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Every decision you make as an executive should do 1 of 3 things: 1. Drive top-line revenue growth. 2. Improve margin and efficiency. 3. Reduce churn and increase the Lifetime Value of the customer. That's it. Every decision. Every person you hire. Every process you create. They can do one of those 3 things tomorrow or they can do them in 6 or 12 months (like investments in brand). But if you're doing something and can't quite tie it back to 1 of those 3 things. Consider not doing it.
Sam Jacobs This was a provocative post! I know you’re vested in optimizing performance. How do you see ‘people’ fitting inside this framework that you’ve offered? Just curious…
#4 Improve the team's daily work.
True and a much-needed rule for companies who blatantly neglect this, but also to be enjoyed with caution. This approach can lead to toxic, numbers-obsessed cultures. Some things like legal compliance, employee engagement, risk management, etc don't directly drive revenue or efficiency, but neglecting them can tank the company over the mid- and longterm.
That’s what Boeing did (points 1 & 2) and is still doing after its merger/takeover of McDonnell Douglas. Ever since it has been on a downward curve. Action (1) and Processes (2) should ideally produce (3). But it doesn’t happen, either (1) or (2) can get skewed and out of alignment with the rest. So, I disagree that an executive decision should only focus on 1,2 and 3.
Absolutely agree with your point. Many companies, especially in the industrial sector, focus on products and create an illusion of customer orientation without truly embodying it. A clear strategy on customer centricity is essential. Otherwise, they risk inefficiency and failing to differentiate. It's like the French saying, "being caught between two stools," meaning being in an inefficient business position.
Couldn't agree more. I break out #1 into new business and expanding existing accounts as separate items. But I like the simplified list of three.
I completely agree with your perspective on executive decision-making. Focusing on driving top-line revenue growth, improving margin and efficiency, and enhancing customer lifetime value are fundamental aspects of a successful business strategy. By aligning every decision, hire, and process with these goals, organizations can ensure they are moving in the right direction for sustainable growth and profitability. It's crucial to regularly evaluate activities and initiatives against these criteria to prioritize efforts effectively.
What about tbe people? The staff that make 1,2,3 possible?
2x Chief of Staff, 2x Founder | Trying to find the best tools for Startups
2wYou forget people in this whole equation - rather than being in the back of your mind, it should be #1