Bert Sadtler - President
Not only is running a business difficult; but, many smart people have been unsuccessful. According to an October 2014 Gallup survey, about half of businesses fail in their first five years in spite of good products, good people and good markets.
Assuming you are delivering a relevant product or service, what is the most critical element that a business must have in order to generate growth and success?
There are varying opinions. Some experts think leadership is the top element for business success while other feel the proper ingredients include a sense of urgency, proper financial backing, market timing, product sales and marketing strategies and even some luck. Clearly, in addition every viable business must have the right talent to be successful.
However, the best talent in the world cannot overcome the sins of poor leadership or a poorly run business. There must be a more critical element than simply having the right talent.
Consider the following questions:
– When building a business beyond it being an employee of one, shouldn’t the total output of the business exceed the total sum of each individual employee?
– Isn’t the business’s output a key element? If businesses face a competitive marketplace, what kind of favorable competitive advantage awaits the business that can find a way to deliver a higher value to their customer?
We are really talking about “Performance Optimization”.
The business must be able to go beyond the talent aspect and define ways to measure success in terms of performance optimization. The success metric becomes a function of the talent’s total output as the business delivers value to its customers and clients.
Now, back to the question: “What is the #1 Element for Business Success?”
If we agree we have the right ingredients for the business as listed above, and we want to maximize value for our customers then one could argue that:
The key to business success = performance optimization
To maximize performance optimization; then “Organizational Goal Alignment” is the #1 element for business success.
Let’s look at alignment through the example of a Roman warship. For the Roman Warship to achieve success, leadership needed to chart the right course, maximize the effectiveness of the crew (talent), synchronize all of its various weapons (performance optimization) and align the various components to focus on the same goal (organizational alignment).
With the Roman warship, there are many moving parts. For example, the oarsman’s leader needed to understand where the boat was headed and then focus the oarsman on getting to that spot. The army’s leader needed to know when the ship carrying them would reach its destination and where the army with its horsemen would be departing into battle. The leader of the sailors needed to know the plan so the sailors could have the boat trimmed for maximum speed and maximum effectiveness.
The Roman warship could be powered using its sails or it could be powered using the strength of oarsman or both could power it. Weapons on the boat included cannons, an army with horses and the ability for the warship itself to be a ramming weapon so it could broadside enemy boats. None of these moving parts worked effectively or efficiently without alignment. With alignment they would be able to deliver a greater total output than the sum of each individual part.
The goals of each group on the boat needed to be aligned with the overall goal of winning the battle. Leadership needed to coordinate the aligned actions on the boat in order to optimize total performance. The element of just leadership alone is not enough. The alignment element is the enabler for the greatest output.
Returning to business, the leader must have an understanding of the correct path forward and then be able to effectively communicate that path in order for the talent to be capable of flawless execution.
Leaders need to make the right decisions for their organization to succeed. A leader who changes course every other minute will exhaust and frustrate the talent to the point where the execution will fail. Without effective alignment, and the ability to communicate the goals quickly through the organization, the value of critical leadership decision-making is lost.
Alignment requires the leader to assign responsibility and functions to each department, so that all are focusing their responsibilities in the same direction.
A business that is properly aligned, has good leadership, delivers performance optimization and gains competitive advantage will have the singular focus to successfully complete the overall goal of business growth.
How do you decide if your business is properly aligned to deliver performance optimization from a talent perspective? Initially determining if a business is aligned can be completed through some simple questions.
Here are two examples:
Example 1) If the leadership were to hire a high caliber sales producer who earned $1M in sales commission, would the leadership be thrilled because the business had a significant revenue increase that also earned a bonus for the leadership? …or would the leadership be soured because they thought it was crazy to pay that sales producer so much commission bonus?
An aligned organization (with an aligned compensation program) would answer with the first option. With an aligned organization, when the sales producer over-delivers, the leadership directly benefits in addition to the sales producer. Instead of viewing the commission bonus as an expense, it is viewed by leadership as a business investment.
Example 2) If we were to speak with a selection of senior, mid level and low level members of your business and ask them to tell us the mission or purpose of your business or ask them to explain what your business delivered to its customers, would their answers be very similar or extremely different?
An aligned business would answer with very similar responses. Unfortunately, we don’t see this happening at enough businesses.
How does this impact your talent recruiting?
Alignment is an essential element for best practice recruiting. Knowing that businesses must have the right talent in order to grow, how much more effective would a newly hired talent perform on day 1 with a clearly defined and aligned action plan versus the newly hired talent who is hired first and then needs to develop an action plan during their first 60 days of employment?
Worth noting, the business climate is very dynamic and can change every day. A business that is initially aligned must have systems in place in order to remain aligned in the future.
Critical to maintaining alignment is:
– Constant internal communication
– The implementation of a pay for performance compensation model
– Recognizing that the talent, which got your business to this point, may not be the same talent that will get your business to the next level.
Summary for Thought:
Is your business ALIGNED for successful growth today and in the future?
Will your talent answer the alignment questions with similar or different responses?
How are you going to maximize your performance optimization? How will you measure it?
How do you know you have the right talent to take you to the next level?
What are you doing to embrace change and drive continuous improvement?
About Boxwood Strategies
Bert Sadtler is the President of Boxwood Strategies and is a thought-leader for best practices recruiting, performance-based compensation and the shift in the changing paradigm toward acquiring critical senior level talent.
Boxwood Strategies is a management, consulting and recruiting firm located in the National Capital region. As a dedicated, consulting resource to CEO’s and hiring managers, Boxwood develops strategies for organizational growth through a focus on performance, as well as the evaluation and acquisition of critical talent.
To help companies meet numerous business challenges, Bert has co-founded the Alliance of Independent Managers, a group of diverse and accomplished senior-level professionals who are available to companies on a consultative and project basis. The focus of this group is to take “AIM” at a company’s challenges and opportunities, clearly defining it’s challenges, and deliver cost-effective solutions by using experienced, professional consultants instead of hiring full time employees. Market sectors include: SATCOM, Space, Government Contracting, Communications and Technology.
Bert can be reached at: BertSadtler@BoxwoodSearch.com and at BoxwoodSearch.com