2-days of Productive Yearly Planning

It is that time of year again.  The annual “off-site” planning process for next year and beyond.  If you are looking for suggestions or an alternative approach, I have provided a 60-day pre-planning process and 2-day meeting agenda that has been used successfully for many years.  Please note that it is skewed slightly towards the ScalingUp process but can be adapted for those who are not familiar with some of the jargon and tools.

I am happy to walk you through the differences.  Contact info below.

Enjoy!

Bill – Certified Scaling Up Coach

If you found this useful, please share with others.

Click here for a link to the sample agenda and 60-day process (#14 on the Business Resources list)

Special One Day ScalingUp Workshop offer – $299/seat (normally $595/seat) when you sign up by 12/31/17 for the upcoming Waltham/Boston ScalingUp workshop scheduled for 4/12/18

Held at Forefront Center in Waltham, MA.  Please send an email (see above) by 12/31 to qualify for this special offer.

Questions? Assistance?

bill@catalystgrowthadvisors.com; 978-314-9888

Run a meeting like Alfred Sloan – Productive Weekly Meeting Agenda offered (1 min)

Alfred Sloan- “… the most effective business executive I have ever known.”^ – Peter Drucker

Peter Drucker called Alfred Sloan “the most effective business executive I have ever known” citing his meeting and follow-up methodology as significant reasons why. In general, the most effective executives strive to make themselves obsolete in the day to day running of the business, division, department, etc. They know that they can be most effective when they have the time to do more strategic and/or longer term thinking. Below are an agenda and process to help you get closer to that goal.

Weekly Meeting Agenda** (70-105 minutes)

  1. Good News (5 minutes) All participate, share 2 good news stories. One personal and one business. Creates more close knit team.
  2. 90-day/To Do List Review (5-10 minutes) Report everyone’s individual/team 90-day goals and measurements (90-day goals/measurements are pre-determined in annual and quarterly planning meetings) No details or excuses – VERY IMPORTANT (this is where meetings can get bogged down)
  3. Review To Do lists from previous weekly meeting No details or excuses – VERY IMPORTANT (this is where meetings can get bogged down. Anything that is not on track, move to Discuss and Resolve Portion below IMPORTANT – The key to success here is full disclosure – this is where the magic happens. Trust in the team. Help each other.
  4. Customer and Employee Feedback (10 minutes) Each meeting member should check in with at least one employee (Start, Stop, Keep*) and one customer (4Q*) each week. (Use best judgment on how often to speak to each within a reasonable timeframe) Review Only. Discussion saved for Discuss and Resolve below.  Keep running log.) Review customer feedback logs. Look for recurring issues.
  5. Collective Intelligence (15-30 min) Discuss/brainstorm one strategic issue or priority (Pre-determined in Annual and/or Quarterly Planning Meeting) Person with accountability presents the situation analysis. If you have a weekly Strategic Council meeting as Jim Collins advocates, this portion could be skipped.
  6. Discuss and Resolve (30-45 min.) Discuss and Resolve any unfinished items from To Do List (5-10 min.) Pick top 3 items from 90-day review above by level of importance and urgency. Discuss and Resolve one at a time. Stay focused. If you have time, reprioritize the list and pick new top 3. Rinse and Repeat until 30 minutes is reached. If you cannot resolve all, move items to next week unless an item cannot keep.
  7. One Phrase Close (3-5 min) Everyone says a word or phrase that represents how he or she feels about the meeting.

EXTREMELY IMPORTANT – Keep a log of Who said What they would do by When. Share with the team. Use this “To Do list” for next weekly meeting (see above).

Logistics

  1. Be on the same day each week
  2. Be at the same time each week
  3. Have the same printed agenda format
  4. Start on time
  5. End on time
  6. Make sure everyone has his/her say

* Please contact me and I will send you 4Q and Start, Stop, Keep (and another option or two for each) info to you directly. Thanks for reading.

Be Exceptional!

To learn more about building your own One Page Strategic Plan visit https://catalystgrowthadvisors.com or contact me at  bill@catalystgrowthadvisors.com.

If you found this post useful, please like, comment and/or share with others.

** Compiled with help from Dave Baney, Verne Harnish and Gino Wickman

^ Drucker, Peter F. (2017-01-24). The Effective Executive: The Definitive Guide to Getting the Right Things Done

When is a decision really made? 4 parts Drucker, 1 part Flynn (1 minute read)

I just finished reading Managing Oneself by Peter Drucker. As with most things Drucker, it was written many years ago and still holds true today; especially one section – when a decision is truly made.

