Imagine that you are now the CEO. Further imagine that your organization is underperforming. Worse yet, your organization has low employee morale, high labor turnover, declining market share, falling profits, competitors that are under-pricing you, and constant criticism from your board of directors, investors and investment analysts.
Sound like a fun job? What are you going to do?
Imagine that you are now the CEO. Further imagine that your organization is underperforming. Worse yet, your organization has low employee morale, high labor turnover, declining market share, falling profits, competitors that are under-pricing you, and constant criticism from your board of directors, investors and investment analysts.
Sound like a fun job? What are you going to do?
You start building. How different would this challenge be than accepting a head coaching position for a college sports team that has been winless for the last four years? You begin looking for the athletes who want to win. But that is not enough. You need to grow talent and lead them to work with each other.
Being a CEO is not much different.
Starting the rebuilding journey
Where do you begin? There is no road map. There is no stepwise sequence. So many things need to get fixed. When you are alone, in solitude, you need to dwell on the right vision and mission for the organization from which to formulate your strategy. That is your primary job – to set direction. Everyone will want to know your answer to the question, “Where do we want to go?”
You don’t have to fully decide yourself. That is what your executive team is there for – to bounce your ideas off. They may not all want to get on the bus with you. Choose quickly who should stay with you – and who should not. It is not going to be an easy journey.
You have so many secondary jobs besides just direction setting and strategy formulation. And there is little time to delay. Of course, there are dozens of best-selling books on leadership. Perhaps one will provide you a winning formula. If it were my decision, I would create a culture for metrics. You cannot manage what you cannot measure.
I suggest you also create a culture of manager and employee involvement. My favorite methodology for this is constructing a strategy map and quickly delegating to your managers the task of identifying a few manageable projects, as well as the core processes, to implement and improve. Also, ask them to propose the key performance indicators (KPIs) that can be monitored to assess the progress of achieving the strategic objectives in your strategy map. The KPIs will monitor those same projects and core processes. The benefit of this approach is that your managers and employees will have ownership of the actions and more easily accept the accountability they will be responsible for. You asked, “Where do we want to go?” They must answer, “How are we going to get there?” and also “How are we doing on what is important?”
You cannot get there without customers
Are you done? No. What about your customers? You can try to make them all happy. However, my suggestion is to first identify which types of customers to retain, to grow, to win back and to acquire – and which types not to. You are not a charity organization; you have shareholders expecting financial returns from your business. You do not want to just grow sales. You want to grow profitable sales. This will require measuring, reporting and analyzing customer profitability and their future potential value. Treat customers as investments in a portfolio. The ones with the highest financial return will translate into increasing the rate of shareholder wealth creation. This can silence the criticism of your board of directors and the investment community.