leadership goals

This past week, my Introduction to Business class (freshmen) have begun reading Eliyahu Goldratt's The Goal, a great book about operations as well as a way of thinking and looking at business (and life). In the book, the main character is confronted with the question, "What is the goal of your company?" After much debate, he realizes that the goal is to make money. He then goes through a process of finding the best way to do that, from which he develops the theory that a company makes money by increasing throughput while decreasing inventory and operational expenses. My students over the past few years have loved reading the book and it leads to discussions around multiple isses. One of those issues is"What really is the goal of an organization?" And here is the next question for me and you to consider - does the goal of the organization differ from the goal of leadership? Let's explore...

• is the goal to make money an end or a means? Does the organization make money so at the end of the day it can pat itself on the back and say "look at how much we have provided for our shareholders" or "look how much money we have in the bank"? Or does the organization make money so it can be sustainable over the long haul?
• Leaders have multiploe goals - but at the end of the day, when push comes to shove (what does that phrase really mean?) does the leader worry about making money over everything else (we know where that leads to) or does the leader worry more about the people of the organization?
• If the leader's goal is to develop the people of the organization, is it an end or a means toward the goal...in other words, am I developing people so they have a greater capacity to make money for the organization, or so they themselves become better leaders?
• Sustainability of the organization involves creating value - which we all know carries more weight in many instances than only making money. However, there had better be a plan in place to eventually make money, or the value will become valueless. So what comes first - the plan to make money or the plan to create value?
• The inherent mind of the leader goes to influencing people toward a common goal. What if the organization one leads is a not-for-profit? (I am having breakfast in 20 minutes with my good friend Jerry Daivs, CEO of Goodwill Industries of Central Texas). But as we all know...no margin, no mission. So is that common goal making money or doing good? In the long run, shouldn't everyone be working to make money for the organization so that it can live out its mission?
• The ideal of leadership grabs many people because they want to act for the common good...or want to make a difference...or believe there is a better way of doing things. Sometimes the mantle of leadership is thrust upon someone and they have to step up and lead, with little or no forethought about what that means. Will they automatically "punt" to the goal of making money - or another goal that is near and dear to their heart?

As I finish this week's blog, let me think outloud for a few moments. I do believe there is no perfect answer to this conundrum...I do believe it is a BOTH/AND rather than an EITHER/OR...I do believe in the idea of "no margin, no mission"...I do believe the leader had better be concerned that at the end of the day there is cash left over to not only pay the bills but to save something for a rainy day...I do believe that people need to be developed to use their gifts and talents for more than just the goals of the organization which they work for at this time...I do believe that leaders must first and foremost consider and care for the sustainability of the organization which employs them at that moment...I do believe that a leader's personal growth will come through living with these seemingly conflicting goals...and I do believe that by living with these seemingly conflicting goals, leaders will strengthen their organizations in the long run.

what's your goal?

It's a worthy question...most people would agree it is important...and it is something we think about all the time, whether it be personal or organizational goals. Over the past two weeks, I was reminded that for organizations to exist, there is really one goal - read on...
In my Introduction to Business class, we were discussing the "fundamental and powerful concepts" within business (fundamental and powerful concepts help shape how one thinks within any given discipline). While many of the comments had to do with customer service or quality products, one young man piped up and said very simply - "profit." His classmates jumped all over him, but after some clarification and further understanding, we all came to the conclusion that he was right. PROFIT is the ultimate goal of business - and any other organization if it wants to exist beyond a short time.
That same weekend I began to read The Goal by Eliyahu Goldratt. I had seen this book on the shelf for years, but had failed to pick it up. Not too far into the book the narrator is confronted with the question, "What is the goal of your business?" After many attempts to answer the question (all of them wrong), he realizes that the answer is TO MAKE MONEY. To effectively and efficiently operate a business, one must then figure out what it is that makes money for the organization and begin to work on those processes.
SO...how would I translate that into a University setting (or a church...or a not-for-profit venture...or any organization that seems to have "more lofty goals" than making money)? It still comes down to the fact that in order for any organization to continue its work (be that making a product or delivering a service) it's goal must be to make money (in reality, to make MORE money than they are spending). At the University level, our income is derived (for the most part) through credit hours sold (what we might call our throughputs). Those credit hours are delivered through classes (what we might call our inventories). And our costs - for the most part - consist of our faculty (what we would call our operational expenses). Knowing that, we have to find a way to increase throughputs, decrease inventories, and decrease operational expenses...while at the same time staying true to our mission and value added propositions.
At least that is how I interpreted Goldratt's thinking for the University. I am not sure if I am right, BUT the book got me thinking about profit in a different way. I would recommend it for anyone who has to think about an organization beyond one day. And by the way, it is also a fun story to read.