This is the second in a five part series on decision making.
Steven Covey asks us to ‘seek first to understand, then to be understood.’ The first step the leadership team needs to do is collect the information necessary to make the right decision. This is no time for seat of the pants leadership, or gut feeling management or even doing it “like we did in the 90’s.” This is a time to find out exactly where you are making and losing money and what drives value in your company. Every market and every company has a set of value drivers that impact its business value. Talk with a valuation expert, poll your leadership team, and take the time to think through the top ten value drivers for your company.
One way to look at value drivers is to think of your company from an internal and external perspective. Internal value drivers are things like your financial performance, asset base, product and service development, service delivery, leadership and human resources and management controls. External value drivers are your sales management, your product and service offerings, pricing, your customer base and customer support. Rate each of these areas and ask yourself “what area should rate the highest in order to be a leader in our market?” What two or three areas can separate you from the rest of the pack? Knowing what really drives business value in your company will allow you to narrow your decision making focus. Get the facts first.