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When your team isn't making the best decisions, they aren't operating to their full potential. The single biggest factor for goal aligned decisions is clarity on what that goal is. This article outlines how you can gain that clarity for your team, drive better decisions and achieve greater outcomes.
Why aren't my team making the best decisions? Why are they wasting their time on stuff that doesn’t matter? Why does it seem like ever time I hire someone new, less and less is added? Why do I need to step in constantly to re-direct? If you ask yourself any of these questions read on, there is one thing you can do that will make a big difference.
The dream for a team leader is to have a high performing, self-sufficient team whose sum is greater than it’s parts. A team who drives the business forward by consistently hitting targets. With an optimised team, leadership becomes about shaping the environment, pulling the best out of people and not about taking them by the hand.
Unfortunately, this often isn’t reality.
Everything we do at work is based on decisions. We make decisions about how to get work done, what to do, when to do it. Decisions based on what we think is best. What we think ‘good’ is. Your team members are people doing the same thing.
Most people want to be good at their job, in fact, I’m hard pushed to think of anyone I know who doesn’t. The problem is if we don’t understand what ‘good’ is how can we ‘be good’?
Crystal clarity on what ‘good’ looks like will begin to drive the right decisions. If team members ears are tuned into what the customer wants and how what they do makes a contribution, their perception of ‘good’ will change and therefore the decisions they make will be better.
When I work with business teams the most common root cause of those that don’t all walk in the same direction is that they don’t understand how the business sustainably makes profit. The purpose of any team is to contribute positively to the business’ sustainable profit. Each member was hired to add something, to advance the business in some way, but surprisingly often they don’t know with clarity what that is.
Ask team members:
If their answer differs from your definition, you will see improvements by clarifying it for them.
When I speak with team leaders in this position, they tell me we need to be more efficient, we need more tools, we need a better CRM, we need a fancy communication app or we need to hire better talent.
In my experience, the biggest fastest swing we have always achieved hasn’t been from better talent or from spending money it has simply been from explanation and understanding.
When a business first starts hiring everyone is directly connected to the boss, they are there to course correct and explain. Job descriptions only vaguely exist, and people get stuck into a multitude of things. Because people are involved in various business functions they develop a broad understanding of what matters. As your business grows jobs become more and more specific and team members move further away from the boss and from each other.
Sometimes we can’t see what others can’t see. We don’t realise they don’t understand. Those ‘I just know’ things that go unsaid need to be said for others to understand them.
When you think about it you know this from your own life and achieving your own goals. We know we need to start at the end. What are you aiming for? What is the goal? If we have target clarity, we are much more effective at hitting the mark.
This understanding creates the baseline which allows for team agility, creating a culture of continuous improvement and performance enhancement in the right direction.
Below I will give you a model to build this for your team but first let me share a case study of when I have seen this problem in action.
When I joined a market research company, to head up their data reporting department, the developers were seen as the gems of the team. They were very skilled. Ask them to create pretty much anything on a report they could figure it out. Not only that, they could build it into the complicated system so it would be delivered to the client as often as the data refreshed. Nothing was out with possibility. I remain impressed with their technical skill.
Problem was bespoke reporting wasn’t the business this business was in.
This business sold data not dashboards.
Their offering was standardised data, delivered fast and at a high quality. Pricing was determined by data set requirements. But the team had never been given the time to sit down and understand this. They were being publicly praised every time a complex request was accomplished.
There were essentially 2 members of the 20 person team who were spending 80% of their time creating work that wasn’t being paid for.
Don’t get me wrong it was valued by the customer. But it wasn’t what we were selling. And it was generating more ongoing cost, complexity, and expectation for the team.
Not only did the team not understand their purpose; they were being rewarded for performing a different purpose. It felt like I managed a football team and 2 members of the team were tasked with redesigning the kit, that wasn’t going to help us win more matches…
We needed to go back to first principles. We were never going to score goals consistently if the team didn’t know they were supposed to kick the ball, no less that they needed to aim it between the two posts.
We’ll come back to our developer friends but first let me explain how you can solve this problem for your team.
As I noted above, the purpose of any team within a business is to contribute to the sustainable profit of the business. So, what exactly do I mean by sustainable profit?
Every business generates profit in the same way; they exchange value for revenue while incurring costs at a lower rate. They sustain profit by ensuring the value delivered is worth more than the money the customer exchanges for it, and by ensuring their customer spend is consistent or growing.
You know this. I say this not to patronise but to demonstrate how simply it needs to be outlined for your team.
