Three Questions to Ask When Setting Your Organizational Priorities
When you're setting annual or quarterly priorities, here are the three areas to consider and the questions you should ask yourself.
When you're setting annual or quarterly priorities, here are the three areas to consider and the questions you should ask yourself.
Every successful company that I've worked with as a business coach has mastered the art of setting organizational priorities on a regular basis. They realize that while they can do anything they want, they can't do everything they want. And if they don't choose a few things to align the company behind, they will see little progress and marginal success.
Each year and each quarter, these high-performance companies collect input and insights from inside and outside the business to figure out where there are needs and opportunities for improvements. Through discussion and constructive debate, the leadership teams choose a set of key areas of focus and a set of priorities for the organization.
Once determined, they cascade these down to the different departments and teams, allowing each level to define a set of more focused efforts to support these key objectives. By doing so, everyone in the business knows what to pay attention to and how they can contribute.
The challenge with this process is that there are many potential areas of focus a business can choose from. If it doesn't choose the right ones in the right order, key dependencies and opportunities can be missed. Good companies consider the following questions in the following order to figure out what they should put at the top of their lists.
1. How is your cash-flow engine running?
The first thing to consider is your core cash engine. Ask yourself, what are the key five to eight activities that give the organization momentum and put money in the bank? Look at each one of these steps and assess how it's working and what can be done to improve it.
You also want to make sure each step is reasonably balanced. If your marketing team is generating more leads than your sales team can process, you might need to beef up sales or have marketing do more work qualifying leads so salespeople are not wasting time with low-potential leads. Focus on system-level optimization, not local performance. Spending too much attention only on local performance is tantamount to worrying about your sprained ankle when you have a bullet wound to the chest.
2. Can you improve your operational excellence?
Assuming your core cash-flow engine is working well, you can start looking to key areas where you can drive operational efficiencies. At this level, you're looking for processes that either consume a disproportionate amount of resources or have frequent quality and consistency issues.
The key focus of this stage is continuous improvement and process standardization. Checklists and SOPs (standard operating procedures) will become critical tools to find efficiencies and reduce errors and omissions. Pay particular focus on cross-department handoffs and coordination of activities.
As an example, if your installation team is having problems installing your equipment because the onsite specifications are different from what was specified on the drawings, take a step back. Go and talk to the design team and site managers in order to figure out a better way of documenting the initial conditions and capturing more details. It's far better to get the information right from the beginning than to retrofit changes when installing.
One key tool at this stage is to find a handful of KPIs (key performance indicators) that will tell you how efficiently you're running. I like ones that focus on profit such as profit per employee, profit per customer, profit per delivery, etc. These get you thinking about ways to drive bottom-line results, not just reduce costs.
3. Where can you advance your long-term strategy?
Finally, once your cash engine is running well and your operations are smooth and consistently producing quality results, you can focus on strategic initiatives. These are the things you need to implement in your business that will bring the company in line with the key position you want to own in the market and the capabilities that will drive value with your core customer.
If you've created a good strategic plan, you'll have a set of priorities around key capabilities and differentiating activities that will give you a unique and valuable position in the market. Use these to assess your current situation and map out several quarters of projects and milestones. Then use these to create annual and quarterly priorities to guide your focus.
While you will likely start with things at the top of this list and move down as you work through the process to more strategic work, don't forget to keep going back and asking these questions each time you plan. Things change, and if you stay focused on strategic work and fail to see a problem with your core cash-flow engine, you could be in for a rude surprise.
One of the Most Important Roles on Any Team, That Most Get Wrong
Every high-performance team needs someone to keep things in check and balance the discussion.
Every high-performance team needs someone to keep things in check and balance the discussion.
Every team has roles that need to be filled to be successful. A good team has a diverse set of members who have different perspectives, experiences, points of view, and styles. This prevents blind spots and groupthink that can lead the team down dangerous paths and to poor performance.
One of the key roles that teams often get wrong is that of the devil's advocate. This is the person on the team who takes an opposing point of view and brings up contrary evidence and perspective. It's a key role to help make sure the team isn't missing a critical piece of information or failing to consider other options.
In 1587, the Catholic Church established the role of advocatus diaboli as part of the process of declaring someone a saint. The purpose of the role was to present counter-evidence of sainthood and to find holes in the events presented as miracles. One of the most famous examples was when the atheist author Christopher Hitchens was asked to testify against Mother Teresa.
What the Church has long realized, and what good teams come to learn, is that without someone to present contrary evidence and an alternative opinion, you risk missing other opportunities and making big mistakes. It's a risk that you can't afford to take and one that's easy to avoid.
However, many teams get the role wrong. Instead of inhabiting a key role necessary to improve decisions and results, a bad devil's advocate will just be argumentative and create friction on the team. Here are the right ways to make sure your team is taking everything into consideration.
1. Attack the ideas, not the people
Ad hominem attacks are not helpful. The goal of the devil's advocate is not to question a person's character or credibility. In fact, doing so will only hurt personal relationships and prevent others from presenting their ideas or opinions.
Instead, focus on the idea being presented and stick to the merits and soundness of the arguments being made. Question the evidence and the conclusions by providing additional or alternative data, logic, or experiences. Do so respectfully and avoid making your comments personal or demeaning.
2. Provide solid logic and rationale
A good devil's advocate will present new and valid data and sound thinking. It's not just about being argumentative and saying you don't like something. Focus on providing different examples and data sets that can be used to draw different insights and conclusions. Your goal is to get the team to consider other options and positions, not to personally discredit someone else on the team.
3. Offer new alternatives
One of the best things you can do as the devil's advocate is to offer new and alternative options. Instead of just undermining and undercutting another idea, focus on providing a different path. Even if the suggestion isn't totally viable or thought out, it can promote discussion and debate that can lead to other ideas and directions.
4. Serve the team, not your personal agenda
One of the situations I see a lot on dysfunctional teams is when an individual uses the devil's advocate role to advance a personal agenda or grind an ax they have with another team member. This is neither appropriate nor helpful. Instead, focus on serving the team's agenda to efficiently reach a better outcome.
If you see someone not acting in the best interests of the team, the best thing to do is to ask that person to clarify their logic and rationale. If they can't articulate a valid reason, the team should consider their point and then move on and focus on other issues.
5. Know when enough is enough
The point of the devil's advocate is to advance the team's thinking and the quality of their decision making, not to grind discussion to a halt and stymie the team's progress. When you feel like you've exhausted the value of a line of reasoning or that the team is ready to move forward, it's time to step out of the role and move on.
6. Switch it up
The devil's advocate role is key on any team and it's important that every team has one. However, it's best not to let it be the same person every time. If one person is always the naysayer, it will create a rut for everyone. Instead, switch it up and make sure everyone develops the skill and can take the role when needed.
I often see teams who are "playing too nice" and fail to engage in critical debate and challenge one another. Introducing the idea of a devil's advocate will help raise the bar on the team's discussion and help them reach better solutions more quickly.
The Easiest Way to Innovate Is to Pivot. Here Are Your Two Best Strategies
Here are two basic strategies every organization can use to expand their business.
Here are two basic strategies every organization can use to expand their business.
As a strategic business coach, innovation is a key subject that I teach and work on with my client companies. Once we assess the market and a company's current strengths and weaknesses, we look to find new business opportunities that remain unnoticed or unexploited by competitors.
While startups have many challenges, they do have the luxury of the blank slate. They can explore and try to build a business based on just about any model and address any possible problem they see in the market. Since they have no existing business or customers, they have very little at stake and can try radical ideas and take big risks.
Existing companies, however, need to get creative about exploring new ideas and business models; if they extend themselves too far, they will lose footing and overextend their resources too quickly. To innovate well, a business needs to find levers and pivot points from its existing model.
There are two dimensions a business can innovate on: first, the company's current customers, and second, the company's current products and services. While you can innovate on either, trying to innovate on both at once is extremely risky and fails to leverage your current knowledge and assets.
1. Find new products/services for existing customers.
The first way in which a company can innovate is by keeping their existing customer base and finding new products or services that these people might find valuable. In this direction, you leverage your existing relationships but consider new lines of business to develop.
In some cases, these can be subtle but important changes. Say you're a fitness center that provides unique fitness programs and classes and you have a strong and dedicated customer base. While those customers don't need more fitness classes, they may need nutrition coaching, apparel, or at-home workout services. Same customers, but new products and services.
In some cases, these new directions are quite different. Say you're a staffing company that provides candidates for companies to hire. However, you see that companies need more than just people, but also training and project management. You can develop online certification and testing programs to help your clients train and level-up their current staff. Same customers, but you're solving a different, more valuable need.
The trick with this approach is to have deep relationships with customers and to develop insights into what really drives value for them. You need to understand the bigger, more important problems they are facing and then find new and improved solutions to offer them.
If your business is transactional and doesn't provide deep customer insights and strong relationships that you can leverage in the sales process, this approach might be difficult.
