Avoid Horrible Meetings

A client asked me to observe his weekly leadership team meeting and it was one of the worst meetings I had attended in a long time. Every leader in the room should have been upset because they essentially wasted 90 minutes. More concerning was the fact that leadership rated it a great meeting.

Might you and your leaders unconsciously fall into the same traps as my client? After all, the agenda and process for the meeting is common practice and is prescribed by EOS (Entrepreneurial Operating System) Implementers all around the world. The problem was not the process or EOS, it was the way it was being implemented. Let’s dissect what happened and then discuss what should happen in every weekly meeting.

Form Over Substance

The overriding problem was form over substance. The team followed a proven process and yielded the wrong outcomes. The meeting involved a standard agenda, covered the topics, engaged everyone, started on time, and finished on time. From a theoretical standpoint it appeared to be a well-run meeting. And my client rated it so!

Here are the primary reasons I would rate the meeting horrible:
1. Clarity of Purpose
2. Undervaluing time
3. Little (if any) conflict
4. Lack of accountability
5. Failed to address serious problems

Clarity of Purpose

Are your meetings more focused on purpose or process? Purpose focuses on intended outcomes and process focuses agendas, start and end time, checking the boxes, and having the meeting in the first place. The problem with process is that you can follow it flawlessly and not accomplish your purpose. The challenge with standard operating procedures is the presumption that conditions don’t change. When it comes to leadership meetings, we are always operating in turbulent conditions, so we need to have flexible standard operating procedures that adjust the process to accomplish our purpose.

The purpose of the weekly leadership meeting is to:
• Share key information across the team
• Break silos
• Keep focus on the top priorities
• Hold people accountable when they are off track
• Solve big issue(s) together

Agendas are typically designed to identify the key information that needs to be shared. Personal update, business update, customer feedback, employee feedback, priority status, to-do status, metrics update, and key company and department challenges. After providing this information the team identifies topics, prioritize, and discuss key topics, and agree on solutions. This is precisely what my client did. So, you are probably thinking, this sounds like they should have had a great meeting. What’s the problem?

Information was shared and after 45 minutes none of the key issues in the company were raised. Yes, they identified issues, but it was all small issues. This company had major issues and none of them were brought to the table. When issues were addressed, half the room would check out when it was not their issue. Leaders had opinions and observations that should be raised, and they did not. Worse, most of the issues discussed was a quick conversation between two people that should have happened and could have been resolved before the meeting. These people are all in the same building, are steps away from each other and clearly have not been talking.

Had this meeting addressed its purpose, the leadership team would have spent a lot of time discussing their number 1 issue, people. Certain vacant positions were causing the company to miss opportunities. Keeping the wrong people was costing them money. And, there was no confidence in how this would be resolved. Every leader has a hand in this obstacle and failure to address was costing this company over $1 Million in profit. This discussion should happen every week until results prove that the plan is in place that is showing the progress necessary to capture the $1 Million.

Key Observation: Focus on making major improvement to your business every week. Leadership meetings should limit the small stuff.

Undervaluing Time

If your week is like most leaders, time is always an issue. Time is finite and if we don’t use it wisely the company and performance suffers. When we have meetings, we are investing time just like we would money. When you allow for a bad meeting, one that fails to speed up taking advantage of big opportunities and eliminating your bottlenecks, it is costing you dearly. In the case of the people issue (identified above), it is costing the company $20K in profit each week.

Have you ever wondered why time is being squandered? I have given this significant thought and find two reasons to be the main culprit. First, we tend to avoid the elephants in the room. The elephants are the big problems. To resolve them is difficult, it can take considerable thought, requires conflict, and takes significant steps and time to address. As a result, we go after the small stuff. Second, it feels good to check items off the task list. As problem solvers by nature, we feel good when we solve a volume of problems. However, most of the problems would go away or be different if you addressed the elephants.

In the client example, it was considered important to finish and end on time. Because this occurred, the meeting was rated well. Based on the content and discussion, this meeting should have been completed in 60, not 90 minutes. Most weekly meetings, when focused, can be completed in 30 minutes. In my client’s case, the extra time was caused by taking 45 minutes for ideation and updates. Not only did they spend time focusing on minor issues, but they also spent too much doing it. I plan 60-minute meetings with a 30-minute buffer. While I expect to get done in 60 minutes, there are times when the issue is big and important. It is crucial that you finished discussing and prescribing a solution before leaving the meeting. Failure to do so adds a week delay in addressing important issues. In addition, it causes more time to solve the same problem because you lose momentum in the discussion.

