If there is no profit, then it is not sustainable. Today we’re look at thriving, not just surviving!
One of the wisest men to ever live penned the following truth:
- Where there is no vision, the people perish
Other translations render the second half as “cast off restraint.” The results are the same, either way. What people seem to miss along the way is that every law we have on the books … is a vision statement:
- Don’t murder … the vision is to live in a safe world
- Don’t lie … the vision statement is to be truthful
You get the idea. And, it really feels like Vision is the most scarce commodity on the planet at this time. Did you know that of all of the original companies on the Fortune 500 list (each of those had a vision), almost 90% of those are no longer on the list. You can dive a little deeper into that topic in my post on “What’s your Passion #43 – CVO not CEO.”
In the same way that “common sense” is the least common of all senses, true Vision(s) are an extremely rare and precious jewel.
So, in Flow, Vision is the starting point for all sustainability.
We have been going through this 5-part miniseries on the new role for managers (as they shift to becoming true leaders) and in this third part we are focusing on sustainability.
In the Flow Leadership Framework and Mindset we look at “sustainability” through the following lenses:
The first key to sustainability is cash flow, revenue and profit.
If there is no profit in what you are doing, then you probably will stop doing it (even non-profits will close down if they do not generate enough revenue to keep the lights on). How many of you would still show up for work if they company stopped paying your salary? Maybe if you are a stockholder in a start-up you might, but most people would stop showing up to their job if the paychecks stop coming.
It’s a simple equation.
And cash flow, sales, revenue and profit are all measurable. They are quantitative. If there is no profit, it is not sustainable.
The second key to sustainability is saving costs.
In his book “What They Don’t Teach You at Harvard Business School: Notes from a Street-smart Executive,” Mark McCormack pointed out that a cost cutting mentality shouldn’t take over the organization as the primary purpose for existing. It’s good to focus on operational excellence and performance, but not at the expense of innovation or the long-term sustainability of the organization.
He gives a great example in his book of how the bean-counters took over Ford Motor Company for awhile and were driving cost cutting measures to the extreme. Finally one battle-scarred veteran raise their voice in a Board Meeting and pointed out that they could save 100% of the costs by shutting down ALL of the plants. After that, sanity was restored and the bean-counters slunk back to whatever dark cave it was from which they emerged, never to be heard from again.
In Flow, we measure revenue increase, performance increase, and cost savings. You can read a little more about that here. We have a solid track record of delivering remarkable results and have stood the test of time.
The third key to sustainability is mitigating, accepting, transferring and/or eliminating risks.
Larger, typically manufacturing companies, will actually have a way to assign dollar value to risk (via some rather complex algorithms). Compared to Revenue and/or Costs, this is much less quantitative and much more qualitative in nature. Nonetheless, there is still tangible value in managing risks.
Even Agile recognizes risk.
The beauty of Agile is that it only manages a risk when it manifests itself.
Nokia did a huge program back around 2005 to have all of the 750+ project and program managers capture every risk that they anticipated and/or encountered. After collecting the data for an entire year, only 8% of the risks had actually manifested. The amount of time wasted gathering the other 92% of the risks, that never happened, was in the tens of million of Euros. In spite of focusing a huge amount of resources on risk management, Nokia ceased to be a market force since they only focused on operational excellence.
The final key to sustainability is doing the right thing.
This is intangible and can be rather hard to measure in quantitative terms. Again, Nokia is a perfect example of being totally out of balance:
It’s a both/and situation and not an either/or situation. Doing the right thing needs to be filtered by both sides of this infinity loop. Nokia focused only on the right side of the equation and ended up in the dust bin of history. Have shared this story a number of times both in blog posts and on LinkedIn.
Doing the right thing also goes beyond the infinity loop above and/or having an infinite mindset.
Vision must be your true north, the higher purpose for which your organization exists.
If your company does not have an identifiable higher purpose (other than to make money), then even though it still might be breathing, it’s most likely already dead (as evidenced by the absence of almost 90% of the original Fortune 500 companies).
Want to learn more about Flow?
Then let’s chat!
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In these five (5) blog posts (numbers 51 through 55) we explore the five areas outlined in the “Manager-Agile-Flow” image above – here are the link-backs to each one:
- #50 – Intro
- #51 – Team Vision
- #52 – Mindset Guide
- #53 – Sustainability
- #54 – Pursuing Excellence
- #55 – Coaching & Mentoring
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For those that are not familiar with the Flow Leadership Framework & Mindset, it is what’s next for businesses and organizations that are ready to succeed regardless of the methods, frameworks or management tools that they use throughout their enterprise. Flow is methodology agnostic.
Are you ‘in the zone’ of optimal performance right now as a person, team or enterprise? Did you get there by accident or by focused intentional acts?
“Flow” gives you the way of working and mindset needed to create and maintain an optimal state of high performance as an individual, team or organization.
The Flow Leadership Framework turbocharges everything you do, including “business agile” leadership and Scaled Agile.
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PS Here are the associated links to this blog post for:
#culture #scrum #agile #pmi #pmp #kanban #lean #flow #scaledagile #transformation #change #transform