What’s going on in our business, and why does it matter?
How many different things do you have to consider while doing your job and running your business?
How many different issues affect your business?
If you’re like most people, the answer to these questions is somewhere north of 1000. We are all navigating our way to a better future while dealing with a myriad of obstacles, advantages, challenges, opportunities, forces, strengths, weaknesses and trends.
Can we deal with all of these different issues? Of course not.
Can we consider every factor affecting our businesses as we determine our action plans? Of course not.
So, what do we do?
Identify the “Things That Matter.”
No matter how many issues affect your business, no matter how many different factors influence your success, you can create a short-list of issues that are the most important. These issues, the Things That Matter, are the guideposts, direction-finders and filters that will help you sort through your complex world and focus yourself and your organization on actions that will lead to success.
Finding the Things That Matter in your business is really all about answering this question: What’s really going on in our business, and why is it important?
Finding the Things That Matter is about getting in tune with your business and understanding what really counts, so you can focus your efforts and create a better future. Understanding the Things That Matter in your business will give you significant and valuable business self-awareness.
Even if you can articulate 1000 or more issues affecting your business, my experience shows that it is always possible to narrow this list down to 5, 10 or 15 Things That Matter. Wouldn’t life be easier if you could devote most of your attention to 15 Things That Matter?
Identifying the Things That Matter is a lot like panning for gold. You need to sift through your business issues, looking for the valuable, shiny gems that attract your attention as they shout,“Hey, pay attention to me, I’m important!”
Here is the first step to help you pan for gold and identify the Things That Matter in your business: Recognize that everyissue that affects your business, whether you have 10, 100, 1000 or 10,000, falls into one of four categories:
- Customer issues
- Who are your customers? Who could be your customers? What do they care about? How do they behave?
- Competitive issues
- Who are your competitors? Who could they be? What do they care about? How do they behave? How do you compare to them?
- Marketplace issues
- What affects you, but is out of your control?
- Internal issues
- What about your organization– strengths, weaknesses, financial dynamics, people, etc.– affects your business, for better or worse?
As you sift through your business issues, panning for gold, recognize which issues fall into which categories.
- “90% of our customers buy from us once, then never return” is, clearly, a customer issue.
- “Most of our competitors are big, stodgy bureaucracies, who move much slower than we can” is an important competitive issue and may be connected to an internal issue: “We are very nimble and can react quickly to new conditions.“
- Another internal issue: “Our sales people are very good at acquiring customers but don’t do a good job building relationships with current customers.”
- Examples of marketplace issues might be, “tightening of the credit markets makes it difficult for customers to obtain financing” or “forecasts for a mild hurricane season will lead to stronger business for our Caribbean resort.”
Look for “candidates”
Don’t try to leap directly from 1000 issues to 15 Things That Matter. You need to work your way there, and you can do it in steps.
At Yastrow & Company, when we analyze a business and work to identify the Things That Matter, our first list may include
50-75 “candidates” for Things That Matter. If an issue has the possibility of being important, we keep track of it. We can always throw it out later, or combine it with other, similar issues.
Gather together with your colleagues and make lists of issues affecting your business in each of the four categories listed above: customer issues, competitive issues, marketplace issues and internal issues. Some of the issues will surface from analyzing your business reports and hard data, and many issues will emerge through discussion and brainstorming. Trust your brainstorming; you have much experience and knowledge of your business, and you don’t need to limit your exploration of issues to Excel spreadsheets and other business reporting.
Sift through your issues, looking for patterns and noticing opportunities to consolidate issues into overarching themes. For example, consider the issues described above. “90% of our customers buy from us once then never return” and “Our sales people are very good at acquiring customers, but don’t do a good job building relationships with current customers”may be components of a larger issue, that your company has problems creating long-term, profitable relationships with customers.
