Thursday, January 8, 2009

Keeping focused as you grow.

If you don't know where you're going, you probably won't get there. A very common problem in startup businesses is confusion of purpose and lack of focus. It's easy to fall into the trap of being scattered, unfocused, overwhelmed. Entrepreneurs are often high-achievers, but they waste time, money and energy having too many irons in the fire because they’re unable to let go of the details. It's tempting to be a jack-of-all-trades and master-of-none. But that won't work - you must focus, focus, focus.

Your thoughts, energies and ideas must all be single-mindedly concentrated on your primary objective and your strategic initiatives. You can’t pursue five goals at once. You must focus your energy until you become like a laser beam. Then, communicate, so everyone understands the vision, the plan. Talk about these every single day. Don’t ask employees to pursue vague intermediate objectives like “excellence.” If you can’t clearly state on paper what you expect from someone, you’re in trouble.

Keep people focused on bottom-line performance and long-term survival. Have really clear system-wide goals - reduce crime by 30% for example, rather than concentrating on intermediate objectives such as increasing arrests or improving the response time of police officers. Avoid goals such as launching a new advertising campaign by the end of May - focus instead on increasing market share by 20%. Don’t focus on narrow functional goals. When you do, everyone goes off in a different direction and even though the basic measures of the company’s performance may be slipping, no one feels responsible to do anything about it. Emphasize improvement in broad business performance instead. Sharon Ballard says, “You get what you inspect, so inspect the things that are key for your startup's success.”

You can't succeed without mastering the fundamentals of your business. People who are masters at anything are relentless about studying, practicing and polishing the fundamentals. There are no short-cuts to mastery. You must be doing the fundamentals right before you get to the advanced stuff. The fundamentals include: business, management and interpersonal skills, planning, financial controls, marketing strategies, superior products and services, effective sales efforts, unparalleled customer service, and effective tools and systems. And you must understand the financials. After all, it’s your money. You have to have the numbers down cold.

One of the problems that comes with success is that people don't want to change. So the person at the top has to be the champion for change. When complacency stalls growth, get people to think about redefining their markets. In the early 1980s, Robert Goizueta challenged Coca-Cola’s staff to stop thinking about their 35% share of the soft drinks market, but to remember instead that people drank 64 fluid ounces of liquid a day - and only two of these were Coke.

As your company grows, you no longer face the challenge of having to do everything yourself. Instead, surround yourself with people who are smarter than you are and get out of their way. Don’t be afraid to give up control. Include rather than exclude them in decisions about running the business. Delegate and you’ll be amazed by what people can do. However, the price of getting people’s commitment is working on their issues as well as your issues.


Anonymous said...

Something else to touch on would be the effect that funding rounds can have on a company. If someone isnt focused, and they get a large round of funding, they might be inclined to spread out wide and grow in a lot of directions instead of focusing even harder in the direction they are going. That can happen at a slower rate with natural growth or success.... but with the quick injection of capital I've seen it happen more than once now.

john cotter said...

Absolutely right - I've seen this as well. That's why clarity and of focus and discipline in implementation are so important.
Thank you for your comment.