Managing a business or enterprise is like driving a car: we monitor the road ahead; we deal with the internal environment such as the radio blaring, broken aircon and kids fighting in the backseat; we also check the rear-view mirror regularly.
Without knowing exactly what will happen on the road ahead, we can prepare by observing our current situation, trends and past experiences.
Having sent out 49 weekly newsletters in the past year that analyse the business challenges ahead (and more than 20 that were published in the Leadership Section of the Business Spectator), I picked out five “P”s that drive organisational performance:
1. Partnership power
Partnering is an off-balance sheet way of gaining access to resources. As a solo practitioner, I’ve learned that partnering is powerful. I’ve been able to get two workshop programs from concept to reality within weeks, rather than the months it would have taken me on my own.
One of these programs was designed to help business and community interests partner more effectively, and there has been good demand for capacity building in this area.
A new frontier for the business, non-profit and the public sectors is cross-sector partnering. Technological advances, disruptive change and the shorter product cycles that come with it require higher levels of organisational flexibility.
A vice-president of Xerox recently talked of their use of innovative partnerships. For example, Xerox levered its product energy efficiency efforts by partnering with the US EPA to build the Energy Star program.
Energy Australia is well known for partnering with local communities in order to help balance its technical needs with social and environmental concerns, leading to less disputes and shorter development times.
A long journey is safer and achieved with more reliability if the driving is shared (as long as the partners get on with each other!).
2. Present well
In a tough business environment, improving communications is a cost-effective way of improving performance.
I can easily list 19 types of stakeholders that are critical to every business. From shareholders (or funders), employees and suppliers through to regulators, customers and the media. Once you start adding them all up there is a formidable array of “brands” that need to be managed in the market, as each one represents a different type of relationship.
If your executives are incoherent, your technical support crew focus on what they know rather than what the customer cares about or your emerging leaders are overwhelmed by public speaking, then you are putting brand at risk.
In the past year, I’ve seen numerous speakers fail to harness conference-speaking opportunities because they were not focused on the audience or the outcome. I’ve also seen a select few absolutely nail it.
Consistency in your messaging and the values you portray count for a lot. A car with three good panels and four rusty ones is not a great car.
3. Prepare for the future
Consider that business valuations are dominated by intangible assets such as intellectual property, employee engagement and customer connectivity; these less-visible assets account for 80% of the value of the US stock market.
Do you know what your intangible assets are? Which ones will you need to develop? What capabilities should your strategic HR plan be focusing on?
As much as social media brings a low-cost way of communicating, I’ve heard too many people embrace and expect it to solve their key business issues. It is just a tool, not a business solutions package.
Products like the Commonwealth Bank’s Kaching application are the result of leadership, internal collaboration, commitment to research and development and partnering capabilities, not social media per se.
It’s time to look under the bonnet, the engine is important!
4. Productivity is king, innovation is its servant
Productivity tends to imply cost cutting and longer hours, however it is often maligned. To me, it is about forming a better understanding of the assets in a business so that we can get better returns from them.
This could manifest itself in the form of more engaged and satisfied employees, the development of strategic partnerships or improving knowledge sharing practices. It requires some form of change, or innovation.
When Nestle decided to align its business strategy with major societal issues (water, nutrition and rural development), I’d argue that it was an innovative play on productivity. It was improving its alignment with regulators, communities and customers. This is smart, as it gives it scope to improve the value of its brand in the eyes of key stakeholders.
Nestle is not without issues in its business, however it is attempting to improve the productivity of a major asset – its corporate brand.
Persisting with the car analogy, every component has to play a role and pull its weight, so to speak, for it to perform well.
5. Performance is a battle of timeframes
In the investment world, capital flows in and out of stock markets with alarming speed. Investors who are obsessed with short-term performance are missing out on smarter opportunities and putting money at risk. As Warren Buffett noted:
The stock market is simply the transfer of wealth from the impatient to the patient.
Likewise, we are all challenged to develop long-term strategies and improve performance whilst balancing short-term demands. The Bendigo Bank knows all about it. Internal reporting cycles and sales targets compound the problem.
Leading businesses have the ability to head in the right direction and develop compelling communications around their approach, which help to mitigate unreasonable short-term demands.
A master of this game was the late Ray Anderson, of carpet and floor tile manufacturer, Interface. As the CEO of a listed company, how did he adopt a seemingly impossible environmental goal and get away with it? He used business – not environmental – language to describe what he was doing and how it would benefit shareholders. The financial results have been compelling.
No one wants a car with cheap brake pads that perform superbly for three months and then fail; we want ones that work consistently over a longer term.
Putting the “P” in Performance
When so many things are out of our control, there is no sure way to succeed. However there are ways to maximise our chances of success and these five “P”s are integral to that equation.
In short, innovative approaches to partnering, presenting and preparing lead to productivity, which in turn leads to performance.