2. Find new customers for existing products/services.
The second way to drive innovation is to take your current products/services and find a new customer segment or a new market for them. While you might need to tweak them and/or repackage them to fit the new scenario, you're leveraging your current capabilities and solutions and finding new problems to solve.
This might be as simple as looking at adjacent and related markets. If you provide cleaning services to offices, you can try selling to universities. If you provide accounting services to multi-store retailers, you can try selling to chain restaurants. Think about who else has similar problems that your skills might be a good fit for.
Some companies can make bigger jumps using this strategy. One of my favorite examples is Gore, which started with making high tech fabrics but branched out and found all sorts of applications for its material technology in medical, biotech, automotive, and electronics. They even figured out that their waterproof fabric product Gore-Tex works great as dental floss which is now sold as the product Oral-B Glide.
If your core strength is in services and development of products, then this might be a more fruitful approach to finding new ways of expanding your business. To be successful in this approach, you need to explore many businesses and industries looking for problems that haven't been solved, that also have significant value to companies with money.
While either approach to innovation can yield good results, trying to do both at the same time is extremely difficult. Changing both your customers and your products and services leaves you with no stable leg to stand on. You'll basically launch yourself into start-up mode. And with an already existing company to operate on top of that, you'll make your life extremely difficult.
Growing and expanding a company requires a smart strategy and clear process. Good companies stumble on opportunities and take advantage of them. Great companies make innovation a core process and invest time, money, and energy into finding new ways to expand their reach and the value they create.
How COVID-19 Will Permanently Change the Cannabis Industry
One of the hottest industries of the past decade is not immune from the effects of Covid-19.
One of the hottest industries of the past decade is not immune from the effects of Covid-19.
As a business coach, I've worked with dozens of cannabis businesses on growth strategy and business operations. I also run a podcast focused on the cannabis industry and have interviewed over a hundred leaders in the space. With the Covid-19 pandemic in full swing, every industry is feeling pain; however, the cannabis industry has a unique set of challenges as well as opportunities in this crisis. Here's what you need to know about the current state of the industry:
1. Cannabis sales will continue to be erratic.
While cannabis companies have been declared essential services in most states where it's legal, hoarding is creating swings in demand. When Massachusetts ordered dispensaries closed, there was a run on stores, and more than 1,300 applications for medical marijuana cards were made within 10 days.
Other states such as California allowed dispensaries to stay open. Denver's mayor initially ordered adult-use marijuana dispensaries closed, but then quickly reversed the order after lines formed creating a health risk.
Changing government policy and consumer fear will continue to cause swings in sales. Coupled with disruptions in the labor force for cultivation, processing, and shipping, cannabis product inventories will be unpredictable for some time to come.
2. Buyer behaviors will change.
Shelter-in-place and social-distancing orders have meant that customers are not going into retail stores. Many dispensaries have moved to curbside pickup. And in states where it is legal, delivery is taking off. Technology companies that provide delivery technology are seeing a huge spike in inquiries as stores scramble to provide this service.
While some consumers will go back to visiting the store to get their weed, many will stick with the ease, convenience, and safety of delivery services long after the crisis has passed. This will also be fueled by stores that see the benefit of marketing to customers with loyalty programs provided through delivery apps.
3. The crisis is driving people to ingestibles .
As it became clear that Covid-19 affects people with respiratory issues harder than most, consumers have become wary of inhaled products. Vapes, concentrates, and smoked flower sales have flattened or even dropped in some locations while edible and tincture sales have increased.
In addition, orders to shelter in place mean that people are inside with other family members much of the time. Smoking and vaping are being avoided while people remain in close quarters.
While some consumers will go back to inhaled products after the crisis eases, it's likely that some users will change behavior permanently as a result of new habits.
4. CBD use is on the rise.
The focus on staying healthy and boosting immune systems is driving consumers to all sorts of health-focused products, and CBD is no exception. While there's a lack of significant clinical research and conclusive data on the health benefits of cannabis products, CBD has clearly been positioned as having several health-related benefits by manufacturers and retailers.
And while CBD stores have not been considered essential businesses, online orders are up significantly. In addition, those brands that distribute through pharmacy and health food stores have remained available to consumers, showing strong sales that will likely continue.
5. Consumers will look to value products.
Over the past year, there has been a glut of high-end premium-priced brands in all cannabis categories and product types. Even before the Covid-19 pandemic, experts have said the top of the market was crowded and not sustainable.
With uncertain economic futures and massive rates of unemployment, consumers will become cost-conscious. This will drive purchases into the value-priced mid-tier categories and even down to the lower price points. Even if we see a strong recovery, consumers will likely stick to budgets for some time.
6. Some businesses won't make it.
While the cannabis market has been booming, it's still a fiercely competitive space with many companies struggling to make it. Many cannabis companies have relied on the capital markets to fund growth. Unfortunately, it's clear that capital markets are going to take a while to recover, leaving many businesses starving for cash. And because THC cannabis is still federally illegal, these companies are not eligible for the PPP and loan programs designed to aid recovery.
In addition, companies were hoping for banking reform to remove the punitive 208e tax code regulations, which will now be pushed into the distant future. Businesses that have overextended themselves will feel the pinch. Expect many of them to go out of business or get bought up by healthier competitors.
While every massive disruption to an economy will cull the herd and put many companies out of business, it also creates opportunities. Those who are in a good financial position to weather the storm and who can pivot their business to take advantage of openings will go on to grow quickly and dominate the new industry.
Now Is the Time to Figure out How You’ll Thrive in the New Normal Post COVID-19
Good companies are finding smart ways to survive Covid-19. Great companies are planning how they are going to thrive once we're out of the woods.
Good companies are finding smart ways to survive Covid-19. Great companies are planning how they are going to thrive once we're out of the woods.
Covid-19 is upending every business in every industry, with many doing everything they can just to survive each week. As a strategic business coach, I've been logging long days on video calls with CEOs dealing with operational fires, right-sizing expenditures, and finding new, quick revenue streams to keep businesses afloat.
And while this is all-consuming and at times completely overwhelming, now is the time to start thinking about what the world will look like post-pandemic. Even if it's just a few hours a week, taking the time to develop a strategic plan will give you a better map to make smarter decisions in the short term.
Here are the questions that I've seen future industry leaders are asking themselves. Use these to kickstart your strategic planning process and create a plan for a quick recovery.
1. How will life change for your customers?
If you're going to be successful in business, you need to deliver value to your customers. COVID-19 will change many businesses' and people's lives for a significant period of time. Understanding how these changes will re-shape your customer's needs, desires, and decision-making criteria will be key. Anticipating how you need to change your products and services, or create new ones, to deliver value will be key to your success.
2. What will happen to your current competition?
Your competitors will make changes to survive as well. Make educated guesses about what kind of financial position they will be in, what resources they will have or not have, and what strategic moves they are likely to make. While you won't know for sure, you want to steer towards the open ocean and away from bloody waters.
3. Who might be your new competition?
While you need to assess what might happen to your current competitors, you'll also need to consider who might choose to pivot into your space. And if you're thinking of making a pivot yourself, you'll need to assess who's already in your new market. Everyone will be making moves and you'll need to strategize to see all the moves.
4. Where will you get new talent?
With around 17 million filing for unemployment, this crisis has been one of the largest talent shakeups in the last fifty years. Many good people with amazing talent have found themselves without jobs. If you've shed your workforce and will need to rebuild, have a plan for getting the best people quickly before everyone else starts snapping them up.
5. What will your supply chain look like?
If you are dependent on suppliers to run your business, you'll need to take a hard and careful look at your supply chain. And don't stop just with your provider, you'll need to look back several layers to assess what's working and what's not. While some parts of the system might take time to recover, others will change altogether. Have a plan that will strategically support your recovery and future growth.
6. What specific things will set you apart in the new market?
Once you have a plan for refocusing your core customer and core product or service, you'll need to reassess how you're going to win in your market. The best companies have a unique and valuable differentiation strategy that sets them apart from their competitors. Otherwise, you'll be competing on price, and that's an ugly business place to be. Identify the two to three factors that will make you stand out to your best customers.
7. What specific things will you need to stop doing or let go of?
If you're adjusting your product or services or if you're making a pivot, you'll also need to figure out what capabilities you need to stop doing. These are the things that may have served you well before but are not going to be an asset in the new world. The sooner you identify and stop doing these things, and the sooner you redeploy your resources to new strategic capabilities, the better. Holding on to these will only drain your finances and dilute your focus.
8. What are your new monthly forecasts and key milestones?
Once you have a new positioning and key capabilities, you'll need to forecast the next twelve to twenty-four months of key metrics and operational targets. You'll also need to set key milestones for implementing any business changes and capacity building. These will be key for your leadership planning sessions and establishing your priorities.
