What’s your return on management attention?

Some boards allow management to spread attention too thin and focus on too many little things. The right approach is bigger bets in fewer places.

Management attention is a resource. Just like capital, boards need to determine how they will allocate that scarce resource when thinking about a new initiative. When a board is contemplating doing something new or different, it’s always important to ask who will be responsible for it – who will devote the bulk of their energy and attention to the project.

If no one has the time, capability or energy to put behind an initiative then it’s unlikely to be successful.

Bigger bets increase your return

There is a general tendency for companies to be additive – the management team is constantly given more things to do, but things are rarely taken off their plate. Taking on too many things splits management’s attention and places the business at risk of doing a lot of things badly.

Obviously, management’s attention is first taken up with the job of running daily operations. While this consumes a lot of attention, there should always be some time left to consider new projects or special initiatives. But management needs to have enough time to do each of these initiatives justice.

Rather than trying to do everything now, companies should place bigger bets in fewer places. If a strategy is worth pursuing then it needs to be done wholeheartedly. You’re more likely to have a profound impact if you pick up one big initiative and go after it rather than distributing your time and attention across many little things.

A classic example where it’s worth laying a big bet is in client development. If you want to truly penetrate a big client you’ve got to devote a team to focusing on that client and not much else. If your client development team is focusing on a whole range of customers, you’re unlikely to get the scale that you need to win that bigger client.

Management attention is a resource. Just like capital, boards need to determine how they will allocate that scarce resource when thinking about a new initiative.

It’s time to stop doing things

Many executives spend too much time looking after things that add little value or are no longer useful. If they’re going to find time to do new things they need to stop doing other things – so retire products, partly used systems and prune things that are no longer used. While trimming around the edges might be important at times, if you really want to make big strides you’ve got to do it with purpose and at scale.

The ability to say no is critical in managing any scarce resource – whether that’s management attention or something else. A company that’s mindful about where it spends its energies and attention is often more ruthless in its approach to strategy. Lendlease does this extraordinarily well. It has a philosophy that it will work only in gateway cities. These cities have been defined, so if a project comes up in a city that’s not included they simply don’t do it. It focuses everybody’s mind on what’s important.

The first consideration for most new initiatives is whether the business has the capital to invest in that area. But the board should also consider whether it will get the return it wants on management attention if it implements the new project. If they can’t find someone of appropriate seniority who will be able to devote their time and attention to the initiative then it’s time to reassess. All boards must look at how many bets they’re laying and place bigger bets in fewer places to maximise their return on management attention.

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