There’s an especially strong theme coming from owners and their executives: the desire to invest smartly in improving business results. Actually, it’s stronger than that. It’s an awakening to the absolute fact that “business as normal” is simply not okay. It’s not okay to struggle and kick and scream and work hard and still produce… fill in the blank for yourself: the same old sales results, a lack of profit, not enough clients, insufficient productivity, a lack of satisfaction, or all of the above.
While ever-present, the passion around this commitment only becomes larger in times of recovery.
Some approach solving this challenge with what I like to call the Six Flags Technique. As though their life is a theme park, they “hop on” their business like it’s an amusement park ride and then try to hold on for dear life, living a “be-all, do-all” lifestyle of overwork while going round and round in circles without solving the challenge. Far from getting old, this analogy has gotten better with time, thanks to the advent of newer roller coasters that dangle the rider – feet flailing – a bit like Superman.
As good as we are, alas, none of us are Superman. What is needed is a few simple principles to guide leadership, keep us focused, and in so doing, make us more efficient, effective leaders. The purpose of this article is to outline five such principles and their application.
As you read, though, I want you to see these principles as absolutely connecting together into something larger – and you’ll see that’s true. But just to drive the point home, let’s give that something a name: Return on Management.
What Is Return On Management?
Return on Management isn’t new, and it’s not complicated. Introduced by Simons & Davila, it’s simply a measure of efficiency. Namely, it’s a measure of how effectively your organization uses its most precious resource: your time and attention as a leader. As you read through each principle, notice that each represents efficient leadership in an effective organization. Also as you read, take stock of your own company’s success and room for improvement.
#1 – Ultimate Focus
Lots of companies do focus exercises and strategic planning retreats – and you should. But Ultimate Focus takes it a step further.
After strategic planning, one company I worked with went through a remarkable transformation. The CEO took a step back and began realizing how many things the company was engaged in that were “out of bounds” – absolute wastes of energy and resources. The planning had not only brought clarity regarding what the company should do but more importantly to what they shouldn’t do. The CEO not only defined direction but also what was out of bounds and took clear action, leading the company to a dramatic, lucrative shift in direction.
Ultimate Focus establishes what to do while firmly establishing filters and barriers against those things that waste time, effort, and energy. A key term here is “dilution.” By screening out activities that don’t make sense and prioritizing to efforts that do, dilution is prevented, energy preserved, and leadership efficiency maximized.
#2 – Relentless Pursuit of Results
Companies that live and breathe performance measures are more positive, more proactive, more committed, and more successful in attaining their desired results. They give off a palpable sense of urgency – a sense that not only can something be done to achieve the goal, but that it must be done. These companies have a sense not only of the goal but also its path and have moved on to mapping out their progress at attaining it.
The trick is for these measures to always be absolutely, 100% relevant and on-task to accomplishing the corporate goal. The temptation is to set measures and plans that stop short or point in different directions. The dogged determination for success comes to play in making certain the measures are on-task – completely on-task.
Relentless Pursuit of Results means having such a burning need to achieve the goal and avoid failure, and having the performance measures that tell you how close you are along the way.
#3 – Ruthless Simplicity
Having information is one thing. Making progress is another. Preventing overwhelm also means honing in on only the most critical information needed at the time. These Critical Factors provide a picture of the company’s health without getting unwieldy.
The key is to select the Critical Factors to capture the full company through minimal time and effort. In my practice, I generally counsel clients to focus on typically four categories of measures, often: Fiscal, Quality, Productivity, and Business Development. Examining these categories produces a broad yet thorough picture of organizational health.
Ruthless Simplicity is prioritizing data so that maximum control is gained through minimum time and effort.
#4 – Mastery of Information
I once faced a challenge with one company where certain paperwork was being entered into the computer, then photocopied, then one copy filed normally, while the original was placed in a vault. And I’ve left some steps out. The example is extreme but the point is simple: every once in a while we have to step back and ask whether we can simple stop doing what we’re doing. Perhaps change, but ideally “just stop.” A key to unburdening leadership is both letting go as well as forcibly clearing the decks of things that don’t have to happen.
Mastery of Information is about perfecting the sharing, flow, and retention of knowledge.
#5 – Shared Passion
Every so often, you find a really good organization where everything they do is focused around one core passion and pretty much the whole world knows about it. Toyota and innovation. Nordstrom and customer service.
These passions start from somewhere, are nurtured, and grow throughout the organization. They come to permeate everything the organization does. In fact, if you think about it, if you take the example of Nordstrom and customer service, shared passion is the driving force that connects through all four of the other principles. It determines what’s in focus, what’s measured, what the priorities are, and even how information is communicated. In short, how everything is done.
Shared Passion is your driving force, your principle that you believe will be the catalyst to your business. Through your leadership, Shared Passion is “the thing” that your employees, your customers, and your partners will focus on, and the thing for which you will come to be known as “great.”
What’s Your Return on Management?
Companies that feature low Return on Management struggle at these core concepts of leadership and management, struggle tirelessly in earnest to produce results, and feature managers and administrators worn thin.
By contrast, organizations that feature high Return on Management master these and other principles of leadership, excel at producing results, and feature leaders committed to a cause.
How do you rate? What’s your plan to improve?