Working through a crisis is not easy, and can be harrowing for many. But the sooner you stabilize your current situation and start focusing on what the world will look like in the new world, you will not only have a better chance at future success, you will have the confidence and motivation to keep going today.
5 Most Common Problems With Daily Huddles and How to Fix Them
Daily huddles are key to high-performing teams. To keep yours focused and on-point, avoid these five pitfalls.
Daily huddles are key to high-performing teams. To keep yours focused and on-point, avoid these five pitfalls.
One of the hardest parts of team performance is coordinating and aligning individual efforts. Too often everyone is working hard and trying to be as productive as possible, but they are crossing paths and conflicting on resources. If members are pulling hard, but in opposite directions and stepping on each other's toes, the team will go nowhere fast.
The key meeting that helps a team get on the same page and coordinate their efforts is the daily huddle. You might call this meeting something different, but the huddle is a quick meeting once a day, usually in the morning, where everyone checks in and talks about what they've accomplished and what they are working on next.
Unfortunately, I've seen many daily huddles that are ineffective. Below are the five most common issues in huddles and how to fix them.
1. They go too long.
The key to a daily huddle is to keep them short: under 15 minutes, ideally under ten. Too often, I see huddles that stretch to 20 or 30 minutes. If the huddle turns into a major meeting and chews up a big part of the day, people will become unfocused and will start to skip the meeting.
I'd rather see a huddle cut short than run long. I have teams set a timer for 15 minutes and have them stop the meeting regardless of where they are on the agenda. Even better is a large digital count-down timer that shows everyone exactly how much time they have left.
2. They lack focus.
It's easy for the huddle agenda to go astray. People have long lists of issues and topics they want to address and it's natural to try to resolve issues as they come up. However, this is what bloats huddles and causes them to drag out.
Keep your huddles on point by just focusing on the key items that happened since yesterday, what items are happening today, and what issues are standing in people's way. No more, no less. Anything else should be handled after the huddle.
3. People are not prepared.
Everybody needs to be prepared to make a huddle operate well. This means that they need to know what they are going to say and they are focused only on the key items that need to be communicated. If it's someone's turn to go and they have to think about what they are going to say and end up droning on about what they had for lunch, it will kill productivity.
One trick that I use is that I have a stack of index cards or sticky notes and I make everyone write down what they are doing to say. I limit them to two or three points for yesterday, today, and 'stucks,' or what they're stuck on for ongoing projects. Then, when the huddle starts, I make everyone hold up their cards to show they've written down their comments. And anyone who doesn't have written notes can't speak. This keeps everyone on point and focused.
4. Nobody is facilitating.
While anyone can facilitate a huddle, someone should be the designated facilitator each time. This person calls the meeting to order, establishes the order, keeps things moving, and identifies the items that will be followed up on after the meeting and by whom.
I like having team members rotate facilitators each week. This gives each person a chance to hone their skills while having a set routine. And by making sure everyone on the teams takes a turn, anyone can step in to facilitate if someone is missing. It also makes people appreciate how hard it is to facilitate and encourages them to come prepared and stay focused.
5. The wrong people speak.
Huddles are for team members to coordinate their work. It's an internal working meeting for the team and not for reporting on progress or coordinating with people outside the team. Often I see executives or members of other teams at huddles and they begin asking questions or bringing up topics. This will quickly kill the meeting.
Instead, I have anyone who is not on the team but who wants to attend stand back and away from the group while they meet and ask them to remain completely silent. The only reason they should speak is if they are asked a direct question by someone on the team. This will allow them to hear what's going on without interrupting the flow.
While huddles aren't rocket science, they aren't easy to master either. It's easy for them to meander and have them drag on. The best teams work hard to keep their huddles short and sweet. Done well, they will increase a team's focus and pace. Done poorly, they will become just another meeting everyone tries to avoid.
Successful companies don’t worry about market share. They focus on this instead
Here's why market share may be a false measure of success.
Here's why market share may be a false measure of success.
You might think that with a market capitalization now of over $1.1 trillion, Apple owns the vast majority of the smartphone market. Logical, but wrong. In fact, Apple had under 25 percent of the total handhelds shipped for most of 2019 and was actually the number two in the market that year.
So why do people admire and extol Apple as the leader in the handheld device market? It's not because of their dominance in the overall market. It's because while they don't have the lion's share of the market in volume, they do have the vast majority of profits.
While Apple had under 25 percent of the market by units, it took home over 60 percent of the total profit-share of the industry. By focusing on high-value customers and creating high-value products, it focuses on the higher end of the market where the majority of the profits lie. As a result, the remaining 85 percent of the handhelds shipped have to fight over the crumbs that remain.
Which would you like to have? A bigger percentage of the overall revenues or of the profit of your market?
Smart companies don't worry about market share. They focus on capturing the most profitable segment of the market and leave the rest to their competitors. Here are several ways that they do it and how you can do it too.
1. Focus on your ideal customer.
Trying to sell everything to anyone is not a profitable or scalable strategy. Yet, I see many companies that chase anyone who has a budget to spend. Not only does it make your own operations difficult, but it also makes it impossible for people to know why they should buy from you and who to refer you to.
Figuring out who your best customer is and what their needs and fears are will allow you to align your business to what they want. This will also make it easy for you to target your messaging and sales strategies. And when people know who your target customer is, it's much easier to refer you to the right prospects.
2. Create a high-value product/service.
Once you have your ideal customer dialed in and well-understood, you can hone your product or services to meet their needs. The key at this stage is to understand both the practical logical needs as well as their emotional needs and fears. Remember, people buy based on emotional needs and justify based on a logical rationale.
Once you have them well mapped out, review all that you do to meet those categories. Re-design your processes and procedure to maximize the delivery of value to your ideal customer. By focusing on just this one most important segment, you'll be able to keep things simple while delivering significant impact.
3. Differentiate yourself in the market.
The key to strategy is to carve out a well-differentiated position in your market. If you want to command a better than the average profit margin, this is a must. If you don't stand out from the crowd, you'll be in a price war that will only undermine your profits.
Find two to three areas where you can provide superior performance relative to the key competitors and work to operationally deliver on these better and more consistently than anyone else in the market.
4. Strive for operational excellence
A great strategy is worthless if you can't execute on it. Once you've developed a way to differentiate yourself, dedicate yourself to delivering on that strategy through bullet-proof operations. Consistently delivering a quality product on a consistent and reliable basis is what will make you successful in the market.
Develop standard procedures and operational playbooks to ensure that standards and processes are met. As you grow, these will help drive quality and efficiency as you add people and scale up the organization. Without these, quality will suffer as you grow.
5. Don't leave money on the table
Many of the companies I speak to end up leaving money on the table. They typically haven't done enough market research to understand the market value of the products/services they provide, and instead use a cost-plus approach (raw materials plus labor plus fixed profit) to set their prices. If you have a well-defined position and a targeted offer, you should be charging far more than standard rates and getting much higher than the standard profit margin.
While it can be impressive to quote your total revenues and what percentage the market share you command, these things are vanity metrics. Real business leaders know that long-term, sustainable success comes from having a solid strategy that carves out the most profitable customers.
The Best Companies Out-Think Their Competition by Becoming Learning Machines
The best organizations are learning machines. By focusing on continuously getting better, they outthink and outpace their competition.
The best organizations are learning machines. By focusing on continuously getting better, they outthink and outpace their competition.
A core principle that I learned from over a decade as a Lean/Agile coach is that one of the best sources of learning is your recent past. However, most teams don't learn from this fountain of knowledge because they don't have a system in place for analyzing and processing results.
By reflecting on what you've accomplished and where you've failed, you can find key patterns and discover the sources of your outcomes. Once you can see these root causes, you can begin to make strategic changes to improve and get better results going forward.
Once this is fully embraced and adopted, it creates a powerful strategic advantage. Reviewing results closely, finding insights and patterns, choosing key changes to make, and implementing them with commitment will fuel innovation and remove waste in a business.
Here are the six key steps to embrace a culture of continuous improvement and build a true learning organization.
1. Eliminate shame and judgment.
The biggest blocker to embracing a continuous improvement mindset is the tendency for people to look for problems and assign blame to individuals. The need to figure out who's at fault is a powerful human tendency.
if you really want to create a learning culture, you need to push that aside and focus on insights rather than judgment. Setting good ground rules will help keep things focused on learning, not witch-hunting.
2. Make it okay to talk about failure.
While I'm not a big advocate for failing per se, I am a big fan of learning from failures by openly talking about them and learning from them. First, you need to capture them and the surrounding data. Like the Federal Aviation Administration (FAA) after an airplane crash, you want to collect as much data as you can as quickly as possible. This will be important fodder for your analysis and insight development.
3. Get good at root cause analysis.
As an architect, I like to tell the story of my college professor saying, "If you see water in the basement, the first place to check is the flashing around the chimney." Why check the chimney? Well, just because you see water in the basement doesn't mean that's where it's coming from, and chimneys, which are often the core cause, are notoriously leaky.
