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How Will Your Choices Shape the Future?

–METRICS THAT MATTER (PART 3 OF 3)

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.

SEE PRIOR PARTS IN THIS SERIES BELOW ⤵︎

Will We Choose to Just Survive or Will We Choose to THRIVE?

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 knowledgebase 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 the 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 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.

How can employees better understand how their role impacts the company from an expense standpoint?

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?

What are we doing to move the global discussion forward?

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Catherine Fitzgerald
Catherine Fitzgeraldhttps://www.catapultleadershipgroup.com/
Catherine Fitzgerald is an experienced executive, natural leader, business coach, speaker, and writer. She is the founder of Catapult Leadership Group and certified with The Great Game Of Business®. Catherine has over 35 years’ experience as a strong professional with a proven track record in developing people, performance, and profits. She’s held many titles, be it as Regional Sales Manager, Vice President, Executive Director or CEO, in various industries from banking to health insurance and from choral music to feeding the hungry. Catherine is passionate about helping people which has been the common thread throughout her career. She understands that it is the people who make the difference, whether it is in the for-profit or the non-profit sectors. Catherine’s focus is on building strong businesses by helping employers to engage and align their employees through financial literacy training which is the cornerstone of open-book management. When employees know how to WIN at work and they are provided a stake in the outcome, they learn how to improve the financial scoreboard for the company. The result is that employees are empowered to think, act and feel like owners, which creates a financially secure company with an incredible culture. Catherine fell in love with the written word in high school and has always enjoyed the process of writing. She went on to UCLA and changed majors after her first year, graduating with a degree in English. She has always considered herself a writer and is enjoying the freedom to explore writing within her passion rather than as an assignment. Catherine is a board member for a local non-profit, an enthusiastic fan of live theater and loves to gather family & friends for a delicious homecooked meal but she is most proud of being the mom of three accomplished, amazing young men.

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4 CONVERSATIONS

  1. Specialists, for example, coaches, able to manage work remotely and above all to lead the change triggered in recent months. In summary, this is the portrait of the new leaders needed in the post-Covid-19 world. If for the duration of the health emergency we wondered what would remain of our old world once the coronavirus tsunami withdrew, the lens must be focused on the challenges that managers and companies must take up to ferry companies (but also a country) out. from the economic crisis.
    In recent months, the need to accelerate the digital transformation has arisen, for which the requests of managers and specialized profiles continue to be important, and it is a transformation that also determines a cultural change, based on the mentality of growth. And this means that anyone can change, learn and grow, in a world where potential can always be fed and is not predetermined. This is the new leadership, always ready to learn and intrigue, not blocked by the fear of failure, with three fundamental skills at its core: being an example, coaching and taking care of its employees.

    • Aldo, I completely agree. Thank you for sharing your insight. I think when we look back on this time we will realize that the world was in great transition that can only be seen in it’s enormity by looking through the rear view mirror!

  2. Jeff, I love that quote! “Profits sustain us, but they don’t define us.” You are right in that there is an art in bringing the numbers into a discussion with employees because it can become a weaponizing of the numbers to drum in the idea of More, More, More… it can easily feel like it is never enough. It is important to use the information in a way that opens dialogue and is not just a continuation ot the Top Down manetality of old. I believe that leaders who center the message, the way you did with your team, can use the numbers to illustrate the power their choices have to impact reaching the heart-centered goal which makes the numbers more relavant to a tema that is driven by purpose. But it truly is a delicate balance.

    Thank you for sharing your perspective.

  3. “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.”

    Catherine, I agree with that statement. As a department head back in the day, I worked for an inspired business manager who took the time to explain the 21 line P&L and how what we did could affect this line or that line. But I had limited success spreading that information within the department. We were building educational materials, and most dept members weren’t motivated by profit etc., they were motivated by building better textbooks for kids and teachers.

    Our CEO sensed that about our work and was fond of saying “Profits sustain us, but they don’t define us.” That was something our staff could rally around. At my level, I stopped talking about revenue and instead translated revenue into the number of books my staff was helping to put into students’ hands. That’s where they saw their impact.

    So, all this to say, it may depend on the business. I certainly valued having a detailed sense of what drove the financials, and it made me a wiser manager/leader in terms of decision making, but our editors, marketers and designers were focused on the cause.

    A good, thought-provoking article.

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