In the previous 5 Minute Growth Tip article, I shared some tips for developing a successful strategy to compete and thrive in your market. Yet, developing a great strategy (and executing it) takes more than a framework. It takes a high performing leadership team. That, in turn, takes high performing leaders.
The People Challenge
As a CEO, president, owner or entrepreneur, you’ve likely had department heads on your team that didn’t meet your expectations or were poor leaders. It can be frustrating to be repeatedly disappointed or to have to continuously push, cajole or just grin and bear it.
Yet, it’s entirely feasible to resolve these headaches and prevent them from happening in the first place.
This is about ensuring that, on the leadership team, we have the right people in the right seats doing the right things in the right ways.
The key to getting it right is not to start by looking at the people. The first thing to do is define the right seats, right things and right ways, and then ensure we have the right people that fit what we need.
First, we want to ensure we have the right seats - the right roles needed on our leadership team. These usually include some common functional roles like marketing, sales, operations, accounting, finance, human resources, technology & systems, etc.
Keep in mind that, often, leadership team members in mid-size companies need to play more than one role. Certain functions don’t need a full time leader just yet. By thinking of it this way, we can identify what functional roles are being played by each leader, and whether the right roles exist on the team.
It may be that certain roles don’t exist that need to, or a role has been left unfilled.
It’s also helpful to identify any roles that seem to have more than one person playing them, causing mixed messages and confusion. It may also be that certain leaders are in too many roles, therefore being stretched thin and dropping balls.
Having the right seats means having clarity about what roles are needed and where there are gaps and overlaps.
We also want to get each leader, and the whole leadership team, on the same page about what each role means and what is expected in terms of results (eg. role: marketing => results: qualified leads).
It’s best if these results expectations are quantified with metrics and specific targets (eg. 50 qualified leads per month). The results, metrics and targets are the productivity side of each role.
The “right things” will often also include the big changes and improvements that need to be made within each function over the course of the year and/or the quarter.
We also want to be clear about the behavioural side. This includes defining the behavioural expectations needed across the leadership team and across the company.
These behaviours are captured in our core values. These core values distill the essential behaviours expected of everyone in the company, including the leadership team members. This is what enables great teamwork, productive conversations and problem-solving, developing a strong strategy and execution plan, and coordinating to execute.
Clarity on core values is also critical because leaders living them is one of the main ways the company’s culture is brought to life among employees.
With productivity and behaviour expectations clear, we want to ensure we have the right person in each seat.
We can ask ourselves: is each person on the leadership team meeting our expectations...in terms of both the results expected in their role AND the behaviours captured in our core values?
Furthermore, if we want to build a thriving company, we’ll need A-players. We define A-players as being among the top 10% performers for the specific role and for the pay we can afford, AND they live and breathe all of our core values.
Being a top 10% leader doesn’t just mean doing a great job at one’s function: marketing, accounting or human resources, etc. It means getting great productivity from their people - both quantity and quality of work. This takes strong planning, communication, delegation, monitoring and coaching skills.
Often leaders tend towards one of two extremes: micro-managing or laisser-faire management. Strong leaders will stay involved enough to monitor and be supportive while at the same time letting experienced employees use their skills, be self-sufficient and take initiative.
A-player leaders create an environment in their department that inspires employees to perform at their best.
The Challenge of Behaviour Change
When it comes to leaders who don’t live our core values, it’s often a dead end. Because a person’s values can’t really be changed.
People behave according to what they believe. If they grew up believing that learning and adapting is valuable in its own right, they’ll learn and adapt on the job. If they believe that tradition, duty and compliance are noble, they won’t behave in adaptable ways.
If they don’t believe in one of our core values, there’s often not much we can do about it. We can coach them on that core value, and they may start behaving more in alignment with it for a while. And if so, great. It’s worth giving it a try. But often, they’ll slip back into their habits.
This means that often, a leader that isn’t living one or more of our core values never truly will. And so they’ll never be an A player leader, at least not in our company.
