As a leader of both private and public companies for the past 18 years, I’ve often found that the pace and intensity of the job makes it hard to be clear and objective about critical business issues. When you live, eat and breathe your business, often a CEO can’t see the forest for the trees.
Like a doctor monitoring a patient during times of health or illness, there is a set of critical pressure points that any leader must constantly check to keep a business successful. Some things can go wrong in a business and the company continues to survive and thrive, but if any of these vital pressure points are ignored, a serious illness can occur — and you don’t want that.
Here are the five evaluative points that I recommend to help keep your company on track:
- Vision As the world changes, it’s imperative that the direction you plan for the company is strategically correct. Do you have a vision statement? What do you do with it? I’ve visited hundreds of companies that proudly display their vision statement, but when I ask employees about those statements, no one seems to really understand the strategic path reflected by the vision, let alone how they’re connected to it.Successful leaders connect their team members directly to the vision on a daily basis and know what employees are doing in their jobs to drive the team closer to the end goal.One great example is at a company led by Jack Stack, creator of Open Book Management. At his SRC companies, people are directly linked to the future path of the business via the tool of educating, sharing and focusing on key financial metrics. He has created an alignment to the vision through financial literacy. It is powerful and it works.
- Culture and Cultural Learning Points Most companies have a culture but don’t clearly define it so that employees understand their place in it. This results in lack of effectiveness and sometimes a culture of chaos.Several years ago I took part in the turnaround of a small manufacturing company. The work environment was in chaos. Staff interaction wasn’t clearly defined, so each person behaved as they chose. There was considerable negative energy and wasted time.We developed a set of five cultural learning points on how people would operate within the company and what they should focus on. This included a vision statement, the company’s values, a definition of value-added tasks and two coaching tools. Each person had to memorize these five points as a condition of employment. This simple request to commit cultural learning points to memory began the process of determining who truly supported the company and its culture and who didn’t.
Within 18 months, we cut manufacturing staffing costs by 45 percent while simultaneously increasing output. People were focused on the cultural learning points and the expectations were clear: What mattered was results, and the behavior that was necessary to achieve those results. We were on our way to turning the company around. This became the foundation for our future success.
- Focus Too many small companies waste valuable time by not focusing on the most important tasks. For example, meetings are held with no agenda or facilitator to discuss product pricing, then half-way through, the talk shifts to paving the parking lot or other irrelevant subjects. Such lack of focus and discipline generates significant inefficiency.One tool I’ve used is a simple card, posted at each person’s work area, called a “focus scorecard.” On this scorecard are that individual’s top three of objectives for a specified time period. These link back to the vision and have to include a measurable task. In many cases, I have also linked incentive pay to the associate’s ability to hit the focus scorecard objectives. It is a simple yet powerful tool to create focus.
- Process Humans by their nature tend to make simple things complicated. There are hundreds or thousands of processes that make your company function. You must constantly find a way to drive the non-value added from these processes, starting with the major processes that support your vision and core competencies. Teach your people to avoid the comfort of “we’ve always done it this way.” There are several great tools to assist you, from the well-known Open Book approach to simple quality improvement techniques. Find one and use it daily.
- Rewards The final pressure point that a good CEO or leader monitors is the company’s reward systems. When you link financial rewards to individual and team goals (that tie back to the vision), you have the framework for a great compensation program. Too many leaders give raises but can’t always quantify what an employee has returned to the company in specific results.Just as important is the non-financial reward system. While consulting with a distributorship in Baltimore, I observed that the CEO knew all the problem employees by name and their specific situations, but when the time came to honor an employee who hadn’t missed a day of work in 20 years, the CEO had little knowledge of that person. Find people who do things right and celebrate their achievements, whether little or big. Hold team meetings to celebrate successes. One of the top five reasons that people come to work is to be validated. You are the chief validator — find ways to lift up your team beyond money!
Maybe the most important element of all is to find time, as a leader, to check these five pressure points on a consistent basis. If one is broken, don’t panic. Focus on methodically getting back on track. It’s your job. Do it well.
Vistage speaker Jon Baker is president of Baker McCormick Group, Inc., based in Springfield, Missouri.