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Leadership is often paralleled to conducting an orchestra where at the highs of performance the maestro enters a state of flow becoming one with his tune, his orchestra players, and the audience. Known and unknown ingredients are at play and the way these are synthesized to produce that harmony seems to go beyond our understanding. For that reason, we call a great performance by a different name, we call it art!

In the business analogy, a great leader makes himself part of the system, is sensitive to the effects of his practice–his presence and vibes touch everyone in the room—understands his role as composer and constantly seeks to create a whole that is greater than its parts.

The leader enters a state of flow and not with a baton but with strategy themes, he channels the attention of his people and establishes a rhythm that aims to mobilize their forces towards the goal.

And like the high-performing orchestra conductor, great leadership is not a matter of deciding the order of performing—which first or which next to play–but rather of composition–when and how much of each in the pursuit of achieving the whole.

For great leadership, you need to go beyond operational mastery. You need to show that you can tune to your environment, that you can practice empathy towards your people and partners creating trust as a safety net for all. You need to demonstrate that you allow your people freedom to perform, that you can communicate and share with them critical thoughts, and that you not only seek their input, but you value it as well. Help them play as best as they can, and they will in return show you how their best works for your [...]

Purpose stimulates and drives a business forward. Yet many business leaders do not express purpose explicitly in their strategic statements and are thereby not able to communicate it properly to exploit its power.

Purpose answers why we are in business and what society need our business is there to serve. We frame the answer in the so-called purpose statement—a clear, pithy, and inspiring conviction—that aims to communicate our company’s existential why to everyone inside and outside the company: “We exist to accelerate the planet’s transition to sustainable transport.” Tesla; “Entertaining the world.” Netflix; “Organize the world’s information.” Google’s first purpose.

Unlike the mission statement that tells of what our company will do and for what customers, and unlike the vision statement that expresses our aspirations as to where we aim to reach, purpose tells of our reason for business not from the inside-the-company view but from the outside, from the society’s vantage point. It precedes all the other company statements and, very importantly, serves to guide and infuse them with its spirit.

Not every kind of purpose will do the job. Purposes that a company drafts to be in vogue and that are used only in wall signs, what HBS prof Ranjay Gulati calls “shallow purpose”, will not work. Companies need as Ranjay says, “deep purposes”, purposes that reflect why the company exists and that are communicated to and shared by everyone in the company. People, regardless of position or rank, understand and embrace the purpose, remember it every time they put themselves to work, and get inspired knowing that they work for a purpose that has its roots in the needs of their society.

Purpose is not making money nor is it only applicable to social institutions. [...]

Who doesn’t want to know where to focus his attention and action so as to hit his targets? The Critical Success Factors, CSFs, is one great methodology to achieve that. But though most managers are enamored with the term, many admit having only a cursory experience with it and feel uncertain whether what they list as their CSFs are the right ones or even meaningful.

Some fine points from a recognized HBR article on CSFs to help readers grasp what CSFs are, are quoted below:

CSFs are the limited number of areas in which satisfactory results will ensure successful competitive performance for the individual, department, or organization. CSFs are the few key areas where “things must go right” for the business to flourish and for the manger’s goals to be attained.
CSFs are the areas in which good performance is necessary to ensure attainment of goals.
In most industries there are usually three to six factors that determine success; these key jobs must be done exceedingly well for a company to be successful.

(From John F. Rockart’s HBR article March-April 1979 entitled “The Chief Executives Define Their Own Data Needs”

Note: CSFs were first discussed in the management literature in 1961 by D. Ronald Daniel, Managing Director of McKinsey & Company).

In other words, CSFs are what a manager must selectively do each day in working to accomplish his goals. Thus, Goals very much influence CSFs. Having identified a manager’s goals, the CSFs underlying the goals will next be derived and discussed. Goals and CSFs are interrelated and can be thought together when working to determine them.

But from where should managers draw content to identify goals and CSFs? Of course, company strategy and objectives and strategy goals are very [...]

When considering the purpose of organization, we must not forget the circumstances that gave rise to its creation. It was society and its needs that called for the establishment of this entity we call organization. Its contemplated role: to provide what individuals couldn’t, to provide for new products and services efficiently.

This dual-purpose -innovation for new products and efficiency in performing the task of production-is an existential reason of leadership.

Though both innovation and efficiency are critically important, there are stages in an organization’s life that make one more needed than the other. See diagram below:

Efficiency

Innovation

Neglecting either one could have serious consequences. Focusing only on innovation will in the longer term open the door to other efficiency focused companies to take away from the innovative company the gains, whereas focusing only on efficiency will deprive the company from deploying the resources necessary for innovation.

If both, during an organization’s life, are necessary, how to go about them, is a question vexing many companies. Our suggestion is depicted by the diagram: innovate first, but after, be prepared to do the task efficiently, a sequence that in the life of the company repeats itself and leads to the fulfillment of the vision and mission.

For a sustainable company it is necessary to be good at both processes. Efficiency follows a more logical path, and it is easier understood how to apply methodologies like lean and six sigma to enhance it. Innovation, on the other hand, is rather an untamed process that has no real recipes as to how to apply it. Following the doctrine that a leader makes the company, it would follow that to do both should be a prime concern of a leader.

Furthermore, since the time when either [...]

Who wouldn’t want a tool that identifies problems early avoiding the inaction or complacency that comes from not knowing and not pinning down where the trouble is?

To respond to this, we introduce here the “business critical mass framework”.

Critical mass is that quantity of something that makes the desired process sustainable.

The term “critical mass” was first used in nuclear physics where it meant the smallest amount of fissile material needed for a sustained nuclear chain reaction (Wikipedia).

In business “critical mass” is the point at which a growing company becomes self-sustaining and no longer needs additional investment to remain economically viable (Investopedia).

Note, however, that the critical mass concept applies to two areas of business, the overall business and the individual processes that comprise it.

Business critical mass (overall): It relates to the customer revenues determined largely by the number of customers. They provide the income to back feed, to the necessary degree, all business processes.
Individual process critical mass: The individual business processes have also their own critical mass that is the quantity needed to make them efficient. Below that quantity, resources are not fully utilized, and processes underperform consuming more funds and thereby increasing the magnitude of business critical mass. This process critical mass, though important, is secondary.

Customer revenue

Customer revenue is the main determinant of the business critical mass and in its terms the business critical mass is expressed. A company should strive to raise the customer revenue above a threshold, the critical mass, to provide adequate feeds for all the business needs.

Business needs

A business cannot be sustained without covering its production system costs, nor can it survive without keeping current its machinery and other infrastructure, nor without advertising campaigns to attract and maintain customers nor can it survive without new [...]