Similarly, you need to dig beneath the surface of the presenting problems that you see at first glance. Ask "why" several times to uncover the underlying source of the problems you've identified. Once you've dug down, identify the areas that really need to be addressed to fix the problems at the source to create long-term, sustainable improvements.
4. Distinguish between decisions and outcomes.
One of the key skills I work on with executives is the ability to separate the evaluation of decisions from outcomes. All businesses have varying levels of uncertainty, which means that not all good decisions lead to good outcomes and not all bad decisions lead to bad outcomes. Luck and chance play a role. Just because you had a bad outcome, don't assume you made the wrong decision. And don't lull yourself into a false sense of security by assuming all good outcomes were the result of brilliant decisions on your part.
5. Commit to improvements and changes.
Once you identify areas that need improvement and changes you could make, focus your efforts on a limited and specific set of priorities. Don't spread yourself too thin. Better to get a few things done quickly and completely than to have a long list of partially completed projects.
It's also important to track and monitor changes being implemented. Have a plan of action, milestones, and follow-ups to make sure things are really being implemented, and that they are having the impact you intended. If need be, don't be afraid to take a step back and rethink your approach.
6. Make it a regular habit and commitment.
The most important thing you need to do to become a true learning-based organization is to make a habit of reflecting on results and finding insights into future changes. High-performance teams set aside time each and every week to run retrospectives and identify the improvements that they will commit to. Great leaders reflect on their habits and behaviors to find ways to improve. Great companies bake these activities into the regular rhythm of meetings and reviews.
These strategies will increase your company's learning velocity and ultimate ability to improve and innovate more quickly. If you're in a high-growth business and/or a quickly changing market, these skills are not just nice-to-have, they are critical to your survival. In fast-paced markets, the company that can learn the fastest will be the one to rise to the top and dominate its competitors.
Innovation Can Become Stifled by Knowledge. the Best Solution Is to Think Like a Beginner
Executives in growth companies need to be constantly learning, and the best way to do that is to develop a beginner's mindset.
Executives in growth companies need to be constantly learning, and the best way to do that is to develop a beginner's mindset.
One of the biggest challenges in growing and scaling a business quickly is raising the bar on the CEO and the senior team. If the leaders of the business don't continuously learn and expand their thinking, the company will be stuck and growth will be anemic. Grow the leaders and the company will follow naturally. But it's not easy.
As a leadership and strategy coach, one of my first jobs is to make sure the right people are in the right seats. But I also need to make sure they have the right mindsets. I can have the best experts in the world with decades of experience, but if they are closed to new ways of thinking and new strategies, all of the coaching in the world won't make a difference.
I often get brought into situations where the business is stuck and performance is lackluster. And when I speak with the executives in these situations, what I typically find is that they tell me they've studied every angle of the business and have tried every possible option.
In these cases, I encourage them to adopt a beginner's mindset and look closely at the business and the challenges they face. By doing so they will see new information, reveal new opportunities, and uncover possible strategies they've missed to date.
Here are the three key principles that I explain in my meetings with senior teams in order to help them embrace a beginner's mindset and unleash their growth.
1. Forget what you've learned.
One of the first things I encourage executives to do is to forget what they've learned. The best way to do this is to pretend you're an intern on your first day of work and think about what questions you would be asking. What would you want to know, and what would be the most important thing for you to understand about the business?
I will often do an exercise where I have them explain the situation and problem to me as if I'm just out of school and this is my first job. How would they break down the situation, information, and the options under consideration?
Invariably, we stumble on a few things that either don't make sense or they can't answer very well. And therein lie new opportunities to discover and learn. These usually lead to options that haven't been considered before.
2. Sharpen your observation skills.
I have a Youtube video of two teams each passing a basketball. One team is wearing all white and the other team is wearing all black. The instructions are to count the number of passes the team in white makes in the video. I sometimes offer a reward for the people who can count correctly for added emphasis.
What they don't know is that a few seconds into the video, a person in a gorilla suit begins dancing through the frame. Then I ask how many passes people counted and often get several correct answers. But when I ask how many people saw the gorilla, everyone stares at me with blank expressions.
When I go back and show them the video and they see the gorilla as plain as day, they are dumbfounded. Then I explain that their business problems are in the same situation. They are focused on seeing only a certain type of information. And by slowing down, taking a different perspective, and noticing more, they can uncover new insights.
3. Ask why, a lot.
When I first introduce this idea, people laugh and say, "We should just add a 5-year-old to the leadership team and they can ask why of everything, ad infinitum." But it's more than that. Yes, you need to ask why, but you need to target key assumptions and then drill down strategically.
One of the key techniques developed by Sakichi Toyoda at Toyota along with its now-famous just-in-time approach to production was the Five Why's method of problem analysis. By asking why a problem happened and looking at the possible answers and asking why again to find the next level of answers and then repeating that until you're five levels deep, you get to the core causes of your problems.
Leadership teams can use this same recursive questioning to dig deep into situations and uncover the root cause of their issues and thus find root solutions to the problems they've been facing.
While developing a beginner's mindset is not easy, individuals and teams that learn to do it well will discover better ways of doing things and will solve problems at a deeper level. And in a high growth industry that is quickly changing and evolving, the company that can learn and change the fastest will naturally win in the market.
6 Key Steps to Increase Your Team’s Accountability on Its Commitments
A great strategy is worthless if your team doesn't deliver on its commitments. Here are six ways to increase accountability and progress on goals.
A great strategy is worthless if your team doesn't deliver on its commitments. Here are six ways to increase accountability and progress on goals.
As an executive team coach, one of my first jobs is to make sure a team has a clear and effective strategy for how they are going to grow and scale their business. This involves zeroing in on their ideal customer, understanding the key forces in the market, selecting a handful of attributes to differentiate around, and then determining what operational capabilities to focus on.
However, even with these key strategic questions answered perfectly, the company will fail to achieve its goals if the team can't deliver on its plans. And unfortunately, many teams struggle with following through and staying accountable to their commitments.
When I see issues of follow-through, I have the team step back and look at the habits and culture they've built around accountability. I have them focus on these strategies to raise the bar.
1. Set a compelling vision
Before we dig into the details of commitments and follow-ups, I start by making sure the team has a clear vision for success and the future state. It's extremely difficult for people to invest and take risks to achieve something that is unclear or lacks passion and desire. Without a compelling vision, you get compliance at best and sabotage at worst.
2. Define clear priorities
It's impossible to make smart, strategic decisions without a clear set of team priorities. Without them, people are left having to do their own analysis and assessments and choose what to focus on. And when members of a team focus on good, but different priorities, you create confusion and conflicts. After a while, people will stop stretching and taking smart risks and instead play it safe and avoid big goals.
Make sure you have your top priorities set and agreed to as a team. Define them in clear language and make sure everyone understands the rationale. Make sure the team is truly committed and behind what you choose and understands the tradeoffs and benefits.
3. Encourage healthy debate
One of the reasons teams don't follow through on their commitments is that there isn't adequate debate before making the decisions. I see CEOs push through on their plan only to be disappointed in the outcome and lack of delivery. This happens because concerns were not voiced and issues not addressed beforehand.
To get healthy, open debate, you need to create an environment where it's safe to disagree and voice conflicting ideas. Set good ground rules and focus on getting voices heard from each and every team member. Dedicate time and space for debate, don't rush this process. And remember, letting people be heard is important, but you don't need to make everything a vote.
4. Ask, don't tell
One of the most important ways to increase your team results is to make commitments a real choice and not force the process. If you pressure people into doing things, you're getting compliance, not true commitment. True commitment is only possible when someone has the legitimate option to say "no" to the request. If they have the option to say no, then it really is a choice. Otherwise, you're just pressuring them to accept the task, which they will resent you for afterward.
5. Give frank feedback.
Great teams hold themselves and each other accountable. This should happen upfront when people are committing to tasks: other team members would make sure the person committing to a task really has the skills, capacity, and resources to be successful. If someone on the team sees someone else sign up for something they are not likely able to deliver, they speak up and make sure the team member has what they need.
When the project is in flight, team members actively check in on each other to make sure everyone is on track. They know that their success is based on everyone else's success and the team staying on track as a whole. When they see an issue, they don't just call it out, they step in and provide help and resources to get things back on schedule.
6. Set a common standard.
Great teams have high standards that are set early in the process. When I work with teams that are struggling, I start by scaling back the scope and ambition and get a few rounds of good delivery. Once we have established a pattern and expectation of success, we can then build and expand. Trying to increase accountability by heaping on more work will only make things worse.
High-performance teams don't develop a culture of commitment and accountability by accident. It takes intention, focus, and work to build that muscle and flex it to deliver on goals. Without constant focus and discipline, the muscle will quickly atrophy and wane.
