Fast starters versus fast finishers: What’s the best strategy?
I want to tell you a story about two leaders I worked with back when I was a management consultant. They were peers and senior leaders in the same company. Both were in similar roles and in charge of very large teams. We will call them James and Richard. Made-up names, for sure, but their story is very real. In fact it is a story that I saw regularly played out in clients across the world. The story doesn’t end happy or sad, but billions of dollars were lost and I learned a valuable distinction about success in business that I want to share with you.
Let’s start with James. James always seemed to shine brightest early in the first quarter of the fiscal year. He had the reputation of being visionary and strategic. He was always looking three to five years ahead and, one would think, could pretty much see the future. Through his confidence, conviction and swagger he would engage employees, senior executives, customers and investors. He would imbue them with his passion. I mean, this guy was going places and with his leadership the company had the potential to do anything! The spotlight was on…and shone bright.
At least until week 11 of the quarter, that is. During week 11 many eyes seemed to shift to Richard.
Richard was less charismatic. Not boring by any means just not as exciting as James. Less swagger. He didn’t do jazz hands. There wasn’t much razzle-dazzle, but at the end of the quarter he delivered his number.
Always. Without fail.
Bad economy? Didn’t matter. He always found a way to ethically grow a profitable business no matter what was happening in the environment.
Once the first quarter was over, more eyes would shift back to James. That is, until near the end of the first half of the fiscal year. Then everyone would look to Richard to see if he could bring in the number, as well as a little bit extra to help James’s division.
The pattern would repeat until late Q3, early Q4. Then things would dramatically shift. At this point all eyes were on Richard’s team to ensure that the year ended positive, growth was achieved and the investors kept happy.
Then Q1 for the next year would start and, guess what? James became the fair-haired boy once again!
When I described this to a colleague I explained it like this. If I were to give James $1000 to invest I would have an exciting story to tell my friends at dinner parties about the great things that were happening with my investment and, at the end of the year I might have a little more but most likely less. However, if I were giving that same $1000 to Richard to invest I wouldn’t have any exciting stories to tell my friends but at the end of the year I would have my $1000 back along with some profits. My daughter’s education fund would definitely be with Richard.
This Q1/Q4 pattern continued for several years until someone had the bright idea to give James even more responsibility because he was being groomed for bigger roles.
After James’s left the company to ‘pursue other interests’ I spoke with some of the leaders who had to clean up the mess he left. The loss was in the billions.
What I learned
There is a certain type of leader who shines in Q1. They can tell the story and sell the vision. They are exciting. They could speak with a rock and the rock would enjoy the experience. They are big personalities and exciting to be around. Businesses need them. These are the people who inspire others to action, describe the future for investors to gain needed funds, and can get customers on board even before a product has been created. They do very well in Q1.
In week 11 of Q1 or in Q4 another type of leader shines. This is the one who will ensure that commitments are met, sales are made, and opex is reduced. They will make sure that top-line and bottom-line are moving in the right direction. They deliver on their commitments. Always. They may not be as exciting. But, you can count on them to deliver.
Are there leaders who can do both? Well, theoretically they can but in my experience the vast majority can’t. Either they are a Q1 or a Q4 leader.
Even if they are one of the rare few that can do vision, strategy & execution they will be energized by one area more than the other and also tend to better in that area. Why? Well, when something is a strength for you and you do it, you usually tend to do it well.
What is the ideal mix of Q1 vs. Q4 for a business?
So, look at your executive team or the executive portfolio in your organization. Do you have the right mix of Q1 and Q4 leaders? How many do you count on in Q1 to get customers, investors and partners genuinely excited about your products and services? How many do you count on in Q4 that will deliver no matter what? Is this the right mix for next 6-8 quarters for your business?
Is there a formula for the right mix?
In this age of big data, the answer is clear.
Divide annual revenues by the number of executives add the number of different countries the company operates in (or for private equity divide by the number of portfolio companies). Then, subtract the number of green M&Ms in the next bag you buy. Get it?! There is no secret algorithm that works for all companies and beware anyone who claims they have one. Remember, management is both art and science.
Don’t overcomplicate things when looking for your right mix. There is no static right or wrong number here. My best advice is to just know your people and match the right player with the right time, company, and strategy. One day we may have the analytic capability to accurately predict the right mix but that day is yet to come.
One thing I would recommend is to focus on the next 6 to 8 quarters and not the next 3 to 5 years. Digitization and data analytics are changing everything and market dynamics are being transformed faster than ever before.
How will you know you have the mix wrong?
Huh? You mean right. No, I mean wrong. Once we make up our mind on something we can become inflexible. Recent research in psychology is showing us that what you don’t know is less dangerous than what you think is absolutely correct. Know in advance what data you will need to change your mind.
Finally, this isn’t just for the CEO or CHRO to consider. Having the right talent mix at the top is increasingly being seen important by both corporate boards of directors for risk management and private equity when they examine their portfolios of companies.
This distinction is one of several personal metrics I have used in my consultations. I hope you find use for it as well. If you have your own metrics you have found helpful leave them in the comments below and let’s chat.
Robert Kovach is the Director of Leader Success for Cisco’s Leadership and Team Intelligence Practice Area. He has been an advisor to leadership teams of Fortune 500, FTSE 100 and FTSE Global 500 companies on driving business strategy through executive leadership effectiveness and organizational agility. The opinions expressed in this blog are his own and not those of Cisco. Contact him for speaking enquiries.
Illustration courtesy of Pexels and Caio