Addressing the Gaps
As CEOs, presidents and owners, we can often be hesitant to let a leader go who doesn’t fit. Our underlying concern is often that maybe we weren’t clear on our expectations or maybe we didn’t coach the leader enough or very effectively.
So, it can be reassuring to start by establishing clear expectations and providing better coaching where needed. At the end of the day, the leader may still not meet our expectations. But at least we’ll know that we did what we could to support them.
A good practice is to, every quarter, ask ourselves how each of the members of our leadership team are performing both in terms of results AND core values. Then, for any team members that aren’t performing, ask, what will I do about it this quarter? Will I coach them or cut the chord? If we keep coaching the leader on the same issue quarter after quarter, we should not only question their leadership, we should question ours too.
Sometimes a leader’s poor performance IS in fact our fault. It’s entirely possible for a CEO to create an environment where people can’t perform well. Maybe we’re the micro-manager, or the laisser-faire manager. Or we set a poor example by not being accountable or not living some of our core values.
If we have just one or two leaders whose performance is in question and the majority of the leaders reporting to us are performing great, we may have a people issue. Yet, if most or all of our leaders are struggling, chances are our own leadership is what needs work.
Working Through Hesitation
Usually, the decision to let a leader go isn’t hard. Once we think it through, it’s often pretty clear. It’s just that we avoid thinking it through. We avoid it because of how it feels. It’s sad. It’s disappointing. It’s nerve-racking. We can feel guilty or like a failure.
If we acknowledge, accept and process those feelings, we can then face the facts of the situation and come to a logical, firm conclusion. This can usually be tackled with some pros and cons thinking, considering all the impacts of the leader, on both the culture and performance of their department, the leadership team and the company as a whole.
Replacing a Leader
It’s one thing to come to realize and accept that a leader has to go. It’s another to feel confident we can successfully replace them with an A-player. If you’re concerned about this, you probably have a recruiting and selection problem. And you’re not alone. The average hiring process picks an A-player 25% of the time.
Implement the Top Grading or A-Method hiring process and you’ll notch that up to an 80 or 90% success rate. Replacing a top level leader is a great reason to make that change. You’ll get two trees with one stone: an A player leader and a drastic improvement in your hiring process.
As Jim Collins found in his research for Good to Great, the foundation of a thriving company is “disciplined people”. This includes being a Level 5 leader (determined AND humble) and getting the right people on the bus in the right seats on our leadership team. Only then can we create a great strategy collaboratively with our leadership team, to achieve efficient team buyin. And with buyin and a great leadership team, we can implement the right structures, systems and processes to grow more rapidly, profitably and sustainably.
Right? Not quite.
This is where great execution comes in. In my next 5 Minute Growth Tip article, I’ll share the common challenges with executing a strategy and the three key execution disciplines to minimize drama and maximize profitability.
How can you have more A-players in your company?
To find out how to have stronger talent and leaders to grow more easily, quickly and profitability, AND enjoy the ride, try our complimentary Agile Growth Checklist. This self-service questionnaire takes 5 to 10 minutes to complete. You'll receive the checklist with your responses immediately. Within 24 hours, you'll receive a compiled report highlighting areas to improve. Complete section 2 to check your talent processes. Or complete all 7 sections to find out how your company is doing in each of the 7 areas needed to produce more rapid, profitable and sustainable growth. This report is complementary and involves no obligation.
Systemization around branding and operations is a big missing link in many organizations. The disconnect occurs when Marketing sets an expectation and there are no standard operating procedures systematized throughout the customer's journey, aligning the experience with the expectation.
In this Gravitas Impact Premium Coaches webinar and podcast, Brandon Dempsey, Author of Shut Up and Go, and Co-founder of St. Louis marketing company, goBRANDgo!, describes how the systemization of a brand creates cohesion and connects customers with the company.