Good Leaders Are Powerful Systems Thinkers. Here’s How You Can Become One
Seeing your business as a system can help make you a better strategist and a more insightful leader. Here are five ways to get started.
Seeing your business as a system can help make you a better strategist and a more insightful leader. Here are five ways to get started.
I wasn't always a businessperson. My training was in architecture. While this didn't put me directly on the path of becoming an entrepreneur and an Inc 500 CEO, it has served me well in many ways. The one thing my architecture training has taught me which I've been able to leverage as a business leader is my ability to be a systems thinker.
Every business is a system, a collection of elements and forces that interact with each other to produce a given set of results. People implement processes that produce products and services, which create value. That value creates money, which allows you to hire more people. Change one element and you impact all the others.
Systems thinking seeks to understand the subtle and long-term impact of how one change can all the elements over time. And being a good systems thinker can help make you a better strategist--and a more insightful leader. Here are five ways it can improve your ability to create and deliver results in your business.
1. Search for connections.
Business is a combination of customers, employees, processes, products, competitors, investors, and many more. Knowing the factors that drive your business results is key. Missing one will mean you'll miss key elements that can make your business successful and hinder your ability to effectively plan.
When faced with a business problem, start by mapping out the key elements that are in play, then look for how these are connected--how they impact each other. If you want to increase quality with more quality checks, know that your development time will increase, as well as your production costs.
2. Understand the cause and effect of decisions in your business.
In business, you can increase your prices but that will likely decrease the number of deals you close. However, you may make up for it through the higher profitability of the remaining customers. A good systems thinker understands how these types of decisions can affect multiple areas of the business.
When faced with a business problem, build your map and then ask yourself how changes might change the system. Do elements have direct or indirect relationships? Does one factor increase or decrease as another one changes? Is there a time delay? Is the rate of change continuous or varied over a specified range? These types of questions will give you key insights into what might be impacted by the changes your considering.
3. Find feedback loops.
These are often situations where two or more elements in your business feed each other. For example, if you develop a great product and people love it, they will tell other people, which will increase the number of customers who will love your product and so on. These positive feedback loops are what you want more of because they will naturally grow and scale the business.
However, you might find reverse loops. Cutting salaries to save money will lead to your best people leaving, which will decrease your ability to deliver, which will lead to unhappy customers, and so on. When you're business is in trouble, you need to find and correct these vicious cycles.
4. Look for balancing forces.
In business, growing sales is a good thing, but without also increasing delivery capacity, you'll run your business off the rails. And if you don't hire more people as you grow, you'll overwork your existing teams and they will likely quit.
Business is full of short-term strategies that can lead to long-term problems. And unless you have a good understanding of how your business works as a system--and where you need to balance and level the forces at work--you'll run the risk of digging holes and painting yourself into corners.
5. Learn through experiments
The best way to know if you have the right system model for your business is to experiment and measure. If you're not sure how many customers will stay with you if you raise prices, don't make the change all at once. Pick 10 percent of your customer base, try it, and see what happens. Once you're confident, then roll it out en masse.
If you get your predicted results, then you probably have a fairly good model. If you don't, then you're missing some factor that's at play or interaction that's changing the system. Take measurements and observe each component so see what you're missing.
Whether you're trying to increase sales, hire more or better people, enter new markets, or bring on new investors, having a good understanding of your business as a system will help you with both developing and correcting your strategy and empower you to achieve the success you want.
5 Simple Steps To Dealing With Passive-aggressive Behavior On Your Team
Don't fall prey to the one thing that quickly kills a team's energy and culture, and undermines its success.
Don't fall prey to the one thing that quickly kills a team's energy and culture, and undermines its success.
As a strategic coach, I spend a lot of time working with leadership teams on strategy and accountability. My job is to help a team develop and agree to a set of priorities and actions, and then to drive the commitment and accountability process for implementation.
While there are many challenges that face any team, when someone is passive-aggressive, it's the one behavior that will quickly undermine your team's success and put it in a downward spiral. Left unchecked it will eat away at the fabric of your team's culture.
Passive-aggressiveness is when someone seems willing and agreeable at one time, then after plans have been made and put in motion, disagrees with the course of action and works to derail and sabotage the effort. Usually, this is combined with highly defensive language and deflection by pointing out other problems or shifting blame to other people.
Here are the five key steps I suggest leaders use when they see signs of passive-aggressive behavior. Following these steps can help minimize the impact of this behavior on your team and hopefully turn the ship around.
1. Call it out.
Though this might seem easy, this bit is actually quite hard. Someone who is an expert at being passive-aggressive is likely a master at deflection and at bringing up other issues to distracting the team. Unless you step back and see these tricks for what they are, you'll fall into the trap.
Look for two things. First, a quiet and seemingly compliant attitude when discussing key issues and directions. If someone is just going with the flow, they are likely not bringing up deeper concerns or voicing opinions. This is dangerous because left unresolved, their concerns can fester and pop up later.
Second, look for me-versus-you language. If someone is talking about how they did or didn't want something and how someone else did or didn't do something, suspect a passive-aggressive dynamic. A true team member sees everything from the perspective of the team and will use 'us' more than 'I' in their conversations.
Once you've identified it, call it out. My suggestion is to use the phrase: "I feel we didn't get your complete buy-in on this approach and now you are not supporting the priorities we're trying to implement, is that the case?"
2. Ask for a change in behavior.
Get clear on what you want to happen differently going forward. Make it a request and wait for them to either accept the request or say they are unwilling to change. If the latter occurs, then you have a different problem and you need to decide if they should stay on the team.
Typically the request has two parts. First, you want to make it clear that it's critical for everyone to support and work to implement decisions and priorities the group decides on together. There can be no ifs, and's, or buts about this one. Second, ask them to be more vocal in the discussion, to contribute more to the debate, and to make sure they have either voiced any and all concerns or let them go.
3. Acknowledge your own contribution.
Even if you think you've done a pretty good job in making sure everyone was heard and your team had an engaging debate, you need to look at what you can do differently, too. Finding things you can improve upon and acknowledging how you can make the situation better will create more possibilities for the other person to be willing to make changes as well.
4. Confirm everyone's commitment.
When discussing decisions and directions as a team, pay extra attention to the conversation. Make sure everyone not only has a chance to speak but actually insist on everyone voicing their concerns and opinions. Don't give anyone wiggle room to avoid speaking, even if you have to wait through a few minutes of silence. While you may feel pressure to push through the process, you'll only pay more for it later if you do.
5. Address the underlying issues.
Sometimes there are real and valid issues at the core of someone's passive-aggressive behavior. While it's not an excuse, consider what might be driving the situation and address the issues constructively. However, don't let that distract you from calling out the behavioral issue as well. Both need to be tackled head-on.
Passive-aggressive behavior is not always easy to spot and can be even harder to deal with. And there is a real possibility the behavior won't change. The most important thing is to spot it early and address it immediately so you can minimize its deteriorating impact on your team's culture.
5 Simple Strategies To Grow Your Professional Network
Knowing the right people with the right connections can be one of the best ways to create value for your business.
Knowing the right people with the right connections can be one of the best ways to create value for your business.
As a business coach, I've worked with dozens of executives and entrepreneurs on how to become stronger leaders and more effective strategists. However, one asset I find most people have woefully underdeveloped is their professional network. Developing a strong collection of people you know inside and outside your industry is one of the best investments of your time and energy. While your skills and capabilities are important to your entrepreneurial success, knowing the right people with the right connections can be one of the best ways to create value for your business.
1. Cultivate relationships.
Before you try to expand your network, leverage the people you already know. A network is not just a collection of business cards. People do business with people whom they know, like, and trust. If you haven't built real relationships, you won't have a strong network.
Unfortunately, there is no shortcut here. You need to spend time with people to get to know them, and for them to get to know you. Having a coffee or tea or even a meal with someone is much better than just being connected on LinkedIn. If you're looking to create efficiency, invite a small group to lunch and get to know several people at once.
2. Give first, then ask.
Before you start strategizing on what you can get out of your network, focus on what you can give. Look for opportunities to offer help or expertise in an area you know well. You need to build up credit before you can make asks of others.
These don't need to be big things or things directly related to business. If you hear someone is traveling to a city you know well, follow up with a few restaurant recommendations. Have a good book you've read? Send someone a copy who you think might like it. Another great strategy is to make introductions to other people in your network; that's two birds with one stone.
3. Leverage your second degrees of connection.
Just because you can't find someone in your immediate network who can help you with your need, don't give up. Every one of your contacts knows many people. Look for someone who's likely to know someone who can help, and reach out to them. If you're looking for a good trusts and estates attorney, ask some of your attorney friends who they know. This not only gets you a warm introduction, it gives your friend the credit for a referral.
4. Look for weak links.
One of the challenges in building a broad network is that you can get stuck meeting people who all know each other and operate in the same circles. Since they all know each other already, you won't be expanding your reach very well.
