Successful Entrepreneurs Use These 3 Business Concepts. Do You?

By guest contributor Jim McGraw (founder, LEAPPAhead.com; former chief operating officer, Marion Laboratories Inc.; former board member & chairman, Ewing Marion Kauffman Foundation)

Jim McGraw was Marion Laboratories’ Chief Operating Officer for 16 years. He served on the Ewing Marion Kauffman Foundation board for 14 years as a founding member and ultimately chairman. Jim founded LEAPPAhead.com to help today’s entrepreneurs enhance their skills of Leadership, Empathy and Persuasion. He lives in Kansas City with his wife of 68 years, Ann.

As a young entrepreneur, Ewing Kauffman had a vision of building a successful pharmaceutical company. With $5,000 of borrowed money, he started Marion Laboratories in his home. A few decades later, he sold the company for billions, having created a company that helped make millionaires out of secretaries and shop workers.

But he didn’t stop there. Mr. K then went on to create the Ewing Marion Kauffman Foundation, bring the Royals to Kansas City and build a lasting legacy of value-based, ethical business practices that are as relevant today as they were then.

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But, while his vision of a great company may have been clear to him from the beginning, Mr. K realized that clarity would be just as critical for his associates to successfully help build Marion Laboratories into what it could be.

That’s why he and his leadership team created the Three Clarities. Every project — no matter how large or how small — required us to establish and follow these three concepts, which you can  use in your business:

CLARITY OF DIRECTION 
What’s our goal and why?

CLARITY OF ORGANIZATION
Who and how will we get the job done?

CLARITY OF MEASUREMENT
How will we measure our performance along the way?

Clarity of Direction

Clarity of Direction requires the leader to inform the team exactly what their task is and why it is important to the overall good of the business.

For example, a clear directive would be to increase annual sales by 20 percent in the next 12 months. On the flip side, unclear direction would be to just “increase sales.” Setting clearly defined and measurable goals is a great way to actually achieve those goals.

The leader should also tell the team why achieving these goals is important. For instance, meeting our sales goal will set the company on a trajectory for profitability, which means a bonus for everyone in the company. When employees have an incentive to succeed, it’s likely they’ll ensure their company will, too.

Clarity of Organization

Clarity of Organization answers the question, “Who’s responsible?”

On any project, it’s important to clearly establish the roles and responsibilities of every team member.

For example, at Marion Laboratories:

• Mr. Kauffman was the macro-leader, founder and chairman.
• Next, the CEO was responsible for the three- to 10-year strategic direction with emphasis on new product development.
• My job as COO was the one- to three-year manufacturing, sales, marketing and other day-to-day functions.

With this structure in place, there was no confusion about whose job it was to get things done.

Think about how you can clearly define your team roles, so that everyone knows what lane to swim in.  For instance, if you’re rolling out a new product does your purchasing department know when you need parts delivered; does manufacturing know when products must be packaged and ready to ship; does marketing know when ads and social media must hit to drive demand; and does IT have your database ready to accept and ship orders?

Clarity of Measurement

Clarity of Measurement is simple to understand but difficult to accomplish because it requires discipline. At Marion Laboratories, leaders would regularly ask:

• Are we on plan?
• If not, why not?
• What do we have to do to get back on plan?

Communication and feedback are critical elements of measurement. At Marion Laboratories, we had quarterly “Marion on the Move” all-associate meetings at Municipal Auditorium to let everyone know how things were going, what needed improvement and to celebrate our successes. 

Today, it might be easier to rely on electronic forms of communication to keep people accountable and up-to-date, but I’m sure Mr. K would still recommend regular face-to-face meetings to inform and engage your teams. It doesn’t have to be difficult. Maybe it’s as simple as a brown bag lunch or an all-staff happy hour. Just remember that effective leaders communicate regularly so everyone knows how they and the company are doing. 

The Three Clarities were critical to Marion Laboratories’ success, and they can do the same for you.  As we share the Clarities with area businesses, universities and organizations through our LEAPPAhead program we are gratified to hear many of today’s entrepreneurs acknowledge that these leadership tips are as relevant and effective today as they were then. 

Jim McGraw shares the Three Clarities and other useful business skills in a free program he developed called www.LEAPPAhead.com. There, you’ll find articles and videos to help you start and grow your business. You can also schedule a free program at your business, school or civic group.