At this time of year, many companies are updating their operations strategies or developing new ones for the future. Some began last fall, but others are defining their roadmap now. What can executives – especially the CEO — bring to strategy development in order to maximize the company’s growth and profitability?
As research for my forthcoming book, Moving Into The Express Lane: How To Rapidly Increase The Value of Your Company, I interviewed six middle market executives to find out how their companies developed business strategy and aligned it with their operations strategy. All six companies are successful, but three are particularly strong in profitability and growth. The two hallmarks of their strategy development process are that the CEO leads it, and the executive team takes charge of aligning the departments’ strategies with the overall company strategy.
What specifically does the CEO and executive team do that makes the process so successful in these companies? In my view, it is their job to bring value to their businesses. Some owners and executives of middle market companies think the company should bring significance to them, but it is the leaders’ job to bring significance to the company. There are five ways successful leaders build strategy that leads to growth and profitability.
First, leaders need to provide the vision for the company and their specific area of responsibility, such as operations. Vision expresses where the company is going and why. It provides a clear, measurable picture of the future, usually two to three years out. Longer visions and strategy processes almost become meaningless because too much change can occur. Vision provides context for employees to let them know why they are doing what they are doing and helps create significance in their jobs.
Second, leaders need to make sure the right people are in the right positions. Several of my current consulting engagements have to do with developing or coaching operations executives to help develop the skills they need to reach the next level of success for the company. Most of my clients are growing, some very rapidly, and they are finding their resources stretched, including their leadership team. CEOs need to be sure they have a clear definition of roles and organization structure to get to the next level of performance. Jack Welch once said that the two roles of a CEO are to create the vision and to make sure the company has the right people to execute.
Next, executives need to empower their teams to get the job done and to foster change. The leaders need to set clear visions and expectations, ensure their teams have the training and resources they need, and give them ownership of their processes. Often, especially in smaller companies, executives tend to solve process problems themselves, because it is quicker. To help drive change, executives should instead focus on coaching and empowering their people. Empowerment personalizes change initiatives, which in turn creates continuous improvement and continuous value increase.
We don’t know who first said, “You must inspect what you expect,” but one thing is certain: it is critical for success. As part of my Action Imperative™, accountability is key for developing operations discipline. Executives need to establish key performance indicators to hold executives accountable for results.
Any strategy, whether it’s for the company as a whole or specifically for operations, needs to include measures so you know that progress is being made toward the business objectives. Those measures need to be both forward looking and back looking. Using only financial measures provides just one perspective, like driving with the rear view mirror. My most successful clients have a dashboard, sometimes measured daily, to guide them in their efforts.
Finally, celebrate success. Feedback can be much more than a score or a bonus; belonging to a winning team, and letting people know they brought value to the company will help give them significance. I find that personalizing strategy and change will drive results to levels beyond expectation.
If you want to achieve extraordinary results, don’t wait for the value to come to you. Top executives can bring great value to their companies and teams by being visionary, making sure the right people are in the right positions, providing them with the necessary resources, holding them accountable and celebrating success.
© 2018 – Rick Pay – All Rights Reserved