Why Knowing Your Biggest Opportunity (or Challenge) is the First Step to Valuable Performance Improvement
It never ceases to amaze me how few business owners and senior executives can answer this one simple question: “What is your biggest opportunity (or challenge)?”
Fully half of those I ask just stare at me and say: “Wow! That’s a great question….”
When this happens, I have to restrain myself from wanting to pounce and ask them: Just what do you do when you first get to your desk Monday morning? Do you wait for the phone to ring, a staff member to speak to you, or just act on that first email?
(Of course, I don’t pounce on them quite this early into the conversation…!)
I don’t know what these people do with their time during the day, but it certainly is not going to be spent on their biggest opportunity or challenge if they don’t know what it is.
Even more telling is that most among those who actually do give me an answer vaguely say: “I need more customers (or clients)”
Sometimes I dare to see if they are willing to be challenged by responding: “Why? What have you done with your exiting clients?”
Now that gets their mental wheels turning!!!
Well, at least these people have a general direction, but that is all they have. And, because they usually stop right there (if I let them), many will simply miss the very lesson life (and I) just handed them.
Any Improvements in Performance Starts With Looking at the Performance History (Including the Numbers!!!)
The starting point for looking at performance improvement is to look at your current results in terms of value. (Some call this exercise a Performance Review, but please note this is a review of the operation task’s performance, not an evaluation of staff performance.) Break down your operations, sales, etc. into key tasks and look at their results in as many ways as makes sense.
For each key task, determine your current results and your historical best performance (this may take some digging, but it is worth it). Create some measurement systems with appropriate metrics if you need to, especially if such measurements can be automated.
Note that if you do not know what your current results are worth to you, nor what a 1% improvement is worth to you, then you do not know how much time and energy you should put into improving your performance, so that is also something you will have to determine as part of this exercise.
Feeling overwhelmed? Remember, we are not looking for high precision here – a rough estimate will suffice in the first pass. You can always refine the analysis once your improvements start to happen….
What happens when your improvement priority becomes clearer
Quite simply, you (and your staff) become laser-focused on the most important and valuable changes within your business.
Should your improvement effort be your main focus for this week? It should be if you discover that it is “mission critical” to your business.
Before you scoff, let me tell you that this happens more often than you think. The number of times a highly valuable opportunity to add to the bottom line is disguised in a hidden performance shortfall is astounding.
A “positive deviant” micro-case study
I am always inspired when I meet a business owner or senior executive who can actually give me an solid answer to the biggest opportunity or challenge question, and attach specific financial magnitudes attached to this answer.
Let me give you an example why this awareness is so powerful. Once, at a business networking event, I spoke with a small business co-owner, someone who could answer the “biggest opportunity” question. The co-owner said: here are my two biggest challenges and opportunities…with dollar figures attached to both of them.
Within minutes, we had figured out two avenues for him to pursue:
- the first was a marketing direction that enabled them to advance their marketing campaign by a full year, and
- the second was how they could work with new customers in a new vertical and simultaneously get some financing for the equipment they needed in order to do it.
All within 10 minutes… because this person knew what their biggest opportunities and challenges were AND each was worth to them if they could just figure out how to get it.
Over to You — How You Can Leverage Your Own Opportunity or Challenge Into Real Results
WARNING: Those that do this exercise have made the first and important step towards operational excellence.
So, try to answer this question for yourself: what is your biggest opportunity or challenge right now?
You can have more than one, but keep working to identify the biggest ones you have AND what it costs you (every minute / hour / day / week / month… you get the point) delay in resolving that challenge or taking advantage of that opportunity
(Hint: determine what a 1% or 1 unit change would be worth, then multiply that by how much you can improve in a best case scenario.)
What would it be worth for you if you would wave a magic wand right now and solve that challenge completely or take full advantage of that opportunity?
Don’t think of why you can’t – imagine you can and think of the impact that would have on your customer satisfaction, product or service quality, staff morale, and of course, your bottom line.
Then ask yourself: have I spent the time I need to today in making this improvement effort a priority? Look at your past week, your past month… have you properly prioritized that performance improvement? If not, perhaps you have some very valuable work to do!
I have given you a simple yet effective improvement process to get you started. Of course, if you have any questions, or have examples of other creative ways to use opportunities or challenges to drive your business forward, let me know in the comments below!