A critical aspect of leading a business is clarity; clarity of direction, clarity of roles and responsibilities, and clarity of processes.  People need that.  They need to know exactly what is expected of them in their jobs, and what they must do and how.  Their training is derived from it.  Their performance and pay is linked to it.  The organizations ability to operate profitably is directly affected by it.  A lot of fundamental elements of organizational effectiveness are wrapped up in clarity.

I am sure you have all heard it said that specialization of tasks enables people to perform with high quality and efficiency.  Adam Smith characterized this as division of labor and wrote of the advantages of specialization for enhancing human productivity as early as 1776 in his classic book The Wealth of Nations.  Clarity and consistency are fundamental elements of that concept. 

…[leaders] often do not realize that they have the opportunity, in fact the responsibility, to draw the line as to what options they are willing to offer in their products and services, and in their processes to deliver them.

The less clarity and consistency an organization has, the more the variability that creeps in.  With that variability comes different ways of doing things from one situation to the next.  Those different ways of doing things cause quality problems and inefficiencies, errors and increased costs.  Much of what you learn in process improvement technologies, such as Lean Sigma and Kaizen, is all about reducing variability for that exact reason.

However, customers often want things their own way, and it is important to be flexible in providing your products or services in order to meet those special needs.  The McDonalds/Burger King war hinged on that exact concept.  Burger King waged the “Have It Your Way” campaign for years to distinguish themselves from McDonalds and earn market share.  It worked, but it was expensive for Burger King.   

However, Burger King used the Core Concept quite effectively for that time.  They identified a range of options within which customers could “have it their way”, but they limited those options.  For example, you could have your burgers with or without lettuce, cheese, pickles, etc., but you could not specify what type of lettuce, cheese, pickles or bun you wanted.  Most importantly, you could not have your burger made any other way than grilled.  You could not have it fried or sautéed with onions and mushrooms. You could not order your burger rare, medium or well-done.  Why not?  That degree of variability would have been too much for their operations to handle efficiently (to say nothing of the fact that it would have taken away their major differentiator).  That degree of variability brings with it increased operating costs.  With increased costs comes increased prices, and they would no longer have been able to compete with other fast food restaurants.  So, while Burger King was adding a degree of flexibility to their operations and their service offerings, they were protecting the core operations of their business by limiting the options that they were offering. 

Every operation has the same issue, and many leaders do not realize it.  Customers often feel that they have a special need that cannot be met any other way than the way they have in mind.  In an effort to meet the disparate needs of all their customers, leaders often lose sight of the core strengths of their business and their business model.  They try to be everything to everyone.  They do not realize that they have the opportunity, in fact the responsibility, to draw the line as to what options they are willing to offer in their products and services.

Remember, your customers are not the experts in YOUR BUSINESS and usually do not know all the options available to them for meeting their needs.  They do not understand the benefits of doing things the way you do them from a cost and quality standpoint.  That is the discussion that you must have with them.  That is the education they need.  

It is right to try to find every possible way of meeting your customer’s needs.  The key is determining where and how to draw that line.  As a leader you need to decide in which areas will you choose to be flexible, and in which areas will you not?  In which areas will flexibility enhance your product or service offerings, and in which areas will it not?  How much flexibility can you profitably manage within the context of the business model you have chosen and the market segment in which you are competing?  Those processes constitute your CORE. 

• Those core processes are where you establish and maintain your position as an expert supplier or service provider.  
• Those core processes are where you add the most value to the end results your customers are after. 
• Those core processes are where you maintain the opportunity to ensure the profitability of your business.

To protect your CORE, you MUST demonstrate the technical and economic equivalence or superiority of your methods to what your customer is proposing.  

The obvious question becomes what if you cannot prove the technical superiority or economic advantage of your methods?  Then you may need to consider implementing their recommended changes on a broader scale.  Don’t be afraid of this outcome.  Don’t let your ego get in the way of listening to ideas that may help you improve your operations.  Remember, your customers are a great source of competitive information.  They are shopping your competition every day.  Take advantage of that. 

Just for the record, customers are not the only group that can affect your core processes and operations.  In addition, processes are not the only aspect of your business that can be affected by external influences.  Employee attitudes can be affected as well.  Regulations, media communications, competitive changes are examples of external influences that can affect processes and/or employee attitudes and your organization’s ability to perform correctly.  Therefore, a task that you have as a leader is to minimize the impact that all “external influences” have on the CORE of your business. 

Think about this.  What business are you in?  What is your expertise!  What are your core processes?  Identify the core elements of your business and build structures and processes to enable that core to operate as efficiently as possible.  Then, protect that core from external influences.  It will enable you to improve the quality of your services and the profitability of your operations.

I like this quote because it speaks to “how” you get things done as a leader, more so than ”what” you get done.  To me, the “how” has a greater affect on your ability to sustain organizational performance than it does on achieving a short term result because it defines an approach which, if reflective of your style and attitude, is representative of how you will do things in the future.  It is therefore also reflective of the results you will continue to achieve.

The quote goes:

“Being successful as a leader does not mean having all the answers, it means getting them.”

This quote speaks to knowing the strengths of your team and being able to access their knowledge and expertise for the use and benefit of the entire organization.  By doing so you leverage your own strengths and abilities, and you exponentially increase the results your organization can achieve. 

