By Ken Rosen
[If needed, see our Performance Portfolio intro…and each sector has one descriptive post] 
“One sector to rule them all, One sector to guide them. One sector to bring them together and in full alignment, bind them.” Yes, I’ve adopted, adapted…and abused…a line from Lord of the Rings to talk about Sector 1. So, yes, I’ve got a geeky streak. Back on topic, we saved Sector 1 of the Performance Portfolio for last because we need to be clear that every sector matters:

  • Sector 2: long-term/internal = planning = the ultimate in leadership table stakes—deciding how to use your resources to accomplish your goals.
  • Sector 3: short-medium term/internal = optimization = your path to continuous improvement—every day. Getting one step closer, every day, to your customers. Gaining a step, every day, over your competition.
  • Sector 4: short-medium term/external = external engagement = building the customer, partner, influencer relationships to find those elusive win/win/win relationships.

This brings us to Sector 1. Sector 1—long-term/external focus—emphasizes alignment of all activities with the core purpose of the organization (your 10-20 year “grapefruit“). In a word: leadership. And companies that matter have Sector 1 commitment in their DNA. Sector 1 begs the question, “In the service of what?” We often talk about Sector 1 awareness as “higher ground”—not acting from expediency, ease, or historical precedent, but driving plans, continuous improvement, and external engagement in the service of your organizational purpose. There are many ways to set direction in the other sectors. There are even quite a few ways to be successful. But there are fewer ways to execute in ways that constantly reinforce your reason for existing and your brand promise. Across functions, examples include:

  • In strategic plan, define, communicate…and live up to…a core brand promise
  • In marketing, understand underlying customer needs…even if they are still emerging
  • In real estate holdings, define a real estate and infrastructure plan directly supporting employees’ ability to deliver on the core purpose
  • In products and services, understand what constitutes a “whole product” to customers, so they have a complete and satisfying package
  • In organizational planning, drive a culture that self-polices a commitment to core purpose
  • In resource planning, align supply chain, fund raising, and budgeting processes to reinforce the organizations ability to deliver on brand promise

When companies commit to Sector 1 leadership, work may happen behind closed doors, but results—positive and negative—are very public:

  • Apple puts more industrial design into a single product than Dell seems to put into their entire product line.
  • Google invests in alternative energy because they need low incremental cost energy sources to maintain their business model.
  • Starbucks invests in coffee bean grower education to ensure supply of quality beans.
  • Virgin America ties a menu of entertainment and refreshment choices to the psychographic they serve.
  • Odwalla juice sickens people in 1996…the founders’ pain is palpable and their response immediate.
  • Cost-cutting manufacturers who do not police suppliers allow cheap, poisonous lead components into their product lines. Sadly, if their brand promise is “be cheapest,” this might be fitting.
  • McDonalds serves the same (mediocre) burger around most of the world because sameness is part of their promise.
  • Google employees know creating a new beta service quickly to rapidly test and revise is more “Googley” than sitting in an office seeking perfection.

Sector 1 starts big, with phrases like Purpose, Brand Promise, and Higher Ground. But walking the talk means those phrases are only the start. If Sector 1 is, indeed, the “one sector to guide them…and in full alignment, bind them,” the path is constant awareness and vigilance of that alignment.

Takeaways

  • Commit to being a Company That Matters. If you are wavering, please see 11 Results of Being a Company That Matters.
  • Ensure all leaders are clear on the Purpose, Values, and Brand Promise of the organization.
  • Learn to evaluate whether proposed strategies and approaches align with your Purpose and commit to the practice. Initially, this may feel like an added step—later, it becomes second nature.
  • Reward decisions supporting core purpose over those embracing expediency.
  • Avoid accepting conventional wisdom about “best practices” without testing for alignment with Purpose. This will apply to every function in the organization.