Just Say No?

Put It To The Test

Simons suggests five tests to see if your ROM is roaring or receding. First, does your organization know what opportunities are out of bounds? Having a mission statement isn't enough, says Simons, because mission statements are usually too broad. It's more important to identify opportunities you can't pursue rather than ones you can, says Simons.

You should also assess whether you have faced the fear of failure. One trick: Look five years ahead and imagine you've failed. What went wrong? This will help you identify opportunities to avoid, Simons says.

Next ask yourself, Are managers able to easily remember the key measures they're held accountable for? Simons suggests assigning no more than seven measures per manager and limiting them to concerns that will make or break the company.

The fourth test: Are you drowning in paperwork? If reports and budgets are taking on lives of their own, you're probably not spending enough time making critical decisions, Simons says. He suggests you request reports only when things go wrong. Otherwise, let the company run on autopilot.

Finally, ask employees what they pay attention to. If it's the same things that keep you up at night, fine. If not, your ROM is probably lower than it should be.

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This article was originally published in the August 1998 print edition of Entrepreneur with the headline: Just Say No?.

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