Business Intelligence

It seems incredible, but when it comes to business leadership, we don’t consider the most important pieces of it: Does this person have the know-hows to succeed? Is he or she capable of developing them and driven to continue to hone them? The seeds of personality traits might be born, but know-how is learned, developed through practice, and honed through experience. Leaders who are disciplined, determined, consistent, and persistent in developing these kinds of know-how tend to be successful on a sustained basis. In that sense, leaders are made.

-Ram Charan

(21808) Ram Charan says:

Great business leaders understand the issues that command public attention and position their enterprises on the right side of each. They understand that business doesn’t exist in a vacuum, and since they plan on being around for the long haul, people with know-how address society’s legitimate concerns.

Listen to Outside Voices

Like it or not, this is the era of total business transparency. That means not only do your stakeholders have a say in how your business is run, but so too do various special interest groups. You simply cannot spend all your time focusing solely on your main job of making money. You also have to keep your business on the right side of all the issues that generate public interest.

As tempting as it may be to ignore special interest groups as distractions from your real work, to do so can be very risky. Instead, you need to identify emerging special interest groups, understand their motivations and concerns, build relationships, respond to legitimate concerns and generally manage this kind of societal pressure. And since many of these battles will take place in the court of public opinion rather than in a more structured legal setting, this is probably more like a game of chess than anything else. You always need to be looking a few moves ahead and positioning yourself rather than responding to the potshots they are taking.

The New Rules of the Game

From a business manager’s perspective, the rules of the game have changed. Nowadays, the new facts of corporate life are:

Know-How

(21807) Ram Charan says:

Priorities are essential. They tell people what to focus on and what doesn’t really matter. Part of having know-how is the ability to help everyone focus on the right things and ignore everything else.

Start at the Ground Level

Priorities are worthwhile because they keep the truly important things front and center rather than being bustled off the radar screen by day-to-day events and happenings. Good priorities provide clarity and focus and are the basis for how resources are allocated.

A good way to understand the distinction between goals and priorities is to remember that goals are set at a top-down level, as if you were looking at your business from 50,000 feet in the air. Priorities, by contrast, are set at ground level where there are loads and loads of messy details gumming up the scene. Priorities specify what your most important actions are and what the flow-on consequences of your decisions will be.

Take Current Resources into Account

The right priorities can generate a tremendous amount of energy within a corporation. And equally, the wrong priorities can generate an awful lot of confusion, duplication of effort, conflict, waste of resources and demotivation. It is possible to have the right goals but the wrong priorities. You have to generate buy-in for the right priorities for your business to move forward.

Never forget that it is people who breathe life into your priorities, and therefore it’s vital that you communicate with those who will be living by your preferred priorities. Whenever you want to set new priorities, there are a few questions you should be pondering carefully:

(21806) Ram Charan says: 

Determining the right goals is always a juggling act. There are many different things a business can achieve that are noteworthy and laudable. Someone with know-how cuts through the various options and sets goals that are the right type and magnitude for the organization at this present time. This is often more challenging than it seems.

Goals Must Reflect Future Opportunities

Goals align people’s energy and automatically set the tone for everything that gets done. When goals are linked directly to rewards, they have a powerful and far-reaching impact. Selecting the right set of goals is always a balancing act because there are so many options. The key, however, is balance. Your goals need to reflect the opportunities that are available while at the same time taking into account your organization’s abilities to pursue and achieve those goals.

It’s all too easy to set goals that are either too modest or too aggressive. Great goals achieve the right things within an appropriate time frame, to an acceptable level and in the best possible combination. You can’t set great goals by looking in the rearview mirror and just adding a percentage to what was achieved last year. Nor can you go by what is forecast for your industry or the economy overall. Robust and worthwhile goals reflect the opportunities that lie ahead and what is feasible and desirable for your business moving forward.

When selecting your goals, try to keep these general principles and concepts in mind:

Choose goals that will keep your organization in balance–because it’s all too easy to focus on just one area to the detriment of everything else. What you go after needs to move your organization forward on all fronts that are important. For example, seeking aggressive top line growth at the expense of bottom line profitability is unbalanced and therefore unsustainable.

When selecting a goal, think long and hard about its doability–about whether the people at the front lines will actually be able to follow through. There’s no use becoming the author of the systematic destruction of what is currently a viable going concern. As you set goals, think through what actions and behaviors will be required to achieve them.

Keep an open dialogue with the people you assign responsibility for achieving a goal to–so you can ensure that what you’re doing is motivating rather than discouraging. Ongoing dialogue lets you make sure that the assumptions behind your goals match reality. It also ensures that your goals are reasonable rather than being far too high or much too low.

By all means set stretch goals that will energize–so your people have opportunities and the motivation to grow professionally. Stretch goals based around realistic improvements are good. They can fire up people’s imaginations as long as the goals are still doable and enough resources are available.

Keep your goals in sync with changes in the marketplace–so they are relevant to the current realities rather than set in stone. As you think about your market, your competitors and the general business environment, you’ll realize there are many factors beyond your ability to control. Be willing to adjust your goals when required so you can keep them relevant.

Know-How

It takes blood, sweat and tears to build a team, but the return on effort is huge. Many leaders think molding a team isn’t worth the effort, but they’re missing a tremendous opportunity to differentiate themselves and build the business. The more people can see the total anatomy of the business, the intersections of its moving parts, and the broader context in which it operates, the better job they do.

-Ram Charan