Key Observation – Get better at increasing the value from holding meetings and have the discipline to get done in shorter periods of time. Reward the team with unscheduled time when this happens, and they will go back and get more ROI from their time. A key measure of a successful meeting is identifying and measuring the value of the decisions and actions from the meeting.

Break Silos and Encourage Conflict

I have participated in thousands of meetings. The difference between great and ordinary leadership team meetings is how leaders engage in meetings. In great meetings, everyone in the room is playing to win and there are no sacred cows. Everyone demands excellence, want to contribute value, and cannot stand for bulls#@t. If you get through a meeting and there is little conflict, your meeting suffered one of the following:

1. You are discussing insignificant items.
2. There is a lack of trust

Healthy conflict needs to be mandatory. If you are discussing a difficult issue, there should be varying opinions as to the definition of the issue, multiple ways to solve the problem, and rarely consensus on actions to take. It takes vigorous debate, challenging each other’s assumptions, questions about sources of information, and so on. While I am certain there are moments where this happens in your meetings, how often? What percentage of your meeting involves conflict?

In my experience, a lack of conflict occurs because of the highest-ranking person in the room. For conflict to happen, this person must be more curious, and listening rather than talking too much. After all, they already know their opinion. The job is to access everyone else’s brains. It is important to understand everyone’s perspective on a subject. Even when it is not in their area of expertise. Some of the best ideas and perspectives come from those people that seem the least qualified to contribute. In every meeting everyone should expect to share and contribute ideas. They should truly be part of the decisions. Our job in meetings is to co-create.

We also need to be vigilant about three types of circumstances:

1. Politics
2. Low Contributors
3. Negative Influencers

You can identify politics when people are not speaking their mind. Their body language, tone and past discussions on a subject indicate whether they are speaking up. When people are saying what others want to hear or staying quiet because they are avoiding going against the grain, this is politics.

Key Observation: By making people speak up you help them grow as leaders. You get more and better ideas and break siloed thinking. We want to not only hear everyone, but we also want to understand why they have come to their conclusions.

Lack of Accountability

We must hold the team accountable for achieving company and department priorities and goals. While this is obvious, it is not happening in most organizations and execution suffers. While my client presented the status of priorities and goals, it was a farce, and no one spoke up but me.

First, when leaders presented their metrics, almost everyone one of them was red. Red should be an indicator of poor performance. In an accountable organization when this goes on for too long someone should be fired. When I saw how many metrics were red, I asked “how long they had been red.” The team answered “forever.” Essentially their targets were not real expectations and did not represent reasonable expectations. Targets for the week, month, and quarter for every metrics must represent present conditions. Failure to adjust them accordingly leads to an environment where it becomes impossible to be accountable.

Secondly, this team recently set new priorities and had concluded that the old priorities were too shallow and would not drive needed results. Instead of updating their scorecards they reported on old priorities. Worse, since there were no clear milestones and due date for action steps it was impossible to know whether leaders were on track to complete their priorities. Thus, the priority status update was bogus.

Key Observation: When metrics and priorities are not properly developed it is impossible to hold someone accountable until it is too late.

In conclusion, by having meetings that achieve their purpose, you will be able to grow your organization faster and with less effort. You must properly use time when you hold weekly leadership team meetings. Time is best used solving “big” rather than small issues. Your company would be better off solving one big issue rather than lots of small ones. The big issues relate to quarterly priorities and show up when metrics are below meeting a reasonably high standard. You know that you have hit gold, when you are having constructive conflict and rigorous debate.

Trying to Sell an Apple to Someone Looking for Chocolate?

Recently, I facilitated a meeting for one of the most innovative companies I work with. The leadership team is one of the smartest I have ever worked with, and there is a clear vision about solving gaps in their market. Moreover, they arguably have the best SAAS platform to serve their target segment. Yet, they have struggled to grow.

Have you ever wondered why some companies seem to grow with ease while others don’t? I have pondered this question because I have seen far too many organizations struggle to grow. For the SAAS Company, the secret showed up in a strategy session I recently facilitated. The conversation centered around one key question, “Why is this SAAS company finding it so difficult to acquire new customers? The answer was not what you would expect.

Are You Answering the Right Question?

Often, leaders are trying to solve their growth issues by centering on the wrong questions and problems. Typically if you asked the question, “How do we increase sales faster,” you would hear answers like:
• We need more revenue.
• We need more leads.
• We need higher quality leads?
• We need better salespeople.
• Our sales manager is not doing her job.
• We need better marketing.
• We need more marketing.
• We need more salespeople.
• Our customers don’t understand why we are different.
• We have failed to articulate our value proposition well.
• Our salespeople need a better process.
• Our salespeople need better training.

