“Business has only two basic functions-marketing and innovation.” — Peter Drucker
How do you figure out what your organization or business is really about?
It’s one thing to know it intuitively. It’s another to be able to share it or have meaningful dialogue.
This is extremely important in an economy that’s contracting.
Why Does the Business Exist?
Obviously, it’s important when the economy is expanding too, but when the economy is contracting, it forces you to take a really good look at why the business exists.
Why do people fund you? What’s the value? What’s the intrinsic value of what you do versus what’s the market value? Have you found the right efficiencies or does it cost you a $5 to produce that item that nobody will pay you more than $1 for?
Here are the tests I use to quickly know what a team, organization, or business is really about:
Tests for Organizational Clarity
Here are the simple questions I use to test business clarity:
- Vision / Mission: What’s the one-liner vision and mission?
- Customers: Who’s the customer?
- Problems: What domains or problems does it focus on?
- Business Case: What’s the internal and external business case?
- Measures of Success: What’s the measures of success?
- Catalog / Products / Services: What’s the product line / deliverables / results?
- Rhythm of Results: What’s the product cycle or rhythm of results?
- Cost: What’s the minimum you need each month to stay in business?
If you know these, it tells you a lot.
Here’s a quick rundown on how you can use this.
Mission
Mission is who you are and vision is where you want to go. An important attribute in the mission, is some unique value or differentiator. If everybody knows the vision and mission, they can run to the same finish line.
For me, I like one-liner visions and missions that you can spit out in the hall without a cue card.
Customers
In a large shop like Microsoft, knowing your customers makes a big difference. For me, while I server a lot of customers, my main focus is developers.
While it’s partly a chicken and egg deal, knowing your customers helps you clarify which domains or problems you tackle.
When in doubt, ask your customers!
Problems You Solve
Owning important problems is key. I think you can measure the value of an org, by measuring the value of the problems it solves.
Business Case
Business cases are powerful because they justify existence and investment. I think looking through two lenses helps — what do your customers see as the business case? (why you versus some other group or service or product) … and what does your company see as the business case? (In other words, what’s the unique value to keep this group around and invest in it?)
One important piece of a business case is knowing how big is the pie and what’s your slice.
Measures of Success
Measuring success is important. Everybody wants to do a good job and know what it is. Knowing what gets measured tells you what’s valued.
Catalog of Products / Services
Knowing the deliverables in the form of a catalog or product line tells a lot about an org or team. I like to think in terms of portfolios of results. When I talk to teams about what they do, finding out what they deliver really cuts to the chase.
Rhythm of Success
The rhythm of results is important. This tells you a lot about the cadence, work styles, value of time, … etc.
Cost
How much do you need to make to stay in business? Or, as Drucker would put it, how much profitability do you need to stay in business?
You can use this insight to balance your costs and to stay within the bounds of your budget.
There’s obviously a lot more you can know about an organization or team, but I’m finding these are fast keys to cut to the chase and get to what counts.
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