The key here is to find weak links. These are people who you may not know well, but operate in a completely different circle of people. And while it's hard to find and connect with these folks, when you do, you open up connections to large groups of new people that you otherwise wouldn't have access to. This is one of the quickest ways to expand your network in a strategic way.
5. Communicate regularly.
Once you have connections, you need to stay connected and top of mind with them. Tools like LinkedIn can help publish content and updates to your network on a regular basis. And a newsletter or a blog is another great way to create value and stay on peoples' radar. The key here is to create a steady and regular stream of quality content and updates so that people learn who you are and what you do. Done well, this will keep you front and center in the minds of people in your network, or those you want in your network.
The hardest part of developing a good network is that it takes time and investment. Good networks take years to build and develop. Have a plan and put in the time on a regular basis. Your hard work will pay off when done right and consistently. If you wait until you need your network to build one, you're too late.
How the Japanese Word 'Ikigai' Can Help Your Business Be More Successful
These Japanese islanders have a long tradition of finding the secret to a successful life. And businesses can use the same idea to find their niche.
These Japanese islanders have a long tradition of finding the secret to a successful life. And businesses can use the same idea to find their niche.
Okinawa is a small island off the southern coast of the main Japanese island. Some might know it from the U.S military and the bases located there. However, according to Japan's ministry of health, the island is also known for having one of the highest populations of centenarians and amazingly low rates of illnesses that plague the rest of modern societies.
Why? Well, many factors are likely at play; however, one of the more interesting ones is that the residents of Okinawa have a long tradition of creating productive and personally meaningful lives for themselves. And, according to National Geographic Fellow and New York Times best-selling author Dan Buettner, this has led to high levels of happiness and personal satisfaction, and a strong sense of purpose in life.
The Okinawans have given this general sense of living a meaningful life a name. The Japanese word is ikigai (pronounced eek-ee-guy) and it represents a balance among four key factors that drive satisfaction and motivation: passion, expertise, demand, and value.
As a strategy coach, I've found that businesses can use these same four factors to find a perfect balance that creates a unique and powerful driving force for the growth and momentum of a company. While applying them to a business is a little different, the core ideas are the same and they transpose rather well.
These are the four factors of ikigai and how we can apply them to businesses to help balance and align your organization.
1. What you're passionate about
First is discovering and clarifying what you're truly passionate about. For an individual, it's what you just love to do. For a company, it's what work motivates the organization's culture. This could be a specific activity, an impact you have in the world, or a customer you love to help.
A few examples that come to mind: Apple loves to create beautiful technology, Toms Shoes loves to help communities that are underserved, and Google loves to organize information. The trick is that though there may be many things you love to do, only some of them will also meet the other criteria below.
2. What you're good at
While you might love to do many things, you will only actually be good at some of them. And to live a meaningful life and be a well-balanced business, you need to make sure you're good at what you do. This is where ikigai departs from the common advice to just "do what you love" and everything else will follow. In fact, just doing what you love won't lead to a meaningful life. You need to be good at it too.
3. What the world needs
Regardless of whether you are an individual or a business, if the thing you focus on isn't really needed in the world, you're going to spend a lot of time making and doing things that will go unused and unappreciated. Your focus needs to provide a product or service that is desirable and needed by someone somewhere.
While it's fine to have a niche, you need to make sure you have a sizable enough market to build a business around. Thankfully, in today's highly connected world, you can create very niche markets and reach them globally through the internet. I'm always surprised when I run into incredibly focused companies that have significant markets behind them.
4. What you can get paid for
While you can find something you love, something you're good at, and something people need, if you can't charge enough for it to cover your costs plus make a reasonable profit, you won't be very successful. The problem your product or service solves needs to be important enough to incentivize people to part with their hard-earned money. If not, you're building a charity, not a business.
Just like the residents of Okinawa, great businesses have found a sweet spot that covers all four of these factors and have mastered the art of ikigai. And, as they evolve and change along with the world, they continue to monitor and hone this balancing act.
Done poorly, it will result in subpar performance and frustration. Done well, it can create a life full of meaning and impact.
Good Leaders Are Powerful Systems Thinkers. Here’s How You Can Become One
Seeing your business as a system can help make you a better strategist and a more insightful leader. Here are five ways to get started.
Seeing your business as a system can help make you a better strategist and a more insightful leader. Here are five ways to get started.
I wasn't always a businessperson. My training was in architecture. While this didn't put me directly on the path of becoming an entrepreneur and an Inc 500 CEO, it has served me well in many ways. The one thing my architecture training has taught me which I've been able to leverage as a business leader is my ability to be a systems thinker.
Every business is a system, a collection of elements and forces that interact with each other to produce a given set of results. People implement processes that produce products and services, which create value. That value creates money, which allows you to hire more people. Change one element and you impact all the others.
Systems thinking seeks to understand the subtle and long-term impact of how one change can aall the elements over time. And being a good systems thinker can help make you a better strategist--and a more insightful leader. Here are five ways it can improve your ability to create and deliver results in your business.
1. Search for connections.
Business is a combination of customers, employees, processes, products, competitors, investors, and many more. Knowing the factors that drive your business results is key. Missing one will mean you'll miss key elements that can make your business successful and hinder your ability to effectively plan.
When faced with a business problem, start by mapping out the key elements that are in play, then look for how these are connected--how they impact each other. If you want to increase quality with more quality checks, know that your development time will increase, as well as your production costs.
2. Understand the cause and effect of decisions in your business.
In business, you can increase your prices but that will likely decrease the number of deals you close. However, you may make up for it through the higher profitability of the remaining customers. A good systems thinker understands how these types of decisions can affect multiple areas of the business.
When faced with a business problem, build your map and then ask yourself how changes might change the system. Do elements have direct or indirect relationships? Does one factor increase or decrease as another one changes? Is there a time delay? Is the rate of change continuous or varied over a specified range? These types of questions will give you key insights into what might be impacted by the changes your considering.
3. Find feedback loops.
These are often situations where two or more elements in your business feed each other. For example, if you develop a great product and people love it, they will tell other people, which will increase the number of customers who will love your product and so on. These positive feedback loops are what you want more of because they will naturally grow and scale the business.
However, you might find reverse loops. Cutting salaries to save money will lead to your best people leaving, which will decrease your ability to deliver, which will lead to unhappy customers, and so on. When you're business is in trouble, you need to find and correct these vicious cycles.
4. Look for balancing forces.
In business, growing sales is a good thing, but without also increasing delivery capacity, you'll run your business off the rails. And if you don't hire more people as you grow, you'll overwork your existing teams and they will likely quit.
Business is full of short-term strategies that can lead to long-term problems. And unless you have a good understanding of how your business works as a system--and where you need to balance and level the forces at work--you'll run the risk of digging holes and painting yourself into corners.
5. Learn through experiments
The best way to know if you have the right system model for your business is to experiment and measure. If you're not sure how many customers will stay with you if you raise prices, don't make the change all at once. Pick 10 percent of your customer base, try it, and see what happens. Once you're confident, then roll it out en masse.
If you get your predicted results, then you probably have a fairly good model. If you don't, then you're missing some factor that's at play or interaction that's changing the system. Take measurements and observe each component so see what you're missing.
Whether you're trying to increase sales, hire more or better people, enter new markets, or bring on new investors, having a good understanding of your business as a system will help you with both developing and correcting your strategy and empower you to achieve the success you want.
5 Simple Steps to Dealing With Passive-Aggressive Behavior on Your Team
Don't fall prey to the one thing that quickly kills a team's energy and culture, and undermines its success.
Don't fall prey to the one thing that quickly kills a team's energy and culture, and undermines its success.
As a strategic coach, I spend a lot of time working with leadership teams on strategy and accountability. My job is to help a team develop and agree to a set of priorities and actions, and then to drive the commitment and accountability process for implementation.
While there are many challenges that face any team, when someone is passive-aggressive, it's the one behavior that will quickly undermine your team's success and put it in a downward spiral. Left unchecked it will eat away at the fabric of your team's culture.
Passive-aggressiveness is when someone seems willing and agreeable at one time, then after plans have been made and put in motion, disagrees with the course of action and works to derail and sabotage the effort. Usually, this is combined with highly defensive language and deflection by pointing out other problems or shifting blame to other people.
Here are the five key steps I suggest leaders use when they see signs of passive-aggressive behavior. Following these steps can help minimize the impact of this behavior on your team and hopefully turn the ship around.
1. Call it out.
Though this might seem easy, this bit is actually quite hard. Someone who is an expert at being passive-aggressive is likely a master at deflection and at bringing up other issues to distracting the team. Unless you step back and see these tricks for what they are, you'll fall into the trap.
Look for two things. First, a quiet and seemingly compliant attitude when discussing key issues and directions. If someone is just going with the flow, they are likely not bringing up deeper concerns or voicing opinions. This is dangerous because left unresolved, their concerns can fester and pop up later.
