Businesses go down the rabbit holes of ruin because their leaders get the basics wrong

The business of business is actually quite simple, but far too often we over-complicate it for ourselves — and in the process, we lose the plot, the cash flow and ultimately the company. All any manager needs to do is manage three things: standards, priorities and planning.  It is simpler said than done though.

Business is about having an idea to produce or sell something that someone wants because there is a value to that product. The product also has to be different from similar products to make it more desirable. You then make an operational machine — people, systems, processes and equipment, to keep on making this thing of value. This is why it is so important to set standards, because when you slip off your creative value, you slip out.

It’s trite, but all businesses die for the same reason; they run out of cash. For most businesses there is no anti-gravity machine or skyhook in the form of a benevolent big brother that can pull them out of a financial morass, they have to generate revenues and watch their costs. The purpose of business has to be to make money and to create a surplus which can then be reinvested into the broader machine that makes the money — not waste it through financial incontinence.

This then comes down to setting priorities, focussing on those things that keep the machine running optimally, whether it be money or time spent. But far too often we get it wrong. We focus on the wrong issues; we waste time and we waste money.

When people don’t know what to do, they default to that which feels most comfortable, creating work to create the illusion of work. When they are scared, they shift to procedures because it makes them feel safe but it really doesn’t, in fact it is actually very dangerous.

Research companies Martech and Ipsos US have found that the creative quality in an advertisement campaign is five times more important than the actual execution plan of getting it on air, in print or on a billboard, yet far too many people fixate on the minutiae of execution rather than perfecting the actual concept.

People think being professional, organised and efficient is supreme, when in fact if the value basics are not right, these focussed attributes will be fatal because they will continue to blind business leaders from seeing what is wrong with the business until it is too late.

Sometimes it’s wilful myopia, with proceduralists and planners who should be focussing on the messaging and creative quality, instead creating a tsunami of obfuscation; cowing you with spreadsheets of data crushing the creative endeavour and sucking out all possibility of your company winning.

In the process, they will always have an argument about why they are doing this which appears watertight until you probe it and see dubious or lazy assumptions at the base of it.

Solid management

To be an effective manager, you have to understand your business, what value you provide people. Then set those priorities to keep that value flowing, and plan to make that happen.

When something comes in use the four quadrants of the Covey method (as designed by Steven Covey) to triage them and respond accordingly: 1) if it’s urgent and important do it now; 2) If it’s important but not urgent, schedule it; 3) If it’s urgent but not important, delegate it to someone to handle; and 4) If it isn’t urgent or important, kill it. In that order of priority – 1, 2, 3, 4.

Most people, of course, go 1, 3, 2, 4 and live in a particular hell of their own making as the unattended important stuff keeps mounting into crises.

This is important because you must plan according to the business priorities and allocate resources accordingly. The problem is that many people do not.

I use a four-column chart where I work. There are four columns: A to-do or review column, followed by a doing column, then a review column and the final column is done. All I have to do is to ensure that the items on the chart keep moving from left to right. 

The key here is that this is not a description of things that have to be done, it’s simply the tasks that have to keep moving to completion. Many people don’t do this, they get off on the endorphin rush of describing the problem without ever getting around to resolving it.

You don’t need a massive pie chart; the longer your to-do list, the less chance of getting it done, which is why using the Covey matrix is so important to perpetually triage the tasks that are coming in.

If you do nothing more than understand the value that your business creates, set standards across the various sectors and uphold them, prioritising and planning accordingly, the business will thrive.

Instead, though, far too many people will disappear down rabbit holes thinking that the secret to being a good CEO is the ability to speak in public or motivate people.

Of course, you have to be able to speak in public, because that’s a very important part of being able to lead people, to get them to move things from the left-hand side of the to-do list to the right-hand side consistently, but if the company is going down the tubes, no one is really going to be interested in what you have to say, if it’s just motherhood and apple pie.

Disagreeability and moving forward

Apply the same principle when you are a CEO managing others. You get I-shaped specialists in companies, who are there for their technical acumen but can’t manage. A CEO is T-shaped, working across all these experts and getting them to work together, to the standards you’ve set.

There is another aspect to consider: the dimension of agreeability: it turns out that being disagreeable is more effective than being agreeable in building value. People equate agreeability with getting on with people. The mistake is not understanding that disagreeing doesn’t mean being grumpy and destroying people, it means not going along with bad ideas and not accepting lower standards.

Agreeability, or being the nice “yes-person” at all costs, is a race to the bottom. Being disagreeable is the heart of innovation and progress. You say no and then you reframe the idea, give it a different purpose, content or rationale and then start respectfully engaging people to understand this new concept and move with it — and with you.

You have to be able to cultivate the ability to be disagreeable if you want to innovate or maintain standards, and when you do that you will find you have a business that sells products to a high standard at reasonable cost that are in demand. When you do that, you have created value.

So, set the standards, triage the priorities and plan. Don’t allow yourself to be distracted. When you eventually stop for a breath, you’ll be amazed at how far you have all come, not just you, and the bottom line — in all its different angles — will look very healthy too.

This article was originally published in Daily Maverick.