The Systems Attribute within the 7 Attributes of Agile Growth® framework is a key differentiator for Gravitas Impact Premium Coaches. Many mid-market companies don’t focus on Systems, and yet Systems are critical to scaling efficiently and profitably.
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How can you build systems to deliver on your brand?
To find out how to strengthen your systems to grow more easily, quickly and profitability, AND enjoy the ride, try our complimentary Agile Growth Checklist. This self-service questionnaire takes 5 to 10 minutes to complete. You'll receive the checklist with your responses immediately. Within 24 hours, you'll receive a compiled report highlighting areas to improve. Complete section 7 to check your company’s talent processes. Or complete all 7 sections to find out how your company is doing in each of the 7 areas needed to produce more rapid, profitable and sustainable growth. This report is complementary and involves no obligation.
As more business owners, CEOs and presidents become aware of leadership operating systems like Scaling Up and the 7 Attributes of Agile Growth, it’s important to remember that these frameworks stand on the shoulders of one of the first frameworks developed for mid-sized companies: Mastering the Rockefeller Habits, by Verne Harnish.
Mastering the Rockefeller Habits, like the methodologies that followed in its footsteps, describes a compilation of several tools developed and proven by other great thought leaders, and packaged for owners, CEOs and presidents of mid-sized companies.
Released in 2001, the book, for the first time, brought together concepts like getting the right people doing the right things, creating a one page strategic plan, setting quarterly metrics and priorities, and having an effective meeting rhythm.
Verne was inspired by the biography and executive team routines of the renowned John D. Rockefeller, who led Standard Oil for 19 years, as well as the practices of many other business leaders, like Jack Welch of GE, Tom Meredith of Dell, Tom Siebel of Siebel Systems and Bill Gates, founder of Microsoft.
The best practices covered in Mastering the Rockefeller Habits are now corner-stones of the more recent Scaling Up system (also spear-headed by Verne Harnish) and the more holistic 7 Attributes of Agile Growth system, summarized in books by the same names.
Yet Mastering the Rockefeller Habits is still worth the read. Beyond seeing some of these best practices from another perspective, there are a couple of tools that haven’t been carried forward into later systems: how to de-hassle your company (Chapter 7) and how to make banks compete to loan you money (Chapter 10).
Scaling Up and the 7 Attributes of Agile Growth focus instead on finding cash from within the company (EOS doesn’t directly address cashflow and profitability). Yet, financing is still often needed. And Mastering the Rockefeller Habits provides some great advice on this.
Book: 150 pages, 4 hour audio. GetAbstract Summary: 5 pages, 10 minute audio.
How can you strengthen your team’s habits?
To find out how to create more discipline on your executive team to grow more easily, quickly and profitability, AND enjoy the ride, try our complimentary Agile Growth Checklist. This self-service questionnaire takes 5 to 10 minutes to complete. You'll receive the checklist with your responses immediately. Within 24 hours, you'll receive a compiled report highlighting areas to improve. Find out how your company is doing in each of the 7 areas needed to produce more rapid, profitable and sustainable growth. This report is complementary and involves no obligation.
STRATEGIES TO ATTRACT AND KEEP TOP TALENT
In partnership with Growth Faculty, we are delighted to offer you a 25% discount to Hire, Coach and Keep “A” Players, with Chris Mursau.
You might have heard about The Great Resignation phenomenon. In 2021, 1 in 5 Americans left their jobs, and almost a quarter are still considering it. It is a tough market to get talented people into your team, however it has never been more important to get this right.
Chris Mursau is the president of Topgrading, an agency helping companies identify and recruit top talent. He has worked with Red Bull, Bank of America, and other Fortune 500 companies to help them assemble the best teams. These companies have tripled or even quadrupled their hiring successes thanks to Chris’ methods.
He joins Growth Faculty in May for a 90-minute masterclass on the art of hiring well. He will take a deep dive into the Topgrading philosophy, how to attract A-players, as well as the red flags that often go unrecognised until it is too late.
This is not to be missed by anyone who realises the power of the right person in the right seat.
