Consistent Decisionmaking isn't for the Weak of Heart
“The bottleneck is always at the top of the bottle” Peter Drucker
The demand on CEO’s making decisions has grown exponentially, as well for their executive teams and line staff. So how do you make them aligned and consistent with achieving your company’s goals?
This is a reality that every CEO and team I work with experiences and where the bottlenecks seem to begin. While being reactive to everyday situations is unavoidable, it helps to have a “decision filter” to come up with the best answers for the tough decisions. It is also a great way pushing down decision making to your staff levels, and again consistent with strategy and principles.
Having filters is a way to make the decisions consistent, but not necessarily easier.
Just look at how the NBA recently handled the Donald Sterling episode, this wasn't his first rodeo when it came to his thoughts and actions about minorities. He took any ambiguity over what to do, with his outrageous comments, but what was the NBA's thinking before this episode? We live in a grey world for the most part, but it would be beneficial if we could get a better picture of what our black and white is.
So what to do?
Start with your principles, such as your Purpose and the Core Values of the company. Ask the question is this decision moving us closer or further away from our principles? If you don't currently use your principles and usually go ad-hoc, this will be a big difference maker for you.
Next, consider your Brand Promise, (ex. “guaranteed to absolutely, positively to be there by 10am….FedEx). The Brand Promise is your differentiator from the competition and notice that it is measurable. Is the solution to this decision, moving closer or pushing us further away from our Brand Promise?
How about your Vision or Big Hairy Audacious Goal, how is this decision going to affect your focus there.
Is this decision building and leveraging on your Core Competencies or what your company is are exceptional at? Examples are customer service, innovation, speed, efficiency, execution, client relationships, etc.
Again this will make the decision making simpler and consistent, but not necessarily easier! Not easy sticking to your word, when you may suffer financially or lose a key employee or client in the process. But that is what separates the good from the most effective leaders. When things get tough there are so many variables and people we are trying to please, but we know someone is not going to get what they want.
When you are consistent, people might not like the final decision, but should respect that you were consistent with your principles. It would help if they knew what they were, and that is where it takes guts to lay it out for all to see.
If you need help in defining your filters, invest a day at our Mastering the Rockefeller Habit Workshop, on June 4th in Chevy Chase, MD, we will absolutely help you gain clarity in defining your key decision filters.
A Better Way to Measure Employee Happiness
Successful leaders know they need to balance the needs of employees, customers, and shareholders to build a thriving company. Many firms excel at tracking key performance indicators (KPIs) like profits, as well as customer feedback on a weekly or daily basis, but they fall flat when it comes to monitoring employees’ morale—and it shows. New research by Gallup found that 52% of American workers are not engaged in their work, while another 18% are “actively disengaged.”
Many CEOs think that they can keep an eye on morale with annual employee survey, but that is like driving your car by only looking in the rearview mirror. By the time you get the results, most of the “accidents” have already happened: Grumpy employees have alienated good customers, incompetent managers have killed productivity, and the best talent has left for the competition. You need to measure employee happiness daily or weekly.
Business Partnership Issues that Don't Go Away!
Read twice, do these sound familiar?
• It is easier to be the least mature member of a highly mature system than the most mature member of a very immature system
• Increasing one’s pain threshold for others helps them mature.
• Stress and burnout are relational rather than quantitative, and are due primarily to getting caught in a responsible position for others and their problems.
• In any partnership, the more anxious you are to see that something is done; the less motivated your partner will be to take the lead.
• In any stuck relationship between an over-adequate member and an under-adequate other, the over-functioner must change before the under-functioner can change.
• In any relationship anywhere, the partner doing the least amount of thinking about the other is more attractive one to the other.
If you want to understand more about these principles, come to Biz Book Briefs on Friday, April 5th in Annapolis.
The book is Failure of Nerve: Leadership in the Age of the Quick Fix by Edwin Friedman. We promise the author will give you an entirely new perspective of Leadership and its traps and the path out. This works but it is NOT easy!
# 1 Metric for Customer Loyalty
It is nice to say that your company is customer focused as a philosophy, but would you like to know how your customers really think about you? Would you like to have a metric your company can rally around that is easily understood?
Fred Reichhold of Bain Capital created the Net Promoter Score (NPS) to help companies understand how customer centric a company is and how to use this score as a stepping stone to action. His book "The Ultimate Question 2.0" is the road-map to get you there.
What is the Net Promoter Score?
It is asking your current customers via survey the question, “How likely is it that you would recommend this company or this product or service to a friend or colleague? The scale used is on a 1 - 10 basis.
Promoters - rate you either 9 or 10 and they account for 80% of referrals and have the highest repurchase rates.
Passives - rate 7 or 8 referral and their repurchase rates are 50% below promoters and are waiting for the next best deal to catch their attention.
Detractors - rate you 0 to 6, this group accounts for 80% of negative comments, they are employee nightmares and tarnish the company's reputation.
NPS = Promoters - Detractors
Now you have a simple metric that tells the entire company how loyal customers are to you. By creating a system to contact these customers after this simple survey, you can learn why they gave the company its score. Because the survey is so simple response rates are much higher than normal surveys.
Notice that the survey consists of One Question, a follow up question can be added to get to the root cause of the rating. “What is the most important improvement that would make you more likely to recommend us?” Keep it simple!
The beauty of this metric is that the company can move the rating up, which results in more loyal customers, happier workforce and better profits.
Apple, Intuit, GE, Amazon and Enterprise Rent a Car are a few of the large companies utilizing NPS today. It works for smaller and mid size companies as well using a tool such as Survey Monkey to get you started.
Read the book or better yet come to BizBookBriefs this Friday morning for a review and discussion on this call to action metric.
The Four Decisions™ for driving growth.
Today's business environment can be an unforgiving place with all its uncertainty and distractions it is hard to focus on what is really important. At First & Main we bring a practical, concise and disciplined process to help CEOs and their executive teams make the right decisions when it comes to four key areas: people, strategy, execution and cash. It may not sound sexy, but it is about getting important things done!.
Where ulcers begin?
Top Line Fading?
- Is your company different? If so, how does it diverge from your competition?
- Great Strategic planning process, but then nothing happens?
- How well do your priorities for the quarter, year and three years align?
- Do your long term corporate goals influence day to day decisions?
- Is execution built into your strategy?
Getting Things Done
- Our strategy had created an advantage in the market, but we still can’t make money.
- Is the management aligned around the top 3 priorities?
- Are your scheduled meetings focused on achieving the priorities or the latest problem?
- Does your staff know what the MOST important priority is and how it is measured?
- Is someone accountable for this priority and supported by the management team?
Where is it going?
Fast growing companies eat up cash. We encourage you to track how long it takes to spend a dollar and then get it back. Think about how long the cycles are for sales, creating and delivering product, then billing and collecting. The responsibility to shorten these cycles is not only for the CFO, Comptroller or Owner, but for everyone involved in these processes.
"“In a very compressed period of time, our Gazelle’s coach, Bob Shannon, has helped our executive and ownership groups achieve greater clarity and focus. After years of sporadic strategic planning and wrestling with questions of culture, vision, purpose, core values and being results oriented, we are finally making real progress. Bob has helped us create effective change by his unwavering focus on reality and on us his client. We are fortunate to receive the benefits of his past executive experiences.” -
~ Carter Heim, Managing Partner, Heimlantz Business Accounting