Sometimes, we make a decision and wonder why it has not been carried out fully and/or are surprised by the result or lack thereof. It could be that we have not also identified the following:

  1. The name of the person accountable for carrying it out;
  2. The deadline;
  3. The names of the people who will be affected by the decision and therefore have to know about, understand, and approve it—or at least not be strongly opposed to it
  4. And the names of the people who have to be informed of the decision, even if they are not directly affected by it.
  5. The leading and lagging indicators (a.k.a., KPIs, metrics, OKRs…) to be able to know how to measure the success of the decision and its impact.*

(I have a useful link on my website to a Who, What, When document (No. 11) – a simple tool that helps address some of the above.)

Another bit of useful guidance Drucker gives is to review the decision periodically setting the review schedule up front. This way you can make corrections well in advance if necessary.

Here is to making great decisions and correcting them quickly when they turn out to be not as great as originally thought.

Thanks for reading.

Be Exceptional!

To learn more about building your own One Page Strategic Plan visit https://catalystgrowthadvisors.com or contact me at  bill@catalystgrowthadvisors.com.

If you found this post useful, please like, comment and/or share with others.

*My addition to Drucker’s list

6 lies that stand between you and success

In his 2013 book, The ONE Thing: The Surprisingly Simple Truth Behind Extraordinary Results , Gary Keller reminds us of how often we get in our own way to reaching our potential. Beliefs we have either adopted or that society foists upon us or conventional wisdom dictates or that no longer work for us act like a false ceiling. They keep us from realizing our fullest capacity.  Here are the six lies:

  1. Everything Matters Equally
  2. Multitasking
  3. A Disciplined Life
  4. Willpower Is Always on Will Call
  5. A Balanced Life
  6. Big Is Bad

Everything Matters Equally

In a previous blog post, I spoke of the success of Richard Koch, one of the most successful investors of our time. He has written several books. One of which is a treatise on the 80/20 rule and how applying it has helped him to have a 50% hit rate on his investments. Keller speaks of similar impact by not treating everything the same since everything and everyone are not the same. Most of the meaningful results are generated by a few decisions, actions, and/or people.

Those of us who figure out what The One Thing tend to drive the bulk of the progress and success in our business are usually the ones that succeed beyond expectations. Here is an example I came across last night while watching The Founder about Ray Kroc:

Kroc visited the McDonald’s hamburger stand in San Bernadino because they ordered an unprecedented 8 Multi-Mixers (milkshake mixers) to keep up with growing demand. Kroc drove half way across the country to meet them since this was such an unusual order.  Over dinner, Mac and Dick McDonald told Kroc how they figured out how to run a highly productive restaurant. One discovery was that 87% of their profit came from three menu items – hamburgers, french fries, and soft drinks. They soon cut the menu down to just 9 items from 27.

The other key breakthrough was speed. They redesigned their facility so they could deliver a consistent and delicious meal experience in 30 seconds versus 30 minutes. We call this an X-factor in Gazelles.

A combination of a few meaningful changes made a huge difference, was recognized by Kroc and became the largest and most famous restaurant chain in the world within a relatively short amount of time.

Multitasking

How good of a multitasker are you?  Trick question.  If you think you are a multi-tasker, you are lying to yourself – unless you count chewing gum and walking or breathing and writing. Science has long proved that the human brain can only focus on one thing at a time.

There are many examples of new drivers (and experienced drivers) placing focused attention to their phone and absent-mindedly taking their foot off the brake while at a stop light.  Many drive into the car in front of them as they realize too late that they are moving.  The reason is that the human brain can only focus deeply on one thing at a time. This is why practice pickpockets are so good at their chosen field.  Those of us who think they are multitasking are actually doing “rapid context switching”.  While it seems like you are getting more done, the process is actually less productive over time since it takes us up to twenty minutes to fully re-engage in the previous task.

Bottom line: Don’t multitask, you can’t do it. Here is a video to show you a real-life driving test from National Geographic. Spoiler alert: this self-professed multitasker fails miserably.

A disciplined life

Conventional wisdom says that disciplined people that live disciplined lives are the most successful. As with most conventional wisdom, this does not hold up.

