A few habits – well practiced – create beauty, efficiency, and profitability in a business.
I believe that execution is mainly about three things:
- Destination – Leaders establish the main goal(s) to achieve.
- Calculation – Leaders establish the right metrics to measure progress. A combination of leading and lagging indicators is recommended.
- Conversation – Leaders establish meeting rhythms to facilitate meaningful and useful communication throughout the organization. (I have provided a link to suggested agendas for daily, weekly and monthly meetings below.)
It is important to set an ultimate end point or North Star. This destination will make sense based upon the culture and purpose of the business. For instance, one billion lives saved within 20 years could be a North Star for a medical company or being in 100,000 stores within 30 years for a retail product or 2,000 projects completed within 10 years for a local IT services company.
A journey without a destination is aimless wandering.
While aimless wandering can serve a purpose, in the case of a company that has employees and customers in a fast-paced market, it can be a long walk into obscurity or worse.
Having an ultimate destination in mind is important but remember that there will be stops along the way. These “waypoints” provide harbingers of direction and progress. Identifying these 3-5 year goals and then breaking them down into annual, quarterly, monthly, etc. chunks are critical to achieving the longer-term North Star. A marathon training regimen starts with that first 1-3 mile run.
Execution typically starts with an annual plan that has 3-5 priorities. These priorities usually have a number of steps prior to achievement as well as one person accountable for priority with others helping along the way.
One key to a successful annual plan is to ensure that the 3-5 priorities align with your longer term goals (3-5 years and North Star) as the annual plan is a waypoint to your ultimate destination. Also important is to make sure you have clearly identified each critical step, have assigned an accountable person and determined at least one key metric to measure progress.
While setting a destination is important, providing a timeframe is equally important. Imagine you have a certain amount of food and water for your journey but you are not sure how long it will take or how to measure how far along you are in the journey. That could have dire consequences.
It is important to state where you are going AND how long you think it will take you to get there. In the case where things go off course, you can make adjustments much earlier to make up time or seek out additional resources to help bridge the gap for the longer, unexpected distance.
Each priority should have at least two metrics: the key numbers an organization tracks to make sure performance is in line with plans. These two metrics should balance each other out. For instance, if you want to add lots of customers (metric one), your balancing metric should be the resources and/or people (metric two and three) you need to properly serve all customers accounting for the increased total number.
Metrics help us answer the question ‘How are we doing?’ and great metrics help to predict ‘How will we be doing?’ They also help us look behind and ahead.
There are many kinds of metrics (profit/loss, balance sheet, departmental, people, process), but sometimes companies try to track so many numbers that the leaders can’t possibly read and digest them all. It is important to find the few key metrics that support priority progress.
As mentioned above, it is also important to have a lagging and leading indicator when choosing metrics. The lagging indicator allows you to look behind or in the rear view mirror to see how you did. The leading indicator lets you look through the front windshield to see where you are going and avoid and bumps in the road before they become roadblocks.
For instance, the number of customers acquired is a lagging indicator as it tells you how you did. The number of webinars delivered could be a leading metric if you know that webinars are the main source of leads that convert to customers over a 90-120 period. Now you can see months ahead if you are going to make your numbers or not based upon your conversion percentages and length of sales cycle.
While on the journey, it is important to update everyone on progress or change in direction, however slight, and inform and ask them how they can continue to help. It is also important to make sure that everyone has and understands their role in the process. If they get stuck, they should be encouraged to ask for help.
The final key is to meet on a regular basis to make adjustments along the way. Please note that I did not say status updates. I am a firm believer that meetings should drive forward progress, not provide a look in the rear view mirror as their primary purpose. Status updates should be provided prior to the meeting in writing.
These updates should be read prior to the meeting. Their content will provide a valuable look at the progress each group or individual has made toward achieving the main goal(s) or steps towards that goal. The reader will bring his/her questions to the meeting for clarification or discussion/debate. The meeting itself should be used to make adjustments.
If you are not running into issues along the way, I recommend that you set more challenging goals.
Please click here for some suggested agendas and purposes for daily, weekly and monthly meetings.
Compelling execution questions
Execution is basically about the bottom line results and/or profit. Growth sucks cash and a great source of cash is from your customers. The following set of questions can help determine how well you are executing in your organization and generating greater profit:
- Are all the processes in your company running smoothly – without drama?
- Are they driving industry-leading profitability?
If so, great. If not, why not?
We all seek some level of predictability as do our customers. Customers tend to get a bit squeamish if they cannot rely on you to consistently deliver your perceived value as that inconsistency affects their ability to get their jobs done. If you fail enough times and make their jobs harder to do, you will be replaced.
Once you have a clear annual plan, I recommend strongly that you minimally break it down into quarterly if not monthly and maybe even weekly plans based upon the speed of your business. The quarterly and monthly planning processes should be nearly identical to the annual but with some minor adjustments.
To sum up:
- Individual goals and key steps are assigned to one person each for accountability with others given responsibility to help achieve them.
- Each should have metrics to calculate progress – leading and lagging at a minimum but not so many that you get lost in numbers.
- Regular meetings should be held to keep everyone informed so changes can be made well before there is a major crisis and everyone feels involved and heard.
We have one more post to complete the series of Start-up to Scale-up. Thank you to those who have stuck with me so far and a big thanks to those that like, comment and share. I greatly appreciate it and hope you are able to find one or two nuggets that are useful for your business.
Cash – the fuel for your growth. See you next time.
If you would like to review any of the previous posts in this series or any of the dozens of others I have written to date, please click here.
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