Focus on Key Result Areas

YOUR KEY result areas are your most significant areas of contribution. In the field of managerial performance, the focus on key result areas is the key to your effectiveness, your future, and success in your career.

There are seven key results areas for managers. Each is important, and, whatever your position, one of them is probably more important than any other at a given time. With changing circumstances, one key result area will rise to prominence and one will decline in importance. But you must be cognizant of what they are if you want to improve and perform at your best in each area.

Customers Count

The first key result area in a business is customer needs. The customer can be defined as “someone who depends on you, and someone you depend on for your success in your career.”

It turns out that every manager has three “customers” to serve in order to be successful. The first customer is, of course, your boss. Managers must give their bosses what they want and in the form that they demand it. As long as you please your boss, your job will be secure and your future will be assured.

The second customer that you have to satisfy is the external customer. This is the customer who uses what you produce. It could be an outside customer in the marketplace, or it could be another department within the organization. This customer must be satisfied for you to be deemed to be doing an excellent job.

The third customer is your staff. Keeping them happy and focused on the most valuable uses of their time is absolutely essential for you to get the most out of each staff member.

Profit and Loss

The second key result area in business is economics. All organizational success is determined by economics. Managers are continually striving to either increase revenues or to decrease costs. As a manager, you think continually about the cost of inputs relative to the value of outputs.

Economics always refers to “maximization.” You are always trying to get the highest possible return on the amount of money, time, energy, and emotion invested in a particular course of endeavor.

Focus on Quality

The third key result area of management is quality. The quality of your work largely determines your future in business.

As an executive, you set the standards for your area of responsibility, so the standards of quality that you set for your products and services, as well as for the work that you do, are especially important. For this reason, you must emphasize quality, discuss quality, and continually encourage others to think about how you could improve the quality of what you do for your internal and external customers.

Produce More with Less

The fourth key result area in business is productivity. The most successful companies use their resources efficiently and well. They achieve a higher level of output per unit of input than their competitors. They are continually seeking ways to do things better, faster, or cheaper.

A focus on increasing productivity requires clear goals, plans, checklists of essential activities, and a never-ending focus on getting more and more important things done in less time.

Innovation and Creativity

The fifth key result area in business is innovation—developing new products, services, and ways of doing business to satisfy the ever-increasing demands of your customers in a competitive market.

Innovation requires that you create a culture that encourages people to generate new ideas. These new ideas include better ways of getting things done, new approaches to the business, new products, new services, and new methods and processes for operating your business. A top executive wrote, “Our only sustainable competitive advantage is our ability to learn and apply new ideas faster than our competitors.”

One of the best examples of the power of innovation is the ongoing smartphone battle between Apple and Samsung. When Apple released its iPhone in 2007, it quickly revolutionized the entire world of mobile phones. Within a year, Apple had sold tens of millions of units of its new product, with gross margins of almost 50 percent profit per unit.

At this point, Samsung, a manufacturer of consumer electronics and laptop computers, decided that the smartphone market was an excellent area for innovation and expansion. While Apple began introducing one new version of its iPhone every twelve to eighteen months, Samsung began offering three to five versions of new smartphones each year.

Within five years, the Apple iPhone went from a 50 percent market share to a market share of 12.9 percent in 2013. Samsung, because of its furious rate of innovation and new product offerings, moved from the “new kid on the block” to holding 69 percent of the world market for smartphones by 2013.

Grow Your People

The sixth key result area in business is people growth. How much time and money do you invest in training and developing the people upon which your business is dependent?

According to the American Society for Training and Development, the top 20 percent of companies, in terms of growth and profits, invest 3 percent or more of their gross revenue back into training the people that they depend on to generate those revenues in the first place.

According to an article in Human Resource Executive magazine, the payoff in people training is extraordinarily high, ranging from $10 back to the bottom line to as much as $32 back for every dollar spent in training people to become even better at what they do.

Organizational Development

The seventh key result area in business is organizational development, which entails thinking about and doing the things that create a positive and harmonious organizational climate. These are the aspects of your business that make people feel happy to work there and fully engaged, enabling them to produce at their very best.

You should continually be asking yourself what you could do to improve in each of the seven key result areas: customer needs, economics, quality, productivity, innovation, employee growth and training, and organizational development. What are the 20 percent of activities that account for 80 percent of your results? What are the 20 percent of problems that account for 80 percent of your stress or underachievement? What are the 20 percent of things you can do that can enable you to take advantage of 80 percent of your opportunities in your field?

Excellent managers have clarity. They continually focus their efforts on key result areas of their businesses.