Posts Tagged ‘focus’

Lists That Last

Tuesday, November 25th, 2014

It’s funny how 2 unrelated events often come together to produce a completely unexpected outcome.Stay focused on the list of your company's set principles to maintain consistent success

In this case, the first event is that we recently decided to undertake a long overdue revamp of our web site. As a result, I’ve been thinking about the changes we need to make to our content.

The second is that I’m re-reading Jim Collins’ book “Built To Last” which employs his now familiar technique of contrasting Visionary companies with less successful Comparison companies.

One of the differences between them is that the Visionary companies all had a well-articulated core ideology.

Collins credits that core ideology with keeping the company focused on a set of principles that it practiced consistently through the decades. That focus was a major contributor to the Visionary companies consistent success.

That set me thinking.

When I started ProfitPATH 12 years ago, I had 2 reasons for doing so.

One was to share the tools and techniques I’d learned working for some remarkable companies, on 3 different continents. This didn’t mean I knew more than other people. I just knew different things.

The second was to do things differently to traditional consulting companies.

In fact, I made a list of all the things the consultants I’d hired over the years had done that had annoyed me and said – we’ll do the opposite.

I’ve often spoken about that list to colleagues and clients over the years, and I try very hard to live by it every day.

But, apart from the original scrap of paper I scribbled it on, I’ve never actually written it down or publicized it.

Now I’m going to change that.

That list is going to replace the outdated content that inhabits one of the pages on our current web site.

There are, of course, a couple of challenges.

Those of you who know me will agree that I have really bad handwriting. So, even if I could find the piece of paper on which I wrote the list, I probably wouldn’t be able to read it.

Fortunately, I remember most of the items quite well as I have verbally shared them often. The others will come back to me as I’m writing down the former.

I’ll share the list with you next week. And you can tell me what you think before I put them on the web site.

 

If you enjoyed this post you’ll also enjoy The Elusive ‘Silver Bullet’

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

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Use These 3 Tips To Make Your Next Critical Decision

Tuesday, March 25th, 2014

I am a Libra; my astrological sign is the balancing scales. I don’t, however, believe in astrology.Weighing all the factors when making critical decisions

On the other hand, I do tend to see both sides of an argument.

Which can make decision-making interesting for me. So, I read articles about it.

I saw one the other day which featured Ram Charan¹  who co-wrote “Execution”, one of my favourite books on strategy.

He’s been working with accomplished business leaders for almost 30 years, watching them making some really difficult decisions.

Charan says they do 3 things when faced with a critical decision.

  1. First they focus on the end goal. They are very clear and specific about what has to be achieved. There is no ambiguity in their thinking.
  2. They consider all of the options or alternatives. They do not hesitate to think “outside the box” using their imagination and creativity, but temper the results with pragmatism.
  3. Then they go and get different points of view. Why, because critical decisions often deal with complex issues and the business world can move very quickly now. Getting diverse input helps them see as many aspects of a situation as possible.

Having done that, they use their judgment to focus on the 2 or 3 most important factors affecting the decision. Finally they think through the consequences of their decision. And come up with contingency plans to deal with them.

Of course they do these things simultaneously and complete the process relatively quickly.

The important point is that none of these steps are beyond the ability of the average business owner. A trait that entrepreneurs have to guard against, however, is the temptation to skip the third step – even when they’ve grown their companies to a point where they’ve hired a management team.

And, by the way, when I think I’ve looked at both sides of an argument for long enough, I recall advice I was given many, many years ago. A good decision is commendable; a bad decision is regrettable; but no decision at all is unforgivable.

Then I just do it.

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¹ “What the Best Decision Makers Do”, HBR Blog Network, 24 Oct 13
http://blogs.hbr.org/2013/10/what-the-best-decision-makers-do/

 

If you enjoyed this post you’ll also enjoy 4 Decision-Making Tips for Business Owners

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

It Starts With A “Corny” Story

Friday, March 9th, 2012

Ever been in a situation when you see or hear something – and then a few days later you see or hear a variation of it?

That happened to me this week.

It started when I read a blog post called “What You Can Control in a Tough Business Climate” by Karie Willyerd.

A “Corny” Story

She describes how, as communism came to an end in Romania, bureaucratic decision making resulted in a cornfield being divided amongst local farmers.

Each farmer was given 2 rows.

They didn’t – or wouldn’t – collaborate so the results of each individual’s work could be easily compared with those of his or her contemporaries.

