Effective leadership can make or break your business. Are you an effective leader?
A few months ago, I wrote a post entitled “Are You an Effective Leader and Why You Should Care” Since that post, one of my Mastermind groups discussed each of the 23 aspects of leadership outlined in this post. This discussion revealed some very valuable nuggets of information! I took a lot of notes during these discussions and the key points I captured are shown below:
The book review for this week is Profit First by Mike Michalowicz.
Michalowicz introduces a new and unique way of managing the financial side of your business. Rather than running your business using traditional GAAP based reporting, he introduces an approach that keeps the business owners focused on profits not on Revenue, SG&A or COGs.
His point is that profit is not an event . . . Profit must be baked into your business every day, every event, every transaction. The best way to do this is to build a system that puts profit first and not GAAP accounting (although the accounting still must happen). Michalowicz lays out a simple but powerful system that does this.
In a 2005 Bain and Company survey of 362 companies, a huge gap was identified between what customers experience versus what companies thought they were delivering.
The gap was not just huge, it was staggering! Only 8% of customers in this survey described their service experience as “superior” while 80% of the companies described the service they provide as “superior.”
Tom Peters calls this the 8/80 chasm!
I have experienced this 8/80 chasm on a few engineering projects over the years.
An engineering contract typically has a ton of detail built into it. Because of this, it is really easy to fall into the trap of “working to fulfill the contract” instead of working to understand exactly what the customer needs before you are too far down the design road to make adjustments.
When a project manager falls into this trap of managing to the contract, it is inevitable that they will encounter a customer who is not happy with the finished product. Usually, when this happens, the project is so far down the design path that the effort to get realigned with the customer’s expectations is extremely painful for both the project manager and the customer!
So what can businesses do to bridge this chasm or avoid it altogether?
I attended a “Jamie Clarke” keynote earlier this year and was struck by a number of things he said and how they apply to business.
Clarke is a fellow Calgarian who has summited Mt. Everest twice, climbed the Seven Summits, written a few books, and is the CEO of Live Out There Ltd. He was a very engaging speaker with a ton of life experience and wisdom.
Of the topics he covered in his keynote, there was one statement he made that every business leader needs to practice:
“Be urgent with the tactic and patient with the strategy”
It is really easy to get stuck on one side of this equation and forget about the other. Some people gravitate towards tactics and are always busy but never really “move the ball forward.” Other people are so focused on creating a legendary strategy that they don’t get anything practical done!
About 10 years ago, my son and I decided to build a remote-controlled submarine. We talked through some ideas, drew up a few conceptual plans but never really had a solid strategy in place before we went a bought a bunch of parts from Lowes. Once we had the parts, we went into full-on build mode.
We had a ton of fun while we created an amazing submarine prototype that ended up having so much buoyancy it probably could have floated a full-sized car! We were too focused on tactics and should have stepped back and built a solid design strategy!
In the end, after a lot of discussion and some quick Google searches, we discovered it was way cheaper to just buy a remote-controlled submarine online. However, we still have yards of white PVC pipe glued together somewhere in the shed as a reminder of our glaring failure!
We often hear that execution eats strategy for breakfast or that action without strategy pointless . . . So what is the answer?
A few months ago, I attended a key note by Marshall Eizenga where he explained that each of us holds value statements or value definitions in our minds. These value statements define how we think, act, react, and respond to the events around us. As such, value statements have a profound impact on our success and the success of the things (e.g., our businesses) and the people that we influence.
There is no one set of “correct” value statements. Rather, we are all products of our environments and our value statements are created throughout our life. They are a product of our experiences and our interpretations of these experiences. Each of us can experience the same thing but form completely unique value statements. These value statements can be either positive or negative.
Positive value statements can be very beneficial to us and the organizations that we lead. Negative value statements can be extremely damaging to us, our businesses, and the people that we influence.