Have You Identified the True Problem?

While the above may be components of solving your growth issues, it is likely not your problem. I often see companies spend significant money and time addressing all the above. After years of frustration, they find themselves right back where they started from. They find other companies in their industry growing far faster, and some started much later and far larger. Your company has likely developed great products and services, cares about your employees and customers, works very hard, and has many loyal customers. In addition, your company might have implemented best-practice execution processes like EOS and Scaling Up, and yet the growth outcomes are not getting much better. What gives?

The right approach is to change your question. In my client example, we changed the question from “how do we increase revenue” to “why is it so difficult to acquire new clients ?” I asked the leadership to answer the question with a question. We brainstormed for 10 minutes until we complied with enough inquiries related to the initial question. Here are some of the questions they came up with?
• How do we remove sales friction?
• What would we need to do to increase market share dramatically?
• Why can’t we sell product “A” to our target market?
• Why is there so much friction in acquiring new customers?
• Would it be easier to sell a product that is on par with our competition?
• What do we need to shift in sales and marketing?
• Who is our real target customer?
• What is the evolutionary path for customers?

After developing 25 questions, I asked the team to narrow down the list to one critical question that would address almost all of the questions. The answer was, “why can’t we sell product “A” to the masses?”

By using the new question as a focal point, we were able to discover their real problem. The market was desiring a product they were not offering. Worse, they had the perfect product, and it was bundled into their more sophisticated product. In the long run, their product was more complete and would better serve their target market. The problem, most companies were not ready to consider their full suite, and they were trying to force it on them.

While there is a lot more to this story, I was hoping you could recognize that these extremely smart leaders were essentially trying to sell an apple to people looking to buy chocolate. When the prospect did not see the chocolate, they moved on to the competitors. We realized that we had to metaphorically get the customer into the supermarket and sell them chocolate before they were willing to consider the apple. Chocolate was their primary need. Once they loved our chocolate, we could take them down more isles and sell them more of what they needed.

Stop Trying to Convert the Heathens?

Are you guilty of ignoring the market? This is a common mistake. My client was a great example. They had the perfect product but were so enamored with their complete solution causing them to ignore the market expectations. While they are correct, their product can and will solve bigger, more complex problems, there were too few leaders that were aware and ready to solve them. They were getting ahead of themselves. And, like a good priest or rabbi, they were delivering sermons to inspire and convert the heathens. The problem was that the disciples were not listening. When this occurs, the sermon is white noise. Their best approach was to get the easy win, earn the customer’s trust, and use that as a platform to cross-sell later.

Conclusion – Ask Yourself… and Take Action!

If you are like many leaders, you know that your company can and should be growing much faster. Have you found the right question to answer? Do you know the primary problem? Are you spending enough time facing the brutal facts?


Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about Howard Shore or the firm, please contact Activate Group or call (305) 722-7216.

Three Keys to Maximum Business Performance

3 Keys to Maximum Business Performance

While people have been impacted by globalization, technology, and other circumstances, achieving business success has not changed. Over time, you will need to discuss changing conditions and have a robust operating system maneuvering these issues. But I have concluded that while most entrepreneurs pride themselves on their speed in getting things done, I see them running in circles. More creative entrepreneurs may make lots of rapid right turns instead of circles. Still, they find themselves in the same place and with the same problems as the people running in circles, never achieving acceleration.

 

The Difference Between Speed, Velocity, and Acceleration!

Acceleration in performance should be the goal of all leaders. Most people use the words speed, velocity, and acceleration interchangeably. However, these are three different outcomes. Speed defines how much distance has been covered in a particular timeframe. Velocity is the rate of change of distance in a particular direction concerning time. And acceleration is the rate of increase in velocity. Great companies achieve far greater velocity than “good” companies.

 

Every Business Has the Same Fifteen Leaks

As I wrote in my first best-selling book, Your Business is A Leaky Bucket, there are fifteen ways every business is leaking growth and profits. The bigger the business, the bigger the leaks. No business is immune. The odd part is that you likely already know you have the leaks. And, all fifteen leaks had a centering cause…leadership. They result from poor leadership. These leaks individually and collectively slow velocity, and large leaks can cause demise in your business. My book helps you identify and quantify the leaks. More importantly, I prescribed how to address each leak. Average companies achieve speed, good companies achieve velocity, and great companies achieve acceleration. The latter spend specific leadership time narrowing the fifteen leaks.

