Focusing on Understanding How Business Works

A Best Practice for 2018

“One of the biggest problems in my company right now is that too many of our core employees simply don’t understand how business works let alone how our business works.  Forget all of the forecasts about disruptive technologies and artificial intelligence; how about basic business skills?”

— Chief Learning Officer, Fortune 500 Company

This quote came from a conversation on the day after Christmas with a long-time client who was expressing his frustrations with the current business environment and his perception of the state of talent in his and other organizations.  As I shared during our dialogue, I don’t think he’s alone. Based on many similar formal and informal conversations, I feel that many organizations are struggling with the same issue and they become accentuated at the start of every new year when leaders start to put together their plans for the coming year.  Below are some observations about the challenges ahead in 2018 and some easy actions that can be taken to solve the challenges.

Employees are just “living in the moment”

The hassles of getting to work, the non-stop pace of change, the overwhelming amounts of emails, texts, phone call, and data, and the impact of the geopolitical issues have taken a toll of the motivation and ability for employees to think long term about anything.  As a result, they are just thinking in the moment. Unfortunately, business is not a just-in-the-moment thing.  By not seeing the big picture and thinking about the balance between the short-term and the long term, employees are creating a self-fulfilling prophesy of failure.

One of the most critical actions leaders and employees can take is to develop enhanced business skills that provide the tools needed to see the big picture and understand how a business really works, makes money, and creates shareholder value.

The value proposition to customers must be in everything you do

Many of the leaders I have worked with during the past year acknowledge that they as well as employees have forgotten why they are actually in business.  One of the most unfortunate impacts of the digital economy is that goods and services become quickly commoditized and therefore it’s easy to forget that the only reason a business exists is to deliver a unique value proposition to customers who are willing to pay for that unique value proposition.  In other words, you can’t forget about your customers. The most successful companies in the world today have one big common thread; they are clear on their value proposition to their customers, their organizations embrace the value proposition, and they execute the value proposition very well.

An important action leaders and employees can take is to spend time developing the skills and tools to understand their own value proposition and then do everything possible to keep it in mind in everything you do including asking customers if you are successfully implementing your strategy and satisfying their needs.

You must know how to define and measure success

I was more amazed in 2017 than any other year I’ve been in the talent development business at the lack of skills in the area of business and financial performance.  It’s one thing to know the big picture and it’s another to be able to measure success.  What are the key objectives and results?  Are they short-term, are they long-term, do they align to the strategy and value proposition?  These are basic questions, but again not enough organizations are focusing on these core and foundational issues.

Another important action leaders and employees can take is to spend time developing foundational business acumen skills that enable you to measure the success of your strategy.  There are many tools available that give you basic Business Acumen 101 skills which can help you both see the big picture and measure the results of the strategy.

Employees must be accountable for understanding how the business works

Understanding how the business works and an employee’s role in the success of the business can’t be optional; everyone is self-accountable for taking ownership in both their own metrics and for understanding how business works.

Leaders must create an environment for accountability.  In 2018 and beyond, this is achieved through proactive dialogues, monthly reviews, and immediate corrective actions as opposed to letting things sit and fester.

Forget “empowerment,” give people the skills to be successful

A few years ago, one of the many “magic buzzwords” of leadership was the concept of “empowerment.”  You need to “empower” people so they will take ownership and be accountable for their actions.  While of course that is true, it is not the magic formula for success.  The magic formula for success in 2018 and beyond are foundational skills of Business Acumen, Business Leadership, and Strategic Business Selling. 

By giving your leaders and employees any or all of those skills you are in effect empowering them to be successful at seeing the big picture, delivering on the value proposition, measuring success, and being accountable.