“It is extremely important to focus time on getting your hiring process right…. as much time as you spend getting any other process in the business right.”
Chris Mursau - President of Topgrading
Monday, May 17, 2022 - 8pm in MB, 7pm in SK
NON-MEMBER: $130* | OUR NETWORK: $115*
Click on “See more session times / currencies” to see the US/Canada time and currency.
*Prices quoted in USD.
How can you attract the best people?
To find out how to strengthen your recruitment and selection to grow more easily, quickly and profitability, AND enjoy the ride, try our complimentary Agile Growth Checklist. This self-service questionnaire takes 5 to 10 minutes to complete. You'll receive the checklist with your responses immediately. Within 24 hours, you'll receive a compiled report highlighting areas to improve. Complete section 2 to check your company’s talent processes. Or complete all 7 sections to find out how your company is doing in each of the 7 areas needed to produce more rapid, profitable and sustainable growth. This report is complementary and involves no obligation.
In the previous 5 Minute Growth Tip article, I wrote about how midsize companies can make more progress at implementing the processes and systems that will enable them to grow and grow profitably. But is it really progress if you’re not going in the right direction? And how do you know if you are going in the right direction?
While various types of processes and systems are needed to grow beyond a company’s current level (see the first article in this series), some types of systems will need to be chosen (or tailored) specifically for that unique business AND to support and execute its strategy in the market.
Developing a clear strategy is not only important to making the right progress. It’s also important for ensuring a company is pursuing truly valuable growth opportunities.
This brief article will cover the basics of clarifying and strengthening your strategy. From there, other tools and practices can be used to refine the strategy and make it more robust over time.
The strategy misconception
First, let’s recognize what strategy is NOT. As Jack Welch once put it, “Strategy is NOT a lengthy action plan. It is the evolution of a CENTRAL IDEA through continually changing circumstances.” A list of projects, priorities or action items is not strategy. That’s an execution plan.
And what is this “central idea” Jack speaks of?
I’ve been facilitating strategy development for 17 years. In all that time, the simplest, most accurate description of strategy I have come across is from Michael Porter, the renowned Harvard Business School professor, researcher and consultant.
In his best selling book “Competitive Advantage”, Porter describes strategy succinctly as “a unique and valuable position in the market that involves a different set of activities from competitors”.
Your “unique and valuable position in the market” is this “central idea”. And it needs to continually evolve to respond to changing circumstances. It describes the essence of the business you and your leadership team want to build. Your execution plan is how you’ll build it.
Thinking of strategy as what needs to be done, rather than a vision for the business you are building, results in directionless busyness. Imagine building a house with no clear blueprints. How confusing would that be? It’s the same in a company.
More Than Unique
Let’s look at what Porter calls a “position in the market.”
Put simply, this is about how your offering compares to competitors who offer the same or similar products or services. In the Scaling Up system and the 7 Attributes of Agile Growth, we use the term “Differentiation”.
For most business leaders, like myself, it’s been drilled into our heads that our business needs to be unique. Porter confirms that this is important for our positioning.
But why? To create customer loyalty. If our customers can only get our unique twist on a product or service from us, and they can’t get it from our competitors, they’ll keep coming back.
Hence the more traditional terms used for Differentiation, including Unique Value Proposition, Unique Selling Proposition, Unique Offer and Competitive Advantage. They all essentially mean the same thing - a brief statement that describes how our product or service is or will be unique from our competitors.
One example is SouthWest Airlines. While they provide air travel services like so many other airlines, they have clear differentiation, which is captured in their brand promise: “Low Fares, Lots of Flights, Lots of Fun”. This is unique in the american airline business.
Yet Porter’s definition means our differentiation needs to be more than unique. It also has to be valuable. Valuable to who? Customers.
This can be tricky. Because what’s valuable to one type of customer is not necessarily valuable to another. To make our differentiation valuable to a customer, we need to know WHO that customer is.
