3 Universal Business Priorities
I posted a Tweet on this that seemed to generate a lot of support and agreement so I figured I’d write a slightly longer article here without the 280 character limit to break it down even further. In my career with Ingersoll Rand/Trane I’ve worked in several business units and functions and 5 different states. My roles have ranged from engineering to marketing/product management, and now commercial sales/service leadership. I also enjoy reading and talking about business in general, both in the field I’m currently operating and to learn new things by studying entirely different industries and business models.
It recently struck me that there are 3 priorities and focus areas that are common to pretty much any business type. If you do these 3 things well, financial success and business results will generally follow. Now don’t get me wrong, there’s infinite nuance and complexity within any business, and you can’t ignore that. However if you continuously try to ground yourself with these “Big 3” and ensure what you’re working on is in alignment with at least one of these, I think your business will be better for it. Also I’m listing these in the order and ranking that I think about them, although that is certainly open to debate and could vary for your particular situations.
1. Employee Engagement – I truly believe if you have the right people, you care about them while also holding them accountable, and show trust through empowerment…the rest tends to take care of itself. It’s for these reasons I list this first although some would contend you have to start with the customer. I view employee engagement as a two-pronged effort of both recruiting and attracting the right people, while also leading the existing team and creating an environment that people enjoy working within. In creating the culture you have to really get to know people, build trust, maintain a high say-do ratio, show that you can remove obstacles getting in their way, all the while holding them accountable. There’s enough to unpack here to warrant an entire dedicated post (and come to think of it I might put that together). Suffice to say though, focusing first and foremost on having engaged team members created a flywheel effect that builds on itself and positively impacts all aspects of a business
2. Customer Delight – Customer delight starts with the basics…answering the phone, how you greet someone, the professionalism with which you provide the good or service, and a solid follow-up process. I personally believe the customer service bar is set very low in many industries. My wife coordinates with most anything home services related (plumbing, pest control, landscaping, cleaning, etc.) and she’s commented how poor the communication is. The labor shortages, supply chain delays, additional safety requirements, and many other things triggered by the pandemic have only magnified these issues. The challenge I’ve issued to my team is that rather than using these as an excuse, we need to raise the bar on those things within our control and really ensure our communication and follow through is crisp, now more than ever. Regardless of the industry you’re in, there’s incremental value to be gained by continuing to relentlessly raise the bar of customer service and strive for total delight rather than just basic satisfaction
3. Process Improvement – I used to think that a focus on the first two, Employee Engagement and Customer Delight, was sufficient and if you did these two things well, the financial performance would follow. I now believe that in most if not all businesses, you need to complement these with a focus on continuous process improvement. If you don’t, your systems and processes will accumulate waste which will ultimately burden the cost structure of your business. This will force you to either raise prices to a level that doesn’t correspond to the value you’re delivering in the market, or accept lower margins. Either one of these will ultimately get in your way of being a viable and sustainable business for the long-term as the world continues to rapidly progress and change (see previous post on The Red Queen Effect). At Trane we use Lean as our framework for continuous improvement. Regardless of the toolkit you use, it starts with truly understanding how works gets done at all levels of your organization, measuring critical things, empowering people to bubble up obstacles, and identifying those that are causing rework or waste and putting corrective actions in place to resolve those issues permanently, rather than just a band-aid
Once you’ve prioritized these 3 areas, I think you need to find a way to measure them. This is a bit dangerous, as Goodhart’s Law states, “when a measure becomes a target, it is subsequently no longer a good measure.” In the Lean framework, we try and overcome this by separating Driver metrics from Watch metrics. If we take Customer Delight, an example might be percent of times we place a follow-up call to a customer within 48 hours after service as a driver metric. The corresponding watch metric might be a customer survey satisfaction score. The idea being you really focus on the key driver metrics and then keep tabs on your watch metrics to ensure the drivers are having the intended impact.
Like I said, I’ve found these 3 priorities to be pretty much universal across all businesses. I’m curious, does anyone have a 4th they’d throw into the discussion? Or perhaps you’d bump 1 of the 3 for something else? Appreciate any feedback and thanks for reading!
Here are some of the favorite things I’ve come across the last couple weeks.
· Article - An Exact Breakdown of How One CEO Spent His First Two Years by Sam Corcos – I’m pretty regimented around how I manage my schedule and time, but this takes it to a different level. Fascinating some of the insights he gets by going through this exercise and some good takeaways for anyone even if they don’t get this granular around tracking
· Book - Sooley by John Grisham – This was a recommendation by my dad and a really good book. Not the typical Grisham legal drama, this is about a South Sudanese basketball player who gets his chance to make it big in the US all the while his family is enduring a civil war back home
· Podcast Episode - Ramit Sethi on The Tim Ferriss Show – This episode is all about money and finances and particularly how to navigate through that as a couple. I’ve heard Sethi before and enjoy his material, sounds like he has a new podcast himself that I might check out
· Twitter Thread - Trung Phan on Lionel Messi – Ashley’s family has been unsuccessfully trying to get me into soccer but I found this short thread about one of soccer’s greatest to be super interesting
· Quote – Knowledge is a skyscraper. You can take a shortcut with a fragile foundation of memorization, or build slowly upon a steel frame of understanding. Naval Ravikant