Leaders I work with are stunned when they realize how easily they can improve a business. But are often surprised by the dollar value in the improvements. However, easy does not equal simple. It takes discipline to work on the business rather than in it. It takes perseverance to stick to your plans and focus on a limited number of objectives while saying “no” to others. It takes rigor to drive excellence.

 


The Three Primary Reason Business Leaks Occur

There are three primary reasons why those leaks continue to recur throughout the life of your business:

1. Mediocrity—You know your organization and people are capable of more, but you allow average to become the standard for your business. Sometimes, this happens because you attempted but failed to raise the bar in the past. There is also a tendency to compare your business to industry norms and become comfortable if it’s doing better than the industry average—even if that industry average is a massive bottleneck in your business. Accepting the lower standard may be common in your industry, so you accept it, too. For example, high turnover has become the accepted norm in certain positions in some industries. But excessive turnover is a significant drag on a company’s ability to grow and scale. Ask yourself, how often have you taken too long to replace someone you know is not capable of doing his or her job? These are examples of accepting mediocrity!

2. Mastery—It takes discipline and perseverance to continually improve and address the issues that cause slower growth, lower profitability, and cause leaders to be tied to their work. Let’s be honest; when you started your career, were you thinking, “I am going to be a master craftsman at culture, team cohesiveness, strategy, people, execution, and cash systems?” Each of those areas requires skills and knowledge, continuous learning, and continuously increasing your level of mastery. However, as your business grows, so do the challenges in these areas. The typical leader would prefer to focus on industry knowledge, serving customers, and making better products and services rather than think about, discuss, and address those other, less tangible issues. In reality, culture, team cohesiveness, strategy, people, execution, and cash are the business operating systems that you use to run your business.

3. Invisibility—Financial statements do not capture the substantial costs of the weaknesses in your business operating system. Generally accepted accounting principles are only designed to capture actual transactions, assets, and liabilities. There is not a place in accounting principles to capture the cost of mediocrity and lack of mastery. Like most leaders, you do not go out of your way to quantify these costs. Here are some examples of mediocrity that should be monitored and will not be found in your financial statements:

– The cost of keeping underperformers

– The cost of lost sales because of mistakes in the sales process

– The cost of customers who left because of their disappointment with your quality and bad processes

– The cost of a bad strategy leading to higher customer turnover or slower customer growth

 

There are no financial statement line items for these costs, yet they exist in every business. Such losses are much more significant than you want to face, so you don’t! You are complacent with being good enough, especially if you are growing rapidly and profitably.

To succeed in business, leaders must have a business operating system and toolkit that help them work on the business in a way that allows their team members to make clear decisions and act regardless of the noise. Success is the result of your commitment to that system and how well you use the tools that support it. For the past 100 years and into the next 100, you will find that business challenges are the consequence of how effectively leaders handle these six operating systems:

(1) Culture
(2) Team Cohesiveness
(3) People
(4) Strategy
(5) Execution
(6) Cash

 


Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about Howard Shore or the firm, please contact Activate Group or call (305) 722-7216.

Lack of Accountability is an Epidemic

Have you ever been frustrated because a colleague had failed to follow through on a critical priority? You are not alone. I have concluded that lack of accountability is an epidemic in most organizations. The good news, this is solvable.

I recently had a C.E.O., Rocky (not his real name), tell me that he felt his team wasn’t following through on the key priorities. Worse, they agreed to them! Rocky felt that maybe his team thought that what they chose to work on was more important than the agreed-to strategic initiatives. I found this puzzling and needed more context to diagnose and develop an action plan. After all, I knew his team members. All possessed high integrity and the required intelligence, and all worked hard. I doubted that any of them were willfully sabotaging the company, mainly since this was a group issue.

So, I asked if I could sit in on their next weekly meeting as an observer. What I found was eye-opening!

Rocky led the meeting with his entire team present, and they all actively participated. After the meeting concluded, I debriefed his whole team. I complimented them on their high energy and congeniality and asked if this was a typical meeting. They said it was. So, I pointed out that even though they all effectively worked together to solve a business problem, there was one key item missing from their meeting, and probably from their others, as well. All heads turned to me.

Now that I had their attention, I explained that not once did they discuss their key quarterly priorities and the corresponding key measures developed to provide headlights. In other words, Rocky wasn’t holding his team accountable for focusing on achieving their strategic initiatives. And, by extension, if Rocky wasn’t holding them accountable, I asked if maybe they thought that where they chose to begin wasn’t that critical? I saw a couple of heads nod. However, the most common response was that they didn’t fully grasp what they were supposed to do.