The key to success is to be disciplined at the right time. A great example is Michael Phelps. He is considered a success by many standards. However, he is arguably not someone that has lived a disciplined life. His life has been chronicled publicly showing how his ADHD got him in trouble many times over many years. His Olympic coach, Bob Bowman, noted that Michael could often be found next to the lifeguard chair due unruly behavior at the pool.  His kindergarten teacher stated how he has no focus, can’t sit still and can’t be quiet.

Phelps eventually practiced what is called selective discipline. He focused on one thing – training. He spent 365 days/year in the pool channeling his energy into one endeavor. This focus also spilled over into other parts of his life. Later in Phelps’ career, Bowman was quoted saying that Phelps’ discipline was his strongest attribute. The same guy who made him stand next to the lifeguard chair years earlier!

The key to discipline according to Keller is to be disciplined long enough to create a habit. He cites a study at the University College of London that showed that the average amount of time to create a habit is 66 days. If you are having trouble sticking with something it is most likely that it is not yer a habit.  Give it a try for a couple of months and see what happens.

Willpower is always on will call

“Where there is a will, there is a way.” Lie!

Many of you have probably heard of The Marshmallow Test.

The issue is that willpower has a limited battery life. We consume energy when we use willpower to not do something we really want to do. If we do not replenish that energy by eating well, sleeping enough, exercising regularly, it becomes harder and harder to resist. Here is an excerpt from The ONE Thing citing a Standford study:

Stanford University professor Baba Shiv’s research shows just how fleeting our willpower can be. He divided 165 undergraduate students into two groups and asked them to memorize either a two-digit or a seven digit number. Both tasks were well within the average person’s cognitive abilities, and they could take as much time as they needed. When they were ready, students would then go to another room where they would recall the number. Along the way, they were offered a snack for participating in the study. The two choices were chocolate cake or a bowl of fruit salad— guilty pleasure or healthy treat. Here’s the kicker: students asked to memorize the seven-digit number were nearly twice as likely to choose cake. This tiny extra cognitive load was just enough to prevent a prudent choice.

A balanced life

Making sure you live a balanced life is another myth that comes with the best of intentions. The problem is that if you try to attend to all things equally well, you will do nothing that well at all.

The key is to figure out what matters most and make sure you spend your time focusing on that first. Once that is satisfied, you can move back toward the middle or beyond the middle to the other side of the ledger – work and family, for instance, are on opposite sides.  The key is to counterbalance all the important areas of your life.

I heard Alan Mulally (CEO Boeing and Ford) speak recently and he was asked how he balances work and family. He said that he does not. He sees it all as one thing – life.  While he was busy turning around Ford and his daughter had an event that was in the middle of the day, he left work and attended the event as his daughter (and family)  were and are his priority. He may then find time in the evening to do some work when the opportunity presents itself as he had many people’s livelihoods relying on his ability to turn Ford around.

Keller writes the following: Start leading a counterbalanced life. Let the right things take precedence when they should and get to the rest when you can. An extraordinary life is a counterbalancing act.

Big is Bad

Few of us really know our limits or what we can truly accomplish if we focus our energies in the right areas at the right time.  Here is a great video example from Alan Fine, author of You Already Know How to Be Great, that illustrates the point.

Being growth-minded can lead to extraordinary results. It actually changes our brain wiring and helps us to accomplish wonderful things. There is a study that Carol Dweck cites in her book Growth Mindset. Here is her TED talk on the subject:

When thinking big, most fear failure which is real and compelling. I listen to a podcast called Startup and it is rife with fear of failure stories. The founders that are interviewed constantly talk about how they made promises and strive to live up to them so they do not let others down. One founder was most concerned with what her mother thought when the business was reaching a critical decision point.  She was likely going to lose her mother’s money but even worse was her fear that her mother would be disappointed in her. Growing up, she recalls always being successful at what she set out to do.  This was the first big thing in her life where she was likely not going to succeed and she was not looking forward to telling her mother.

The conversation with her mother went very differently than she thought. Her mother was proud of her for trying, glad that she took the risk and learned so much from it. There was no talk of disappointment. Sometimes what we fear most is all in our heads.

To avoid the fear of failure many compensate by setting their sites low so they can succeed but miss out on extraordinary results. Here are some suggestions from Keller to think about when you find yourself in this situation:

  1. Think big – If your first thought is 10, think about ways to make it 20 or 100.
  2. Think “different” – The way to be so much better than anyone else is to find ways that clearly set you apart.  Think Dyson, Apple, Next, Google, Facebook.
  3. Act bold – Come up with ways to be a breakout success.  Test all the ways you can think of to do so and pick the one that looks like it will work the best.
  4. Redefine failure – Failure is not lack of achievement.  It is not learning from that lack of achievement and applying it to the next challenge.

