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In today’s minisode, we are going to talk about how to work on the business, and in particular, the mindset that you can bring in order to absolutely nail your role as a senior executive.
Working on the business is the role of a Chief, but it took me a number of years to truly understand that the business is actually an asset. It's something that has value, it's something that has an impact, something that plays a role.
When you imagine that the business is more like a house, you would understand that it has a role, which is to house a family, and secondarily it has a value, either via rent or via capital growth. And so, what we're looking for here is a mindset where you have a helicopter view down and you’re trying to improve the house’s impact and its valuation in the market. That is the mindset we have to bring to this; we have to think like an owner.
Imagine if you bought this business, and you are required to perform a very certain function to a specific service level. What kind of organisation would you need? Thinking like a true chief or owner, think about the monetary value and what you would require in order to perform that certain function in society.
Systems and Processes
The next step then is figuring out your process. In order to start working on the business, you actually have to understand how the business works, and before you can do that you need to understand how the business is actually valued. You might have someone who has an equity stake in the business, it might be a complete single owner, it might be a consortium, it might be a listed company. You also need to understand all of the different factors that go into valuation, from EBITDA to things like barriers to entry, barriers to exit, and sustainable competitive advantage, and anything that analysts in your particular industry would value. Until you understand all of this, then it's really hard to work on the business because you actually don't know what you're trying to do.
If you are more in the public sector, you have to understand how the business is assessed as being successful. What are the core measures across the business as a whole? When the Director-General or CEO of that particular department goes before Members of Parliament and outlines what activities they’ve been doing, they need to know how they're being assessed as a whole.
The final point here is that you might be a few layers down in the organisational hierarchy, and you might not really understand how the business is valued or assessed. But, Chief, I have found over the years it is absolutely enlightening when you go and find that out. Go speak to the CFO, the CEO or a Board member, or the Director-General. Get to understand the charter of the organisation and its core factors that drive its whole creation, what return on investment the shareholders or government is looking for in that particular business.
This could be both as a team or an executive team, and also as an individual. You need to find a bit of a rhythm, where you are regularly working on the business. As an organisation we need to do that too.
I was working with an executive team once, and we went away for a couple of days, and we had all of our strategic work before us. I did a bit of research in the lead-up to this offsite, and I asked them for all the historical strategic plans. I got all the strategic plans, and I did a bit of a review and I noticed something pretty quickly.
I put them on the walls in this big conference room we were in and when the executive team turned up, I asked them to pair up and just go look at these five strategic plans and see if they could see any patterns. The executives paired up, they walked over to the wall, they started looking at all the different plans, and then you started hearing this giggling around the room, people laughing, you could see that they just couldn't believe what they were looking at! And I said, “What do you guys see?” And they said, “All the plans are the same.” So I said, “Yes! Therefore, we've got to determine if the plan is wrong or if you don't know how to execute.”
Because, Chief, working on the business is both defining what it is you need to do AND how the business is evaluated or performance is assessed, and then executing the tasks that need to be done and doing this consistently.
Delegating tasks effectively down into the business, tracking results, coaching your people, creating a fantastic culture, that's all working on the business. So your operating rhythm, as both an individual and as an organisation, is critical. Just email me and I'll send you an executive team operating rhythm, which helps you work on the business.
Anyway, back to the story. We got the executive team to define their highest-level strategic pillars, and the key projects underneath each of those, that would help improve the valuation of the business, and actually their share price in the market. So we did a wonderful job of that over several days, then got them to execute on those plans and set up a review in one month, which is the monthly strategy steering committee. In that meeting, not one bit of work had been done! Not one. And that's because they were back into the office and life just got busy again. The chaos rained.
Effectively, what happened was that they set up the plans but simply forgot the next part, which was execution. So what we did is implement a get-together every week, on Wednesday from 2:00 to 4:00 PM, where the group worked on the business, just doing the tasks attached to their strategic projects. We made it fun, grabbed coffees, and had a laugh as well. Now, that executive team went from doing no work per week on the business to doing two hours per week on the business. And then what happened, they started doing some prep work, which meant that they went from two hours to four/five hours a week! In time, they even ended up getting to 10 hours a week working on the business.
What it showed was that when you have an executive that is working at least two hours a day shifting the dials to strategic projects, the business rapidly improves, the transformation worked, they executed their first strategy in 20 years, and hit their first proper target in seven years!
What does this look like in practice?
Now, just at a very high level, what does working on the business look like?
- An annual two-day strategic offsite: go away with your team, get really clear on purpose, vision, values, strategy, operating rhythm, and your comms plan across the business.
- A quarterly check-in: these normally go for about half a day or a day, again offsite. You don't need a facilitator, just go yourself and spend time on the business as an executive team.
- A monthly steering committee: assess the projects that you've been working on. You need a project sponsor and a project manager, who are both reporting on the progress against your strategic projects, providing complete visibility. You want people with accountability and excitement and inspiration, actually telling the story of how their projects are tracking. There should be a dashboard or project reporting tool showing how all of your strategic projects are going in the right direction and the executive team is working on the business to make these improvements, and showing that you are operating the business every single day.
So, Chief, they're the three big things of how to work on the business. Get the mindset right, get your process for understanding how the business is valued and how it is assessed from a performance perspective, and then get your operating rhythm in place.
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