My colleagues and I at Activate Group, Inc. have been exposed to thousands of leaders spanning most industries in businesses ranging from start-ups to billions in revenue. We have learned that a lack of accountability typically stems from a lack of clarity. After all, it is hard to commit to something if you don’t fully understand it; and, if you’re not committed, you can’t subscribe to the need to see it through.

In his excellent book The Five Dysfunctions of a Team, Patrick Lencioni talks about how, for a team to get the desired results, it first needs to work its way up through four other levels. It starts with trust. This is the foundation required from which they can effectively engage. Next, a strong team will engage in constructive conflict and dialog to allow everyone to be heard, gain clarity, and consider more alternatives. After everyone is heard, it is crucial that you ask for and gain commitment from all stakeholders. It is at this point that engenders the necessity of accountability to drive results. When you skip any or all of the first three steps, you tend to lose clarity and commitment.

In my client’s case, it turned out they didn’t spend enough time engaging in constructive conflict. While they had developed a solid foundation of trust over the years, they didn’t spend enough time in having that constructive dialog so that everyone clearly understood the initiatives and could commit to supporting them as priorities.

The other mistake I found—and find often—is a lack of a clear accountability system. Within this system must be clear on who is accountable to make sure a particular thing gets done, what must get done, and when. In many cases, that assignment is left ambiguous, and, as a result, no one feels accountable.

I helped my client implement several steps that you can implement in your organization:

1- Leave plenty of time on the agenda to make sure that everyone was clear on the priorities.

2- Ensure that the priorities are specific, measurable, attainable, relevant, and time-bound—the useful acronym S.M.A.R.T.

3- Limit the number of priorities assigned to each executive to make sure you spend enough time in a constructive discussion (Specific, Measurable, and Relevant) and that they aren’t stretched to the point that they might drop some balls (Attainable) during the upcoming fiscal quarter (Time-bound).

4- Assign accountability to only one person. Others can help, so they can delegate responsibility for any number of tasks, but only one executive would be held accountable.

5- Create an Accountability Dashboard so that anyone could review it and understand the status of each priority. The Dashboard has to be updated before each meeting.

6-  Change meeting agendas so that time is allocated to priorities and key measures first, and other topics are addressed as time permits. The Dashboard now becomes a tool to be reviewed.

7-  Create a powerful meeting tempo for each week to allow the team to stay current with all key aspects of the business and get help with their stuck priorities.

The above changes have become ingrained in the company, and the level of team engagement has far exceeded Rocky’s expectations. As a result, by driving clarity and, thus, accountability, the company has managed to grow during the three most recent quarters, all during the pandemic! They grew sales by 20% and increased their profitability by almost 30%!

 

Want to Learn More about Accountability?

Mo Rousso is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving execution. To learn more about him or the firm, please visit our website at www.activategroupinc.com/contact or contact Howard Shore at (305) 722-7216.

How to Remove OVERWHELMED from your Business Vocabulary

HOW TO REMOVE OVERWHELMED FROM YOUR BUSINESS VOCABULARY

The CEO of one of my Business Coaching clients, let’s call him Joe, was very highly strung when I first met him. He was saddled with both working on the business and working in the business. He felt that his management team was inadequate for the job and had to step in and do the job for them constantly. As a result, he was always tired, impatient, and short-fused. His team members frequently walked on eggshells to avoid the fallout of Joe unloading from feeling overwhelmed and over-worked.

That was a year ago. I recently picked up a new executive coaching client, Mike, who was a referral from Joe. After going through some pleasantries in our first call, I asked him why he wanted to work with me. He told me that he has known Joe for years and has noticed a remarkable change in Joe’s behavior. He now found Joe much more relaxed, Mike continued, and it was fun to hang out again. Additionally, he noticed that Joe now appeared to be more focused and took the time to work on his business expansion, as well as made the time take a long overdue vacation with his family. Mike wanted that for himself, as well! He felt that he was facing burnout and needed to reverse that trend.

Many business owners and CEOs find that they, too, can feel overwhelmed and over-worked. Sometimes, they behave like Joe, and other times they just check out and disappear, trying to hide from the demands and the fatigue. These are all symptoms of burnout, just from different ends of the spectrum. It is always a big red flag when the CEO is the busiest person in the Company.

