Recently, I heard commendation for the annual results of a financial services company as being an improvement on what was done before. As good as it sounds; this is not what most investors want to hear. And, defending performance improvements based solely on comparison with the previous period is not entirely correct. It also doesn’t lead to long term market leadership.
- The “better than yesterday” metric doesn’t work today.
Improvement is good, but businesses are more likely to be compared with what is better in the general market than an improvement on what was done before. This is due in part to reduced switching costs in most industries with clients being able to change service providers with minimal inconvenience. This is a good reason innovation is so strong.
It simply says “this is the best available – you must have this”. Current players about to be extinct say “this is better than what we did yesterday”. Unless this “better than yesterday” translates to best in class, businesses with the “better than yesterday” strategy are only waiting to be upended.
- Listening is where tomorrow’s ideas are.
This is where the real direction for a business or a career is.
You know what you already know, and it has gotten you this far. To get to the next phase, information from the outside is unbelievably critical. Listen to contrary views, listing to supporting views, take note of thoughts that are ahead of yours and be open to thoughts that you would consider below you. There is the insider’s trap you should seek to avoid.
Do not protect a position to the point that there is an unwillingness to consider other options, even where they seem wrong.
- It’s Easier to Think like the CEO.
That is, think long term. Think with a deadline. Think with all the factors in the market.
Think about the competition and be honest about your performance. Be aware of the situation of your firm, before the environment does that to you. When you have to respond to investors who have interests in better performing firms in your market, your excuses be better refined. Investors always want more and tend to have a strong case for same. Therefore, listening to the market further gives ideas on how organisational performance may be improved. Bottom line, investors want growth and the market demands same.
This is the major way to drive further investment in your direction.