-term oriented. Business is a marathon, not a sprint. Always do what’s right. 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 life force of your company. Don’t 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 their average service life (number of years)? 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 five 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 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’s considerable repeat business, spending money on marketing makes sense. Invest a little to make a lot! That’s leverage.
Focus on having fun
And lastly, focus on making your 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, that will put some excitement and fun into the work environment.
Good employees want to learn, grow, be challenged and rewarded, and fulfill their cravings to be social beings. Make your culture an enjoyable place to work.
Rick Brines is the owner of The Growth Coach of Chattanooga. He can be reached at 423-886-6095 or R.Brines@TheGrowthCoach.com.