There is no magic formula for the CEO to change this dynamic. It’s about adopting new habits, both for themselves and their management team, to give them the freedom to spend more time working on the business. Here are the things you can implement to help not feel overwhelmed and burned out:

-1-  Create a Culture of Learning – The entire team was assigned a reading list and we did follow-on discussions and exercises. I curate the reading list to focus on gaps in the desired behaviors the team needed.

-2-  Create a Culture of Accountability – If you’ve read my previous blog, you learned that the lack of accountability typically stems from the lack of clarity. After all, it is hard to commit to something if you don’t fully understand it; and, if you’re not committed, you can’t subscribe to the need to see it through.

-3-  Prioritization – Implement a planning process (Strategic and Operational) that identifies the key priorities and aligns the management team’s members. Use a balanced set of metrics to provide both headlights and taillights so that everyone knows how they are performing.

-4-  Talent Scorecard – Implement a talent scorecard to determine if you have the right people filling the right seats. The scorecard is used to evaluate everyone in the Company, including the CEO.

-5-  Communications – Create a strong communication culture by implementing proper meeting rhythms and employs active listening.

-6-  Transparency – Fostered organizational alignment and improved operational velocity and effectiveness through clarity and accountability. Everyone in the Company knows what is going on and how you are doing. Everyone must understand the Company’s purpose and values, its priorities (for the quarter, year and beyond), and how success is measured.

By applying these six key principles, Joe’s Company is growing at a healthy clip and year-over-year profitability has improved by 20%. Also, employee turnover has dropped, and most employees think it’s a great place to work. Joe has developed and made his bench of managers stronger and more capable; and the trust in the leadership team is at an all-time high. He now has the freedom to focus on other higher-value initiatives and activities. Most of all, Joe no longer feels overwhelmed. He is working on growing the business and finds the time to spend with his family and hone his golf game. Joe is a happy man, and his team sees that too. He is still busy, but he is now only pursuing strategic business objectives and lives a balanced personal life.

Want to Learn More about Removing that Feeling of Being OVERWHELMED?

Mo Rousso is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving execution. To learn more about him or the firm, please visit our website at www.activategroupinc.com/contact or contact Howard Shore at (305) 722-7216.

What’s Coming That I Do Not See?

Recently a client sent me an email with a curious question: “What is coming that I do not see?” All leaders have asked this question one time or another. However, most fail to address the real reason they had the concern. Max (not his real name) was concerned because his financial results (while very positive) were a surprise. He was wondering if there was a better way to avoid positive and negative financial shocks. The key to avoidance is a better understanding of your financial results and the metrics that lead up to them.

There are 5 Reasons to Become Better at Understanding Your Key Metrics

 

1- Lack of understanding key metrics leads to poor decisions.

2- Fear causes your organization to slow down.

3- Lack of financial vision causes your organization to squander key financial resources.

4- Forecasting focuses leaders on the core issues and leads to business acceleration.

5- Lack of mastery of metrics leads to poor accountability.

Predictable Cash Flow is Achievable

The challenge Max and many other leaders face is to overcome their lack of expertise, commitment, and discipline when it comes to gaining a complete understanding of their financial statements and the underlying metrics that drive them. Unlike factors such as a COVID-type event, most financial outcomes can be predicted with a reasonable degree of accuracy. In fact, it’s likely that most of you who are reading this are not comfortable with metrics and finance in general. That discomfort should not prevent you from requiring the same high standards and rigor you demand in the other areas of your business. The good news is that every business leader can address this problem. Committing to better forecasting will make your business stronger, and you don’t have to empty your bank account to do so.

Lack of Understanding Key Metrics Leads to Poor Decisions

After working with hundreds of companies, I have noticed one difference between top industry performers and the rest. In top-performing companies, everyone knows their numbers. I recently witnessed this in action with Company X (not their real name). Company X has great products and services yet failed to make a profit. We were working with several companies in the same industry. All those other companies had accurate and timely financial statements and the right metrics to evaluate how to improve their financial results. Company X never had accurate or timely financial statements for their management meetings. Worse, management had lost trust in the numbers they did have.

Because they lacked reliable and timely information, they made decisions based on hunches. They made all the logical moves to improve a business in their industry. Unfortunately, they were not seeing or addressing the right issues and challenges. Convinced their whole problem was selling, general, and administrative expenses (commonly known as fixed overhead), the leadership team focused on cutting these expenses. While minimizing overhead is a good business practice, it did not get to the root of the problem. In some cases, cutting the expenses caused the company to be less profitable. They were cutting through the bone.

