Getting more by asking for less.
I recently volunteered to co-lead a personal budgeting seminar. My co-leader, an accomplished finance professional, was initially annoyed with over-simplifications in the course. The authors, however, deliberately favored simplicity to increase the odds of long-term success. Most people, when given a complicated budgeting program, quickly give up. Make it simple, and people are much more likely to stick to it.
The lesson: Better a good system that people use than a perfect system usually abandoned.
And how does this apply to follow-up?
Important But Never Urgent
Ask a CEO what is most disappointing about their current capital budgeting practices and the majority answer, “unreliable follow-up.” The company usually has grand plans for tracking everything, but these grand plans collapse under their own weight.
Follow-up is a task categorized as “Important But Not Urgent.” Your people will always face more pressing tasks that need attention TODAY. As a result, follow-up gets pushed back once, twice… and is finally dropped with good intentions to make sure it gets done next year.
Any valuable lessons that would have improved strategy execution are once again lost. Mistakes will be repeated. Second-best practices endure.
Hardly a recipe for best-in-class performance.
Two follow-up simplification practices can consistently deliver the valuable lessons needed to out-pace your competition:
- Set Bare Minimum Requirements: Require follow-up on only the critical few elements.
- Streamline Calculations: No one has the time to re-learn the original project spreadsheets. Use tiny sensitivity-type models to estimate NPV and ROI variances.
The above changes, however, have only a short-term impact unless leaders also adjust their behaviors:
- Do Not Reschedule Reviews: Resist the temptation to push back a review meeting because of an unexpected demand on your time. While harmless in the short-term, rescheduling sends a loud message that follow-up isn’t really that important.
- Wait For Context: Streamlined models can’t capture all the complexities of business… numbers are only the beginning of the discussion. Allow follow-up teams to provide the full picture before jumping to conclusions on the project’s performance.
Getting more by asking for less is a paradox. But if you are getting little or no feedback now, this paradox delivers on its promise!
P.S. We in finance love precision, not approximates. We have to get used to this essential trade-off between elegance and effectiveness.