Resolve Your Hidden Conflicts And Grow Your Business

2009.01.20. Posted by under Uncategorized

Every so often I run into a business that screams “GROWTH POTENTIAL!”, but when the owners reveal that the business has been around for 20 years I find myself asking, “Why aren’t they living the lifestyles of their dreams already?” Of course, there can be many reasons why a company might not grow to realize its potential, but there are two reasons that stand out in my mind as fixable:

(1) Conflicting priorities and (2) Conflicting metrics.

Simply put, many underachieving businesses suffer from conflicting priorities and conflicting metrics, and those conflicts decrease the performance of the business. We will examine the “diseases” of the conflicting priorities and conflicting metrics through the life of “John, the business owner.”

The disease of conflicting priorities

John & Co. has come a long way from its humble origins as a one-man business 20 years ago. It has become an organization of 30 employees and the organization has its own needs and places growing demands on John’s time and attention. On a personal level, John has reached the point where he desires more personal time; a chance to enjoy the lifestyle that he has worked so hard towards achieving. While getting the business to this point has taken 20 years of his life, it still is not where he wanted it to be and clearly he has more thinking and planning to do.

In search of a solution, John sits down with a business advisor and tells a story filled with contradictions and conflicts that John can only sense but the advisor can clearly see.

“I am 100% committed to taking this business to the next level. I am willing to do what it takes,” he tells his advisor. “I need to spend more time with my family. My children are grown and I missed so much of their childhood. My wife wants more of my time and we always planned to travel once the children moved out. I am eager to see all that happen,” he adds.

In 2008 John and his company suffered from the conflicts listed in the Priority Table below.

E.g.	John’s current needs	The needs of John’s people	The needs of John’s business	Action Step
Quarter1	More vacation	More face-time with you	Overseas partnerships	?
Quarter2	More time with family	More training	Better infrastructure	?
Quarter3	More time for skiing	Better tools	Investment in skill building	?
Quarter4	Time to train for the marathon	Guidance & hand-holding	Investment in external help	?

Priority Table: Conflicting Priorities (2008)

In each case John made a choice that reinforced the conflicts instead of removing them, and as a result his company continues to exist in a state of unrealized potential. Many of you reading this article will be able to relate to John and his company. If your company is faced with similar conflicts and you would like to grow your business while living your dream, ask yourself and your core team this question, “What is the next action step that we can take that will remove our conflicts?” Use the priority table as a template to guide your decision making and make decisions that remove conflicts.

The disease of conflicting metrics

In addition to conflicting priorities John & Co. suffers from a second kind of misalignment that I call “the conflict of metrics”, where the customer needs get lost among the many other things John wants to emphasize.

In a typical organization there are four different types of metrics at play:

Personal metrics (hidden) - what the business owner uses as a measure of her own success
Stated metrics - what the business owner tells her people they are being measured upon
Business metrics - measures that reflect the ability of the business to meet its customers’ needs and positively impact profit
Implied metrics (hidden) - what the business owner or leader unconsciously conveys to her employees through words or actions

In John & Co.’s business these four types of metrics listed in the Metrics Table are not aligned.

Business Area	Personal Metrics	Stated Metrics	Business Metrics	Implied Metrics
Retail part of John’s Business	The “upscale look” of the store	Ensure the retail end is operating “smoothly”	Net profit	Move customers through the store as quickly as possible
Web part of John’s Business	Upscale design of the website	Number of hits on website	Conversion from hits into customers	Customers being “impressed” with the website design

Metrics Table: Conflicting Metrics (2009)

John derives a sense of pride and accomplishment (personal metrics) from investing in furniture and fixtures that give an upscale look to his store. He has instructed his retail manager to ensure the retail area runs “smoothly.” On the retail floor the emphasis is on processing customers through the store as quickly as possible rather than ensuring each customer’s needs are met before he or she leaves the store. Yet, every week John looks at his profit from the retail area and is disappointed to see that it is not growing. If John wants his profit to grow, then he must align his metrics first behind the business metrics.

If your business suffers from the misalignment of these four metrics, the “pressing questions” that you should ask yourself are, “What are the key metrics that drive the growth of my business?” and “What metrics should I use to measure my personal success?”

If you succeed in eliminating the two types of conflicts I have talked about here, then your success dashboard might look like this.

Year	Profit (Business Metric)	# of Vacation Days (Personal Metric)	Customer Satisfaction (Stated Metric)	Customers Surprised & Delighted (Implied Metric)
2008	$500,000	7	94%	2%
2009	$1,000,000	28	98%	20%