This aspect of leadership requires having the right processes and mechanisms in place…something we discussed in the post on leadership as being a process rather than a set of skills http://www.scottneilson.com/?p=63

It also implies a strong degree of empowerment in your workforce which enables people to draw on their own creativity and motivations to excell in their work and bring all their skills and abilities to performing their daily taks.  This is a big subject and one which I really want to get into.  It has many sub-parts which must work together to be successful.  It combines aspects of several posts I have done recently, and will be a nice assimilation of the thoughts in each…showing how it all ties together.  That has to be a subject for another post.

As a turnaround specialist I am frequently asked, “What do you find is the common cause of failure in organizations?”  Unfortunately, that is not an easy answer.  Every case is different.  As lawyers are often criticized for saying, “It depends.”

I once had a group ask me to send them a case study of one of my turnarounds so that they could get a good feel for what I do and evaluate my candidacy for their CEO position.  I did.  A few weeks later they came back to me and said that they were not going to fill the position, but were going to handle it themselves.  Apparently, they chose to use that case as a guide for improving their business and save themselves some money.  I am guessing that they were inexperienced enough that they did not realize that each situation is different and requires careful diagnosis – data gathering and analysis – in order to chart the correct path to success.  It is now two years later; the business is still in the red; and, they are desperately looking for new sources of financing.

My observation is that the most common area in which leaders fail is in accurately diagnosing organizational issues.

Having said all that, there is one common area from which organization failure emanates…Leadership.   At times, people get a bit frustrated with that answer because they do not understand what Leadership is.  Leadership is a somewhat nebulous term…it has many aspects…it is not black and white.  Being a leader requires having many skills; it requires recognizing what skill is required for any given situation; it requires moving rapidly from one skill to another as the situation demands.

Further, I can say this.  My observation is that the most common leadership failure is in accurately diagnosing the organizational issues.  People feel the need to act quickly and often do not take the time to accurately determine the problem.  They fail to collect the right information, if they collect any information at all.  They fail to ensure that the data they are collecting is accurate and complete.  As a result, they solve the wrong problem.

As an example, I once observed an organization that was growing nicely but was not making any profits.  Year by year they grew in sales, but they never put any profits on the bottom line.  They assumed that the problem was that they were not managing their costs correctly, so they started cutting back staff.  Unfortunately, this put a heavy workload on the remaining staff and quality issues soon followed.  With the quality problems came customer dissatisfaction, declining sales and further losses at the bottom line.  The actual problem was that they did not understand their cost of doing business, and as a result were under-pricing their services.  They did not take the time to correctly diagnose the problem.  As a result, they solved the wrong problem, and actually created a bigger one by doing so.

Data is fundamental.  Analysis is critical.  As a leader, you need to take the time to accurately diagnose the causes of the symptoms you are seeing in your organization.  As one well-known CEO once said, “You can’t skimp your way to success.”

Finding the right person to fill a position is an issue for anyone who has to hire people.  All too often we are so anxious to fill job openings that we start changing our perspective of what is needed in the job to fit what a candidate has rather than matching the candidates skills and experiences with what we need.  Needless to say, the end result is a poor match between the individual and the requirements of the position.  That leads to the job not being done well and requires performance management to kick into gear, which we have already discussed as being one of the most poorly performed of management tasks.  It is better to take the time to select the right candidate.

This problem starts with a lack of clarity and confidence about what tasks must be performed in the job, and what skills it takes to perform those tasks.  First, recognize the vacancy as an opportunity to improve your business.  Do you really need to replace this position?  Can you change the description of the position to be more or something different than it was before?  Can you absorb the responsibilities of this position into those of another existing position and give that position a raise or promotion?

Never hire an individual if you have any doubt that they can meet every expectation you have of them.  If you do, you will be frustrated forever. 

The quickest way to get these answers is to flow chart the activity of your operation and clarify what is needed in the position.  By doing so you reassess the steps to deliver the product or service you provide, and you clarify the processes and activities to deliver them.  The result is a better idea about what is needed from each individual involved in the process, confidence about your need to fill the position, and clarity about what you need to fill it with.

The next problem stems from the belief that the “right person” for your position does not exist.  There are a couple of reasons why this doubt creeps into your mind.  You are uncertain that your expectations are realistic; you do not know how to define what you are looking for; or you do not know how to go about finding the “right person” for the job.  This uncertainty and lack of clarity is exascerbated by a sense of urgency to fill the position and handle the problems which occur everyday that the position remains unfilled.

If you have established clarity about what is needed in the position to support your processes, then the challenge becomes finding the person who has the skills to deliver on those needs.  First, this means identifying the skills needed to do the job.  If you do not know them yourself talk to people, interview the people who interact with that position, discuss the position with others in similar positions.  Clarify the skills needed. 

Next, create a set of interview questions which enable you to determine if your candidates have those skills.  Use probing open-ended questions in which the candidates can tell you what they have done which demonstrates their skills in those areas.  This is referred to as behavioral interviewing…interviewing in which you are probing for information about observable behaviors in the candidate.

Finally, take the time to select the right person who can do the whole job…don’t settle for whatever is available at the time.    It will be a source of endless frustration for you…and them.