Dear Leaders, the most under-respected and most under-discussed element within leadership meetings and around the boardroom is “what are the factors at play” and how do we influence and then action them.
Knowing The Factors At Play: I recently discussed the forces at play with a new business unit with a large organisation’s leadership team and they struggled with being able to know what were their forces at play, how to find them and then understanding which were internal forces and then external forces.
Forces at play are often out of your control, there are shifts within markets or industries that you can never influence but will greatly impact your business for a number of years ahead.
Economic Factor: Right now we are all experiencing a tough economic environment and many customers have done the wise thing for them to cut their spending, there is a however, not understanding the nuanced factors at play is almost criminal to how you operate and how you then review teams performance and company performance.
Covid Chaos To Crisis: If you have read or listened to recent quarterly earnings (since Q2 of 2020) they have had to blame external factors, when then pushed many CFOs and CEOs struggle to articulate what the deeper factors were (apart from supply chain issues) and how they could change these and influence positive change without many layoffs or numerous rounds of layoffs.
Layoffs for big tech have unfortunately been necessary for most, however, addressing the people side of balance sheet management only doesn’t often change the actual performance of a business, often just the spreadsheet view and you will bad practices, poor decision-making and other operating holes too late and then more misses for quarters to come.
Action: Making Factors Work – Understanding the factors, then categorising them and creating a plan of action (applying to your one company-wide strategy) and then through each departmental plan helps you to reshape and reframe issues.
Here is how you can categorise factors and work out how to reduce anxiety and friction and those you have to take action on:
- We Influence
- Can Influence
- Want To Influence
- Don’t And Can’t Influence
More Than Just Another Unactionable List
This framework works on whiteboards, spreadsheets, miro boards and notion boards, you should keep a running weekly to monthly record (often asynchronously works best) and this enables you to make smart decisions and address/readdress issues and lagging indicators more frequently rather than having to jump straight to headcount freezes and layoffs.
Essential To Truly Know: Dashboards and your internal data often only tell you the surface-level information, the analysis section is imperative and this is where your factors come into their own. Storytelling takes you to the next level.
FYI: Executed right, these factors will appear on your transparent decision document, letting your company know you (and the leadership team have heard and acted upon ideally collaboratively) have made important decisions and then how you got there and why these factors matter, with the actions required to address said issues.
This week consider how you add this framework and workflow into your management meetings, empower department leads and your business analysis (data insights etc) team to feed in weekly or even ad-hoc and discuss these factors regularly,
Thanks and I’ll land back in your inbox next week
Danny Denhard
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PS/ It is well worth reading how Charlie Munger refers to the forces at work and how he operates with or against them.