Seven key areas of focus as a business unit leader

The role of a business unit leader (or CEO) is unique and specialized. In parts exciting, challenging, impactful, this role can also be all-consuming, lonely, and stressful.? While one can prepare for the role, most of the learning happens on the job. Here are seven areas that I focus on as a business unit leader that help ensure essential outcomes are achieved.?

Area 1- Get an External Perspective: Understanding the customer and market need, the competitive landscape, trends, and drivers

The first area to focus on and understand is the current market the business unit plays in, along with market size, segments, drivers, and trends (political, economic, social, technological, legal, environmental).

It is important to understand the ideal customer profile, and the ability of your current offering to meet customer needs against the alternative. These insights provide qualitative and quantitative dimensions of the landscape—such as size, players, and contours.

How to get external perspective:?

• Seek reports and views from industry experts, investors, customers, and competitors. Seek to understand the total addressable market, growth rates, segmentation, market maturity (S-curve), competitive dynamics, and competitive positioning.
• Validate and augment market and competitor insights based on discussions with investors (current, potential, and those not interested), board members, key stakeholders and customers (current, prospective, and lost), if possible
• Understand the funding dynamics (VC, capital market, PE) of the overall market, key competitors, and your organization. Financial macro trends impact the capital availability to sustain the organization.

Area 2 - Get an Internal Perspective: Understand the business unit strategy, corporate strategy, and pitch?

Seeking internal stakeholder input provides clarity on the organization's focus, expectations, and culture. Most importantly, it provides clarity on the capabilities, alignment, and ability (operational, functional, and financial) of the organization to capture economic market value.?

• Seek input from key stakeholders and the board on the current strategy and expectations. Ideally, have these conversations prior to joining the organization or in the initial 30 days to frame an internal perspective on organizational strategy, culture, goals, and expectations.
• Seek a pitch from the sales team as an existing customer and as a prospect, and from the corporate strategy team as a current and prospective investor. This step validates the intersection of internal and external strategy, the current positioning of the product or business in the market, and its ability to capture economic market value.
• Seek input from product-line, business unit, and functional leaders. This tends to provide insights into operational strategy, functional needs, capabilities, culture, mindsets, and the operating model (functional, matrix, scaled agile etc.). It also provides insights into the operational ability of the business to take advantage of market opportunities.

Internal and external perspectives will help inform the overall pain points, direction, and 3-5 themes to focus on in setting and executing the organizational and business unit strategy.

Area 3 - Understand and Build Out Financials: Balance sheet, cash flow, and income statement

While I deem finance as the language of the business, using financial statements to understand the business’s strategy and operations is a learned skill.

Finance is the fuel for the business. One of the primary responsibilities of a leader is to not run out of capital. Understanding the balance sheet, capital sources, budgeting cycles, and capital allocation helps prioritize the strategic focus.

• Work with the CFO to review the balance sheet, cash flow, and income statement. Review current year and upcoming 1-2 year plans, then review plans for 2-3 years prior to understand key sources, use, and flow of capital as it reflects the current momentum and focus of the business. In turnaround situations, a weekly and quarterly review of sales and cash position will require greater focus.?
• Most folks tend to focus on the income statement, but it is critical to understand cash flows as it links the income statement to the balance sheet. The balance sheet reflects business value.
• Seek help from finance, sales, and strategy leaders to understand the future story of the business from the lens of numbers. Vision without the ability to fund execution can be deemed a dream.?
• Within the context of a business it is important to understand the current funding modes and corporate budgeting cycles. Understanding these processes and timelines is critical to plan and pitch for appropriate resources and investments.

Area 4 - Set the Strategy?

Based on external input, internal input, and financials, set the strategy and build a view into the operating model required to deliver on results.?

• Strategic themes are the output of internal and external input, as well as the financials. Seeking input from the operational team to build out strategy helps in team building and culture alignment
• Build strategy and themes into three horizons: Now (3-6 months), Next (6-12 months), and After Next (12–18 months). Do this across people, process, technology, customer focus.
• Identify deliverables and OKRs by time horizons, and identify teams, operating models, and resources required to deliver on the same.?

Area 5 - Build the Operating Model?

Once the strategy is identified, it is critical to align the operating model to deliver results. Alignment of the operating model focuses on organizational structure, methodologies, resources, and cost structure—as well as culture and values.?

• Align the structure to drive business value. Functional, matrixed, product, and business-aligned structures all have their strengths and weaknesses, and are needed per the situation of the business.?
• Align the organization structure to drive value creation from a customer and sustained investor perspective. Change is hard, but it is important to align the organization and set the foundation of appropriate organizational structure early. Seek help in leading change.?
• In most organizations a product-line, business unit or business function might be operating well. Leverage the functions and product-lines that are operating well as the foundation for transformation.?
• Identify problem areas quickly. Ring fence problems as initiatives with self-contained support structures. Ensure problems do not take away critical time or investments from critical growth areas.?

Review capital allocation and alignment to desired goals. This is the initial pocket of resources to focus on for rebalancing capital and resources allocation. Understand the operational value chain from a customer value creation perspective and align the operational model to deliver on value creation.

Area 6 - Build a High-Performing Team and Culture

Teams should be aligned to delivering on strategy in the context of the operating model. It is critical to understand the current team dynamics and endeavor to create workstreams and teams that can work cross-functionally.?

Creating and maintaining a high-performing culture requires ongoing effort and commitment from leaders and employees. It involves aligning values, behaviors, and practices with the organization's mission and goals to create an environment where both individuals and the organization as a whole can thrive.

• Remember: Culture is all about people and mindsets.?
• Focus on building the leadership team. It is extremely important to set appropriate culture and operating models at the leadership level; the? leadership team’s mindset, fears, and impulses will cascade through the organization. It is critical to seek input from 1-2 layers beyond direct reports to get a 360 degree view into the on-the-ground realities.?
• Take appropriate change actions at the leadership level. Do it with respect, but changes at leadership level signal a commitment to change and future direction.
• Design systems and processes to drive desired outcomes in lieu of designing systems around current people and capabilities. Hire to drive desired outcomes.
• It is critical to clearly communicate shared vision, goals, and values with accountability metrics. Build a data driven, fact-based communication culture of accountability.
• Create a culture of empowerment and innovation where employees can be encouraged to take risks, learn, and improve.?
• Foster emotional safety and build a culture and support structure of wellness. This means physically, mentally and emotionally— both for the individual and for all employees. Inspired, empowered employees drive great results.??

Area 7 - Foster Continuous Learning, Communication, and Wellness Loops

Focusing on all of the above areas is not a one-time activity. Build an organizational system and team to sustain the focus on all of these aspects.?

Build real-time data reporting in the above six areas. Real-time data on critical dimensions is akin to building out a real-time GPS system for the organization. You know where you are, where you are going, and what actions you need to take to get there.?

• Markets and systems are dynamic. Situations and circumstances will always evolve, and appropriate internal and external communication loops are needed to seek input and communicate progress. Set internal and external communication loops consciously. They help align, course correct proactively.
• Build internal and external advisory relationships. It takes time and effort, but it needs to be fostered as a discipline
• Last but not the least, seek personal support, structures, and disciplines to enable physical, emotional, financial, and spiritual health and wellness. The organization reflects the leaders mindset and both the good and bad will be amplified.?

Focusing on the seven areas has enabled me to set and execute strategies to deliver investor value while building high performance team cultures and solutions to customer needs.