Is the Spark Still There? Or did Your Organization’s Star Die Years Ago?
“We measure ourselves around revenue, profit and financial metrics that perform long after the spark has gone.” Carl Bass, President and CEO, Autodesk, Inc.
Companies are investing more time and money than ever on dashboards that indicate current performance, historical stock prices, and trend analyses. Unfortunately, by focusing on business outcomes from activities that began six, 12, or more months ago, this data turns business owners into historians and keeps them from seeing key details about specific organizational performance issues.
Suddenly, it’s too late to change and correct the organization’s direction.
This all-too-common reliance on historical data has spilled over into the business press and Wall Street. They report on the failures of household name companies — Hostess, Borders, Blockbuster — and issue warnings that Best Buy has lost 40% of its value, Facebook is facing deceleration of its revenue, and Nokia is struggling to reverse a severe slide in sales.
Carl Bass explained, “I think it’s real easy as a leader to confuse what the results are today with actions that happened a while ago, because then you start coasting.”
Today’s businesses must change their focus and play “what-if” scenarios, not based on historic trends and perspectives, but rather on a prospective one. This will allow them to balance risks and set strategy more effectively. Bass said that although “you can see light from a star that burned out a long time ago,” businesses must use forward-looking measurement tools to so they can stay “entrepreneurial, innovative, and cutting-edge.”
Successful companies deliver growth and increased revenues in order to reach profitability. They use predictability, or barometers, to achieve what they say they are going to achieve. They keep their light burning brightly by knowing what the future holds for them.
Barometers worth considering include:
- Sales Pipelines – A sales pipeline helps ensure enough deals are in the right places to meet a target. It gives a business the ability to predict an outcome by looking at what’s falling into a company’s sales net 6, 12 or 18 months in advance. It should show the status of each opportunity, so the sales team can know at a glance which deals are important to work on and which deals are wastes of time. The result? More accurate forecasting and maximized sales.
- Staff Surveys – A staff survey can provide insight into a company from the perspective of its greatest asset — the people who do the work. By soliciting feedback from them, a business owner can measure morale and the effectiveness of processes and procedures, and then adjust those that need improvement. Testing an organization’s “collective wisdom” —its combined intuitive pulse—can be a proactive way to sense momentum and feelings about an organization’s destiny. Such barometers can often sense demise well before executives can. However, staff surveys need to be simple, short, and anonymous, focusing on the right indicators, to get the best responses. Staff surveys deliver a strong ROI of staff retention and organizational improvement.
- Transforming vs. Running – Enterprises that devote regular time to transforming or repositioning themselves are more likely to spot fresh opportunities than those preoccupied with “running” the day-to-day business. As Bass pointed out, those caught up in today’s monetary success are less likely to be around tomorrow. On the other hand, those focusing on tomorrow’s exceptional stakeholder experiences are actively strengthening their futures.
- Leading vs. Managing – Gauging how much time executives are leading rather than managing is another important barometer. If senior executives are spending 60% or more of their time managing—planning, organizing, directing, or controlling—then their actions are likely to be regressive and based upon history. However, if 60% or more of their time is spent leading—visioning, positioning, engaging, and collaborating—their actions are more likely to be progressive and based upon future intentions.
Other useful barometers include:
- Trade fairs, where you can often spot the “next wave”
- Following industry thought-leaders at universities
- Balancing workforce spread. Is your workforce aging or is there plenty of fresh blood to drive the future? Successful organizations balanced with older workers who can make mature, well-thought-out decisions and younger workers who may be more intrepid and open to new trends and opportunities.
A business that begins using barometers will shift some of its today’s focus into tomorrow’s view, and will quickly be regarded as a leading-edge enterprise that can attract and retain the industry’s best and brightest. Organizations that are more focused on the future than historical results can generate solid growth and prosperity.
The best way to keep the spark alive and burning brightly is to implement forward-looking barometers.