Second, look for me-versus-you language. If someone is talking about how they did or didn't want something and how someone else did or didn't do something, suspect a passive-aggressive dynamic. A true team member sees everything from the perspective of the team and will use 'us' more than 'I' in their conversations.
Once you've identified it, call it out. My suggestion is to use the phrase: "I feel we didn't get your complete buy-in on this approach and now you are not supporting the priorities we're trying to implement, is that the case?"
2. Ask for a change in behavior.
Get clear on what you want to happen differently going forward. Make it a request and wait for them to either accept the request or say they are unwilling to change. If the latter occurs, then you have a different problem and you need to decide if they should stay on the team.
Typically the request has two parts. First, you want to make it clear that it's critical for everyone to support and work to implement decisions and priorities the group decides on together. There can be no ifs, and's, or buts about this one. Second, ask them to be more vocal in the discussion, to contribute more to the debate, and to make sure they have either voiced any and all concerns or let them go.
3. Acknowledge your own contribution.
Even if you think you've done a pretty good job in making sure everyone was heard and your team had an engaging debate, you need to look at what you can do differently, too. Finding things you can improve upon and acknowledging how you can make the situation better will create more possibilities for the other person to be willing to make changes as well.
4. Confirm everyone's commitment.
When discussing decisions and directions as a team, pay extra attention to the conversation. Make sure everyone not only has a chance to speak but actually insist on everyone voicing their concerns and opinions. Don't give anyone wiggle room to avoid speaking, even if you have to wait through a few minutes of silence. While you may feel pressure to push through the process, you'll only pay more for it later if you do.
5. Address the underlying issues.
Sometimes there are real and valid issues at the core of someone's passive-aggressive behavior. While it's not an excuse, consider what might be driving the situation and address the issues constructively. However, don't let that distract you from calling out the behavioral issue as well. Both need to be tackled head-on.
Passive-aggressive behavior is not always easy to spot and can be even harder to deal with. And there is a real possibility the behavior won't change. The most important thing is to spot it early and address it immediately so you can minimize its deteriorating impact on your team's culture.
Immediate priorities for CEOs and their leadership teams facing the COVID-19 crisis
Over the last two weeks, I’ve spoken with over a dozen CEOs and their leadership teams discussing the recent developments regarding the COVID-19 pandemic and actions by federal, state, and local governments. While every business will be hit hard by both the restrictions in travel, the shut down of non-essential businesses, and the general economic impact, there are steps you can take to lessen the impact and position yourself for a faster recovery.
Over the last two weeks, I’ve spoken with over a dozen CEOs and their leadership teams discussing the recent developments regarding the COVID-19 pandemic and actions by federal, state, and local governments. While every business will be hit hard by both the restrictions in travel, the shut down of non-essential businesses, and the general economic impact, there are steps you can take to lessen the impact and position yourself for a faster recovery.
The situation continues to change and develop and different parts of the US and the world are facing different sets of challenges. While China seems to be abating, Italy, Spain, and France are particularly hard hit and the rest of Europe is quickly being affected. In the US, NYC appears to be the hot spot and will be facing severe increases in cases over the coming weeks. If you or your team members are in a hot zone, please plan quickly and accordingly. That said, every community will be impacted in the coming weeks and months and every business needs to have a plan.
Below are the general items I’m working with all of my CEO and leadership team clients on to make sure they have a plan in place now or will have in place quickly. If you haven’t considered and put in place a response to these items, I highly recommend you add them to your next executive meeting agenda.
1) Active priorities
Given the rapidly changing situations in most communities, teams are moving from a quarterly to a weekly planning cycle. The beginning of each week (or the end of the previous week), set 2-3 key business priorities for the next seven days. Each executive should also set 2-3 individual/departmental priorities as well.
These should be the top areas of focus to stabilize the business, identify immediate risks and mitigation strategies, caring for your people, and what to communicate to all customers and business stakeholders. As things play out the next few weeks, add strategic objectives based on your analysis of the next 6-12 months and what actions your business needs to take to be well-positioned on the other side of the pandemic.
2) Weekly planning meetings
Your weekly meeting should be your core rhythm at this point and time. Bring your leadership team together to assess and reflect on the current situation and set/update your active priorities for the coming week. Focus on triaging immediate issues and get clear what actions need to take place over the next one to two weeks.
This meeting should take 90-120 mins and focus on the following core agenda items. Don’t get bogged down in details, focus on clarifying and assigning tasks to executives and getting clear action plans.
Weekly Meeting Agenda
Top 2-3 updates from each executive
Review/revise top 2-3 priorities for the company
Issue processing (define, assign, discuss, decide, and then plan)
Update working assumption and implications
Review action plans and individual/departmental priorities
I recommend that a company communication go out after each meeting letting all stakeholders know of all important decisions and updates. I also recommend that you communicate to your clients and other partners as needed to keep them updated on what business services will be available over what periods of time. Regular communication is key, even if it’s repetitive, in times of uncertainty.
3) Issue list
There will be a lot of issues coming at you and your team over the coming weeks. Focus on tracking, prioritizing, and process them quickly. Use a triage process to sort them in order of importance and urgency. Delegate/assign things quickly wherever possible, then tackle them in order of importance and impact on the business.
For items that need to be discussed by the leadership team, focus on getting clear on the issues before trying to solve them. Once well-defined, focus on clarifying who will be responsible for the issue then have that person lead the discussion. Drive to a clear set of commitments and a plan of action with deadlines.
4) Working assumptions
Given the uncertain nature of the coming months, teams need a set of working assumptions around what may happen with the economy, the market, your business, and communities in general. Discuss these as a team and make a decision on what parameters you will assume for your decision making.
These should include what travel and community restrictions will be in place for what period of time, what will happen with capital markets, likely competitive responses, etc. For many of these, you will need to develop a 20/50/80% probability and time estimates to work against. Update these as you get new information and discuss the changes in your priorities, decisions, and plan that result.
5) Scenario planning
I’m recommending that all teams create a revised 2020 forecast that includes three scenarios against your current plan. These three plans should include a 10%, 25%, and 50% drop in revenue and the resultant drops in COGS and operating expenses, including staff.
Have your finance lead develop a revenue and expense model for each of these scenarios and send out to the team. Each team/department lead should then create a plan for their functional area as to what action they need to take to get to these new targets in each case and which decisions they will need to make under each scenario.
For all three scenarios, identify a last responsible moment for implementing each plan. This is the timeframe that you must make a decision by for keeping the company in reasonable financial health. For some business, this may happen very quickly; others may have some time to see how things play out before needed to take action.
6) Daily huddles
Your key teams, including your leadership team, should all be doing daily huddles at this point. If you’re not, start ASAP. The daily huddle agenda is simple and each member answers three questions with two to three items: 1) what got done yesterday, 2) what are you focused on today, 3) where are you stuck. These meetings should be less than 15 minutes in total.
For the next several weeks, I would open your huddles with any important news or updates to your assumption list as well. And be sure to check in with your team on their personal/family situation and mental/physical health issues.
7) Communication system
At this point, your team and your company should have standardized its communication platforms and protocols. I recommend video as much as possible and using a chat tool (such as Slack) over email for immediate communications.
I also recommend daily communication (email or slack or even video) from the CEO with updates and news to the entire company. Reinforce messages and priorities and remind people where they can find help and resources. Again, don’t worry about repetition. Sending out updates consistent, even if there is little/no new news will help reduce uncertainty and fear.
8) Continuity planning
It’s clear that many people will be affected by COVID-19. I have had one CEO client and several members of leadership teams I work with hospitalized at this point. Do not underestimate the impact and severity of this situation and be prepared.
For each member of your leadership team, including the CEO, have a least two people identified who can step into the role for at least two weeks should someone become incapacitated. Establish how the role will be handed over and communicated and share the plans with all of your key leaders and stakeholders.
If you have any questions or need help with any of the above items, please reach out ASAP. I am offering free coaching calls to CEOs and leadership team members to help develop and we’ll set up a time to discuss your action plan.
I am also running regular webinars on key topics for companies during the COVID-19 crisis including: Running Effective Virtual Meetings, Advanced Zoom Facilitation Techniques, and Running Virtual Daily Huddles. You can register and access the archive here: http://www.eckfeldt.com/webinar.
5 Simple Strategies to Grow Your Professional Network
Knowing the right people with the right connections can be one of the best ways to create value for your business.
Knowing the right people with the right connections can be one of the best ways to create value for your business.
As a business coach, I've worked with dozens of executives and entrepreneurs on how to become stronger leaders and more effective strategists. However, one asset I find most people have woefully underdeveloped is their professional network. Developing a strong collection of people you know inside and outside your industry is one of the best investments of your time and energy. While your skills and capabilities are important to your entrepreneurial success, knowing the right people with the right connections can be one of the best ways to create value for your business.
