Voicings: Focus on the Fundamentals
-All compromise is based on give and take, but there can be no give and take on fundamentals. Any compromise on mere fundamentals is a surrender. For it is all give and no take.
OK. I’ll admit it. I came home from CEDIA kind of bummed out. While I wouldn’t say we had a “bad” show, there just didn’t seem to the kind of buzz I’m used to feeling at EXPO. I usually get such a boost of creative energy and adrenaline at the show I’m still flying high long after I return. This year was different though. We had traffic and I had plenty of meetings, but it wasn’t the usual high intensity, crazy-busy “circus” I’m used to. And so I got on the plane feeling let down. I’d known that the housing and finance problems we’ve been facing would have their effects, but frankly, I’ve always believed we could out run them- and to a large extent we have. But now I was feeling concerned. And so I kind of moped around for a week or so, lamenting the “good old days”, and then it hit me. Focus on the fundamentals. Focus on the fundamentals. Focus on the fundamentals. Sure, things are tough-tougher than I can remember. But what do you do when things get tough? Get back to basics-that’s what you do. And so I hit the books to look for guidance. In the process I stumbled upon Peter Drucker’s Five Most Important Questions and my energy started rushing back. How simple-how basic-and how fundamental Drucker’s questions are but they were exactly what I was looking for-a “back to basics” roadmap to continuing success in tough times. I thought they were so relevant and inspiring that I’d like to share them with you this month.
The Five Most Important Questions You Will Ever Ask About Your Organization.
Question 1: What is your mission?
Your mission defines your purpose- the fundamental reason d’etre of your business. Think of it as the answer to the question: “why do we do what we do?”. When properly crafted and communicated it gives guidance to you and your staff and sets the direction of the company now and for the future. It describes the “why” not the “how” of your business. Your mission should be distilled down to a mission statement. At its most effective, it is broad and eternal and directs you to do the right things now and in the future. It goes something like this. “At Sterns Loudspeaker Company, our mission is to save the world from bad sound”. Properly executed and communicated throughout the organization, a well crafted mission statement lets everyone in the organization see how they contribute to the goal.
Question 2: Who are your customers?
The only real purpose of your company is to create a customer, or in other words, nothing happens until somebody sells something. Drucker describes two types of customers which he calls Primary and Secondary. The primary customer is the one who ultimately writes the check. Supporting customers are employees, referral sources, industry partners, etc. While they are not the direct purchasers, they have the ability to make or break the sale. The reason you must clearly define who your customers are is to keep you focused on those that matter. Chase off in too many directions and you diffuse your energy and your performance suffers. When you clearly identify your primary and secondary customers, you have created a starting point for determining what those customers value.
Question 3: What do your customers value?
This is a key question and one that is often answered wrong by many of us. While we think we know our customers because we interact with them day in and day out, the truth is we don’t really know what they truly value-only they know what motivates them and the only way for you to know is to ask them. Don’t guess! Customers behave predictably based on their situations, but until you understand things from their perspective, it’s difficult to accurately predict their behavior. Ultimately, you’ll need to determine what your primary and supporting customers value and what motivates them. You can’t deliver for primary customers unless supporting customers go along, so make sure you survey supporting customers as well. Decide what knowledge you need to capture and create a process to collect it regularly.
Question 4: What are your results?
While we’d all like to do everything, the truth is that we all have limited resources. Management’s job is to maximize results by allocating resources most efficiently. To do this well, you must know what is working and what is not working in your business. The trick is to strengthen what works and abandon what doesn’t and that requires that you “keep score” by tracking your results. Start by identifying what really matters in your business, your “keys to success” if you will. Once you’ve identified them, develop “metrics” that support them and develop procedures to track those metrics consistently. From this objective measurable starting point, you can accurately evaluate your business and efficiently allocate your scarce resources.
Question 5: What is your plan?
To further your mission requires action today and goals for tomorrow and for that you need a plan. Your plan describes where you are, where you want to be and how you will get there. If it’s well crafted, it will consist of a handful of general, overarching goals supported by specific, measurable objectives that help you achieve these goals and detailed action steps that you can follow to accomplish your objectives. The plan is ever evolving and not cast in stone or stuck on a shelf. Ultimately, planning follows a circle of mission-goals-objectives-action steps-budget-feedback-mission. It’s a never ending process that keeps you on the right track towards success.
In these difficult times, the survivors will be those that have the discipline to apply the fundamentals and stay focused on their mission. Do it now!
Frank K. Sterns is the president of Niles Audio Corporation. He can be reached at firstname.lastname@example.org