Chaper 11: Rely on Bottom-Line Thinking
“There ain’t no rules around here. We’re trying to accomplish something.”
—THOMAS EDISON, INVENTOR
How do you figure out the bottom line for your organization, business, department, team, or group? In many businesses, the bottom line is literally the bottom line. Profit determines whether you are succeeding. But dollars should not always be the primary measure of success. Would you measure the ultimate success of your family by how much money you had at the end of the month or year? And if you run a non-profit or volunteer organization, how would you know whether you were performing at your highest potential?
How do you think bottom line in that situation?
A NONPROFIT’S BOTTOM LINE
Frances Hesselbein had to ask herself exactly that question in 1976, when she became the national executive director of the Girl Scouts of America. When she first got involved with the Girl Scouts, running the organization was the last thing she expected. She and her husband, John, were partners in Hesselbein Studios, a small family business that filmed television commercials and promotional films. She wrote the scripts and he made the films. In the early 1950s, she was recruited as a volunteer troop leader at the Second Presbyterian Church in Johnstown, Pennsylvania. Even that was unusual, since she had a son and no daughters. But she agreed to do it on a temporary basis. She must have loved it, because she led the troop for nine years!
In time, she became council president and a member of the national board. Then she served as executive director of the Talus Rock Girl Scout Council, a full-time paid position. By the time she took the job as CEO of the national organization, the Girl Scouts was in trouble. The organization lacked direction, teenage girls were losing interest in scouting, and it was becoming increasingly difficult to recruit adult volunteers, especially with greater numbers of women entering the workforce. Meanwhile, the Boy Scouts was considering opening itself to girls. Hesselbein desperately needed to bring the organization back to the bottom line.
“We kept asking ourselves very simple questions,” she says. “What is our business? Who is our customer? And what does the customer consider value?
If you’re the Girl Scouts, IBM, or AT&T, you have to manage for a mission.” Hesselbein’s focus on mission enabled her to identify the Girl Scouts’ bottom line. “We really are here for one reason: to help a girl reach her highest potential. More than any one thing, that made the difference.
Because when you are clear about your mission, corporate goals and operating objectives flow from it. ”
Once she figured out her bottom line, she was able to create a strategy to try to achieve it. She started by reorganizing the national staff. Then she created a planning system to be used by each of the 350 regional councils.
And she introduced management training to the organization. Hesselbein didn’t restrict herself to changes in leadership and organization. In the 1960s and ’70s, the country had changed and so had its girls—but the Girl Scouts hadn’t. Hesselbein tackled that issue, too. The organization made its activities more relevant to the current culture, giving greater opportunities for use of computers, for example, rather than hosting a party. She also sought out minority participation, created bilingual materials, and reached out to low-income households. If helping girls reach their highest potential was the group’s bottom line, then why not be more aggressive helping girls who traditionally have fewer opportunities? The strategy worked beautifully. Minority participation in the Girl Scouts tripled.
In 1990, Hesselbein left the Girl Scouts after making it a first-class organization. She went on to become the founding president and CEO of the Peter F. Drucker Foundation for Nonprofit Management, and now serves as chairman of its board of governors. And in 1998, she was awarded the Presidential Medal of Freedom. President Clinton said of Hesselbein during the ceremony at the White House, “She has shared her remarkable recipe for inclusion and excellence with countless organizations whose bottom line is measured not in dollars, but in changed lives. ” He couldn’t have said it better!
WHY YOU SHOULD ENJOY THE RETURN OF BOTTOM-LINE THINKING
If you’re accustomed to thinking of the bottom line only as it relates to financial matters, then you may be missing some things crucial to you and your organization. Instead, think of the bottom line as the end, the takeaway, the desired result. Every activity has its own unique bottom line. If you have a job, your work has a bottom line. If you serve in your church, your activity has a bottom line. So does your effort as a parent, or spouse, if you are one.
As you explore the concept of bottom-line thinking, recognize that it can help you in many ways:
1. Bottom-Line Thinking Provides Great Clarity
What’s the difference between bowling and work? When bowling, it takes only three seconds to know how you’ve done! That’s one reason people love sports so much. There’s no waiting and no guessing about the outcome.
Bottom-line thinking makes it possible for you to measure outcomes more quickly and easily. It gives you a benchmark by which to measure activity. It can be used as a focused way of ensuring that all your little activities are purposeful and line up to achieve a larger goal.
2. Bottom-Line Thinking Helps You Assess Every Situation
When you know your bottom line, it becomes much easier to know how you’re doing in any given area. When Frances Hesselbein began running the Girl Scouts, for example, she measured everything against the organization’s goal of helping a girl reach her highest potential—from the organization’s management structure (which she changed from a hierarchy to a hub) down to what badges the girls could earn. There’s no better measurement tool than the bottom line.
