“We look at the present through a rear-view mirror. We march backwards into the future.”
If you’re leading a mid-market company and expect to sustain performance you don’t want to be “marching backwards into the future.” Here’s a brief (5 minutes max) leadership exercise to see which direction you’re heading…
Visualize your last 100 days. Next, do some quick math. Estimate the percent of time devoted to either Day-to-Day Activity (expected financial impact less-than-one quarter out) or Novel-Strategic Activity (expected financial impact greater-than-one quarter out). Financial impact means moving-the-needle on Growth Rate, Margins, or Operating Income.
To get a feel for actual focus and time spent, complete the following:
How strategic were my last 100 days?
The likely answer, from middle market leader interviews, observations, and research, is not very. In the way is a conflicting mix of immediate day-to-days and seemingly less urgent longer-term strategic possibilities. Balancing the two is a constant battle. Realistically, you want them in relative balance but generally that’s not the case.
Usually, Day-to-Day rules and leader focus is locked into shorter impact horizons, those less-than one quarter out. Meanwhile, Novel-Strategic ideas or moves with longer-term potential fail to materialize beyond the, “Hey, that’s a great idea,” phase.
Today’s Rhythm Trumps Yesterday’s Groove
Operating in Day-to-Day mode works well, when it works. And, just when is that? Bottom line: In highly stable, slow-to-evolve markets. The kind we used to have pre-internet. Then, it was typical of companies to successfully leverage established strategies and business models for long periods of time.
Yesterday’s Groove is no match for today’s disruption. Disruption is Today’s Rhythm and challenges established business models overnight. Think Uber, Airbnb, or the Apple watch. But it also brings opportunity: Amazon Web Services, Big Data Analytics, Cloud apps; etc. Both outcomes place a high premium on leaders being strategic in relation to industry, market, customer, and organization developments.
None of this is revelatory, except for one thing: For many, many mid-market leaders breaking out of Yesterday’s Groove is easier said than done.
Think you’re one of the many? Here’s 4 things you can do about it…
1. TAKE A SELFIE
Use simple exercises like the one above to get a fix on where you’re at. Clarify your intentions for the company and match them with your behavior. If you’re looking to build value then allocate a significant amount of your time to strategic work. Consider 25%-40% baseline, though the best practice is to make it an ongoing part of how you operate.
Once you gain your buy-in, find ways to minimize your current distractions and engage your operating team. Suggest this exercise to them. This will provide context for step 2 and enrich the strategic dialogue to come.
Next, put your business model under the microscope…
2. SNAPSHOT YOUR MODEL
Business models are how companies deliver value to the marketplace: The system of practices used, everything from sales to operations to service.
How established are these eight value drivers in your model? To quickly find out plot each driver twice: First current then desired. Desired is where you think a driver needs to be to improve financial performance. After you connect the dots, focus on how you can close the gaps.
You can do this exercise alone or together with your team. If you include your team (recommended option) you’ll learn two important things:
- Viability of your business model, and
- Degree of team alignment.
Expect a combination of surprises and affirmation with your team. Strategy may be crystal clear to some, not others. Perspectives on addressing customer needs may or may not align; etc. The point is to identify ways to improve your model and solidify team alignment.
From here, it’s a matter of prioritization then execution…
3. PRIORITIZE GAME CHANGERS
Use the matrix to organize your potential initiatives. Prioritize up to four Game Changers to improve financial performance.
How important is execution? Unequivocally, experienced leaders say, very. In a recent McKinsey interview, Novartis CEO Joseph Jimenez identified execution as one of his top four leadership priorities. That’s a pretty good guideline for middle market leaders, too.
With execution, success rates are higher when preceded by planning (steps 1-3). The actual process can be managed differently but we recommend a 100 Day Plan format.
One Hundred Day Plans promote accountability, focus, and urgency. Or, simply put: Responsible parties being assigned a limited number of value-add initiatives to execute within a set timeframe. Plans should enable your company to achieve significant bottom-line, strategic, and organizational benefits.