Merriam-Webster defines fundamentalism as a 20th century Protestantism movement emphasizing the literally interpreted Bible as fundamental to Christian life and teaching. This is similar to Islamic teaching, assuming we substitute “Bible” with “Koran,” the book of sacred writings used in the Muslim religion.
The
dictionary adds “the beliefs of this movement, adherence to such beliefs”
and/or “attitude stressing strict and literal adherence to a set of basic
principles.”
Ancient
stories of ghosts, spirits, goblins and other superheroes don’t impress me
much!
So…
I’m going to write about business. More specifically, business
fundamentals.
Huh?
The
strict and literal adherence to a basic set of business principles:
valuation and earnings!
Merriam-Webster
defines fundamentals as “forming or
relating to the most important part of something.”
In
business management strategy, managing business fundamentals usually implies a
dedicated focus on valuation and earnings, also referred to sometimes as
“market cap” (or value) and “EBITDA.”
We’ve
all probably seen CEOs who - regrettably - focus on managing business
fundamentals as described above, seemingly oblivious to the state of disrepair
of their corporation, or where they are headed. In making this statement,
I’m implying that some business leaders are focused on managing fundamentals only, or primarily.
The
challenge in this regard is that an
organization exists because of the sum total of all its parts! Not because
of financial results, which is an output derived from the collective input of
the employees, and the products/services that the business offers!
Simple
questions for business leaders to ask of themselves should include:
Are
we attracting AND retaining our most
valuable employees?
- We
should ensure that under-performing employees are culled regularly, allowing them to succeed elsewhere. Does
this mean that top-performing employees, who quit, have culled us?
- Do
we view compensation as our only/primary investment in our employees, ignoring
competitive market forces, employee work-life balance and general employee
satisfaction?
-
Are we growing organically, or simply replacing some departing clients with
some new clients?
-
Are we operationally sound, and reinvesting in our own infrastructure to
support the business?
-
Are our competitors out-maneuvering us on the innovation front; are we even
still competitive?
I
could go on and on, but I think you get the picture.
The
CEO who devotedly focuses on managing business fundamentals is also often
completely oblivious to employee EQ and SQ (and other psychological
traits). Not uncommonly, “business fundamentals” practitioners are
frequently entirely absent generally good communication skills. One can
observe this in their interaction with others, their written style and
delivery, presentation style, etc.
Of
course, the opposite of the above may be true as well. Very frequently
the best orators are the poorest business strategy executioners. Think of
your favorite politician (I’ll resist the temptation to lead with an
example). Politicians are exactly the opposite of business managers,
focused on fundamentals.
Politicians
generally get elected because they tell good stories; motivate people,
successfully sell hope, etc. Hardly anyone can under-perform a politician in
terms of execution. In fact, sometimes politicians can be outperformed by
anyone else, by simply arriving!
If
your CEO’s best virtue happens to be his/her political skills, your business is
in trouble. But if, on the other hand, your CEO’s best virtue happens to
be a laser-like focus on business fundamentals (only), your business may also
be doomed in time.
In
the instance of the latter example, it will simply take a little longer for the
soft business underbelly to be
exposed, because fundamentals can look good on paper, reporting period after
reporting period… for quite considerable time!
A
good CEO, regardless of the size and type of ship he/she is captaining, needs
to represent a fine balance between the bookends described above: Not
overly political, and also not narrowly, primarily focused on business
fundamentals.
Think
of your boss, or her boss.
Then,
think of you, where you are at, and where you are headed!
As usual, any real change… begins with you!
