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Book Summary: “Vital Factors” by Lee Froschheiser and Paul Chutkow

Subtitled "The Secret to Transforming Your Business – and Your Life," this book came highly recommended by my friend Markus Isenrich, president of the private equity firm Ferro Management Group. Vital Factors describes and promotes the use of the MAP (Management Action Programs) system to guide the transformation of a business or organization.

MAP is a detailed, comprehensive plan of action, designed to perform six critical missions simultaneously:

1. Teach business fundamentals

2.Pinpoint a company’s Vital Factors

3. Ensure proper measurement and management of these Vital Factors

4. Establish a top-to-bottom system of goals and controls

5. Catalyze positive, ongoing changes throughout the company

6. Instill those virtues that turn good companies into market leaders

 

Vital Factors are "the critical elements that would either hold the company back or propel it to success" and enable the processes and tools to execute in the six basic functions of management: Leading, Communicating, Planning, Organizing, Staffing, and Controlling. Vital Factors are related to the Vital Few, the key drivers of the business and should be utilized based on an important MAP mantra: "The more tightly you control your people, the more you sap their power to succeed." One way to measure this is via a tool the author’s term the Empowerment Pendulum where the organization rates itself on a scale where 1 represents High Control and 10 represents High Empowerment. How would your organization rate?

The authors also delineate some important lessons as related to an organization’s Vital Factors:

  • Gathering accurate and timely financial information is critical.
  • Teaching all levels of staff to understand – and manage – their Vital Factor financial information is also critical.
  • It is essential for key management to agree on the financial Vital Factors to focus on and then to set monthly goals related to them.
  • Holding monthly meetings to review the financial Vital Factors is also essential (although that is a discipline that many companies fail to maintain).

As you can see, an organization’s Vital Factors are a critical element in every aspect of the MAP system. To better comprehend this it is important to review the three phases to MAP:

1. The Mechanics Phase. This is the how phase, when you and your team are just learning how to use the MAP system and tools. You are discovering the answers to questions like these: What is a Vital Factor? What is a goal and what is a corrective action? How do I prepare for my monthly Vital Factor Meeting? This phase is probably the most difficult, because everything is new, including MAP concepts and terminology.

2. The Enlightenment Phase. This is when your people get the hang of the process and it all starts coming together. They no longer ask, "How do I do that?" Now they ask, "Why?" In this phase your people push the process themselves and ask, "Why don’t we measure this Vital Factor or focus on that fundamental; it directly affects profitability."

3. The Internalization Phase. This is the fun part, the who phase. This occurs when your team has totally internalized the MAP philosophy and operating system, accepting as ritual key elements such as Vital Factor Meetings, goals and controls, accountability and discipline, group brainstorming, strategic alignment, managing to your values, empowering your people, practicing candor, and instilling passion in your people.

 

In addition to business applications, MAP is a comprehensive system that can be applied at home and in the community. The authors write about applications in areas such as transforming the family business, improving your relationships, improving your parenting, grooming your successors, and many more.

As is often the case, an important step in achieving constant improvement and terrific results is to identify a system that works for you or your business. And if you want dramatic results, a system like MAP may be right for you.