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LEADERSHIP IS A PROCESS OF SOCIAL INFLUENCE, WHICH MAXIMISES THE EFFORTS OF OTHERS TOWARDS THE ACHIEVEMENT OF A SHARED GOAL.
Wednesday, December 16, 2009
... “On the face of it, shareholder value is the dumbest idea in the world,” he said. “Shareholder value is a result, not a strategy . . . Your main constituencies are your employees, your customers and your products...”
In a subsequent article in BusinessWeek, he said:
'It's obvious that strategies are what drive a business. You might, for instance, have a strategy around innovation aimed at producing the leading products in every cycle, or you might have a strategy to become the low-cost global supplier, or you could have a strategy to globalize a company, taking its strengths in one market and translating them to every market. But you would never tell your employees, "Shareholder value is our strategy." That's not a strategy you can touch. That's not a strategy that helps you know what to do when you come to work every day. It doesn't energize or motivate anyone.
So basically my point is, increasing the value of your company in both the short and long term is an outcome of the implementation of successful strategies...the job of a leader and his or her team is to deliver to commitments in the short term while investing in the long-term health of the business. Bottom line: That's management. Good managers know how to eat today and dream about tomorrow at the same time. Any fool can just deliver in the short term by squeezing, squeezing, squeezing. Similarly, just about anyone can lie back and dream, saying, "Come see me in several years, I'm working on our long-term strategy."
Neither one of these approaches will deliver sustained shareholder value. You have to do both.'
The gravitational pull of internal “stuff” is overwhelming and resists all attempts to move the conversation to topics outside of the firm’s four walls, preferring instead to keep managers focused on the nuances of their own operations. The result is a self-fulfilling management myopia where the view on the world is grossly limited to the immediate surroundings…and ranges as far as the eyes can see outside conference room windows.
Myopic firms miss market moves and focus incorrectly on improving yesterday’s systems and products and services while customers are looking and moving forward in search of new solutions to emerging vexing problems.
Overcoming this myopia requires extraordinary effort on the part of key leaders to train and enable their teams to move outside of the four walls and to build a more comprehensive market view that is constantly in the process of being refreshed; here are some suggestions on how to think 'outside the room':
1. Start by scheduling regular forums where the only items discussed are external in nature. Create a series of core questions that challenge team members to show up prepared to talk about what’s going on with customers, competitors and other industry ecosystem players. Resist the urge in these forums to move towards actions and internal items with one exception.
2. The one exception to the “no internal discussion rule,” is to teach your team members to end their discussions of external forces/factors/changes with “What this means for our company is… .” Capture these notes.
3. Charge team members with the task of monitoring specific competitors and industry participants and providing regular updates to the group as well as instantaneous updates as conditions change. Remember, that the insights must always be accompanied by, “What this means for our company is…” statements. Rotate assignments periodically to keep people fresh.
4. Interview customers. Regularly. It’s interesting to sit around and speculate on what customers are doing or thinking, but it’s much more compelling and actionable to truly understand what’s on their minds. Again, create a simple customer survey script and charge your key managers and contributors with keeping tabs on specific customers. Bring the findings into your “external forums” and share.
5. If your team is internally focused such as IT or an internal support group, make certain to forge relationships with external facing colleagues and departments. Invite members of these groups to join your meetings and to share updates on current market issues. Pay attention for opportunities to better tune your function’s activities and priorities to issues and opportunities that your external facing colleagues see in the market.
Inevitably the best outcome of good external awareness is the reflection of insights in programme, product and service improvements that create value for customers and profitable growth for your organisation.