“Rule No. 3” Helps Leaders Avoid 3 Key Mistakes

In last week’s post, I offered a different Rule No. 3 for the list proposed by Michael Raynor and Mumtaz Ahmed in their HBR article “Three Rules for Making a Company Great.” Their first two rules are 1) Better before cheaper, and 2) Revenue before cost. Their third rule is: There are no other rules.

But I think there is a (real) Rule No. 3. In the research for our book Strategic Speed, which you can find summarized in this short HBR piece, my colleagues and I looked at companies that execute slowly vs. companies that execute fast. We found that in the slower ones, leaders spend a lot of time worrying about processes, systems, and technologies, while in the faster ones, leaders spend more time on people issues, such as alignment, motivation, climate, and agility. (By the way, the faster companies tend to do much better financially than the slower companies.)

So, my Rule No. 3 is: People before process.

This third rule helps leaders avoid three key mistakes:

  1. The Strategy Mistake: CEO Harry spends lots of time devising brilliant strategies that will put his company ahead of the competition and draw in customers. He spends days writing them up, discussing them with his senior team, and having them vetted by consultants.  But, he pays little attention to building the clarity, alignment, and skills in his organization that would actually make the strategies work—so they don’t.
  2. The Technology Mistake: CTO Judy likes to address problems with the very latest tech systems, thinking they’re the strongest, quickest, most lasting lever for changing a business. What she doesn’t realize is that technology is actually a weak, slow, and transitory lever for change unless it’s a) designed with the explicit intention of helping people be more effective, and b) implemented so that people embrace it.
  3. The Efficiency Mistake: COO Martin puts most of his effort into process reengineering. “If we can just get everything lined up properly and get rid of the waste,” he thinks, “things will run smoothly.” His office is wallpapered with boxes and arrows. He fails to see that an efficient business is not necessarily a successful business—and that people’s actual behavior on the job is rarely guided by official flowcharts.

There’s a paradox here: Leaders who devote plenty of time and energy to apparently mushy, slushy people issues are the ones who avoid getting mired in the three big mistakes. And they end up executing faster than those who go for pure speed and efficiency.

So “slow and steady wins the race”? Sort of. But I’d put it this way: “Smart and people-focused wins the race.”

When have you seen leaders ignoring Rule No. 3 and falling into one or more of the three traps? What happened as a result?


About Jocelyn R Davis

Jocelyn Davis is Principal of Seven Learning, a leadership development firm that creates a lasting lift in leaders' effectiveness using classic books, films, and stories.
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One Response to “Rule No. 3” Helps Leaders Avoid 3 Key Mistakes

  1. Kate says:

    I’ve seen many examples of leaders who believe that the right process will obviate the need for talented people. But no system or process can capture all tacit knowledge involved in anything but the most rudimentary business (vending machines, maybe?).

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