Zero in on the Things That Matter
Be patient, and be willing to iterate, cycling through your list a number of times as you discuss the issues, rank them, sort them and combine them. Pretty soon your list of 50-75 candidates for “Things That Matter” will boil down to a much more manageable number. As I mentioned above, we usually end up with a list of 5-10-15 Things That Matter.
Here is a sample list of “Things That Matter,” which I’ve created as a composite of actual Things That Matter I’ve encountered in my work. (Edited, of course, to obscure any company’s identity.)
ABC Inc. — Things That Matter
- 98% of our customers say they would refer us, but we actually receive a very small amount of our business from customer referrals. (customer issue)
- Very few customers will give us all of their business; our customers tend to buy from 2-3 suppliers. (customer issue)
- Customer satisfaction scores have improved significantly, with the exception of our XL-360 line, which has been frequently out of stock. (customer issue and internal issue)
- Our distributors carry hundreds of products, limiting how much time they are willing to spend focusing on our products. (customer issue)
- Most distributor sales people tend to be “order-takers,” although the sales people working for our top two distributors are effective, proactive advocates for our products. (customer issue)
- Our research shows that end-user customers tend to see all products in our category as interchangeable.(customer issue and competitive issue)
- None of the sales people we have hired in the last two years has been successful. (internal issue)
- Our profit margins on product sales are low, but our profit margins on service contracts are very high. (internal issue)
- Our founder is looking to retire within two years, and the company does not have a clear succession plan. (internal issue)
- Our two largest competitors merged last year, and they have been very distracted ever since. Customers have complained to us that their service has eroded significantly since the merger. (competitive issue)
- The outcome of the government health care reform debate will have a major impact on many of our top customers’ businesses. (marketplace issue)
- A weak dollar has significantly increased our overseas manufacturing costs. (marketplace issue)
Think how this list of Things That Matter could help ABC Inc. focus its efforts:
- There is significant potential to get more value from ABC’s current customer relationships. Customers aren’t referring as much as they could, and aren’t giving ABC as much business as they could. A focus on getting close to customers and building customer relationships could have a big payoff. This is especially true in light of ABC’s competitors’ merger, which has distracted them from getting close to customers.
- Customer-relationship building will have a particularly positive effect on results if the company focuses on encouraging current customers to purchase service contracts. This focus on service contracts also dilutes the negative effect of higher manufacturing costs.
- The company should look at its list of distributors and find those that have the most potential to go from “order-taker” to passionate advocate, seeking to duplicate the success of the company’s top two distributors.
- If customers see all competitors as interchangeable, the company has an opportunity to refine its brand story and capture a disproportionate share of interest from customers. Just because no one is claiming a strong brand position doesn’t mean there isn’t a possibility to create one.
- Revamping the company’s process for hiring and orienting new sales people is an immediate opportunity to improve results. Additionally, succession planning should favor the need for a new leader with a strong sales and customer-contact background.
Creating your “To-don’t” list
ABC Inc. has thousands of things to worry about; a focus on the Things That Matter helps them not worry about most of those things. I always remind myself that great strategy isn’t just about what you do, it’s about what you don’t do. By panning for gold and identifying the Things That Matter, you, too, can create a valuable “To-don’t” list that will free you up to work on what really counts.
When you finish your list of Things That Matter, you’re not actually finished.
A list of Things That Matter is ever-evolving, continually-updating and always dynamic. You should look at this list as a current snapshot of what’s going on in your business and what really counts. At Yastrow & Company, we constantly revisit our company’s list of Things That Matter, giving us constant focus on what we should do… and what we shouldn’t do.
Forward this newsletter to 4 or 5 colleagues in your company, inviting them to get together with you and create a list of the Things That Matter in your business. Don’t wait for permission from anyone to do this. Just do it. Right now.
Get together with this team, at least three times over the next two weeks. Go through the process I described above, panning for gold to identify the Things That Matter most to your business.
Your colleagues aren’t sure they have time for this? Help them realize that the best way to free up time is to focus your precious time on what really counts: the Things That Matter.