Focus is the alignment of the value center of ownership with the company’s management, employees, vendors and customers.
The owner just can’t figure out why his employees lack “common sense.” Management is excited—they have created a process of measuring and monitoring an activity yet even after it is implemented, the bottom line of the company drops. Employees are frustrated because they have to face customers who have been treated poorly. These all can be symptoms of a disease we at The Fremont Group call “alignment disorder.”
When your tires are out of alignment it costs you money and endangers your life. Your tires wear unevenly and have to be replaced prematurely. Your control of the car while breaking is compromised putting you and your family in danger. Worst of all, when you really accelerate your steering wheel shakes and you con lose control causing a major accident. The same thing happens when the interests of your employees are not aligned with the interests of the company. When it is in an employee’s best personal interest to take an action that is not in the best interests of the company you have an alignment disorder.
Alignment disorder is when an employee can make more money by working slower and accumulating overtime pay rather than getting the job done efficiently or when it is more important not being blamed for a problem than fixing it. A sales person lying to a customer to get a sale; employees leaving at 5:00 with a project a half-hour from finishing; or the raise given to the one who complains the loudest are all examples of alignment disorder. Bringing a company into alignment first requires that you clearly identify what the company is trying to accomplish. Alignment disorder is often a symptom of an owner who has not clearly communicated to his or her employees what is really important—or a company that says one thing but practices another. Of course once this mission is clearly stated and communicated, systems, procedures and controls must also be introduced which incentify the positive behavior and punish behavior not in conformance with the corporate objective.
What truly is important to you and your company? Money is obvious. If we don’t make a minimum, mandatory profit any other altruistic ideals you might have cannot be achieved. Although it is possible to forget that we need to earn a profit, our work at The Fremont Group rarely encounters this omission. (Possibly because companies that ignore profit are not in business long enough to become our clients!) It is much more common for us to encounter companies that have lost their “value center.”
There is only one reason for your business to exist—to make your life better. We preach this as the “First Commandment.” The obligation of your business is to make the life of the owner better. The things that are making your life better should be identified and built upon; the things that are making your life worse should be identified and eliminated. If however you do not clearly identify your “value center” as making your life better, you will miss a significant portion of this axiom. Everyone has a value center beyond just earning the maximum profit possible. If we did not we would make all “cost-benefit” decisions resulting in acting upon anything that would save the company a nickel regardless of the human consequences. Joe would be fired after he got old or hurt because he could be replaced cheaper. Agreements would be breached if it would save money. Customers would be provided cheaper goods if we could “get away with it.” Few owners (and none of our clients) would totally agree with this approach. There is a “higher agenda” for almost all of us. The litmus test of your value center is easily determined. Take a sheet of paper, as much time as it takes and write out your epitah—how do you want you and your company to be remembered after you are gone? Profit will be included but list at least five additional values that you want you and your company to be remembered for. When you finish you have defined the value center of your company. This now must be transmitted to your organization.
The transmittal of your value center to your organization is required to create alignment and focus. When your employees clearly understand your value center and are incentified to act in accordance with it they suddenly acquire “common sense.” This transmittal is an on-going process. It starts with the hiring process, continues in specific training, is reflected in your incentive plan and most of all is observed by all in the actions of the owner. Just as the parent who tries to teach his children not to lie as they call in sick to work to go skiing, the example of the owner is more important than the rhetoric. When the value center is defined the owner must be sure that they are identifying values that they are prepared to live by themselves.
During the 1990’s many consulting firms made money by convincing businesses that they needed to write a “mission statement.” Had it been done effectively much of the company’s value center would already have been identified. As Steven Covey wrote in The Seven Habits of Successful People (and many others have paraphrased) it is important to “start at the finish.” Most mission statements are either “forward-looking” or current attempts to define the mission of the business. We have already defined that the reason that every business exists is to make the life of the owner better but what is the purpose of the business? What are the things other than money that really will make the life of the owner better by fulfilling their true objectives? This is the value center.
It was also common for companies to create mission statements by committee. Bring in your management team, have them work with a consultant for a day (or more) and come out of the room with a well-written mission statement. Put this mission statement on the wall in the lobby and go about your business. This approach is an abdication of the leadership function of the owner. The troops look to the general for leadership. They expect the general to have a plan—a clear vision of what is going to be done. Then they expect to be informed as to what their role is in this plan. They don’t want to hear the general be “wishy-washy” about the plan and ask them what they want the plan to be. The common element of all leaders is they have a plan; they clearly communicate their vision or plan to their subordinates; and they act decisively upon that plan. It is therefore the leadership responsibility to clearly define the purpose of the company. This is not a group activity—this is a look into the heart of the leader. If the owner does not do so, the company can never have the focus required to be successful without relying upon luck. Time spent by an owner identifying their value center is akin to time spent planning a project—every hour spent in planning saves two on the job.
A clearly defined value center creates in an organization a new definition of “success.” Most of us are not trying to be just the company who makes the most money; most of us have some values that must be complied with in making that money. As an owner we must accept a new definition of success that complies with these values. The attainment of this newly defined success brings about real fulfillment. To be accomplished we must train our people in its meaning and we must at all times demonstrate to the organization the priority of these statements through our daily actions.
In order to transmit your values to employees you not only need to live these values but you must also train your employees in them and incentify them to act upon them. If it is in their financial interest to make a sale using methods outside of your value center you have a structural issue. If they simply don’t understand how they should prioritize competing interests you have a training issue. The mere demonstration that you are willing to invest in training employees regarding these values makes a huge impact upon the organization. It is easy to say “do what is right” but when the company “puts money where their mouth is” the impact is undeniable. That impact brings your employees into alignment with your value center. It creates a focus within the organization. It puts everyone “on the same page.” It makes you more money and it brings about a fulfillment that transcends your bank account. It makes you successful.
We need look no further than the Katrina disaster in New Orleans to see an example of poor leadership. There was no plan, there was no communication of the plan and no decisive action. A strong leader would have immediately appointed a single individual to act in accordance with the values that had been instilled in them decisively pulling together all of the available assets of this country. There would have been second guessing but a strong leader accepts second guessing. Six months later instead of trying to explain and avoid blame lives and a city would have been saved.