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August 2016

Great Leaders: Superstars and Heroes?

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Great Leaders: Superstars and Heroes?

To be a great leader a person must concern themselves with the activities of both strategy and operational management.  All leaders must have some level of competency in these areas, but for reasons we’ll discuss here, not always in equal amounts.

As an example of this, let us look at the roles of a Chief Executive Officer, CEO and Chief Operating Officer, COO.  The CEO is the strategic head of the company, their role is to drive the business, vision, strategy, and interface with the shareholders.  The CEO sets the goals for the business strategy.  The COO’s job is to complement the CEO with a far more operational role, working with the day to day functions of the company, driving the operating processes and ensuring execution happens smoothly.  The COO sets the priorities -of the goals given by the CEO- for the whole organization.  These separate qualities -strategy and operational management- are a difficult for a single person to master together, because both are huge in scope, requiring a lot of time and energy.  This is the same problem for leaders at all levels in an organization.

Superstars & Heroes

I like to say there are two [3 actually] kinds of leaders in organizations– Superstars and Heroes.  Superstars (like the CEO) have great vision and are good at PR’ing the organizations ideas and projects, typically they get a lot of visibility and acclaim, they are highly concerned with and effective at strategic and visionary activities;   Heroes (like the COO) are selfless and work behind the scene to execute on those visions and ideas, typically getting less visibility, they are highly concerned with -and effective at- all operational management activities.  [The 3rd kind of leader, well, let us just say- simply should NOT be!]

Strategy and Operational Management

Strategy is the activity of creating a path to follow, setting and being clear about the goals, and providing consistency and purpose around those goals to the organization.  Explaining why they need to do the things they are doing and conveying enthusiasm to the organization to achieve those things.  Strategy is extremely important to an organization, and deployment of the policies and procedures down to that organization -derived from goals with priorities- is how strategy gets executed effectively.  Strategy focuses and aligns the organization towards the end goals, and outwardly drives the business towards the customer end game.

Operational management can be simple things like defining email lists in a consistent manner for all teams in an organization, or more complexly defined formal communication channels in a matrixed organizational structure.  Operational activities include:

  • Creating organizational structures and running the organization with clarity- which makes communications easier.
  • Formalizing communication channels; i.e. what to communicate, who to communicate things to, and when to communicate those things.
  • Setting priorities to goals.
  • Assigning resources to projects- ensuring teams have the resources to succeed.
  • Defining & communicating clear individual roles & responsibilities.
  • Centralizing project and team information for clarity.
  • Instilling discipline, training and repetition in teams.
  • Understanding time factors- allowing time for operations & best practices.

What are the other qualities that distinguish a great leader?

The great leader should understand the 3 P’s— the People, the Process, and the Product, in that order.  The leader who ignores this will not be as effective.  It is very simple, firstly the People are most important, they need to be instructed in what they do– given their responsibilities.  Secondly the Process, must be defined and clearly communicated to the people so they know how to perform their responsibilities.  Finally the Product must be defined so the People know the requirements to which they must apply their responsibilities, using the process.  If these are given in any other order the outcome will be less effective.

A great leader understands the importance of keeping it simple, KIS.  There are always many ways to solve a problem, good guidance from a great leader is about defining the 3-5 important things to solve thus keeping the focus to avoid dilution by less important things.  This can be demonstrated by the 80-20 rule, which defines that typically the team delivers 80% of the benefit by doing the important 20% of the things on the list.  It is the great leader who is able to identify the right 20%.

Knowing what is good enough, separates the great leaders from the rest. For instance, demanding absolute quality from a SW project, rather than weighing the pros & cons of the business and customer expectations against the final product, can be to the detriment of a project.  Bringing congruence from the stakeholders on what is good enough, is a key skill possessed by the great leader.  Again, the 80-20 rule comes in to play here, i.e. sometimes a customer might be willing to take the 20% that are the best features of a product first, such that the other 80% could be provided later, or even changed by the customers feedback on the initial 20%.

Fairness but firmness, is a key quality in a great leader.  In order to build trust and respect with their teams they are honest, trustworthy, direct and clear.  They are not afraid to make a decision when the team needs one, or when no-one else can provide one, and they are willing to accept the responsibility for that decision.  Fairness comes with supportive and shielding qualities that all teams need to feel happy and be successful.  Teams will follow these great leaders to the ends of the earth -and back- because they trust and believe, and simply because of these qualities they see in their leader.

Lastly compassion, understanding, and humor, are effective medicines that the great leader uses to help release pressure during stressful times and enthuse their teams to achieve better results, build success from failure, and do great things for their organizations.

Ask yourself, which are you more of- Superstar or Hero?

INFIX – Life Coaches for Companies. Infix.us

How To Maximize Your Margins

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How To Maximize Your Margins

When working with clients I often find that the margins they garner could have been better if they changed their mentality around price setting.

The common thing I see is a propensity to set prices, and hence margins, based on the level of effort expended to produce/provide the product/service. However, this thinking – whilst generally a good starting point – doesn’t do justice to the real sellable price and value of the product/service, because it leads to standard (linear) margins across the board. That is to say, margins end up being proportional to effort, which is not necessarily where they have to be.

Consider this– Product “X” took less time to produce than Product “Y”, but does that necessarily mean it’s price should be lower? No, it could be the same or more. The customer doesn’t know what effort was expended, their view of price will be based on the value they see or perceive.

Price setting should be an effort in understanding the value that a product/service represents to the end customer through market research, customer surveys, and understanding supply & demand trends. When prices are set this way margins will become variable (non-linear) and not linked to just the effort expended. The advantage of this is that margins can be maximized for each product or service based on the value they represent in the market.

Therefore, greater margins should be captured across product lines and services if you understand the value each provides, as well as looking at the effort you expend.

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