As I wrote recently, conducting monthly business reviews comes with a downside – as the leader you must deal with what you learn about your business and your leadership team. (Actually it is only a downside if you view it as such – it really is an opportunity to learn the facts about your business.)
As underperformance comes to light, it can be tempting to jump to conclusions, which typically are negative. Perhaps it is human nature. Either we think that the business is flawed or that the leader of the business is not the right fit.
Rarely do we pause to consider: Do we have a business model problem or a leadership problem? It is vital to dig in and diagnose what is really going on.
If you have a great business model but the wrong leader, the business model is going to suffer. If the underlying economics of the business are solid, put the right person in charge of the business and you’ll see performance improve. On the flip side, a great CEO can’t do much to fix a broken or obsolete business model.
After this monthly business review, discussed previously, which revealed that one member of my client’s management team was seriously underperforming to the detriment of the whole team – I talked afterwards privately with the CEO. I raised the question of whether this person is the right person for this job. She looked down and said “Well, I actually think we’re going to exit that business.”
My response: “Is it a business that you want to be in? Is it worth being in it?”
“Well, yes – I really do think it has potential and it fits nicely with our other businesses.”
“So why not keep this business and let another person run it” – and I mentioned someone else on the team who is a very strong performer about to outgrow his current role.
At that, the CEO’s eyes lit up and she said “I hadn’t thought of that.” Following up, I told her that I thought this other person would be great for this post and that if they gave him this business to run, they’d see a lot of improvement pretty quickly because he’s demonstrated his capacity already.
The CEO got very excited – all of a sudden she had this opportunity in front of her she hadn’t even considered before, one that suggested the strategy for this business is right, but the person is wrong.
So here are some questions to consider:
- If your business is underperforming, is it because the strategy is flawed, or because you have the wrong person leading it? If you determine that the strategy is flawed, can you envision any person who could be successful running it? If not, then you probably do want to exit.
- If you determine that the core business strategy is sound, then imagine that the business is performing at its full potential – would you still want to be in that business?
- If you had the right person running it, would you still want to be in that business?
- What will it take to get the right person in place?
- What will it take for you to move the mismatched person to a different role or out of your organization if necessary?
- What opportunities do you have right in front of you to give high performers a stretch opportunity to run part of the business?
Now that you’ve thought through these issues, it’s time to act. These are a few of the gems – and the challenges – of monthly business reviews.