Pick one of these and focus on it in the next few weeks and see what happens. Please write to me and let me know how it went.

Good luck!

Be Exceptional!

(catalystgrowthadvisors.com; bill@catalystgrowthadvisors.com)

If you found this post useful, please like, comment and/or share with others.

Simplification leads to outsized business success (2 of 2; 4 min read)

What do the following people have in common?

Henry Ford; the McDonald Brothers and Ray Kroc; Walt Disney; Ingvar Kamprad; Herb Kelleher; Steve Jobs and Jony Ive; Akio Morita; Bill Bain; James Dyson; Mitt Romney; Jeff Bezos; Pierre Omidyar; Larry Page and Sergey Brin; Daniel Ek; Joe Gebbia; and Travis Kalanick and Garrett Camp.

They all believed in the words of Antoine de Saint-Exupery:

“A designer knows he has achieved perfection not when there is nothing left to add, but when there is nothing left to take away. “

They built businesses, offered services and crafted solutions that were simple.  In his book, Simplify, Richard Koch, shares the principles behind his successful investment approach.  He looks for Stars. Stars are companies that are superior to their counterparts in many ways: they are great places to work, offer customers the solutions to best meet their needs and, great investments. Koch amassed the bulk of his wealth, achieving a 50% success rate, by investing solely in Stars.  This is impressive since the average investment success rate hovers around 10%. He earned a 53-times multiple on his money investing in only 16 companies over about as many years.

How to Simplify

Koch describes two strategies – price-simplification and proposition-simplification.  These two strategies are quite easy to understand but can be difficult to create.  Let’s take one at a time:

Price-Simplification

There are three precepts in this strategy

  1. Make something much cheaper both to make and to supply. This must always be the primary objective.
  2. Eliminate what Koch calls “expensive utility” — anything the customer can do without.
    • McDonald’s dispensed with waitresses and originally offered only nine menu options.
    • IKEA provided one style of furniture, reduced variety within each product category, and eliminated expensive shipping through flat-packed furniture and customer pickup.
  3. Increase utility where it can be provided at little or no extra cost. Substitute cheap utility for expensive utility.
    • Henry Ford helped to perfect vanadium steel which made a lighter, more robust car that was much easier to drive and maintain. However, car costs were kept low. Simple design, lighter materials, and an automated production system all contributed significantly.
    • Dick and Mac McDonald provided better hamburgers and fries than were available at the local coffee shop. They created an assembly-line preparation process with well-documented procedures resulting in little to no wait time for hungry customers. The combination of these attributes allowed them to price their burgers at half the cost of their rivals while still being as or more profitable.
    • IKEA takes a necessary but typically unwelcome process and makes it fun. They know their customers and cater to their needs. By providing play areas for young families, inexpensive restaurants and offering those famous meatballs to give us the energy to keep going we stay longer and buy more.  Most important, IKEA turned a dreaded experience into an enjoyable one.

Coming up with the right combination of expensive and less necessary things to take away and inexpensive things to add takes patience and trial and error. However, the results can be spectacular and well worth the trouble. Knowing your customer and breaking free from the conventional thought processes are key to coming up with clever ways to offer just the right amount of value.

Proposition-Simplification

There are two precepts for the Proposition-Simplifier strategy:

  1. Make something a joy to use.  Add utility through greater ease of use in the first place; then greater usefulness and/or art.
    • Apple is famous for the relentless pursuit of simplicity.   They have proven themselves as the best provider of simplicity with numerous products such as the MAC interface, the single button mouse, the iPod, the iPhone, iTunes, Apple Pay, etc. They add utility by making things easy to use meeting customers’ needs before they even know they need them.
  2. Use simplicity to make the product cheaper to make; or at least to ensure that the extra utility far outweighs the extra cost.
    • Dyson’s bagless cleaner is see-through, easy to empty, and elegantly designed.  The “art” in the design and use of this premium product commands a higher price.
    • The Nest thermostat with its beautiful and well-thought out design and learning capability can cost up to $300.  The thermostats in my house are 1/10 that price.

Having the discipline and patience to design something that is a “joy to use” is rare. Apple is a good example, Dyson is another, Disney is a third. All of these companies can demand a high price and generate high profit (e.g. Apple has about 14% market share and 70% profit share) because they do three things extremely well:

  1. They make their products and services extremely easy to use
  2. They make them useful and,
  3. Emotionally appealing.