3. Bottom-Line Thinking Helps You Make the Best Decisions
Decisions become much easier when you know your bottom line. When the Girl Scouts were struggling in the 1970s, outside organizations tried to convince its members to become women’s rights activists or door-to-door canvassers. But under Hesselbein, it became easy for the Girl Scouts to say no. It knew its bottom line, and it wanted to pursue its goals with focus and fervency.
4. Bottom-Line Thinking Generates High Morale
When you know the bottom line and you go after it, you greatly increase your odds of winning. And nothing generates high morale like winning. How do you describe sports teams that win the championship, or company divisions that achieve their goals, or volunteers who achieve their mission? They’re excited. Hitting the target feels exhilarating. And you can hit it only if you know what it is.
5. Bottom-Line Thinking Ensures Your Future
If you want to be successful tomorrow, you need to think bottom line today. That’s what Frances Hesselbein did, and she turned the Girl Scouts around. Look at any successful, lasting company, and you’ll find leaders who know their bottom line. They make their decisions, allocate their resources, hire their people, and structure their organization to achieve that bottom line.
HOW TO ENJOY THE RETURN OF BOTTOM-LINE THINKING
It isn’t hard to see the value of the bottom line. Most people would agree that bottom-line thinking has a high return. But learning how to be a bottom-line thinker can be challenging.
1. Identify the Real Bottom Line
The process of bottom-line thinking begins with knowing what you’re really going after. It can be as lofty as the big-picture vision, mission, or purpose of an organizaion. Or it can be as focused as what you want to accomplish on a particular project. What’s important is that you be as specific as possible. If your goal is for something as vague as “success,” you will have a painfully difficult time trying to harness bottom-line thinking to achieve it.
The first step is to set aside your “wants.” Get to the results you’re really looking for, the true essence of the goal. Set aside any emotions that may cloud your judgment and remove any politics that may influence your perception. What are you really trying to achieve? When you strip away all the things that don’t really matter, what are you compelled to achieve? What must occur? What is acceptable? That is the real bottom line.
2. Make the Bottom Line the Point
Have you ever been in a conversation with someone whose intentions seem other than stated? Sometimes the situation reflects intentional deception. But it can also occur when the person doesn’t know his own bottom line.
The same thing happens in companies. Sometimes, for example, an idealistically stated mission and the real bottom line don’t jibe. Purpose and profits compete. Earlier, I quoted George W. Merck, who stated, “We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear.” He probably made that statement to remind those in his organization that profits serve purpose—they don’t compete with it.
If making a profit were the real bottom line, and helping people merely provided the means for achieving it, then the company would suffer. Its attention would be divided, and it would neither help people as well as it could nor make as much profit as it desired.
3. Create a Strategic Plan to Achieve the Bottom Line
Bottom-line thinking achieves results. Therefore, it naturally follows that any plans that flow out of such thinking must tie directly to the bottom line—and there can be only one, not two or three. Once the bottom line has been determined, a strategy must be created to achieve it. In organizations, that often means identifying the core elements or functions that must operate properly to achieve the bottom line. This is the leader’s responsibility.
The important thing is that when the bottom line of each activity is achieved, then THE bottom line is achieved. If the sum of the smaller goals doesn’t add up to the real bottom line, then either your strategy is flawed or you’ve not identified your real bottom line.
4. Align Team Members with the Bottom Line
Once you have your strategy in place, make sure your people line up with your strategy. Ideally, all team members should know the big goal, as well as their individual role in achieving it. They need to know their personal bottom line and how that works to achieve the organization’s bottom line.
5. Stick with One System and Monitor Results Continually
Dave Sutherland, a friend and former president of one of my companies, believes that some organizations get into trouble by trying to mix systems. He maintains that many kinds of systems can be successful, but mixing different systems or continually changing from one to another leads to failure. Dave says:
Bottom-line thinking cannot be a one-time thing. It has to be built into the system of working and relating and achieving. You can’t just tune into the desired result every now and then. Achieving with bottom-line thinking must be a way of life, or it will send conflicting messages. I am a bottom-line thinker. It is a part of my “system” for achievement. I practice it every day. No other measurements—no wasted efforts.
Dave used to call members of his field team every night to ask the bottom-line question they expect to hear. He continually kept his eye on the company’s bottom line by monitoring it for every core area.
When it comes right down to it, regardless of your bottom line, you can improve it with good thinking. And bottom-line thinking has a great return because it helps to turn your ideas into results. Like no other kind of mental processing, it can help you to reap the full potential of your thinking and achieve whatever you desire.
Thinking Question
Am I staying focused on the bottom line so that I can gain the maximum return and reap the full potential of my thinking?
