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Leadership Thought #204 – Your Business GPA

August 26, 2011

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Business like school has a GPA.

I’ve always believed that the fundamentals of business are simple, and that people complicate things.  As with most issues in life, we can be our own worst enemy.  We lose focus; get excited by the new rather than seeing things through; procrastinate on challenging yet necessary tasks we don’t like; take an optimistic rather than pragmatic approach when it comes to our finances; struggle with holding others accountable; practice avoidance when it comes to addressing difficult issues; wait until the last minute on important deadlines; neglect critical relationships; and bet on the wrong people; etc.

In my experience, six key fundamentals have emerged as the most important areas of focus for any business:

  1. You must identify and sell to new customers
  2. You must maximize revenue opportunities from existing customers
  3. You must manage your operations effectively to maximize the bottom line
  4. You must first consistently meet and then strive to exceed the expectations of your customers
  5. You must recruit and retain talented employees
  6. You must foster a culture of innovation and continuous improvement


I often ask my clients to think of this as their business Grade Point Average (GPA). Their goal should be to achieve 4.0 GPA which is the equivalent of an A grade on each item.  Put another way, the ultimate goal of any business should be to have high-quality employees who are focused on providing value-added services to a loyal and growing client base in an efficient and profitable manner.  Anything else is a distraction.  And, the workplace is full of distractions.

Many leaders rationalize that achieving these 6 objectives at a consistently high level is not possible.   They reference people, financial, operational, technological, and market realities as obstacles strewn in their pathway to success.  While many of these issues may be true (in a relative context), I’ve always been able to identify organizations that figure out a way to succeed despite these very same pressures. Why, because they confront their own challenges head-on and get back to basic business fundamentals.

Your people will make or break you.  Growth is not an option, it’s a business imperative. Diversification of client/market/product risk is key to your long-term survival.  The economics of your business model has to work at the end of the day.  You must also deliver on your product/service promise and satisfy the needs of your clients or someone else will.  It truly is this simple.  If a senior management team or leader of a small organization can stay focused and committed to these six areas, good things will happen – it’s inevitable!