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|Tuesday, June 26, 2012|
BY TOM COX
Should you be a ‘big picture’ leader or should you ‘sweat the small stuff’? The best leaders do both — the real trick is to swap between the two regularly, without allowing yourself to become fooled.
Take two business owners. Dagwood is a classic “big thinker” salesman type who owns an ad agency. He loves strategy, he oozes confidence, and he always gets clients caught up in the excitement of the big picture.
His competitor, Cliff, is a classic “details guy” at a rival ad agency across town. Cliff sweats the details, he double checks his staff’s work, and his projects are always perfectly executed and on time.
They each have their problems. Dagwood’s big picture ignores some details, which is why his projects are so often late, why his profits are eroded by late and rush charges, and why he has to keep bringing in new clients — because the old ones drift away as they get disappointed in his firm’s execution.
Cliff, meanwhile, has perfectly executed some of the most boring me-too ad campaigns ever seen. He’s reliable, but not exciting, so he keeps only highly cost-conscious utilitarian clients who see advertising as a way to distribute coupons and announce sales. His staff are loyal but the top talent won’t work there, and the big dollar branding campaigns are never offered to him. He’s been the last to adopt new technology and adjust to key industry trends.
Dagwood never goes into “the weeds” of detail, and struggles to execute.
Cliff never gets up out of the weeds into higher thinking and broader vision, and struggles to inspire or create– and even struggles to notice important industry trends.
Every CEO, business owner and manager has to be able to do both — to dive into the details and demand they be right, and to zoom back up and out to see the big picture. Anyone can learn it. Dagwood did — Cliff did not.
When he turned 50 and started thinking about some day selling the firm, Dagwood realized he needed to get better at some of the things he wasn’t naturally good at.
He eventually had a consultant set him up with a corporate dashboard, and delegated to his more detail oriented staff the nuts and bolts of populating it with key numbers. On the dashboard, each area of the business has a couple of crucial numbers that represent the health of that part of the business — from cash-on-hand to employee retention to client turnover — and of course a large section for the projects. Any number in the ‘good’ range is green, and worse numbers are yellow (warning) or red (danger).
Dagwood was able each week to scan the dashboard, see what’s green and what isn’t, and go talk to whoever has a yellow or red project.
Dashboards and performance indicators are tricky, because they are only representations or surrogates for reality. A green dashboard does not mean all is well. Consultant and former CEO Jim Grew worked with a retail clothing chain where every link of the supply chain was reporting inventory as “green” — accuracy was above 90% — yet the warehouse was less than 40% accurate. That’s because each link’s 10% inaccuracy was cumulative with the prior one.
Even worse is when people chase the metric and forget the underlying reality. A tragic example of this is playing out in New York today — that city’s police department had won national acclaim for its metrics-based “CompStat” system for focusing police on crime ‘hot areas’ — but almost two decades later the department has become fixated on the numbers.
According to a class action lawsuit, police officers were ordered to write 20 citations and make one arrest every month, whether or not anybody deserved them. The suit, based on hundreds of hours of audio recordings made by police officers Adil Polanco and Adrian Schoolcraft, details an elaborate quota system that actually made it harder for officers to catch real criminals, while harassing law abiding people with bogus citations that would later be summarily thrown out of court for incompleteness or lack of evidence.
From the Village Voice:
One performance metric that should have revealed this — between 2004 and 2009, out of 2.2 million citations issued, 1.1 million were thrown out.
For Dagwood, however, this blind focus on numbers has not been a problem. At his firm, a ‘red’ project is nothing to be ashamed of — it’s just a reason to get curious, and for senior people to get involved and help solve problems.
For any executive, CEO, or business owner, the key is to never mistake the number for the underlying reality. Use a tool like a dashboard (or a Balanced Scorecard) to tell you which weeds to get into, and zoom in long enough to fix what needs fixing, then zoom back up to keep your eye on your long term goals.
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