About 50 to 70% of business improvement efforts fail according to many studies, yet I’ve discovered an approach that is delivering a 70% success rate on my improvement work. In this video, I’ll share one piece of the puzzle that has helped make this success possible. Hi there, Matts Rehnstrom here, Shaper of Business Excellence. In this video, I’m going to talk about the owner’s perspective. This is yet another video in the series where I go through all these business components that we need to understand and we need to understand the relationship between them as well to be able to succeed in our improvement work. In this video, I will be talking about the owner’s perspective, which is related to the business idea that I will talk about in the next video.
When you do a stakeholders analysis, which we will talk about in yet another future video for the series, you will find two main stakeholders. The customer is one of the main stakeholders. and the owner(s) is another. Today we will be focusing on the owner(s) and their perspective. So the owner(s) expect something out of the business, which is why they invest their own money into the organization in the first place. They had an idea and they want that idea to take off and fly.
If it’s a private organization, owners put down money and of course, they want to accomplish something, but they also want the financial return of the investment from the work I have done. If it’s a public sector organization, then the owners, which in this case is the citizens, want something out of it for the good of the society. That’s what citizens expect while paying their tax money into that public sector organization.
Understand the Owner(s) Perspective- Ask What They Want with Their Ownership
We need to make sure that we understand on the owner’s expectations on a higher level because if you don’t understand their expectations, you will find yourself a little lost in the organization. You don’t really know if you’re doing the right thing.
Let’s take an example, a city, I think that’s a good example as we can all relate to cities. The city is governed by the municipality and the municipality has to answer to its citizens. If the citizens haven’t been clear about what they want out of the city, such as:
- How do they want the city to look like?
- Should it be a bike-friendly city with a lot of bike roads?
- Should it allow cars in downtown with parking garage so you can drive into town?
- Or other things as well.
But if you don’t know what the citizens really want, it’s hard for the people within the municipality to know if they’re doing the right thing. How do they build the city that the citizens really want out of the ownership of the municipality? The same goes for other organizations as well. If we don’t really understand the owner’s perspective of the organization, we can’t really make a good, useful business idea and then we’re lost in our actions within the organization because we don’t really know if we’re doing the right thing. So what do you need to do is first you need to understand the owner’s perspective. You do that by talking to them, interview them, find out what they want when you talk to them.
Ask What the Owners Expect as an Outcome of Investing in Business
Secondly, go a little bit deeper and ask, ask them what’s the expected outcome of their ownership. If it’s a private holding company, it’s maybe then a financial return, but how large is that a? Is it something else? It’s usually is and it should be as well, not just money. They want something good coming out of their business as well.
Write it Down in a One-Page Document
And then third, write this down in a one-page document. Don’t make this a 20-page document with a total report of everything. Make it as useful as possible, easy to read and make it a one-page document. That document will come in handy when you move over to talking about the business idea that we’ll talk about in the next video.
What you’re doing here is creating the foundation for the business idea work that I will describe more in the upcoming video. When you understand what the perspective of the owners is, then you’re ready to move on to the next component, the business idea.
So what do you think? What’s difficult within your organization? Is it difficult to understand the owner’s perspective or do you already know what the owners want out of your business? Please leave a comment down below.
And, if you like to have a copy of this chart here to obtain your FREE copy. Then you can follow along in my upcoming videos when I talk about these different business components and the relationship between them. See you in the next video then.