Once we’re clear on who that customer is, we can define our differentiation, and then design our “different set of activities”, as Porter puts it, to consistently deliver that unique positioning.
Note that, if we are to do things differently than competitors, to deliver on our differentiation for a specific type of customer, the number of different types of customers we serve has to be pretty small. Doing things in a number of unique ways that are each valuable to different types of customers becomes unprofitable, if not impossible, without sufficient scale. So for many companies, especially midsize companies, that often means focussing on one type of customer. We call them our Core Customer.
How do we identify our core customer? We examine our best customers! The ones who are the most profitable, the most loyal, the most likely to refer, the ones who pay on time.
In addition to knowing WHO are core customer IS, we have to know WHAT our core customer NEEDS. This enables us to then define differentiation that will be valuable to them. Without understanding our core customer’s needs, we’re just guessing.
With clarity about who our core customer is, what they need and what differentiation would be valuable to them, we also want to make sure we can deliver on that differentiation.
Maybe we aren’t fully set up right now to deliver on it. But we need to examine if we can get there.
Regardless of our differentiation, those unique activities needed to deliver it need to be doable. If not, when we market our offering based on that differentiation, we’ll be making a promise to customers that we just can’t keep. Customers will be disappointed and become less loyal, rather than more loyal, over time.
What Sandbox to Play In
The Sandbox defines what specific products or services we’re going to offer, where we’re going to sell them, and through who. Through direct sales? Online? Through distributors, affiliates or retail?
The Sandbox encourages us to proactively think through where our focus for growth needs to be over the next 3 to 5 years. It encourages focus also by proactively deciding to avoid products, geographies and distribution channels that will distract us. We may even choose to discontinue some we have right now.
Choosing our Sandbox involves making sure these “what?”, “where?” and “through who?” decisions align with 1) our core customer, 2) our differentiation, and 3) our understanding or estimates of what products, geographies and distribution channels will provide the greatest opportunities for growth and profitability.
SouthWest Airlines, for example, has determined that offering a first class service would not fit. It would take away from their “Lots of Fun” promise by treating some customers more lavishly than others. It would also increase complexity which would lengthen ground time, reduce the number of flights per day - “lots of flights”, and therefore increase costs and affect their “Low Fares” promise.
Making it Work
The three basic elements of a successful competitive strategy include:
This basic strategy work will be most successful when aligned with four foundational pieces:
1) our core purpose (or our Why, as Simon Sinek calls it - the difference we want to make in the world beyond creating jobs and profit),
2) our vision (or Big Hairy Audacious Goal - BHAG - as Jim Collins puts it - a 10 to 30 year company goal that is bold but stimulates innovation and progress),
3) our 3 year strategic targets - including financial, non-financial, - and 3 year highly achievable goal (or 3HAG as Shannon Byrne Susko calls it) that defines what we want the company to look like,
4) an awareness and understanding of the trends unfolding in our market and the world.
And let’s remember, as CEOs, we’re best off developing our strategy collaboratively with our leadership team, in order to achieve “efficient leadership team buy-in” that supports “accountability for execution” (as discussed in my previous article).
From there, we can develop our one year and quarterly execution plan to bring our strategy to life. With the right leadership team members and the right culture, we can execute with efficiency and predictability. AND, with the right leadership team members and culture, we are much more likely to develop a great strategy with that team. More about that in my next 5 Minute Growth Tip article.
How can you improve your strategy?
To find out what you can improve in your competitive strategy to grow more easily, quickly and profitability, AND enjoy the ride, try our complimentary Agile Growth Checklist. This self-service questionnaire takes 5 to 10 minutes to complete. You'll receive the checklist with your responses immediately. Within 24 hours, you'll receive a compiled report highlighting areas to improve. Complete sections 3 and 6 to check your competitive strategy. Or complete all 7 sections to find out how your company is doing in each of the areas needed to produce more rapid, profitable and sustainable growth. This report is complementary and involves no obligation.