THURSDAY, FEBRUARY 12TH, 2009
In Mastering the Rockefeller Habits, Verne Harnish states, “The market makes you look either smart or dumb. When it’s going your way, it covers up a lot of mistakes. When fortunes reverse, all your weaknesses seem to be exposed.”
Speaking to several of my clients in the past several months and to several of the best minds in industry, it’s obvious that the market changes have exposed a lot of weaknesses. Whether it’s baseball or Wall Street, it’s apparent that communication, awareness, integrity are still very important components of operating at high levels of performance.
The challenge for most of us is to discover the truth in our organization. There are endless subtleties to the truth, including the unusual reality that many times people don’t see the same occurrence the same way. In other words their interpretation of the truth is different.
I believe strongly that there are two important components to operating a successful business – the subjective and the objective. The subjective is the emotional, perhaps even spiritual component that the business operates at. It provides a sense of purpose, drive, motivation and momentum. It’s clear in organizations that work that the team is having fun, enjoying their work and each other and it’s because they identify with the business at an emotional level. Their work provides meaning and purpose to their lives and the lives of the customers they serve. There is no end to the success a business can achieve when their employees are truly driven to perform at a high level because they are in synch with the business purpose. That alone can drive a 40% increase in performance levels.
Yet the subjective component, while critical isn’t alone in offering success to your business. You also need an objective component. Here we look at the numbers. Critical numbers are those that are important at the high level of operating the business, what we call key performance indicators as well as those numbers that drive individual performance. Goals need to be set to drive performance. Your staff needs to know where the business needs to be to perform successfully, and the right people always prefer to be measured against these standards. In America we love to keep score, and the sooner you get your people aware of what their scores should be the sooner you will have a business that performs at increasingly higher levels of achievement.
Of course the problem the past several years is that in many cases no matter what we did in our business, the market was performing well enough that our mistakes were covered up.
Those companies that have had their fundamentals in place right now may be feeling a few bumps, however they are managing, and will in fact even begin to thrive in this economy simply because so few other companies had the discipline in place to do things right. Eventually those who are not disciplined will be eliminated.
If you haven’t already done so now is the time to make sure the fundamentals are in place in your business. Now more than ever it is important to know what the truth is inside and outside your business. You need to have a firm grasp on the subjective measurements in your business as well as the objective measurements in your business.
Subjectively you need to be measuring employee loyalty and satisfaction, along with their engagement level with your purpose and core values. You need to be measuring the same from your customers, and perhaps even the same from your competition. Are your customers more loyal to you than to your competition? How well is your brand defined versus your competition?
Objectively you need to know the key performance indicators that drive your business. What are those absolute critical numbers that predict your future outcomes, and what let you know where you are today? How long does it take to get work done? What are the critical numbers your employees need to hit in order for performance to be measured and delivered on a consistent predictable basis? If you don’t know these numbers, it’s time, right now to find out and begin to monitor them. It is the key to surviving and yes thriving in this new economy. Find out the truth, for as they say, the truth will set you free.
Next blog some stories from clients where being aware of the truth significantly impacted their business.
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