Nike advertising says "Just do it!"
Coaches everywhere bombard their clients with "What steps
are you taking this week?"
The army lining the hills in Monty Python's movie The Life
of Brian shouts "Get on with it!"
And they're not wrong. I've said all of those things
myself... and I will again.
But I come from four different meetings in the past few
days where clients were in full out "action" mode... and
couldn't tell me what the specific goals were for all that
effort.
Regardless of whether you're an independent professional, a
leader in a corporation, or owner of a business, here's
information that should give you pause.
Investors in private-equity deals averaged 22.5% returns on
their investment in the 12-months ending last June, while
the S&P 500 returned 6.6%... over the past 10 years that
return was 11.4% versus 6.6%; over the past 20 years it's
been 14.2% versus 9.8%.
Return on investment means return on time, money, elbow
grease ' everything that's put into a business. So how
would you calculate the return on effort you're getting
from your own "investment?"
The seldom-discussed reason for the difference in returns
is the difference in management strategies used in these
two arenas. And it begins with the fundamentals of managing
' regardless of the size of the business.
The starting point in private equity firms is in setting
specific objectives. Often, new objectives are set when new
investors come on board. With new investors come new
experience and new insights to help refresh the thinking of
the management team. New ideas from people standing in a
new line of sight on the industry, competitors, customers.
Private investors are often looking at their three to five
year exit strategy as they walk in the front door, it's a
perspective that keeps attention on how every effort is
increasing or diverting the value of the business.
Every business decision, every operations and management
choice is deliberately aligned with that objective.
Every activity throughout the business is in turn evaluated
for how well it's moving the company's efforts toward those
results... and redesigned to be sure it IS High Payoff!
And the result is 50% higher returns on that investment
of... time... money... resources!
The objective set by one of my law firm clients is to
double net income in five years. That objective leads to a
list of decisions that need to be made regarding: which
client work to take on and which to turn away; what legal
staff to bring in to do the work; what support staff and
infrastructure are needed; and what new management skills
have to be honed to manage that effort.
Having all of that laid out first, before leaping into
'Action!" by hiring the wrong experience, moving to the
wrong space and neglecting managing the resources already
on board, is having a direct result - streamlining his
daily decision making, eliminating two lines of low margin
legal work commonly taken on, and setting clear directions
for his marketing.
And productivity? Stripping out fully one-half of the daily
confusion and stress he and his people were working under
focused their concentration and accelerated the work
results in the span of two days. He's targeting that 50%
boost in returns.
Whether you run your own business, manage a department of a
larger organization, or staff a project, take a lesson from
the private equity world and set clear objectives first.
Then put on your track shoes and go for it!
----------------------------------------------------
© 2007 Linda Feinholz Management expert, consultant,
and coach Linda Feinholz is "Your High Payoff Catalyst" and
publishes the free weekly newsletter The Spark! and
delivers targeted solutions, practical skills and simple
ways to boost professional and personal results. If you're
ready to focus on your High Payoff activities, accelerate
your results and have more fun, get your FREE tips at her
site http://www.YourHighPayoffCatalyst.com
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