An organization will never surpass the capabilities of its leaders.
If your CEO cannot articulate the basic principles of Activity Based Management (ABM), employees will never achieve or sustain activity cost improvement. Leadership ability is always the lid on an organization or individual. “If the leadership is strong, the lid is high.” says John Maxwell. Conversely, if leadership is weak the lid is low.
If your CEO’s understanding of ABM is a 2, then your organization’s effectiveness can never be greater than 2. As a result, if your organization needs a big profit boost from ABM, then your CEO had better be a 7 or you’re doomed to failure. Here are some recommended ways to raise the “ABM lid” of your leadership:
- Give your CEO something comprehensive and concise to read. Give your CEO a copy of PRYOR CONVICTIONS: 31 Insights into ABMor some other easy-to-understand book on ABM and ABC.
- Give your CEO a collection of recent and relevant articles. Create a collection of magazine articlespertinent to your industry. The Internet is a great resource or call ICMS at 817-475-2945.
- Give your CEO an ABM briefing. ICMS, for example, offers a very popular 4-hour senior management workshop.
- Give your CEO an ABM benchmark. Invite a customer or supplier that has already implemented ABM. Their presentation will likely get your CEO excited about reaching out to improve the supply chain.
- Give your CEO an ABM “coach”. Assign a person to help your CEO learn “how to” read, interpret and use ABM reports. The coachcan also help formulate questions the CEO can ask at employee meetings. The coach can be an internal resource or an occasional visit from a seasoned ABM expert .
To raise the lid of an organization’s effectiveness requires ABM wisdom. ABM wisdom has three parts: knowledge of ABM, understanding of ABM followed by experience with ABM. I encourage you and your CEO to gain ABM knowledge, understanding and experience in the coming year. If you do, you’ll raise the lid of potential for everyone.
For more information on “The Law of the Lid”, read The 21 Irrefutable Laws of Leadership by John C. Maxwell. It’s a terrific book.