What kind of simplifier are you?

Koch offers four questions that will help you decide:

  1. Do your firm’s attitudes — its policies and culture — make it more disposed to pursue price-simplifying or proposition-simplifying?
  2. Has a competitor already occupied one or both of the target positions?
  3. Can you see the key to unlocking either position?
  4. Does your firm have people with the necessary skills to execute the target strategy? If not, do you know how you might recruit them and from where?

Koch also provides a number of tests in his book, Simplify, to provide guidance on which strategy is best for you and where your business may have gaps to fill.  If you are looking to learn more, I recommend these additional resources:

Thank you for reading!

Be Exceptional!

(www.catalystgrowthadvisors.com; bill@catalystgrowthadvisors.com)

I look forward to your comments. If you found this post useful, please share, comment and/or like.

 

How to never run out of cash (#11 – final post in series – 4 min read)

Before jumping in, I think that Cash as a topic is inextricably linked to People – people pay you cash, you pay people cash and people spend your cash. People also are the ones that can find new ways to make and spend your cash.

Providing some focus in these two areas can really pay off in the long and short term.

Most Profitable Customers

First, I suggest that understanding – really understanding – everything you can about your most profitable customers can go a long way to generating lots of cash. If you do so, you will be able to target and recognize those attributes in your prospective customers. You will be able to carve out a very defensible market strategy where you capture the most profitable customers in your industry allowing your competitors to fight over the scraps.

Here are three examples of companies that have done this:

  1. Dyson – 5 times more expensive than its competitors, 24% market share and 59% profit share
  2. Nest – 7 times more expensive, 8% market share, 25% profit share
  3. Apple – 3 times more expensive, 12% market share, 70% profit share

Build the Best Team

Second, look internally to your team – how you hire them, how you train them, how you pay them, how you treat them. This oft-overlooked focus can have a tremendous impact on their financial contribution to the business.

Here are a few examples in this area:

  1. The Container Store – New hires are interviewed an average of 9 times, hire only top 3% of applicants, 260 hours of sales training in the first year, 2 times industry pay average, 3 times industry average in revenue per employee
  2. Costco – (as compared to Walmart) 2.5 times the hourly pay rate, 3 times the revenue per employee, 50% less turnover
  3. Goldman Sachs – (as compared to Morgan Stanley) 50% fewer employees, almost 5 times the profit/employee generating $5B more in profits

The topic at hand – Cash

Thank you for indulging me the aforementioned as a precursor to the topic at hand.

There are many reasons why companies run out of cash. Here are some of the usual ways:

  1. Slow or non-paying customers
  2. Short Accounts Payable with suppliers
  3. Unexpected increase in Cost of Goods Sold
  4. Long or lengthening sales cycles
  5. Tight credit
  6. Business Cycle Seasonality
  7. Poor Balance Sheet Management
  8. Unforeseen changes in the business climate

Are you experiencing any of these in your business?

This last one is the toughest as it always happens but we never plan for it. We too often assume that the current business climate will continue. I recommend to my clients that they have at least 2 months and, even better, to have 6+ months of core capital achievement (that is, enough money in the bank to cover expenses) for the eventual and unexpected change your business will have to survive.

I believe that one of the main reasons that businesses run out of cash is that they do not manage their growth deliberately. They sometimes think that because they are growing so rapidly that everything must be going great. Not always.

Dell example

There is an oft-told story of Dell from the early 90s, where they were growing so fast that they were running out of money. They were getting paid by their customers well after they had to pay their suppliers. The more they sold, they faster they were going broke. It is sometimes called “growing broke” and not so uncommon as you may think.

Dell turned it around by changing their business model. They began building custom orders online and were paid upfront before they even started the work. They also slowed payment to their suppliers and went from a cash conversion cycle of plus 63 to minus 39.

This means that they were making a dollar 39 days before they had to invest that same dollar in the business to generate that same dollar. It sounds sort of like time travel.

Per the above sentence and to reiterate this important concept, cash conversion cycle equates simply to the amount of time it takes you to get back a dollar that you invest in the business. In 1991, it took Dell 63 days to see that dollar again. Slightly over 10 years later, they changed that to -39. They were in essence printing money which, I would argue, allowed them to go private and buy some pretty big companies along the way.

Try it yourself

There is a great tool from Gazelles that help you to think through your cash conversion cycle and come up with simple ways to accelerate it.

