Doing the Work
In last week’s blog we discussed the second question of Patrick Lencioni’s Playbook, “How do we behave?” and how that translates to an organization’s core values. This week I want to close out this series to focus on his third question. The tagline of Lencioni’s book The Advantage is “Why Organizational Health Trumps Everything Else in Business." This new question highlights the significance in fostering organizational clarity and the critical part it plays in organizational health.
Question 3 - “What do we do?”
This question may seem simple and truth be told it is. It seeks to address the fundamental need for clarity within an organization. It revolves around understanding the organization's primary reason for existence (Question #1) and its core values (Question #2). It compels leadership teams to articulate their organization's purpose, core values, and long-term goals with absolute clarity to ensure every team member understands and aligns with them.
An organization’s answer to this question should be clear, straightforward, and even dry. Lencioni calls this a “business definition” and advocates that it should be confined to one sentence. By itself this definition isn’t necessarily interesting, but when it is combined with a mission statement it is able to communicate the why and the what of that particular organization, speaking from both an idealistic and practical perspective. In other words, speaking to both the left and right sides of the human brain.
As I spent time planning out Serenity Business Services typical scope of work, I decided our business definition is as follows:
We serve our customers by helping to organize and make sense of their financial information in order to use it to make better informed and forward looking decisions.
It is not uncommon to find the owner of a successful and growing business that doesn’t know what their fixed vs. variable costs are or is able to list off all of the expenses that make up their overhead pool. That shouldn’t be surprising either because these are strictly functions of accounting and finance. It can be difficult for the president of a non-profit organization to take two or three days out of their week to calculate a reasonable percentage of administrative costs to incorporate into their grant budgets.
This is exactly how Serenity gets to bring value to our clients. To take the time to dive into the numbers, look for ways to better organize them based on the needs of the business, and to present them with analysis of what has happened. Then to use that accounting data to produce financial projections and cash flow forecasts to use to plan for the future of the organization and to make sure they are fulfilling the personal financial goals of the business owners and/or the mission of the organization.
I want to challenge you to sit down this week and ask yourself if you fully understand the financial reports you look at? If so, is there more information you wish you had visibility to? Do you know how long it will take you to save to open that second location or purchase that additional equipment? I would welcome the opportunity to help you ask those questions and more that you aren’t able to think up yet.