Focus on what you can control
In our business life as well as our personal life, things we cannot control often upend us. A key to success in business as well as your personal life is to put your effort into things you can control. Then when the unexpected happens, you have a successful foundation from which to respond.
For over 50 years, the academic study of strategy has taught us that an organization’s performance depends upon strong performance in a limited number of areas specific to the business/industry. These are called critical success factors. You do not have to be great at everything. A manager does not have to focus on everything, a manager can accept that many things are outside their control, but they do have to focus on, and be good at a small list of very important priorities.
I remember being responsible for forecasting sales in a rice company. Occasionally we shipped a large cargo ship full of processed rice from the port of Houston. This could account for one fourth of the entire sales forecast for the month during which it occurred. Because the barges could not load and ship during a rainstorm we had a number of forecasting failures simply because it rained during the last few days of the month and the barges could not load as scheduled! It is one thing to offer the excuse, “I cannot control the weather.” That is true, but what can management control? It was actually a simple option to incentivize the buyer to order in the second or third week of the month so that if it did rain, there was still time to load the barge and achieve the forecasted sales. Unbelievably, this problem had existed for years with complaints about the weather, rather than mangers looking at what they could control.
The inability to focus on things we can control is caused by complexity and uncertainty. The complexity of many of our operating environments can cause problems with management focus. While computers, robots and technology have automated many tasks, there is no doubt that the quickening pace of business, global competition, government regulation, information overload and rapidly change technology has made business more complex today that it was in decades past.
I recommend a two-pronged approach for improving a business’ ability to focus. First have a strategic plan to direct you attention, and second identify within your business the critical success factors. Note: this works just as well in your personal life as in business!
Planning is a primary function of management. In its most basic form, it simply defines objectives
and outlines a strategy for achieving them. When planning begins to take on more detail or focus on the shorter term, it will seek to obtain the necessary resources and align them appropriately. Planning is often much derided as creating rigidity or attempting to replace management intuition. And while these criticisms are sometimes deserved, at the high level outlined above the planning function is an absolute necessity and actually improves your ability to respond to unexpected events. Lewis Carroll is famous for writing: If you don’t know where you are going any road can take you there
Every consulting group will have a process set up to help a business do a strategic plan. But unless it accomplishes a few key things it has missed the boat.
First it should help the business to discover things about its potential that it didn’t know
Second, it should force strategic thinking so that a company can understand its opportunities and identify where focus will pay off.
Finally, it should allocate and align resources.
This last point is particularly associated with the discussion here on focus. If there is an aligned focus on certain areas or projects on which resources will be extended, then all the confusion of a thousand competing issues, and the sure to arise uncertainty of an unstable world should not distract the business into dead-ends and alleys that it cannot control. When an airplane flies, into a strong storm it will be required to make many short-term adjustments and as a business faces unknown challenges and unexpected changes the situation is somewhat similar. Business plans at lower levels will require constant and major adjustments similar to a pilot’s adjustment of the rudder, throttle and other controls. However, the strategic plan is similar to the destination of the plane. Having a well thought out and agreed strategic plan allows the ship to make the necessary adjustments to stay on course. Imagine how a plane would behave in a terrible storm if it were uncertain of its destination!
In the early 1980s, the executives at a leading confectionary company had planned a new product for Mexico, the Peso bar. This would be a well-known US candy bar of reduced size, which would sell for exactly 1 peso. Price points had always been an important part of the confectionary business, partially because vending machines were an important distribution channel and until recently, vending machines were tied to specific currencies and coins. In addition, price point was important because the range of snack products across which confectionary competes is very large (chips, drinks, cookies, nuts etc.) and so perceived relative value was important. Manufacturing modifications were made on a line in Canada to provide this new bar, additional investments in packaging design and advertising were made. However, just before the Peso Bar launched disaster struck when the dollar peso exchange rate collapsed. There was no way the “peso” bar could now be sold for a peso.
Management could not control the international exchange rate, and now they could not sell a bar for a peso. It would have been far better for them to target something they could control – “value.” They could still produce a product that could be seen as a good value for the Mexican consumer. This lesson has been seen multiple times. One recent example is the fast food dollar menu. While it was an attractive marketing hook to call their special menu, the “dollar menu” inflation saw to it that the name did not last long. Now the fast food restaurants call their discount items a “value” menu or something similar.
If managers focus on what they can control, they will not have to deal with as many unexpected surprises from the ever-changing business environment and the complex real world in which we operate.