Are you significant? Are you relevant? I don’t mean these questions in some sort of cosmic, or existential sort of way. I am sure that to yourself, your family and friends, you are. At least I hope you are. I mean are you significant and / or relevant on the professional level to you individually, and also on the greater level to the business you create or lead.


Let’s say you lead an organization that is responsible for $25 Million in revenue. If the entire revenue of the business is $25 Million, then you are obviously extremely significant. If the entire revenue of the business is $1 Billion, then potentially, at only 2.5% of total revenues, you may not be very significant.


On the other hand, if the total earnings for the 1$ Billion business is only $10 Million, and your $25 Million revenue organization is responsible for $10 Million in earnings, you could be very significant, depending on the earnings and losses of the other organizations within the business. As you can see, there may be no hard and fast rules regarding significance and relevance for a business.


There may however be some indications about an organization’s significance and relevance to the business. What is the revenue trend? Is it up, down or flat? Upward revenue trending businesses are naturally more relevant as business growth is always a focus. What is the earnings trend in both real dollars and as a percentage of revenue? Of the two, real dollars are usually more important, but businesses like to see both earnings dollars and percentage of revenue on an upward trend.


As you can see, significance and relevance in business is usually measured with a number, and the number usually has a “$” sign in front of it.


Now there are some “significant” businesses that may not meet this acid test. These are organizations that are usually deemed either “strategic” or “investment” organizations. That means that the business is putting resources into these organizations with the expectation that they will become significant and relevant quickly. Usually very quickly.


With the increased demand for and the decreased supply of resources (money, time, people) in the business, strategic and investment organizations are becoming rarer, and those that do exist are having greater demands for more significant performance faster. As the owners of the business (Stockholders, either private or public) demand better performance, so must this be translated into increased demands on each of the business’s organizations for increased and faster improvements in their performance.


Now with all this in place, what do you do when you find yourself in an organization that seems to be neither Relevant nor Strategic to the business?

There are several paths that can be taken in this instance. The choice can depend on personal preference and personality, assessment of the overall business, and the willingness of the individual and organization to accept change. I won’t go into great detail here. I will leave that to the next Blog article, but the basic responses to being in an irrelevant or non-strategic organization are:

  • Move to a new organization that meets the requirements of either a Relevant or Strategic organization.

  • Accept the organizations status within the business and work to make it successful within the bounds and expectations associated with that status.

  • Make the changes required to make the existing organization relevant. This can include changes to products, people and processes. This would include making the required changes needed to make the organization relevant on either the Revenue or Earnings level, or moving it into a strategic role.

I have always tried to be a change agent within the organizations that I have been associated with, so you can suspect what choices I have made in the past. I will look at those options, and others in the next article.

Another Conference Call?

Is it just me, or have conference calls become so pervasive that they are beginning to hamper a team’s ability to get things done? Perhaps I am dating myself, but I do recall when conferencing circuits and services were expensive and were reserved for important topics and meetings. With the increase in the availability of conferencing capabilities, it seems that both the number of conference calls and the number of attendees in the conference calls have skyrocketed.

Conference calls are useful leadership tools. They provide the opportunity for a great deal of information to be exchanged in a short period of time. They provide a forum where issues and concerns can be identified and dealt with quickly. They also seem to provide the opportunity for the dreaded “group think”.

With everybody on the call, and with everybody expounding opinions, eventually a group solution can evolve, unless the call is well managed and led. It is natural to try and take all opinions into account. However too many diverse ideas and inputs can have a tendency to conflict and weaken a direction instead of strengthening it. A leader must remember his responsibility to lead on a conference call, instead of allowing the call to take on a direction of its own.

Conference calls can also have the affect of distributing risk associated with decisions and responsibility. The idea here is that if everyone on the conference call agreed, then everyone shares the responsibility for the outcome. If the outcome is good, this is fine. If the outcome does not produce the desired results, then having everyone share the responsibility for the decision is the same as having no one having responsibility for the decision.

I am a proponent of the association of responsibility and authority when it comes to decision making. That means that the leader is vested with authority to make the requisite decisions, and is held responsible for the results their decisions create. It seems the trend in conference calls is for the decision to be moved from the leader to the conference call attendees. This may result in a decision eventually being made, but it also results in no one having responsibility for the results that are created.

Conference calls can be excellent tools for leaders to use in order to make intelligent decisions. It seems that instead of being a means to an end that they have in fact become the end themselves. Instead of being a tool to enable a decision to be made, that they have become the decision forum itself.

As long as the leader understands their responsibilities, a conference call can be a good tool. However it seems that the trend today may not be in that direction, and every time I get another meeting notice I can’t help but think – another conference call?

No Corporate Goals

With the beginning of the year comes the phrase that
while maybe not striking fear in the heart of a leader, will definitely elicit
a wince, or two. It’s time for annual reviews for the previous year, and the
setting of individual objectives for the New Year. This event normally ranks
right up there with root canal on the fun scale for a leader.

Despite my poking a little fun at how the process mat
be perceived, it is a very important process for the successful business. Set
the goals too low and you bog the business down because goals are achieved to
easily or to early. Set the goals too high and you run the risk of the team not
giving a full effort for a goal that is seen as impossible to achieve.

Another aspect of goal setting that is often
overlooked is that of materiality. We have all been recipients of the dreaded
“corporate” objective. That is the overall corporate Revenue, or Profitability
goal. While this may be a suitable goal for a division or business leader, at some
point in the hierarchy it does become meaningless.

Goals are only useful if the individual that the goal
is set for as the ability to achieve or affect the achievement of that goal.
Many will argue that everyone in the corporation has the ability to affect the
achievement of the corporate goal. This is where the idea of materiality comes
in. The entry level specialists may be able to contribute to the corporate goal
achievement, but their “rating” on this objective will be largely dependent on
the work and decisions of those managers and leaders above them.

“Corporate” goals bring down the performance of your
highest performers and mask and bring up the performance of those on the lower
end of the scale. An example would be if the performance of the leader (and
team) of a higher performing smaller division, would fail to get a bonus or an
appropriate review based on not achieving a corporate “objective” because a
larger, poorer performing division brought the overall corporate performance

It seems to have long been held that if the entire
corporation did not achieve their goals then no one in the corporation could be
said to have full achieved their goals. In reality in this situation there are
always those that have achieved or exceeded their goals. It is just that their
performance has been masked by another group that has not. In this case the
higher performers have been lumped in with the lower performers, with little
opportunity for financial differentiation between them.

So, as the Novocain from the
root canal wears off, and the inevitability of having to set the individual
goals for the members of the team looms large, remember; Try not to set the
goals too low or too high, and make sure that the individual can in fact
achieve, or affect the achievement of the goal. In many instances this will
mean No Corporate Goals.