Company X’s main problems had nothing to do with fixed overhead. In actuality, their fixed costs were lower than that of competitors of similar size. After pushing for better information and competitive benchmarking, they realized their gross margin (revenue minus direct variable costs) was awful. Their gross margin was operating 50% below the better players in the market. It meant that the leaders running their operating departments were failing to perform, and these leaders were hiding in plain sight. In the end, it was determined that they had a pricing problem and direct labor costs required to deliver their services could and should be much lower. Before having this knowledge, they failed to focus on addressing those two issues.

These challenges are predictable and solvable.

Fear Causes Your Organization to Slow Down.

It seems obvious that fear can cause your organization to slow down, but what are you doing about it? Imagine you are in a long dark cavern with many possible turns, no flashlight, and no directions. How fast will you move through that cavern to get to the other side? Most people would slow down and be more cautious. Those who want to try to move quickly are likely to trip, hit their heads, get lost, and possibly injure themselves in the process. Some people may reverse course because they find it too dangerous to move forward or don’t want to go through the trouble.

Now imagine facing the same cavern, except now you have a high-powered flashlight, night vision goggles, and a map showing you the quickest way to the other side. Most of you run your businesses more like the first scenario than the second. And it costs you significantly.

Using the right metrics allows everyone in the organization to contribute to your success. Learning and using your company’s metrics will enable you to show each employee the way to peak performance. The more people that have this flashlight, the better and more predictable your financial results become.

This challenge is predictable and solvable!

Lack of Financial Vision Causes Your Organization to Squander Key Financial Resources.

Getting ahead of oneself is something I wish I could tell you I have never done. I am guilty of bringing on too many people too quickly. Also, I am guilty of investing too heavily in a new endeavor without testing it. We have all done it. I can tell you in almost every single circumstance I should have known better. I was making decisions that defied reality.

A great example is a business services company. They had national growth aspirations, great products and service, a strong reputation in their local market, and the CEO was highly driven. The company was highly profitable, but its growth had stalled in its local market. Rather than addressing the fact that their existing sales team was failing to perform, they doubled the number of sales team members and tripled the number of markets. The result was predictable. Almost all the new salespeople failed. The company got little traction in the new markets, and the old salespeople continued to perform poorly.

You might be thinking, this is an easy problem to solve: Hire the right sales manager, fire the team, and build a new one. That is what most companies would do. However, this company’s data was telling them a story that they did not want to recognize. They had the highest customer churn in years; the owner, who had been a star salesperson in the industry for over 30 years, was no longer producing; and getting meetings with new prospects seemed to take an act of God. After challenging their performance, we learned that their pricing was no longer competitive for the value delivered. Additionally, the market had shifted, and the leaders failed to recognize and address the current market’s needs. Before adding salespeople and a new sales manager, this company needed to address its strategy issues.

By not addressing the real issue, you may be following the plot of the movie 300. The story revolves around King Leonidas, who leads 300 Spartans into battle against the Persian “God-King” Xerxes and his invading army of more than 300,000 soldiers. Despite having 300 of the most formable soldiers globally, there was no way for them to win the battle. I see this same plot playing out in many companies.

This is another problem that is predictable and solvable!

Forecasting Focuses Leaders on the Core issues and Leads to Business Acceleration

Let’s get back to Max. Max leads a company that has lots of good data. They needed more discipline and focus on understanding their metrics, what issues they should be addressing, and how to recognize the leading indicators causing the surprises in their financial results.

After reviewing actual results and comparing them to the forecast, we learned many things. They had identified and used the right metrics but needed to get better and to set realistically high assumptions. In Max’s case, they beat their sales goal but how they originally derived the sales goal had no bearing on reality:

1- They had 40% fewer leads than expected. This happened because they had not done enough analysis to understand how many leads would come from each marketing channel in each market. Had they looked at the past performance, they would have known there was no basis for their targets. And, they had no new action plans that would drive different results.

2- The company exceeded its sales goal by 25%. There was no correlation between the assumptions used to develop the costs. They got the following wrong:

  1. They forecasted having all positions filled in their sales department despite knowing that they were beginning the month with nine open sales positions.
  2. They had several new salespeople who normally do not derive any sales for at least 45 days (their sales cycle).
  3. Their target appointments, appointment conversion rate, and sales closing ratios did not resemble anything close to reality.

Max can now work with the department leaders to improve future forecasts reflecting what they learned. Based on new assumptions, they are going to destroy their sales goals for the year.

This was predictable.