You can certainly run through the tool yourself. If you do so, I recommend that you do it as a cross-functional team, avoid group-think and discuss the different ideas as a group afterward. I also recommend that you pick the top 1 or 2 and give them a try. These should be the ones that are a combination of the greatest impact and the easiest to implement. This will help you to get some traction and momentum for when you revisit some of the others.

There are several other Gazelles tools such as Profitability Analysis, Labor Efficiency Ratio and Power of One that can also help you generate cash more quickly. Unfortunately, these are not public tools and can only be facilitated by a Certified Gazelles Coach. I would get in trouble if I shared them publicly.

Final post in series

This is the final in the series of Startup to Scaleup. It was never intended to be comprehensive but I hope you were able to find something useful among the many posts. Here is a heartening quote from one of my readers that encourages me to keep finding interesting and useful topics to write about. Thanks to (you know who you are)!

“….. I love the stuff you put out in general. We need more stuff like yours on LinkedIn. People are so willing (my company included) to put out stuff in the name of “social media” statistics, so it’s nice when it’s actually succinct and helpful instead of making some generic point that I cannot do much with. Your stuff hits home with me as we are struggling with our own “start up” (new vertical market) and trying to ask ourselves all the hard questions. I say, “keep up the good work”.”

Links to all posts in the series (How to go from Startup to Scaleup)

Here they are in order (not including today’s):

  1. 5 QUICK STEPS TO TAKE BEFORE YOU LAUNCH YOUR STARTUP (#1 IN A SERIES – 5 MIN. READ)
  2. IDENTIFY AND NAIL THE PAIN (#2 IN A SERIES – 3 MIN READ)
  3. HOW WELL DO YOU KNOW YOUR CUSTOMER? (#3 IN A SERIES – 4 MIN READ)
  4. STEVE JOBS’ CUSTOMER TELEPATHY – HOW TO GET IT – (#4 IN A SERIES – ~3 MIN READ)
  5. CRIMEREPORTS – A PROTOTYPING CASE STUDY (#5 IN A SERIES – 3 MIN READ)
  6. 3 SIMPLE WAYS TO GET YOUR BUSINESS MODEL RIGHT. (#6 IN A SERIES – 3 MIN READ)
  7. 4 DECISIONS TO GET RIGHT FOR SCALE-UPS (#7 IN A SERIES – 3 MIN READ)
  8. WOULD YOU ENTHUSIASTICALLY REHIRE ALL STAKEHOLDERS IN YOUR BUSINESS? (#8 IN A SERIES – 5 MIN READ)
  9. COMPETING WITH LUCK – 4 STEPS TO A GREAT STRATEGY (#9 IN A SERIES – 5+ MIN READ)
  10. EXECUTION -> DESTINATION, CALCULATION, AND CONVERSATION (#10 IN A SERIES – 4 MINUTE READ)

Enjoy! Here is to a cash-rich year!

Thanks for reading!

Be Exceptional!

(www.catalystgrowthadvisors.com; bill@catalystgrowthadvisors.com)

I look forward to your comments. If you found this post useful, please share, comment and/or like.

Execution -> Destination, Calculation, and Conversation (#10 in a series – 4 minute read)

A few habits – well practiced – create beauty, efficiency, and profitability in a business.

I believe that execution is mainly about three things:

  1. Destination – Leaders establish the main goal(s) to achieve.
  2. Calculation – Leaders establish the right metrics to measure progress. A combination of leading and lagging indicators is recommended.
  3. 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.)

Destination

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.

Priorities

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.

Calculation

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.

Measurements

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.

Conversation

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.

Meeting Rhythms

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:

  1. Are all the processes in your company running smoothly – without drama?
  2. 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.

Conclusion

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:

  1. Individual goals and key steps are assigned to one person each for accountability with others given responsibility to help achieve them.
  2. Each should have metrics to calculate progress – leading and lagging at a minimum but not so many that you get lost in numbers.
  3. 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.

Thanks for reading!

Be Exceptional!

(www.catalystgrowthadvisors.com; bill@catalystgrowthadvisors.com)

I look forward to your comments. If you found this post useful, please share, comment and/or like.

4 Decisions to get right for scale-ups (#7 in a series – 3 mins)

We have now covered all the main areas in previous posts to tackle in order to successfully navigate through the startup phase. We will now move to the next stage of your business growth – scaling up! (This assumes that you have customers, employees and are at least near or at break even if not making some profit.)

