Have you ever considered that revenue can have a quality to it?
It can: revenue is not neutral. There are good forms of revenue that move a business forward, and bad forms of revenue that slow a business down.
I hadn’t thought of revenue this way before, but it gave me pause for thought because there are many other aspects of a business, in addition to revenue quality, that are determined by the quality of the system. So this idea really matters.
My mantra is ‘The system delivers the Strategy’.
Businesses like to focus on downstream measurements like revenue, profit and ROE, but all of these are determined by upstream factors that are contained in this system.
These are the big ones:
- Leadership coherence: whether the leader body is truly aligned
- Strategic focus: clarity about where a business will/will not compete
- Capability/Strategy fit: whether organisational capabilities truly match its strategy
- Customer-value alignment: whether customers genuinely value what the company does best
- Organisational health: how vital the organisation and its people are
- Operating system quality: how well the ‘engine’ of the business is designed
Getting back to revenue quality … if all of the above are in good shape, revenue quality takes care of itself. In particular, when people find meaning in their work, are treated well, and are given clarity about expectations, they show up in ways that drive revenue. They are motivated, energised, bought-in, generous and resourceful.
These are the qualities of high-performance, but they can seldom be taught, and they can’t be bought. They are by-products of upstream factors.
So here’s the takeaway: if you want downstream success, look upstream first. Any efforts to shift the downstream measures will be shaped by the quality of the upstream conditions.
’The system delivers the Strategy’ is a phrase I’ll keep repeating. Focus on the system quality, and the Strategy will take care of itself.
There is an invisible architecture to a business that is hard to understand and hard to work with, but absolutely critical to your success. Pay attention to this as it’s the very thing that likely determines your professional success.