In 2000, Robert Nardelli was hired to run Home Depot. By 2006 he had nearly doubled sales, cut costs, improved process, increased efficiency and doubled profits. In 2007, the board of directors released Nardelli. Why? He focused on the wrong question. According to Ric Merrifield in his book Rethink, Nardelli fell into the trap of asking the “how” questions when he really needed to be addressing the “what” questions.
While the “hows” will narrow your focus (and there is a time for narrowed focus), focusing on the “whats” will broaden your understanding of the organization and what makes it successful. The “whats” ensure you are looking at the operation in its entirety and focusing efforts on the most desired outcomes. Merrifield offers a five-step approach for using the “whats” to improve performance:
1. Identify the “Whats” that are truly valuable
2. Know What you are (and aren’t) good at
3. Make (and break) connections
4. Understand what can (and can’t) be predicted
5. Unravel (and follow) the rules
In 1999, Proctor & Gamble Company (P&G) focused on the “whats” and decided to change their process for product innovation and began gathering ideas from outside inventors. Within five years, P&G doubled their success rate of new product innovations sparking significant sales and earnings improvements.
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Action Management and Associates
