Applying Business Strategy Outside the Business
January 6, 2017 | Symphona
About eight years ago, I was asked to speak at an accounting honor society function at my alma mater, Georgia Southern University. At the time, the professional and technical topics were unlimited. The tax code had changed eight times in the recent years, the FDIC was closing banks left and right, the profession was still reeling from changes due to Enron and other scandals and we were seeing an all-time low in new accountants entering our field. As a firm and as a profession, we were in the middle of unprecedented times.
The topic I chose, however, was inspired by an article in the Harvard Business Review by Clayton M. Christensen, entitled “How Will You Measure Your Life?” Professor Christensen’s class at Harvard dealt with analyzing large company’s management theories and how they evolved. Were the management structures positive or negative, did the companies grow, and was there innovation? How could the companies change their managerial actions to yield the results they needed?
Toward the end of each course, he would then ask the students to turn what they had learned about management theories on their own personal lives. He challenged them to think about and answer three questions (1) Can I be happy with my chosen career? (2) How can I be sure that my relationship with my family proves to be an enduring source of happiness? and (3) How can I be sure to stay out of jail? The third question more than likely raised eyebrows, but Professor Christensen had three former classmates spend jail time due to financial fraud or embezzlement. As he would explain, these were not bad people, but something had sent them in the wrong direction.
Christensen advocated that by using the five following concepts as not only indicators for long-term, lasting success in a company, but advocated that once turned on ourselves, can be powerful tools to ensure personal success as well.
1. Create a Life Strategy – the most successful businesses will create a strategy that determines the best way to deploy resources and invest funds. Over and over again, case studies will show that decisions to steer resources toward the immediate and tangible returns did not always produce the desired results. This goes along with the idea of “immediate gratification”. The companies were not focusing on long-term strategies or had no strategy at all. The same concepts can be applied to our own life’s purpose.
Professor Christensen used the example from his own life of cramming an extra year worth of studies into one year while he was in the Rhodes Scholar program. During that time, he dedicated an hour every night into reading, thinking and praying about his purpose on earth. What he realized that what he was learning at Oxford would be applied only a few times a year, but what he gained from figuring out his life’s purpose he would use every day.
Realize that education and the pursuit of a profession is but one tool in achieving your purpose. Make sure you spend time to create the “strategy” of your life’s purpose and devote time evaluating and assessing what this means for you.
2. Allocate Your Resources – All companies must decide how to allocate their people’s time and resources. Decisions made correctly or incorrectly in this area can be detrimental and costly in the short and long terms.
Again, Professor Christensen drew the parallel between businesses that pursued the immediate gratification and did not invest in the long-term. As high achievers, as many of us are, you will tend to devote your time to the causes that bring you (1) money and (2) tangible accomplishments. The things that are immediate. Ship a product, finish a report, close a sale, return a call, and get promoted.
In our personal lives, we make decisions every day on how to allocate our “resources”. When I get out of bed, I have to determine what is going to be the biggest absorber of my resources for that day – Mother, Wife, Friend, CPA, Firm Leader, and Community Contributor. These are all “businesses” that compete for my resources. I obviously have a limited amount of time and energy. How much do I invest of my resources to each of these endeavors?
Unfortunately, kids, spouses, friends and family don’t tend to offer the same immediate gratification or sense of achievement. We will tend to over invest in the short term gratification that our careers will bring and under invest in the structure that will bring life-long and enduring success – strong personal and family relationships.
3. Create a Culture – One of the critical manager skills that Christensen’s class identified was dubbed the “Tools of Cooperation”. Although it was important to have vision to see where to take the company, it was equally important to have the skills to get the employees to cooperate and put the plan into place. Assertiveness and coercion would only take a plan so far. The employees had to buy into the plan by seeing their successes over and over thereby building consensus. By embracing priorities and following procedures that bring success, a culture is formed.
You must also build a culture for your family. Threats, assertiveness and coercion only go so far with the ones you love! Start now to make sure everyone has the tools that build self-esteem, decision-making and respectfulness. Your family will have a culture, and what you decide to do to shape and impact it will make the difference between having a productive or unproductive one.
4. Marginal Costs – In evaluating projects or investments, sunk or “marginal” costs will at times be considered inconsequential or not important. Not evaluated or addressed appropriately, these costs may have devastating consequences on an outcome.
Now enters the answer to the “Stay out of Jail” question Christensen posed. For any high profile failure which led to jail time, each of the people involved would probably take you back to the first decision they made where it was said, “I know we shouldn’t do this, but just this once, it is ok”.
The marginal cost of doing something wrong just once always seems low. However, most people don’t look at where the path is heading and the full costs it entails. Once a “just this once decision” is made, it becomes extremely easy to make the next. Throughout your personal life and professional careers, you will be faced with “just this once decisions”. Make sure to define what you stand for and draw your line.
5. Importance of Humility – At various points in a career and life, Christensen explains that you will interact and have the opportunity learn from people smarter than you and some people who may not be. Don’t make the mistake of assuming that you can’t learn from the ones that are not as smart as you. The greatest indicator of high self-esteem is humility.
I make it a point to tell someone that they have taught me something every day and thank them. First of all because I am old enough to know that “I don’t know everything”, and secondly to make sure the person I am interacting with understands that I value them taking the time to teach me something. I want them to feel empowered to do it again and feel respected. That is how people grow.
We continue to live in unprecedented but exciting times. Dr. Christensen was ingenious in seeing the correlation of long-term strategic planning and the critical necessity to apply to our personal selves as well. As we navigate the fast-paced, moving environment that we find ourselves in, we must make sure we are equipped to keep asking the questions of not only our professional selves, but our personal selves to ensure lifelong success. To view Dr. Christensen’s full article, go to www.hbr.org and search for “How Will You Measure Your Life?” or email email@example.com.