The Best Business Strategy: Be Brilliant at the Basics
How Emphasis on Fundamentals Leads To More Successful Business
I was recently working with a large multi-billion euro corporation that ranks high on the Fortune 500 list. Unlike small companies, this firm is publicly traded and has a stock price that has done very well for quite some time. In the eyes of investors, it had all the right chemical make-up of the ideal firm: large, diversified, global, well-known and profitable.
Businesses strive tirelessly to establish such strength and prosperity. They create great visions of the future, set high goals and are always looking at what’s next, just like this one. Corporations of various sizes all try to grow and increase their profitability. Their strategies for product development and gaining more customers are broad. And these firms spend incredible amounts of money on out-of-the-box business systems and tools that will make them better, more competitive and admirable. From the perspective of onlookers, these firms set the bar and standard to which others strive to reach.
But scratching below the surface revealed gaps in leadership, major disagreements between departments and managers, and fractured employee satisfaction. Ongoing debates, lack of communication, and process overload tarnished its productivity. While admirable, the massive investments the firm made into sweeping changes, processes and initiatives to make the firm better were adding more complexity and weight to the course of business. In short, the firm lacked what I would consider the most important piece of any business strategy: being brilliant at the basics.
Why Firm’s Struggle
The reasons businesses often fall into such a state is not due to some management conspiracy or alternate motive. It really just comes down to things like communication and a detailed evaluation of what it really takes to do something. Unfortunately, many boardrooms contain only generalized process charts and block diagrams illustrating how the executives want the business to work and where the pieces fit. Downstairs at the working level though, these illustrations only capture a small amount of the real tasks and activities required for the business to operate.
For example, the board room may display a block diagram of the firm’s business system: The Market Planning leads to Financial Planning, which leads to Setting Targets, and finally Execution. Take budget planning. How do you plan your budget? What do you want to consider, or not consider? What assumptions are managers to make when planning their budget? Is it consistent across the business?
Another great example of these struggles is just within IT. While many businesses to their credit invest heavily in software packages to help them do a job more effectively, few firms take it further and customize the IT packages to better ‘talk’ to one another, or modify functionality to fit the business needs. Instead of tweaking the software, many businesses leave it up to employees to improvise ways around inefficiencies.
Going Back to Basics
So what are the basics that companies should work on? The basics are the fundamentals that enable an organization of any size to operate effectively as a single unit. Basics include having a shared sense of success. Basics are the simple things like clarity of vision, simple and standardized processes and alignment vertically and horizontally throughout the organization on what everyone needed to do. Of course, a larger organization may require more structured efforts to achieve this but it is still obtainable.
A simple example from this company was the presence of unique forms and templates at each office location. The office in Paris had a different way of presenting technical data than its sister office in Chicago. Employees traveling between the two offices had to learn different ways to do the exact same thing. Further, this company had people in high-ranking management positions who routinely failed to provide clear guidance to their teams, resulting is unnecessary organizational friction. This friction required managers to constantly negotiate and force their way through issues. Getting the job done was a perpetual battle that stressed and distracted the business on a daily basis. It was the organizational equivalent of having an extensive system of roads, but without having a single traffic light. Before establishing elaborate and complex business systems, firms need to create a strategy that allows them to execute flawlessly the most basic things that they do.
And being brilliant? Being brilliant is investing in areas that make the business operate with minimal oversight. Being brilliant, for example, is investing in communication tools that ensure everyone knows how to do their job properly and consistently. Being brilliant can also reflect investment into the people who make the organization work – their regular training and growth to ensure they are always at their best. Brilliance in business is also the use of reward systems that motivate people to work hard and reinforce the firm’s appreciation of their dedication which makes the firm successful in the first place.
Questions To Ask Yourself
Here are ten question to help you asses your firm’s grasp of the fundamentals:
1. Do you have sufficient standards in place to allow your business to operate smoothly regardless of where employees sit?
2. Are employees able to easily and quickly find what they need to do an effective job in almost any scenario?
3. Are your teams and managers empowered to make decisions, or do most decisions require some level of approval?
4. When you do run into challenges, how often do you schedule time to address the issue for next time?
5. Do you find your planning of things like budgets and projects to be historically accurate, or do you have to closely manage the details?
6. Do you invest in the business on a regular basis to make its internal operation get better?
7. Do your managers spend more time managing issues or managing people?
8. Would your customers recognize you for efficiency and speed?
9. Can your employees clearly state what the business’s overarching objectives are?
10. Are your experts in various functions (finance, software, supply chain, etc) allows to highly focus on their area of expertise, or are they distracted by other demands?
Depending on how you answer these questions, you may need to consider a deep-dive evaluation of what’s really happening within your company. A great place to start is with the employees who on a daily basis, must execute their duties in accordance with whatever rules, processes or barriers managers have set in place, intentional or otherwise. Ultimately, the employees doing the work will have to make things happen no matter what help they are offered, and will therefore be able to quickly identify areas where you can improve some of your business systems.
Now let’s be honest, there is no perfect business. No organization exists without problems. The difference, though, is that when businesses miss the basics they will never fully live up to their potential. A good test of where your firm stands is looking at the day-to-day. Management intervention should be the exception, not the norm. If you’re finding that getting simple things done is a challenge, it could be a sign that your fundamentals are not sound and need to be revisited.
So, are you brilliant at the basics?