Discover how understanding the limitations of averages and embracing probabilistic thinking can improve decision-making and risk management in business.
Lessons I Learned from Waterskiing that Apply to Business
A champion skier once shared three valuable insights that can be applied to the world of business strategy, systems, and sustainable competitive advantage.
- Slalom skiing appears effortless but requires mastery of each step, namely, operations.
- A ski boat’s V8 engine will always win a tug of war, highlighting the importance of knowing your strengths, namely, sustainable competitive advantage.
- Your eyes dictate where your body will go, emphasizing the need to focus on your end goal, namely, strategy.
How do these principles relate to business?
Mastering Repeatable Processes
Success in business often relies on mastering repeatable processes. Steve Jobs, for example, captivated audiences with seemingly effortless presentations because he practiced each performance relentlessly. Businesses should follow suit, refining core processes until they become second nature. This allows employees to focus on market trends and strategic opportunities, rather than getting bogged down in day-to-day tasks.
Furthermore, it’s essential to master all steps of a process. A weak link can undermine the entire chain, as demonstrated by a company with an excellent M&A due diligence team but a weak integration process, resulting in unrealized benefits from deals. In today’s business environment, employees are often overwhelmed, leaving little time for strategic thinking. Mastering repeatable processes can help alleviate this issue and position a company for future success.
Choosing the Right Battles
In skiing, attempting to beat a ski boat in a tug-of-war is futile. Similarly, in business, it’s crucial to understand what variables can be influenced and focus on those. If a competitor has an unbeatable production process, it’s wiser to develop a sustainable competitive advantage that takes price out of the equation. For example, a wealth management firm that differentiates itself by tying financial goals to life goals can outperform competitors by removing financial performance as a deciding factor.
Focusing on the End Goal
In both sports and business, it’s essential to keep your eyes on the end goal. When facing important decisions, businesses should consider the following:
- Does the decision impact the company’s sustainable competitive advantage (SCA)?
- Will clients care about its resolution?
- What impact will it have on the company’s goals or Key Performance Indicators (KPIs)?
By prioritizing these factors, businesses can maintain focus on the end goal and avoid getting distracted by daily issues.
Conclusion
To maximize business success, practice and refine core processes, understand your strengths and weaknesses, and maintain focus on the end goal. Engaging with a peer group, like Vistage, can provide additional insights and help ensure your business remains on track toward achieving its objectives.
© 2010 Marc Borrelli All Rights Reserved
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