Leading the High-Performing Company

Heidi Pozzo

• Publisher: Business Expert Press
• Year: 2018
• Print ISBN: 9781947843356
• eBook ISBN: 9781947843363
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

Leading the High-Performing Company demystifies performance. This transformational guide provides the crucial tools and insights to grow your business and outperform peers. It pinpoints how successful leaders and companies position themselves to lead in their industries. Explore the symbiotic nature of leaders and the businesses they lead. Learn why life is better for everyone when the business is performing at its best. Discover the actions necessary to leverage your organization to new heights and grow as a leader. This book is based on the author's professional career—leading at an executive level and working with high-performing organizations through the good and bad times. Real-world examples bring the concepts to life based on the experiences of the author, as well as accomplished leaders. You'll walk away with actionable insights to accelerate your business today.

CHAPTER 1

High-Performing Leadership

Why do some businesses perform better than others?

I believe it all comes down to leadership and focus. Throughout my career, I’ve been fortunate to work with incredible leaders and be a part of amazing transformation stories—transforming companies that were not living up to their potential into high-performing organizations.

I’ve also seen some challenging circumstances.

Leaders can take any circumstance and lift an organization up, engage the people, and deliver results. They know the difference between being lucky due to market conditions and running the business well. They don’t take credit for growth driven by a strong economy. Rather, they drive growth in a down economy.

My career has taken me from small businesses to Fortune 500 businesses—privately held, publicly held, and private-equity owned. Regardless of the size or ownership structure of the organization, there is a consistency in leadership that outperforms. And without that leadership, a vacuum develops that causes the company to revert to less optimal performance.

Leadership is everything.

Leadership is the difference between a company going bankrupt and being wildly successful. The direction set by leadership determines the outcome.

To be a high-performing business, high-performing leaders must be present to set the direction and focus of the organization. It is not possible to have a high-performing business without high-performing leadership. We’ll delve into what those leaders do that is distinctive and results in high-performing businesses.

I’ll share insights about what works and what doesn’t based on my own experience, and insights from leaders I admire and businesses that have made the journey.

What Does a High-Performing Business Look Like?

You can recognize high-performing businesses initially by their outward appearance. Regardless of the industry, the facilities are clean and well lit. The office space is comfortable and conducive to work. Manufacturing facilities are well laid out, safe, and facilitate the flow of work. Facilities, equipment, and technology are reasonably up to date and facilitate the business operations.

The people are engaged and enjoy coming to work. People work collaboratively across the organization. You can walk through the business and ask any person about its purpose and goals, and you will receive an answer that is consistent across the organization.

Goals are widely discussed, people understand how they came about, and they are reported against regularly. And not just by management. People up and down the organization own their part and are accountable for results.

Customers and suppliers are engaged at a level beyond just an order. Relationships are in place at many levels across the organization and in a manner that allows for collaboration and adjustments up and down in business size. There are no surprises.

A culture of innovation and learning exists such that resources are dedicated toward business growth. They are not disconnected from the organization, but an integral part that feeds off continuous feedback from sales, operations, customers, suppliers, and market conditions. Work gets done fast. Decision making happens quickly with all relevant information considered; people move quickly to act. Systems and processes are streamlined and support the business. You’ll never hear people complaining that it is taking too long to get a decision made or that they are waiting for the system to get work done.

There is a clear focus driven by leadership around the purpose of the business and its goals. The values become part of the culture. People are responsible and accountable—they own their piece of the business. And it all starts with leadership.

Does your business look like this? Can you think of another business that does? A division of a business?

Early in my career, I was fortunate to be part of a high-performing business. I worked as a teller in a credit union in downtown Los Angeles. The team was diverse, yet cohesive, and enjoyed working together. As you can imagine in any retail location, there would be an influx of customers, and a line would form. Quickly, everyone would pitch in to make sure people were helped in a friendly and expeditious manner. Customer satisfaction was always high.

Many years later, I was a key leader in the transformation of Longview Fibre Paper and Packaging, Inc., a pulp and paper, and corrugated box business located in the Pacific Northwest. The transformation was so successful, it was considered a “textbook example” of restructuring an old-line business. According to Deutsche Bank analyst Mark Wilde, it was “the best turnaround case study we have seen in the past 25 years.”

