“Management is doing things right; leadership is doing the right things.”1 Businesses have always had tremendous decision-making challenges due to lack of relevant, complete, accurate, and timely information. And this problem has become more acute as businesses expand or downsize, the pace of change increases, and the breadth of change expands.
So with all of this change and chaos swirling about, it’s not difficult to understand why some business leaders get caught in the trap of spending precious human resources, time, and money on doing a lot of things right. After all, what harm can come from being efficient? Efficiency equates to a smooth-running organization. Efficiency means optimal performance. Efficiency illustrates competency and expertise. Certainly all of these attributes represent qualities we expect business leaders to establish within their enterprise.
But is this enough?
If executives are fully occupied with execution and doing things right (e.g., processes, projects, and production), how will they know when time, effort, and money are being spent on areas that are not truly important to the business?
While efficiency, doing things right, is certainly vital for business success, perhaps it’s even more important for executives to take a step back on a routine basis and ask themselves a few important questions such as:
- Where are all business assets (people, processes, technology, applications)?
- How much does all this cost?
- Are all of these assets vital to my business—are there areas of obsolescence, redundancy, or waste?
- What assets are really needed to operate and grow the business?
- What are our plans to introduce assets that are missing, optimize critical assets, and safely decommission the rest?
Answering these questions will help ensure precious resources (time, people, and money) are being directed toward areas that will help the business grow and better compete.
By adopting an Enterprise Portfolio Management (EPM) approach, leaders can make more informed business and technology strategy decisions by gaining insights into the key areas (portfolios) that characterize their business. This transparency delivers executives with a clear, real-time view into their assets (tangible and nontangible) and illustrates how and where they are spread across their business.
An EPM approach shows decision makers how assets support corporate goals, strategies, and core business processes. With this newfound clarity, decision makers have the ability to better understand which assets are required to operate and grow their business and which are not. This level of visibility equips business leaders with the ability to take action by making well-informed investment and divestment decisions. Hence “doing the right thing.”
It is equally important to recognize that doing the right thing also means avoiding “doing the wrong thing.” Unfortunately, it is not at all uncommon to hear examples of two project teams whose actions are in direct conflict with each other. Imagine the savings and benefits in time, money, and morale that would be achieved by eliminating one unneeded project.
Using an EPM approach, business leaders and decision makers no longer have to assume they are doing the right thing. Decisions that affect the business can now be consistently made on facts rather that “gut-feel.” Business leaders will be armed with the confidence that the time, money, and effort they are responsible for governing are being spent in the right places. Once executives know the right things to do, they can focus on doing them right.
1. Peter F. Drucker, Essential Drucker: Management, the Individual and Society