1. Cultivate relationships.
Before you try to expand your network, leverage the people you already know. A network is not just a collection of business cards. People do business with people whom they know, like, and trust. If you haven't built real relationships, you won't have a strong network.
Unfortunately, there is no shortcut here. You need to spend time with people to get to know them, and for them to get to know you. Having a coffee or tea or even a meal with someone is much better than just being connected on LinkedIn. If you're looking to create efficiency, invite a small group to lunch and get to know several people at once.
2. Give first, then ask.
Before you start strategizing on what you can get out of your network, focus on what you can give. Look for opportunities to offer help or expertise in an area you know well. You need to build up credit before you can make asks of others.
These don't need to be big things or things directly related to business. If you hear someone is traveling to a city you know well, follow up with a few restaurant recommendations. Have a good book you've read? Send someone a copy who you think might like it. Another great strategy is to make introductions to other people in your network; that's two birds with one stone.
3. Leverage your second degrees of connection.
Just because you can't find someone in your immediate network who can help you with your need, don't give up. Every one of your contacts knows many people. Look for someone who's likely to know someone who can help, and reach out to them. If you're looking for a a good trusts and estates attorney, ask some of your attorney friends who they know. This not only gets you a warm introduction, it gives your friend the credit for a referral.
4. Look for weak links.
One of the challenges in building a broad network is that you can get stuck meeting people who all know each other and operate in the same circles. Since they all know each other already, you won't be expanding your reach very well.
The key here is to find weak links. These are people who you may not know well, but operate in a completely different circle of people. And while it's hard to find and connect with these folks, when you do, you open up connections to large groups of new people that you otherwise wouldn't have access to. This is one of the quickest ways to expand your network in a strategic way.
5. Communicate regularly.
Once you have connections, you need to stay connected and top of mind with them. Tools like LinkedIn can help publish content and updates to your network on a regular basis. And a newsletter or a blog is another great way to create value and stay on peoples' radar. The key here is to create a steady and regular stream of quality content and updates so that people learn who you are and what you do. Done well, this will keep you front and center in in the minds of people in your network, or those you want in your network.
The hardest part of developing a good network is that it takes time and investment. Good networks take years to build and develop. Have a plan and put in the time on a regular basis. Your hard work will pay off when done right and consistently. If you wait until you need your network to build one, you're too late.
The Transition From Founder to CEO Is Not an Easy One. Here’s What to Focus on
As your company grows, you need to evolve from a founder into a CEO. Here’s how your focus will change.
As your company grows, you need to evolve from a founder into a CEO. Here’s how your focus will change.
What it takes to start a company is not what it takes to scale a company. In fact, the mindset and skills that made you successful as a founder can work against you as you step into the role of CEO. Your strategies and your focus need to change, and if you fail to make those changes, you'll hinder the development of both you and your business.
As a strategic coach, here is what I zero in on when working with Founders versus working with CEOs. Each role has a unique and different area of focus and skill set that makes it successful. Through coaching, I help my clients identify the role they need to be in, based on the stage of the company's development.
What makes a great founder...
1. Finding unmet needs in the market
To start a business, you need to find that unmet need--the one that causes a lot of problems. Great founders can hone in on problems that haven't been solved well, and when solved will generate value.
2. Developing early solutions
Once you find a problem, you need to develop a solution. This could be either a product or service, but it needs to directly address the problem in a way that is truly a solution in your customer's eyes. The best way to know you're onto something is if people are willing to part with their hard-earned money.
3. Defining a clear vision
You must see into the future and paint a vivid picture of a better version of the world that you see. Not only will this drive your own passion and motivation, but it will also help people get on board and drive engagement within the company.
4. Selling to customers right away
Good founders might not know the latest sales tools and techniques, they are natural storytellers and highly persuasive. As a founder, one of your core jobs is to meet with the right prospects and convince them to buy what you have to offer.
5. Securing early-stage investors
Startup capital is key to a healthy launch. Getting money from friends and family, angel investors, and venture capitalists is one of your top tasks. Knowing how much you need, what you're going to do with it, and who to get it from is key.
6. Recruiting founding team members
Finally, you must build the initial founding team with the right people and put them in the right seats. And while skills and experience are critical factors, so is getting the right culture and core values. At this stage, one bad apple can be disastrous.
What makes a great CEO...
1. Developing market segments and channels
Once you have traction and your business is growing, one of your key tasks is to identify the best segments to sell to and what channels to sell through. By slicing and dicing data and looking at who buys at a good price, who is easy to serve, and who promotes you in the market, you ensure that your company continues to make progress.
2. Refining and optimizing products/services
With a product or service successfully in the market, your job is to ensure it is continuously improved and optimized. As CEO, when you improve the value you deliver to customers, while also looking for ways to remove waste that doesn't add value, you will drive growth.
3. Setting strategy and key milestones
Once you have a foothold in the market, the CEO's job is to plot the course for growth and success through strategy and focused execution. Defining your strategic position and articulating the key operational milestones for getting there is your responsibility.
4. Developing marketing and a scalable sales process
While early sales are opportunistic and ad hoc, developing a defined and repeatable sales process will be key to scaling the business. As CEO, you need to put these in place and ensure they are being followed.
5. Managing investors and the board of directors
Investors need to be informed and managed. They also need to be leveraged for insights, contacts, expertise, and resources. A good CEO leverages their board for the success of their company.
6. Organizing your team and developing your culture
Rather than directly recruiting individuals, a CEO needs to create a people system that will serve the future vision of the company and a culture that attracts and retains the right people.
While these are not all of the differences between a founder and a CEO, they are some of the most important ones. While nobody goes to sleep a founder and wakes up a CEO, making the transition quickly and efficiently can help fuel your company's growth and evolution.
Want Your Business to Be More Successful? Think Like These Japanese Islanders
These Japanese islanders have a long tradition of finding the secret to a successful life. And businesses can use the same idea to find their niche.
These Japanese islanders have a long tradition of finding the secret to a successful life. And businesses can use the same idea to find their niche.
Okinawa is a small island off the southern coast of the main Japanese island. Some might know it from the U.S military and the bases located there. However, according to Japan's ministry of health, the island is also known for having one of the highest populations of centenarians and amazingly low rates of illnesses that plague the rest of modern societies.
Why? Well, many factors are likely at play; however, one of the more interesting ones is that the residents of Okinawa have a long tradition of creating productive and personally meaningful lives for themselves. And, according to National Geographic Fellow and New York Times best-selling author Dan Buettner, this has led to high levels of happiness and personal satisfaction, and a strong sense of purpose in life.
The Okinawans have given this general sense of living a meaningful life a name. The Japanese word is ikigai (pronounced eek-ee-guy) and it represents a balance among four key factors that drive satisfaction and motivation: passion, expertise, demand, and value.
As a strategy coach, I've found that businesses can use these same four factors to find a perfect balance that creates a unique and powerful driving force for the growth and momentum of a company. While applying them to a business is a little different, the core ideas are the same and they transpose rather well.
These are the four factors of ikigai and how we can apply them to businesses to help balance and align your organization.
1. What you're passionate about
First is discovering and clarifying what you're truly passionate about. For an individual, it's what you just love to do. For a company, it's what work motivates the organization's culture. This could be a specific activity, an impact you have in the world, or a customer you love to help.
A few examples that come to mind: Apple loves to create beautiful technology, Toms Shoes loves to help communities that are underserved, and Google loves to organize information. The trick is that though there may be many things you love to do, only some of them will also meet the other criteria below.
2. What you're good at
While you might love to do many things, you will only actually be good at some of them. And to live a meaningful life and be a well-balanced business, you need to make sure you're good at what you do. This is where ikigai departs from the common advice to just "do what you love" and everything else will follow. In fact, just doing what you love won't lead to a meaningful life. You need to be good at it too.
3. What the world needs
Regardless of whether you are an individual or a business, if the thing you focus on isn't really needed in the world, you're going to spend a lot of time making and doing things that will go unused and unappreciated. Your focus needs to provide a product or service that is desirable and needed by someone somewhere.
While it's fine to have a niche, you need to make sure you have a sizable enough market to build a business around. Thankfully, in today's highly connected world, you can create very niche markets and reach them globally through the internet. I'm always surprised when I run into incredibly focused companies that have significant markets behind them.
4. What you can get paid for
While you can find something you love, something you're good at, and something people need, if you can't charge enough for it to cover your costs plus make a reasonable profit, you won't be very successful. The problem your product or service solves needs to be important enough to incentivize people to part with their hard-earned money. If not, you're building a charity, not a business.
Just like the residents of Okinawa, great businesses have found a sweet spot that covers all four of these factors and have mastered the art of ikigai. And, as they evolve and change along with the world, they continue to monitor and hone this balancing act.
Done poorly, it will result in subpar performance and frustration. Done well, it can create a life full of meaning and impact.