But Longview wasn’t always that way. It took years of working on all the components outlined in this book to become a high-performing business.

The High-Performing Business

High-performing—what does that mean, and how do you achieve it? Even if you don’t hold a formal leadership position today, learning the concepts that go into such an organization will help you thrive in your area and ultimately achieve a leadership position, if desired.

Performance can be measured in a variety of ways: It could be based on the longevity of the company, financial performance, or stock price. Today, other measures, such as social responsibility and diversity, are included as well.

Investors are increasingly looking at the holistic performance of companies in evaluating performance and allocating capital. They are looking for companies having strong financial performance, as well as a positive impact on their ecosystem.

The reality is, companies that outperform know that in order to produce strong financial results, they must be the top choice for customers, have top talent that works together, and do the right things in business every day. Leadership is the means to achieving top performance.

So what does that mean in terms of evaluating performance? Should one use market valuation? Or revenue (which is what Fortune uses to determine its company rankings)? What about longevity? Or earnings per share (EPS)? How does the valuation of different sectors come into play when thinking about how to evaluate performance? And what about nonfinancial measures? The long and short of it is, there are many ways to evaluate performance.

It is helpful to get to the basics when evaluating performance. Every business needs cash to operate. Revenue without cash generation is OK in a start-up, as long as there is a path to success. But long term, a business is not successful by merely selling products or services. Its revenue must exceed the cost of running the business to generate cash and be sustainable. For a business to operate in the longer term, it needs to generate cash.

It is possible to have strong earnings and cash flow in the short term. This can be achieved by reducing costs to boost earnings or not investing in the business to support growth and ongoing operations. But the business won’t be there for the long term with this approach.

Wendy Collie defines success as follows:

• An empowered and engaged staff who feel they are thriving and have meaning in their work
• A differentiated experience that is approachable
• An approach to providing value to customers and community through connecting them in unique ways
• A positive improvement in sales and the bottom line as a result of the aforementioned

To achieve longevity, a business must continually generate strong cash flows and EBITDA (earnings before interest, tax, depreciation, and amortization). And to do that, the business must be a good corporate citizen. If the business acts unethically, harms the environment, or goes against accepted norms, it will suffer a blow. Whether it is a permanent blow or a temporary one is a matter of the significance of the infraction and how well the business works to resolve it.

So, success is ultimately about doing the right things and having an impact. When you are doing that well, you will see financial results that are commensurate with a high-performing business.

Is your organization high-performing? I designed the following assessment (see Table 1.1) to give you insight into the areas in which your organization is doing well and those that need a little more attention. The questions get at the concepts that will be discussed through the course of this book. The questions are designed to look at the entirety of your business and should be answered that way. Even if you don’t have responsibility for the entire business, there are ways you can impact it.

Table 1.1 The high-performing index

	Yes	No
Every person in your business can explain what your business is about (your purpose).
You are constantly being asked by customers, industry associations, publications, and advisers to speak and give tours of your facility.
Your organization’s earnings are in the top 10 percent of your industry.
Your people are constantly being sought by other businesses and they choose to stay with you.
Your people work collaboratively across the organization to further your goals.
You have healthy debate when making decisions, varying perspectives are shared, and a decision is made and acted on quickly.
New products are constantly being innovated and introduced.
Your customers are so pleased by your goods or services, they actively recommend them to others.
You regularly share your goals and expectations, as well as how your organization is performing.
Your expectations are high, and you know your people are capable of achieving your goals.
Your earnings are constantly growing, and the dips mirror market swings and are not a loss of market share or declining margins.
Your energy is high, and you are excited to go to work every day.
You have a group of people who inspire you and who will give you frank perspectives and advice when needed.

If you answered “Yes” to 12 to 13, including the questions about earnings, you are doing well and outperforming. Congratulations! Undoub...

Table of contents

• Cover
• Half Title Page
• Title Page
• Copyright Page
• Contents
• Acknowledgments
• Insights from Accomplished Leaders
• Introduction
• Chapter 1 High-Performing Leadership
• Part I Purpose and Relevance: Why Your Business Exists and How to Evolve to Stay Relevant
• Part II Your Team Extends Beyond the Four Walls of the Business
• Part III Keeping Score and Reaching New Heights
• Part IV You: Becoming a Leader—Who Is a Fine-Tuned Machine
• References
• About the Author
• Index