ILLUSTRATION BY RUTH MACAPAGAL
The best-performing companies in the world have an extremely low tolerance for problems. So do the best CEOs, including the Fortune 500 CEOs and billionaire entrepreneurs I have had the fortune of interacting with or advising.
This also applies to their performance. They do not tolerate problems in their own performance and constantly analyze themselves by asking: How can I perform better? This is an obsession of the world’s top CEOs, especially billionaire entrepreneurs. They embody and personify excellence and high standards. This is why they are never satisfied.
The reason why you are not doing as well as you could is that your standards are too low. The reason why the people in your teams or your company are not doing as well as they could is the same: low standards.
High standards are your best insurance policy
In my experience of working with business leaders from around the world—from the fastest-growing startups on their way to a billion-dollar market valuation to industry leaders and global conglomerates—I’ve seen again and again that the best insurance policy to beat your competition is to enforce very high standards.
Why is this important for you as a business leader? The higher the standards you set for yourself and your business, the less you will accept any superficial explanation of why someone reporting to you did not reach his or her targets. And it will also propel you to constantly improve your “business machine” so it produces the desired outcomes.
In the Philippines, one of the recurring questions clients approach us with is: How do we transform the culture of our business into a culture of high performance to radically improve our profits? High standards are an essential part of that.
‘Soft’ culture is hurting you
What does it mean in practice to have high standards? It means to hold ourselves and each other accountable to do what we said we would do by the time we said we would do it. Yet most companies slack off. Why?
There are too many companies in the Philippines where the culture is too “ soft” when it comes to dealing with problems. They may shrug problems off with the words, “Well, it’s not a biggie. We will do better next time.” Or they may say, “Ah, it’s a one-off,” without having made an actual analysis of that or without having the proper data to draw that conclusion. Or they say, “We do not want to have any conflict, so let us just wait and see if this resolves itself.” It never does.
The fear of conflict in the region is too high when it comes to personal relationships. This is why far too many heads are still on the bodies when they in fact should be rolling. How can you create a culture of ruthless accountability and execution when you do not even hold each other accountable for problems and tolerate them? Not possible.
How to turn your problems into assets
How can you turn problems into assets and little gems that you can profit from to upgrade your business, your teams and your bottom line?
First of all, you need to understand that any type of problem needs to be analyzed concerning the question, “Is this a one-off or is this a symptom of an underlying recurring issue or challenge?” In other words, is there a pattern?
Of course, the reason for this is clear: you want to know as fast as possible, especially if you are the one sitting at the top, if there is a bigger problem that needs fixing. You can only know that if someone keeps tracking the problems across the entire organization and analyzes if there are recurring problems or patterns that need to be addressed.
If you do not have a single person or team in your organization who is 100-percent dedicated to that, then I strongly recommend that you have at least one person in every business unit or department who wears that hat. If you don’t, then some of the biggest elephants in the room may go by completely unnoticed until you have a whole elephant stampede in your backyard.
No bueno. Bad planning and window dressing
One of the reasons why my global strategy and management consulting group is world-renowned for strategic planning is because we put the finger where it hurts. We are not distracted by beautiful PowerPoint presentations. And neither should you!
I recently highlighted a German saying that I grew up with: “It is good to trust, but it is better to control.” This may at first sound harsh for a lot of companies, but based on our experience of supporting companies in Southeast Asia and the Philippines for many years, I can tell you: That one sentence alone, if properly executed, would earn many companies millions of dollars more every year.
Their culture is too soft; mediocrity is tolerated. If people slack off, no heads are rolling and people are not reprimanded. In many companies, year after year, almost the same goals are put up by the business units because they were not reached. This is disguised by highlighting the “positive accomplishments,” which are window dressing to hide the fact that the major goals were, once again, not attained. The consequences? None.
Don’t major in minor things
If you major in minor things, you will never ever make it to the big leagues. This means that you cannot expect to build or maintain a business that is a market leader and tolerate weak excuses why somebody did not perform on a major task. Yet often, companies in the region do exactly that: People are praised for making a beautiful PowerPoint presentation when they actually missed their targets—again.
If you are the owner of a family business or conglomerate—and over 83 percent of our clients are—then this type of behavior has even worse consequences for you. Every time this happens, imagine as if the hands of your employees (the ones who slack off and whom you do not hold accountable to high standards) reach into your pockets and take money out from you, from your children and your grandchildren—because that is what actually happens.
WFWS
If you are at the top, you must hold people accountable and you must make heads roll.
Most companies in the region employ too many people who are doing jobs that are either redundant, not producing outcomes or doubling the work others are doing. That is work for work’s sake (WFWS). One of our clients, who was the CEO and member of the owner’s family, said that 15 people in one division were writing reports that no one ever read. When I asked him what he had done to solve it, he said, “nothing.” He kept them on the payroll. Practices like these set bad examples for all others to slack off and accept pure mediocrity.
5 To thrive-Key takeaways
- The best-performing companies in the world have an extremely low tolerance for problems.
- The best insurance policy to beat your competition is to enforce very high standards.
- You cannot create a high-performing company by tolerating weak links. High standards have to run through your organization like a red thread.
- People need to hold themselves and each other accountable to do what they said they would do by the time they said they would do it.
- If you major in minor things, you will never ever make it to the big leagues. INQ
Tom Oliver, a “global management guru” (Bloomberg), is the chair of The Tom Oliver Group, the trusted advisor and counselor to many of the world’s most influential family businesses, medium-sized enterprises, market leaders and global conglomerates. For more information and inquiries: www.TomOliverGroup.com or email
Tom.Oliver@inquirer.com.ph.