The Four Decisions - Tricks to Getting Them RIGHT!
The foundation of Verne Harnish's "Mastering the Rockefeller Habits" is the Four Decisions model - something which you won't actually find in his book. The four decisions are the four critical factors which you need to have place - like the four legs of a table - in order to grow, be profitable and ultimately succeed in business.
1) Leveraging Your People
The first decision, People, is the oil in the machine. To cite Jim Collins, you need to have the right people, in the right seats and the wrong people off to truly leverage your human capital.
For more on one company's take on this decision, check out the blog Hacking Netflix which posted a 128-slide presentation on Netflix's culture along with an excellent summary. Slides 24 and 28 are great, especially the "Keeper Test" managers should use to determine if they have a star employee (go to slide 29 for the rest of the lesson!). Thanks to Verne Harnish and his Weekly Insights for bringing it to our attention.
You also need to be developing yourself as a leader and figuring out what's the best use of your time and talents. Stew Friedman, the featured speaker at our next "Un-Marketing" event on Wednesday, September 16th has some great tactics and tools that you can use to do this - so consider joining us. Stew's research suggests that people who focus on the concept of Total Leadership have a 20% to 40% increase in satisfaction in all of life's domains and a 9% improvement in job performance - even while working shorter weeks. Quite a productivity deal!
2) Setting Your Strategy
The second decision, Strategy, is what drives revenue - the top line. You should be able to clearly articulate your strategy in one sentence - and according to Harnish - and a well-defined one should actually have you saying "No" to new prospects more often than "Yes!".
For some great examples from Harnish’s Weekly Insights email - if you haven’t seen them, click here. What's your strategy?
3) Executing Efficiently
Execution, what many of you have been working so hard on this past year, is the third decision. Your ability to execute well is what drives your bottom-line and thus, your profitability. Our member spotlight article this quarter features one of our members who has excelled at the Execution game over the past year - employing methods like LEAN manufacturing and weekly tacticals to increase his bottom-line results and run a more efficient business.
Read on to learn more about what has contributed to Keith Baldwin's, Managing Partner of Spike's Trophies, success.
4) Managing Your Cash
And finally, Cash, and your ability to manage it, is the fourth critical decision. For privately-held companies in particular, cash is oxygen - and if you don't have it - it doesn't matter how good the rest of the legs are - you die. According to the SBA, poor cash management is probably the most frequent stumbling block for entrepreneurs...and our experience has certainly borne that out.
The Gazelles website has a great article written by Harnish that outlines twelve steps that you can take NOW to improve your cash position. Click here to learn more and...
And - check out the Small Business Administration's counsel to small businesses struggling with cash flow here.
|
