How Will Your Choices Shape the Future? (Metrics that Matter) Part 3
Photo by Tomasz Frankowski on Unsplash
We have looked at the impact of the pandemic on our world. We have evaluated how the workplace has stretched and pivoted to stay functional during this past year despite government-mandated shutdowns, quarantine, and all the disruption that has rained down on businesses in the past 12+ months. We outlined the characteristics of compassion, empathy, and awareness that are needed for the next chapter.
However, if we limit our discussion to the 'soft skills' that is only half of the equation. Our values must be fostered within the context of building sustainable and financially successful businesses. The very definition of success in business is determined by the numbers and the outcomes. We have all seen or heard of great ideas, that became a business, but then seemingly inexplicably disappeared, haven’t we? Without a focus on the numbers, all the other stuff is just pie in the sky. Numbers DO matter. Profitability DOES matter. Profit is not a dirty word; it is the oxygen for the body that sustains us: business. The metrics are critical to the stability of our society because if businesses fail, then so do families. I would argue the information gap in how the money flows through a business is part of the expanded knowledge base that every person not only needs to know but has a right to know.
I have worked with many leaders who have taken on the burden of knowing, balancing, and driving the numbers for all those who work for them for many years. Setting the targets and wringing their hands when their “employee engagement” did not match the needed energy to meet those targets.
Many CEOs spend night after night worrying about making payroll, paying their debts, strategizing about new challenges, and theorizing about how best to protect and ensure that the company is solvent and secure.
Their concern is not only for themselves but for the future of the families of those they employ. A heavy burden to carry alone or within a few key people at the top of an organization. This gives context for the saying “it’s lonely at the top.”
On the flip side, many employees have been left in the dark about big-picture decisions. They are given their goals or targets for their area, are required to hit them to keep their jobs, and simultaneously told not to worry about the big picture, just do your part and the management will handle the rest. Distrust grows, as we watch company after company closes their doors with little notice to the employees and absolutely no opportunity to stem the tide or even see the tsunami coming. Jobs lost and no true understanding of why. This experience fuels a sense of indifference as the employee is unable to connect their contribution to the success of the company. I visualize employees, head down at their desk, not ever looking up to understand how their role impacts others within the organization or how their job impacts the bottom line of the company because they do not have enough information to make the correlation.
Why is that you may ask? The standard reply? “That is how we have always done it” or worse yet is the idea, “They wouldn’t understand it anyway.” Some leaders are convinced that command and control is the only way to run a business. This hypothesis discounts the intelligence of their team leaving no room or opportunity for the creativity and wisdom of the team’s perspective.
How does an employee feel when their contribution is reduced to the equivalent of a programmed machine? What does the employee learn about their value to the company? Does it lead the employee to be innovative? A problem-solver? Does it foster a shared focus on a goal that enhances teamwork, camaraderie, and enjoyment?
Or does it make people care less about the overall outcome, reducing their focus to just getting through the day and collecting their pay so that they can go home to enjoy their life? I would suggest that employees who are invited to help create solutions and more engaged than those who are limited to doing what they are told.
In my experience as a CEO, a Regional Sales Manager, and a Vice President, my focus was always on the same thing…Revenue in and the resulting bottom line. I assumed the stuff in the middle of the income statement would best be handled by making sure there was a steady inflow of more revenue. These are important metrics, as the saying goes, “Nothing happens until a sale is made!” Right? But that thinking assumes the ratios in the middle are on target for profitability. Who impacts that stuff in the middle anyway? Who drives it? And Who OWNS it?
We can all agree that businesses need to be profitable in order to be sustainable, which in turn provides security for their employees and their families. However, I think we need to take it a step further and help our teams understand how the money flows through the business. When team members have a wide-lens view of the financials, they can make decisions that support the overall growth and profitability of the company. It invites a whole new level of responsibility and loyalty within their teams and for the company at large. Clarity around the financial picture is a key element in building trust and accountability within teams. But this level of open dialogue is still rare in the corporate world.
If we examine the metrics that drive profitability, we can see that the process requires a deeper dive than most employees can access. That is unless of course, you work for a publicly held company and the numbers are published. However, even in those circumstances when the financial statements are public, many employees are not given the context or meaning behind them. They are left with the question, “what does this line item represent in terms that make sense to me as an employee?”
How can employees better understand how their role impacts the company from an expense standpoint?
Sure, there is the obvious, office supplies, expense reimbursements, travel, meals but not every employee has insight into those types of expenses because their job description doesn’t require it. Having the leadership respect and acknowledge that everyone in the company has valuable insights is the first step. Inviting everyone to lift their eyes to look beyond their workspace to see the landscape of the company, looking at the full spectrum of the moving parts that make up the whole, and defining what efficiency in each area looks like is the challenge.
The leaders of today are being challenged to re-evaluate the balance of their focus within their businesses.
What values are exemplified by our actions?
Are we ‘walkin’ the talk’?
Is there a moral compass and is it part of the foundational decision-making within the organization?
What focus is given to the development of the people within the organization?
Are we capturing the wisdom of the crowd?