When the following summer came, the quality of corn which grew varied widely. Some rows produced knee-high, healthy plants. Others produced shin-high plants which were sad to see.

Willyerd’s point is that everyone had been given the same seed and fertilizer and so the difference in results was caused by the people and the decisions they made.

And now to business….

Next she describes a study she conducted with some colleagues.

The goal was to determine if simply executing a business strategy, regardless of what it is, would make a difference to the value of a company.

They focused on the 4 variables they believe are the foundations for the ability to execute. And they found that improving any of them produced an increase in the company’s value.

But they found that 2 of them – aligning goals throughout the organization, top to bottom and across; and identifying and treating high performers differently than low performers – produced the greatest increase.

Putting it together

Willyerd believes that in business, as in farming, there are many factors which can’t be controlled – e.g. drought and the performance of the economy.

So the key to success is to focus on those that can be controlled.
A company’s ability to execute its strategy is definitely one of those.

Two other controllable factors are:

  • Whether the owners, and their management teams, communicate explicitly with every member of their team and align them behind the company’s goals (derived from the strategy). If they don’t parts of the company may meet the business owner’s expectations, but others won’t.
  • People are the seeds of the growth, and ultimately the value, of a company. Owners should, therefore, surround them with resources and nurture them with benefits – particularly the high performers.

The Variation

As you know if you saw my last post, I’m reading Jim Collins’ book Great by Choice. In it he compares pairs of companies in 7 different industries to determine why one did well in uncertainty, even chaos, while the other did not.

Collins’ main theme is that the successful companies focused exclusively on the things they could control. And they kept on doing it no matter what was happening to the things they couldn’t control.

The final chapter talks about the role of luck – and it’s not what you might think (read the book)! In the summary, Collins talks about the importance of finding great people and building deep and enduring relationships with them as a means of creating good luck.

Final thought

You could argue that focusing on what can be controlled and getting good people aligned behind the goals is common sense. But, while Willyerd’s study confirms that they do produce results, Collins’ study demonstrates that companies routinely ignore them.

Where’s the sense in that?

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2 Things That Cause Bad Strategy

Wednesday, September 7th, 2011

Its business planning or budgeting time for many business owners and so in last week’s post I talked about the 4 hallmarks of bad strategy.

They’re featured in an article which was adapted by Richard Rumelt from his new book “Good Strategy/Bad Strategy: The Difference and Why It Matters”. The article appeared in the McKinsey Quarterly

I promised that, for those pressed for time I’d continue summarizing the article in this post and talk about why there is so much bad strategy.

1. Unwillingness or inability to choose

Rumelt argues that a good strategy requires focus. And focus means that business owners have to choose amongst business goals.

Do you remember Digital Equipment Corporation (DEC)? They led the mini-computer industry in the 60’s and 70’s but by the end of the 80’s they were losing ground quickly. There were doubts if the company could survive without making far-reaching changes to their strategy.

Three alternatives were considered – business as usual, become a solutions provider or focus on designing better technology. The CEO wanted consensus on the new strategy but the executive team was divided and unable to reach one.

The result was a compromise, “DEC is committed to providing high-quality products and services and being a leader in data processing.” Like most compromises, it contained a little bit of everything and focused on nothing.

DEC continued losing ground and the CEO was replaced in the early 90’s. His successor focused on technology, but by then it was too late. The losses could only be stopped for a while and the company was acquired by Compaq in the late 90’s.

Failure to choose results in weak strategy and weak strategy results in failure.

2. Confusing “positive thinking” and strategy

Motivational speakers – and their books and web sites – have given rise to the notion that charismatic leaders and positive thinking can achieve the impossible. In concept it’s done by developing a vision and inspiring people to follow it, while empowering them to accomplish it.

The concept was reduced to something of a formula and distilled into a template for strategic planning. But not everyone can be a charismatic leader. Nor can success be achieved simply by applying a formula and completing templates.

A vision has to be more than a statement that the company will be the best, or the leading, or the best known.

The mission has to be filled with more than high-sounding, politically correct statements about the purpose of the business.

And a company’s values can’t be noncontroversial platitudes about integrity, respect and excellence.

Rumelt’s point is that, if the vision, mission and values turn out that way then the strategy is going to be nothing more than aspirations, goals or statements of the obvious presented as decisive insights.

Lack of substance makes a very weak foundation on which to build a future.

3. So what does work?

I’ll save Rumelt’s views on the underlying structure of good strategy for my next post.

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