That is the good news! Here is the not so good news:

Now you have to unlearn almost everything you have learned in the start-up phase (please see my companion post). In order to make sure you scale in a healthy and thriving fashion, you must identify all major business decisions you made along the way, revisit them as a team, and re-make them in a deliberate and thoughtful fashion.

You will keep some, discard others and modify the rest.

Until now, most of your progress was made by making decisions on the fly. Some may be correct but others may hurt you down the road. Some of those can be deadly as they may lack warning signs until it is possibly too late.

DO I WORK HERE?

Speaking of warning signs – for example, what if one of the founding or early managers hires poorly. That lack of skill can have enormous repercussions as you scale. Those poorly hired people may turn into managers who will then hire other people. Over time, this cascading practice could have an insidious effect on culture and performance. You could find, as founder, a few years down the road, that you come in one day and do not recognize your company anymore. The well-oiled machine that took your blood. sweat and tears over many years to build is now dysfunctional, moving at glacial speed and the competition is crushing you. Worst of all, you don’t like coming to work anymore at your own company!

Looking Forward

Over the next several posts, including this one, we are going to cover why most businesses fail. We will then work through the four critical decisions you have to get right to build a company of steady growth and high value.

FOUR DECISIONS

The decisions we will cover are the following:

  • People – How do you create a harmonious culture of accountability?
  • Strategy – How do you create a strategy that is simply stated (by everyone in the organization) and one that drives sustainable and predictable revenue?
  • Execution – How do you optimize your profit in a drama-free workplace?
  • Cash – How do you create sustainable sources of cash to fund your growth?

Here is a list of companies that made these four decisions right:

  • Starbucks
  • Apple
  • Boeing
  • Medtronic
  • Red Hat
  • Ford
  • Atlassian
  • Southwest

Now let’s pivot to why, arguably, most businesses fail.

GROWTH – THE SILENT KILLER

Growth is one of the major reasons (if not the main reason) why businesses fail. It is the silent killer of business.

PATAGONIA EXAMPLE

Here is a great example of a company that grew too fast but survived – remarkably, by slowing down.

I just heard a great podcast with Yvon Chouinard, founder of Patagonia. He talked about his experience re: the growth of his now $750M business over its fifty-year life of the company. He mentioned how he lived through two main growth types over that time:

  • Fat growth – Growing for growth’s sake which can lead to eventual death due to uncontrolled expansion or similar affliction.
  • Strong growth – Growing thoughtfully and deliberately balancing productivity and people keeping the customer at the forefront perpetually.

A start-up can be driven to scale prematurely (usually by its well-intentioned investors) especially before it has nailed the product market fit. A scale-up can suffer from what Patagonia’s founder mentioned above by growing out of control usually in a haphazard fashion. Your organization may also get stuck due to an incomplete strategy and/or one that is poorly executed and/or possibly issues with the senior team that affect the organization negatively at all levels. As the senior team goes, so goes the rest of the organization.

There are many ways that organizations can fail. However, companies that improve and/or endure over many decades or generations typically do the same few things well. I like to use a modified version of the Anna Karenina principle that Tolstoy writes about in the novel of the same name to articulate this phenomenon.

“Successful companies are all alike; each unsuccessful company fails in its own way.”

Although it does not apply 100% across the board, it is pretty accurate.

OTHER EXAMPLES

I have been lucky enough to hear (Ret.) General Stanley McChrystal (Commander of JSOC), CEO of Red Hat, James Whitehurst, Greg Brenneman, CEO that orchestrated Continental Airlines turnaround and Alan Mulally, CEO of Ford and Boeing, all speak this year. They all told basically the same story about how they were able to become successful.  Some had the odds stacked against them and were in very unfamiliar situations.

How did they do it?

They did a few extremely important things very well and they all revolved around people, strategy, execution, and cash.  The four decisions eery company has to get right to scale up.

Next time, we will start with PEOPLE as this is a keystone “decision” that affects everything else in your organization. I will share the principles behind this important decision and provide some stories to reinforce them.

Thanks for reading!

Bill – Certified Scaling Up Coach

Be Exceptional!

(www.catalystgrowthadvisors.com; bill@catalystgrowthadvisors.com)

I look forward to your comments. If you found this post useful, please share, comment and/or like.

Entrepreneur’s step by step success guide from Start-up to Scale-up (1 min read)

Over the next few months, I will be providing a step by step process on how to go from a germ of an idea to, validating it, crafting a go-to-market strategy that is repeatable and then scaling a healthy and thriving business.  This journey will be a combination of my own experience (30 years, 19 businesses, 16 startups, 3 lessons learned) and many books, articles and successful CEOs that I have read, studied or worked with over 30 years of researching business success.

