Business mentor: The meaning of life in business

Sometimes I wonder why I'm in business. I don't seem to have a clear direction, but is it that important?

Margaret Mulqueen, general manager of Quantel Business Solutions, replies:

Welcome aboard Flight XYZ, ladies and gentlemen. We're about to take off now. Not sure where we're going and not sure when we'll get there but we'll have a great time on the way ...

Are you going to want to stay on board that flight? Most of us work in (or own) businesses that operate like this. Is it any wonder that business success is hard to achieve and good people hard to hold?

Clearly defining why your business exists and where it's going is as important to the success of the business as the foundations on a building or having a known destination and arrival time for a flight.

We've developed a model to help businesses define their direction in a way that helps ordinary people understand it at an emotional level.

There are three components:

1. Purpose - the reason the business exists, from a customer's point of view.

2. Promises - commitments your business makes to your clients.

3. Vision - where the business will be in two years and five years.

We call this PPV, and when done well it provides a solid foundation for any business.

Purpose: This must be a sentence that defines why the business exists from a customer's point of view. Few businesses do this well (big ones included). Most define themselves in terms of what they do instead of what the customer wants from them. "I'm a plumber" or "We provide telecommunications" are examples.

Team New Zealand for the 2000 America's Cup Challenge got it right. Their goal was to win the cup again but their business purpose was to make the boat go faster. This was the reason the organisation existed day-by-day and it was popularised by the question "Does it make the boat go faster?" This question was made famous by their media campaign, but they used it to help make business decisions every day.

That's the key quality of a good purpose statement. Can it be used daily to arbitrate on large and small business decisions by everybody in the organisation?

Promises: What are you promising your clients? Be specific. Your clients would like to know. And your staff had better buy into those promises if your company is going to have any chance to consistently deliver on them.

Vague promises such as "To deliver the best service" are worthless. Define what best service is and write it down as a promise. Good promises are defined again from the customers' point of view. What commitment(s) are they looking for from your business?

Once defined, these promises will help to shape the types of systems, processes and resources you need to deliver on them.

Customers are more inclined to pay well for products and services that meet the promises they are looking for and staff perform better if they are clear about the promises they must keep.

Vision: This is where you put the stake in the ground. Clearly and in detail define where you want the business to be in two and in five years. Turnover, markets, products, office location(s), number and type of staff, what type of role in the business do you want, market position, what car do you want to be driving? This defines the destination for your people. From this, the intermediate steps can be drawn to develop the business plan.

We're about to take off. We know what we're here for, our commitments that we will keep along the way, our destination and how we are going to get there. Want to hop on board and come along? The right people will.

* Send your Mentor questions to: Ellen_Read@nzherald.co.nz. Answers will be provided by Business in the Community's Business Mentor Programme.