Expert Commentary

Foundations Are Key

Fundamentals, the foundations of our business, often get overlooked. Even if carefully built, they often get dropped in a drawer, never to be seen again. So let's talk about those foundations for just a moment before we get swept away in the surge toward the next best thing.


Leadership at All Levels
February 2016

Many years ago, I was in the "True North" teaching a sales class (the Producer Academy) for the Insurance Brokers Association of Canada. The course is 12 days long, taught for 3 days once per quarter, and I visited Toronto a total of 9 times teaching students and later training the trainers. For the first year and a half, my room had overlooked the same general vicinity in downtown Toronto.

Like many big cities, Toronto was, at least at that time, in a relatively constant state of construction. Construction cranes filled the air and jackhammers sang. Our hotel was across the street from the site of a new condominium and hotel complex. Of note is the fact that in 6 trips over 18 months, all we saw was the digging, pouring, and stabilizing of the foundation of this massive structure. In 18 months, not a single wall or door or window had appeared. No bricks, two-by-fours, or metal beams were in place. Not a drop of paint had been seen. Almost 2 years had passed, and we still had only the massive hole in the ground and the foundation. This was an incredible structure that was going to be 60 stories or more and eventually would include underground shops and a connection to the Toronto PATH. The foundation of this massive endeavor looked to be about 10 stories deep.

This illustration is an analogy to the important point about foundations and the critical impact they have on building our businesses. They must be firm, deep, solid, well-planned, and meticulously built. We cannot rush the process of building the base for our businesses or our lives. We must spend much of our time, effort, and money on the underpinning of our mission. Our structure simply cannot stand if we are not properly preparing the fundamentals.

This process is difficult because it takes the longest and you don't even have the reward of being able to see it once the building is up! You'll need great discipline to stay the course and to do it right. So where do you start, and what are the steps? What "materials" do you need? Because foundations must start at the beginning to be effective (as author Stephen Covey would say, "begin with the end in mind"), that's where we'll start with this list.

Establish a Solid Foundation

The first piece of the foundation is the definition of who you are as an entity. This can be your "Why" statement, too. Some call this the vision or values statement, used more internally than externally as a guide to the big decisions. It's the short phrase or paragraph that defines how you want to be seen by the outside world. With this guide, you create the type of culture you want in your shop. In addition, it's the code by which your employees are hired, trained, disciplined, or fired. It can even help define the type of clients you want to serve.

Start with a Mission Statement

As the first step, brush off your value/vision statement. How well have you lived it? Update it if needed. Get your team involved in the process, and be sure it can be memorized and recited or paraphrased easily. Your folks can't live up to a creed they can't remember. Are you reviewing this regularly and checking to be sure all internal plans are governed by these values?

The mission statement is familiar to most businesses; most of you have a document, plaque, or web page dedicated to the mission. It's an externally used statement telling the world what you plan to contribute. Who will be your customers? What geographic markets will you serve? This statement is short, direct, and will fit on the back of your business cards. If your organization is large enough, you may need to have a mission statement for each division. The mission is your compass. When new, trendy, fun ideas come along, check carefully against this philosophy. Is this "us"? Do we need to do this to fulfill our main objective?

Develop a Long-Term Plan

When you're sure of who you are and why you do what you do, you have to get there. So long-range planning comes next. This is simply the process of looking down the road 3–5 years to determine where you will be organizationally and how you'll do it. You should consider everything from client base to employees needed to the financial impact of each decision. This is not a step to take lightly. Without it, you simply careen into the future without direction. Even if your business is booming and you are rolling in money, you may be a runaway train heading for the washed-out bridge.

One common excuse for failing to conduct long-range planning is lack of time. Actually, you have as much time as anyone else. If you don't make this a priority, the consequences are significant. Sure, you may still get rich, but what if you could have been richer? What if you could have helped more people in your business or nonprofit? What if you could have created more employment (a value big business creates that many forget) in our economy? So take the time to look down the tracks and decide what you want the organization to look like in 5 years. Get help with this step. You'll need an objective third party to keep you in check. Dream big, and adjust as you go.

Look Closely at Your Assets—Your People

Without your staff, nothing happens. It's easy to get lazy at this point and keep doing what you've always done. Management is an art backed by science, and we get better at it all the time. Organizational charts should be reviewed at least annually. Do you still have the best people in the right spots? Have the job descriptions been updated in the last 12 months? How do you handle staff reviews? Are you consistent? When you are hiring, do you conduct interviews consistently and according to human resource law? What are your training manuals like? How are you protecting your most valuable assets?

Create a formal performance plan for struggling employees. Remember, we don't want to punish the good employees by hanging on to the bad ones too long. This may be the most common mistake we make with employees, and it sends the wrong message to everyone.

Write It Down

This is not just a long list of documents for you to create. The documents are not even the point. The point, and nearly all the value of the exercise, comes in the conversations that happen between staff and management to create (and regularly update) the documents. It's a major part of why we write all this down in the first place. Documentation as a defensive tool is secondary. The creation and arguments and eventual agreement upon what goes in them gives us the opportunity to communicate with one another in a better way.

Writing down plans helps us to stay accountable. The very articulation of the concepts of values, missions, and organizational charts helps us see who we are and who we can become. We need to take the time to talk it out, write it down, and hold each other accountable so that we can accomplish our dreams for the business. This process gives us the light for our path. It is the real work of leadership.

Conclusion

The building in Toronto that was only a foundation after the first 18 months is now a towering structure that will stand the test of time. Once that foundation was done, it took just a few more months to complete the whole thing. Similarly, once the foundation for your business is complete, you can make swift progress and even try some of those new trendy ideas. The success you will find is what makes it all worth it.


Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.

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