Here’s a tool to help you manage your managers – whether you’re a manager of a department, a division, or a company. I call it Herding Cats.
Now, herding cats is crazy hard. But that’s nothing compared to your challenge – managing your managers to “row in unison” towards your financial goals.
Luckily, your company already has a system in place to herd cats, and I call it your company’s GPS.
Let’s look at how your phone’s GPS works:
- You enter your destination on your phone’s GPS.
- Your GPS tells you where you’re starting from.
- Your GPS shows you alternative routes – maybe the shortest, or the quickest, or the most scenic – and you choose one.
- When you’re along the route, your phone’s GPS tells you if you’re off course and tells you how to get back on course to your destination.
Your company’s GPS uses an analogous four-phase process to get to its destination:
- PHASE ONE: Set its long term financial “destination”. That destination, for most companies, is an increase in company value. I refer to this as the VALUE phase.
- PHASE TWO: Identify its current “starting point.” It assesses, usually at the end of each quarter, where it is financially, its strengths and weaknesses, and the drivers of how it got there. I call this the INSIGHT phase.
- PHASE THREE: Identify alternative strategies for the next quarter and the rest of the year and choose the one that creates the most long-term value. I call this the FORESIGHT phase.
- PHASE FOUR: Compare, at the end of each quarter, its financial results versus its strategic plan and determine how to get back on track. I call this the OVERSIGHT phase.
So to “herd” your managers toward your financial objectives, you just need to make sure your manager’s individual GPS’s are aligned with your company’s GPS.
In the VALUE phase, your managers need to understand how your company creates VALUE and should align their objectives with the company’s VALUE objectives.
In the INSIGHT phase, your managers need to understand how their activities are connected to how your company makes money and to be able explain their quarterly results.
In the FORESIGHT phase, your managers need the ability to formulate financially grounded plans for the next quarter and the rest of the year that align with your company’s VALUE objectives.
In the OVERSIGHT phase, your managers should be able to credibly report how their financial results differ from their commitments and to present action plans to close any gap.
When your managers align their individual GPS with your company’s GPS, at the VALUE, INSIGHT, FORESIGHT, and OVERSIGHT phases, your managers will have better synergies, collaboration, motivation, energy, and better financial results.