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April 2, 2019

What's the most important thing we need to focus on as head of the company?

 

If you do happen to be the most senior person in the business this is an important question...it's actually the question. We'll answer it below but first a quick bit of terminology. 

 

  • Lagging indicators - are the results we want (profit, marketshare, number of outlets)

  • Leading indicators - often called key performance indicators or KPIs - are the things we need to focus on to get the results.

E.g. we want to lose 5kg in three months (lagging indicator) we need to focus on daily food intake, and exercise (leading indicators).

 

If we want great results, the most important leading indicator the head of the company needs to focus on is having:

 

the right people in the right place doing the right things, right.

 

Sports managers are continually making sure they have the optimal composition of players in their squad and the best line-up on the field for each game. Companies need to operate the same way. This needs focus on recruiting and retention.

 

Side bar -- Ditch the Job Description...

 

Job descriptions are based chiefly on one thing - skill. Today the detailed skills we need change about every six months and my guess is that if we actually observed the daily activities of our team members they bear little resemblance to the actual job description.

 

Getting (and keeping) the Right Players on The Team

 

It's very likely that most of us have hired primarily for detailed job skills in the past, and many continue to do it today. Look at most job advertisements and we'll most likely see a statement of skills requirements. Today though we suggest hiring on these four key attributes:

 

1) Will. These days markets change quickly and our strategies often need to pivot to take account of these changes. If a person has a strong character and desire to succeed they are able to roll with these changes and meet new challenges. People that rigid in the way they think or do things and don't have the desire to adapt, wont perform well.

 

2) Values. Values form the foundation of a company's culture: values are the key component of the way we do things here. If someone's values are clearly at odds with what's important to the company then there are likely to be challenges in the future. (By the way just because someone has a different set of values doesn't make them a bad person, it just means they will probably be better suited to working in and environment that matches what's important to them).

 

3. Results. The candidate needs to have achieved something similar to what's required in the role they're going to be playing in your company. For example hiring a software developer who has achieved nothing relevant to what they will be working on is a big risk. If a key sales person is being hired to help grow the company's revenues to $5M this year but they've never got close to that figure before, what makes them believe they can achieve that result for you?

 

At the other end of the scale we have the prospect of hiring a new graduate...Results are still important. Grades are an obvious measure but importantly what has that person also achieved outside the area of study such as internships and other projects. What has the project sponsor or intern supervisor said about what they achieved.

 

4. Skill. No I've not forgotten about skills all together! They are important. But if the previous three are not healthy, I'll contend that results over the long term will be hard to come by.

 

Show me the evidence...

 

For each of the above areas I recommend asking for evidence that upholds what is claimed by the individual (and verifying it when possible). Candidates can quite easily state that they have a strong will to succeed, that their values are aligned with the company's and that they have achieved significant results. Without evidence it's hard to get a true picture of that person - and judge whether they're being truthful!

 

Ask for specific examples in each area and - where practical - talk to other people who may be able to provide additional information and perspective.

 

What About Existing Staff?

 

Good team leaders (just like sports managers and coaches) are always assessing who they have on the team in relation to what they're trying to achieve. The same four elements can directly applied to existing team members to see what support they need or what their next position may be.

 

Finally...

 

Yes, market share, profits, cash, bonuses and the like are all important. Without these types of results the company wont survive. The key to ensuring you have the best chance of achieving results in these areas - lagging indicators - rely most on the leading indicator of having the right people, in the right place doing the right things, right!

 

My best,

 

Ian

 

More about Scaling Up

More about Ian.

 

 

 

 

 

 

 

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