Are you managing smarter?

Are you thinking about doing more cost-cutting? If so, stop for a moment if you are considering an across-the-board reduction in spending. Instead, manage smarter by first considering two key questions:

  • What can your organization be the best at?
  • What capabilities enable you to be best-in-class?

The answers to these two questions will be the guide in how you move forward. The challenge is to allocate resources to enhance the capabilities that make you best-in-class and not get distracted by spending time, energy, and money in developing capabilities that really don’t contribute to your distinction. Once you have defined what the organization can do “the best,” be sure everyone in the organization has that shared view. Then, each day, employees will focus on enhancing the organization’s critical capabilities.

In an interesting article, “The Coherence Premium” in the Harvard Business Review, June 2010 issue,┬áPaul Leinwand and Cesare Mainardi provide an excellent discussion of these principles. As the authors state, “Sustainable, superior returns accrue to companies that focus on what they do best.”

Success can be achieved by aligning your core culture–guiding the “why” and the “how” of the organization–with your distinctive internal capabilities that make you best-in-class, and the right market position.