Here are the steps we will go through starting next week.  I will break down some of these steps into smaller chunks so they are easier to digest resulting in well over a dozen posts.  If there are areas that you believe I am missing, please let me know.

Before you Startup

  1. 5 quick steps to take BEFORE you launch your startup

Startup steps

  1. Identify and Nail the Pain
  2. Identify and Nail the Solution
  3. Go to Market Strategy
  4. Identify and Nail the Business Model

Bonus: Sample interview guide

Scale-up steps

  1. People – How to attract and retain the best people
  2. Strategy – How to create a truly differentiated strategy
  3. Execution – How to lead and drive flawless execution
  4. Cash – How to have plenty of cash to weather inevitable storms

See you next week!

Be Exceptional!

2 ways to ask for help that is actually helpful (3 min read)

I think this is going to be one of my least popular posts but I want to share what I have learned recently.  I hope you read it with an open mind.

We all go around asking for and dispensing advice as easily and probably as often as waking up in the morning or breathing.  It is a time honored tradition. We think we are helping or being helped but most of the time advice adds little to no value.

Giving advice is a bad idea for these reasons:

  1. The recipients, even when they ask for it, have an initial negative reaction. They can’t help it. Our primitive brain rejects change and new ideas as a threat by default. Unfortunately this part of our brain is the first stop for anything new so there is no getting around it.
  2. They usually don’t follow it anyway
  3. If they do follow it and it does not work out, they have you to blame
  4. The receiver is put into a “one-down” position which can be uncomfortable due to loss of independence and status.

Although it sounds like a no win situation. After all, how are we to help our family or friends or colleagues?

Below are some proven alternatives to the time honored tradition of advice giving.

Alternative Option

For those who are seeking an alternative, here are some suggestions that come from my experience and from Taming the Primitive Brain by Mark Bowden:

#1 – Offer information instead

  • Information is a pre-cursor to knowledge.  Give an example or two of something that happened to you or someone you know in a similar situation.  The recipient can incorporate this into her own decision process.
  • Receiving information provides a higher level of confidence when the decision is ultimately made.
  • People feel better when they come up with reasons for their choice that they have worked through on their own versus being told/advised what to do. They are also much more likely to follow through.
  • This process gives the receiver a hit of dopamine when making the final choice on their own.

#2 – Ask Questions as an alternative to giving advice

Clarification questions:

For instance, How long has this been happening?  What was discussed during the interview related to your duties? How long has the company been doing business this way?

Clarification questions give you a fuller picture and can pave the way for any number of the following types of questions.

Side Note – “Can you tell me more?” is always a good go to question when you are stuck.

Assumption questions:

For instance, is this discussion based on an assumption or set of assumptions? What could we assume instead? What has been the process to disprove of verify these assumptions?

Many people sit with assumptions for so long that they become emotionally attached and sometimes forget that they are assumptions and may not be entirely correct.  Asking someone to step back and separate their assumptions can allow them to re-look at a familiar situation in a new light.

Reason or evidence questions:

For instance, what might be the underlying cause of this? Have you seen this happen first hand?  What did you observe? Is there 3rd party data to support this?

Similar to assumption questions, reason questions allow someone to change their perspective on their own in a gentle way.  Coming to your own conclusion versus someone else telling you so is always a preferred method for mostly everyone.

Viewpoint and perspective questions:

For instance, what are some other ways to view this? What do you think so and so would say about this? How do you feel about this? What are your thoughts? Some call this perceptual positioning.

Implications and consequences questions:

What impact will this have to others? How will it affect you? How do you think it will affect me? What might happen if we take no action instead?

By asking consequence and viewpoint questions you can create a fuller perspective by putting yourself in other people’s proverbial shoes.  It may decrease the chance that what you hope will happen becoming the only option in your mind thus limiting your ability to look at the problem holistically.

I am sure there are other ways to help others without dispensing advice but you can try one of these next time someone asks for advice from you. Or, if you are looking for help, maybe instead of asking someone for advice you could ask that person to help you think through the situation instead.

If you want my advice, this sounds like a much better way to go! :~)

Be Exceptional!
(www.catalystgrowthadvisors.com; bill@catalystgrowthadvisors.com)

I look forward to your comments. If you found this post useful, please share, comment and/or like.