Simple But Not Easy

It sounds so simple, but simple isn’t always easy.

If you want to improve your business, you have to look at the whole business, not just part of it, and you might have to make difficult changes, said Chris Carey of Chris Carey Advisors, in an interview with Portfolio.com. Most often, that change has to start at the top, with CEOs deciding both what they’re passionate about and what they’re good at—and delegating much of the rest.

“A business is a holistic system,” Carey said. “You can’t isolate one piece and try to improve it. Going in and changing one part is like putting a big engine in a Chevy Nova. You’ve got to put in a better suspension, better brakes in it. You’ve got to improve the overall [flow] of how you do business.”

Great, you say, but just how does that work?

Carey has some ideas he said have worked for his clients in the past. Here’s a quick rundown:

• Know the purpose of your business. Are you in business to make a certain kind of widget, or is it to provide a specific services? “There is no right answer. It’s just that you need to know,” Carey said.
• Know the key differentiator between your business and those of your competitors. Are you especially good at knowing your customers and their needs? Are you the recognized innovator in your field, the Apple of whatever business you happen to do? Are you the low-cost leader in your field, after the Wal-Mart model? Whatever that differentiator is, it has to dominate the way you do business. “It permeates every decision,” Carey said.
• Know whether you’re getting paid the right premium for the service you’re providing. To do that, you have to know exactly what your customers want from you, and what you’re delivering. And if you’re delivering something, be it a service, a product, or an innovation, then you have an opportunity to charge a premium. “We try to find opportunities of positioning these companies…where they can justify a price premium,” Carey said.
• Structure your company so it delivers on its premium. That means taking a long, hard look at whether you have the right people in the right jobs. Are you taking advantage of all the talent at your disposal? By the way, that long, hard look includes you, the CEO. Maybe it includes you especially. “You need to look at how do you leverage that person,” Carey said. “We need to focus on where their passion meets their competence.”