People, Process, and Profit
I had a mentor teach me that that business success was based on these three things in this order. People, Process, Profit.
Do things on purpose
From decades of watching successful business leaders, lessons learned from my own experience as a GM and CEO, and my work with business leaders today, I know that focused, proactive attention in these areas can help you reduce risk and go faster.
And… leaving them to chance can stall your growth.
1. People: Respect People
If you can motivate a talented group people to personally care about growing your business, you have won a big part of the game.
Common misstep: Seeing and treating people as interchangeable resources, instead of as talented, creative partners and contributors in your business growth.
Develop your people and your team. Hire the smartest people you can find, and encourage and support everyone to develop – at all levels. Trust people to take on big things, fail sometimes and learn. Always be building capacity so your team can do more next year than the did this year. See people development as having a hard ROI.
Communicate a lot. Have a bias toward openness, not secrecy. Make people feel included and informed – all the time. Tell the truth. When you can’t share everything don’t stop talking. Share what you can.
Say thank you. Creating a culture of recognition is a very powerful thing. Make sure you have ways of knowing when good things happen, and personally thank people. Make recognition and appreciation a process and a habit.
Manage performance. Do great things for your top performers and have consequences for your low performers. You can’t hide your reluctance to deal with poor performers. Everyone sees it, and it degrades trust and respect.
Acknowledge peoples’ lives outside of work. Invite them to bring their whole self to work, and don’t make their life outside of work need to be in so much competition. A great example of this I heard recently from Stan Slap is to put all of your team’s major personal events and commitments on the work calendar or project plan, so that the whole team can see it, and do their best to plan and work around them. Wish I thought of that 20 years ago!
2. Process: Get stuff DONE
Execute well. Manage and finish the important things.
Common Misstep: I am surprised at how many organizations regularly tolerate not getting done, the things they say they want to do.
Deliver on time. If you are not delivering on time. Fix it. No business can scale if you don’t have the fundamental ability to deliver what you say you will. And people love to get stuff done.
Just enough process. Judge the right amount of process for the size and state of your company. Too much process can stall a fast growth start-up, but not enough will keep a mid-size company from being able to grow, and meet commitments. Decide the right amount, (it’s not none). Put it in place and prioritize it. Make the adherence to the process that supports critical outcomes a higher priority than the work. It’s the only way to mature behaviors and get there. (And you are investing in building even more capacity for the future.)
Measure the most important things and improve. Make sure you are measuring the things that truly matter. What are the key drivers in your business? What makes your business happen? What are the three things that need to happen before someone buys? How do you know that enough of those things are happening?
Make room for strategic thinking and actions. Don’t be so busy with your current business that you fail to make time to work on your bigger, future business. You need to carve out time, people and budget to make sure you are not forgetting to grow your business while taking care of your current revenue stream.
3. Profit: Stay connected to reality
Always be clear about the external perceptions and financial performance of the business.
Common misstep: Tactical activity and wishful thinking can obscure the harsh realities of how well your business is really doing.
Everyone knows how we make money. It is vitally important that every individual knows how the company makes money. What product lines and geographies does the revenue come from? Which of those are the most profitable? What are the fixed and variable costs? Every person should know their role in both the income and expense picture.
External Input, Validation and Measures: Always make sure you are getting the truth from customers, and make sure enough of your measures are externally driven. Don’t congratulate your self too much for delivering beautiful products and offers on time, that the customers don’t find valuable.
Know what’s (really) going on. Come out of your corner office and spend time in the trenches. Kind of like the TV Show, Undercover Boss, but without the disguise. Spend time with the front line workers, see what they are doing and how they are thinking about the business. You will learn more real, valuable information than you can ever learn from your chain of command. It’s not that your managers keep secrets, it just that the information doesn’t boil up with as much clarity and richness as you will learn from getting personally involved.
Sell something. Be acutely tuned to what is selling. How can you improve, accelerate or make the sales process more compelling, effective and efficient? Go on sales calls. Try and sell your products personally. Know what works and what flops. Find and deal with obstacles to the sales process. Know inside and out how your company finds, develops and closes business.
People who are personally motivated, working within a well managed environment that enables them to finish and deliver things, with clear financial accountability will create a profitable growing business. People, Process, Profit.