This may seem really obvious but in today’s world where business offerings aren’t clear cut and we are competing on specific differentiators it isn’t always easy to define. Intangible service elements complicate it. As staff numbers expand, team members often only operate within one box. They don’t have much visibility into the others. Silos develop. Targets become sub-team specific.
The sticking points usually fall in two points customer value and costs that aren’t tangible.
Let’s go through each part of the model starting with these tricky ones.
Customer value are the reasons it’s worth it for your buyers to part with their money. What problem are you solving that would be more expensive or out of reach for them to solve themselves? AND is the value that you intend to deliver.
Depending on your business this could be many things, a physical product, it could be the experience they have when they interact with your service, your expertise, time saving, effort saving, it could be that you can guarantee a certain volume of the product or a specific delivery date, it could be lowest price. It is likely to be a combination of factors.
I am a big believer in delight the customer, that’s how I run my business too. BUT there is a line between the value defined in sustainable profit and giving what you didn’t intend.
Imagine if a takeaway arrived at your door and the delivery person said, I’ll just wait outside and when your finished I’ll come in and clear up. I would certainly value that! But no way that has been built into their business model, its not what they have charged me for. Ok this is extreme, but many businesses I work with have teams that are doing some version of this some of the time.
When you define customer value you must be specific. ‘We delight our customers’ is a minefield. What does that actually mean? I have also seen competing customer value understanding within a business; supply team thinking it's volume, customer service thinking it's quality. The answer is usually a defined cost, quality, volume, experience level for each defined service offering.
Does your team know what your customer is trying to achieve? They value your offering because it helps them move towards their goals. Solves a problem in some way.
Staying aware; enjoying the experience of chatting with friends; a quiet place to work - all these are reasons I have gone bought a coffee. But how I want the barista to serve me is quite different in each scenario.
The decisions the barista needs to make about what to ask me, whether to chat to me, speed versus quality will be different in each context.
Same applies to your business should your team fulfil any request the customer asks, should they pick up the phone or send email-based instructions, should they prioritise one request over another, should they push for as much volume as they can or are there some customers that actually cost you money?
Costs consist of fixed costs and variable costs. Ok, that’s obvious. Team members often don’t have direct impact on fixed costs, but they certainly indirectly and sometimes directly do on variable costs. It’s the intangible costs that usually cause the problem.
As Benjamin Franklin said back in 1748. It still holds true. But many teams don’t seem to make the correlation between their time and the cost of serving clients to the business.
It’s not easy to define this line especially in service-based businesses and businesses where the work being done isn't billable to one customer at a time. It’s important to define guidelines of how much time should be spent on each activity to develop an understanding of the true cost of the offering.
Revenue is fairly simple, these are the line items that appear on the bill. The receipt of cash from the customer. Usually pricing strategy comes from leadership rather than the team itself.
The customer base boxes are your marketing efforts. Your outward facing marketing to find new customers and your service of your current clients to encourage them to buy more, buy other offerings and refer their friends.
Outward marketing is beyond the scope of this article and usually fits within one team area. But an understanding of the customer value box and the problems your offerings solve for the customer can help non sales or marketing people understand how to improve the offering so more can be sold. Social selling is also huge, are your team members active on LinkedIn, should they be?
When we built out this model there were 2 problems.
Costs for this team were staff costs – time. Fixed costs in this case were outside the control of the team.
This team had 2 customers internal and external. Customer services dealt directly with the outside client and made requests of the reporting team on their behalf. Over time the reporting team had inadvertently trained the customer services team that they would accept any request that came their way so customer service were happy to offer this to the end user. This needed to be realigned across both teams.
We couldn’t suddenly take away the bespoke reporting. We had set this expectation with the client. The reporting team needed to re-educate their internal customer on what was and wasn’t on offer at the standard price and a more senior discussion would be had if a customer wanted to pay for something truly bespoke. Working with the client facing teams, they got to work making one version of the reporting that would satisfy most of the needs of the customer.
They were able to cut out hundreds of bespoke reports. When a customer asked for a new 'special' report they were able to implement it almost immediately. Set the parameters of what the customer wanted and an automated report could be generated. The team work capacity sky rocketed.
Both for internal and external customers. External customer experience improved, when they asked for a special report their request was fulfilled within a day rather than months later as was previously the case. Customer services also saved time, it was easy for them to add value to their customer; they knew exactly what was on offer rather than ping ponging with the reporting team.
With the extra capacity and an understanding of the business model they were excited about making suggestions for improvements in line with sustainable profit. They were able to use the time they saved adding more in other areas of their responsibility.
What improvements could you gain from ensuring all you team members understand how your business makes sustainable profit?
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