As a CEO, I am always interested in learning how other people run their companies and how various functional managers approach their work. Ive spent a lot of time benchmarking other companies in this effort. This has allowed me the opportunity to conduct some original research into how managers from different functions think and act. It has been a fascinating experience. The way I approached this study was to ask managers of various functions simply this, What is the sum of 2+2? I feel passionately that everyone in an organization needs to think and act as a general manager, not think and act exclusively as a custodian of their one or two lines on the P&L. The reality is that we all have functional areas that we work in and we are influenced greatly by that function alone. And that impacts how we see the business overall. One Fortune 500 Company I interviewed was particularly interesting in their response. I first went to the CFO and asked, What is the sum of 2+2? He responded immediately, without any hesitation and said, The answer is 4. Anybody who gives you any other answer than that is either stupid or an outright liar and I want to know who they are so that I can have them summarily terminated! His right eye began to twitch and he broke out in a fit of turrets syndrome and kept yelling Sarbanes Oxley with each twitch. So I just said thanks and got out of there. Next I went to the Vice President of Engineering and asked the same question. His response, after some considerable thought, was Well in a linear world the answer would be 4. However since space and time is actually curved the answer is therefore 3.98675439 approximately. From there I decided to try this question out on the Vice President of Sales. He replied, So you want to know the sum of 2+2? I said, Yes. I think he restated the question to buy some time since hes been tripped up on math questions before. His response was this, I believe that the answer is 4, but if that is too high for you I can discount it a little. Finally I decided to wrap this line of questioning up with the Chief Legal Council. I walked into his office, sat down and said, So councilor, what is the sum of 2+2? Before responding, he stands up and quietly closes the door, and then he walks over and closes the blinds, he sits down and leans over his desk and says in a hushed voice, So, what do you want it to be? The moral of this little psychodrama is that most people view the world through their functional lens without ever trying to see things through the whole company lens. I call this functional myopia. While this not a true story, the scary thing is it really feels like it could be! Let me ask you this, do you believe that if only the folks in the other functions really understood your business issues, your company would perform much better? I bet you do. Now, do you believe that you adequately understand how your company works across functions and that you yourself dont suffer from time to time from functional myopia? Be honest! You cant point the finger at the other guy in the first question without being intellectually honest with yourself in answering the second question! Heres what I hope you to take away from this anecdote. We need to run our businesses, within the context of our strategy, by the numbers. Not black and white by the numbers, but by an in-depth understanding of what drives each number on the P&L and how those numbers interplay with each other. With this understanding, we can raise the level of our dialogue between functions from raised voices to raised knowledge. We can engage in a business discussion about the best solutions rather than fighting over whose number on the P&L should take the hit. Now, what does 2+2 really equal? In business the answer must be greater than 4. If not, then we are not generating a profit, we are not providing a return to the shareholders and we are not adding economic value to our enterprises. |
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