Lack of Mastery of Metrics Leads to Poor Accountability

To establish a proper accountability system, you need a clear understanding of your metrics, the same metrics required to build your forecast. Invariably, forecasts and budgets are wrong because they are built the wrong way. In most cases, leaders look at last year’s numbers and decide at a high level what they want the new numbers to be. However, the devil is in the details, and not the details most budget creators think about.

Leaders need to spend significant time understanding the leading metrics (e.g., number of units sold, number of people required to sell that number of units, number of new customers, number of returning customers, etc.). It would be best if you looked back to understand the trends and underlying causes of those trends and project forward what will happen to these leading metrics in the future based on your business plans. A good example is Max’s company. The number of performing salespeople is a crucial component to the company’s success. Fewer performers will ensure lower results. Thus, key considerations are what percentage of salespeople meet quotas and whether those quotas are reasonably high enough to justify the employee’s tenure.

You might be wondering how understanding metrics ties to accountability. Max’s sales manager believes she performed well because she beat the budget. However, the budget was a farce in that none of the company’s performance standards were met in her department. Despite exceeding the revenue budget, the number should have been higher. This conclusion arose by looking at a complete set of metrics rather than the final revenue number. A primary driver was the number of open sales positions.  The lack of people caused them to fall well short of potential.

Moreover, once we started evaluating the critical success metrics (e.g., number of meetings, meeting conversions, etc.), it was clear that there was a lack of integrity in how they were derived.  Not even management was confident about what they should expect. You can’t hold a person accountable without valid expectations.

The results could have been predictable, and this problem is solvable.

Now What?

Practice, practice, and more practice. You can only get better at forecasting with commitment, discipline, and continuous improvement. And the Finance department is not solely accountable for forecasting. Instead, it is a process that requires input from everyone. All leaders need to help develop the metric targets related to their departments. It is also helpful to run the standards by the employees that must deliver on them. The feedback is where the gold lies.

With practice, I believe every leadership team can produce highly predictable results. Each time you go through the evolution of a new forecast, you will learn new ways to improve performance and strengthen accountability in your organization.

Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm, please visit his website at www.activategroupinc.com/contact or contact Howard Shore at (305) 722-7216.

Believe to Achieve

Can you achieve leadership status without having faith in yourself? Do you love who you are? Do you believe in yourself and your skills?

Having faith in yourself is a must for achieving success. Mother Teresa once said, “I do not pray for success, I ask for faithfulness.”  Success is a consequence of faith.

Since you were a little kid you have been learning what you could accomplish by having faith in yourself. As children we learned to do things we saw others doing, such as riding a bike, hitting a ball, or swimming, because we had faith that we could do it. Even though we had to fight our natural fears, we decided to ride that two-wheeler or jump into the water and start swimming. We kept trying no matter how many times we failed. Our faith told us that we could ride the bicycle, swim, or hit the ball, and eventually we did. We did not give up, and we achieved success.

Later in life, we began to try more difficult tasks and experience the consequences of failing or succeeding. Unfortunately, when we failed at some of those attempts we gave up, allowing fear of failure to stop us from trying again.

Everyday we find examples of people that have done things that we want to do. That desire alone should be enough to create the faith in ourselves to achieve those goals. You know that if others could do it, then so can you! Many of these people started from worse circumstances than yours, and they did it.

Faith in yourself is your ticket to success.

In 1877, Thomas Edison said, “Many of life’s failures are people who did not realize how close they were to success when they gave up.” Thomas Edison failed more than 1,000 times when trying to create the light bulb. (The story is often told as 5,000 or 10,000 times depending on who is telling the story.)  When asked about it, Edison allegedly said, “I have not failed 1,000 times. I have successfully discovered 1,000 ways to NOT make a light bulb.” How will having faith in my ability to succeed affect my business? It will help you to show you also have faith in others. Having a positive attitude will help you to always look for a way to help your customers. Look for a win-win scenario and more often than not you will walk out with a new prospect, a smile, and new business for you and your company. At the end of the day, you will be energized. That energy translates to a much better attitude and a large increase in sales.

When people believe in you, there is an incredible power that fills you up. Suddenly the impossible becomes possible. Our work as coaches is to help you visualize success.

How can you build faith in yourself and in others? Here are some tips.

  1. Think of your dream and imagine yourself reaching that. Remember, failure begins with disbelief.
  2. Stop thinking of what you can’t do, and begin to think of the things that you can do. Be a “yes” type of person, at least to yourself.
  3. When facing opportunities, put your heart into it. Again, believe that you’ll make things happen!
  4. Think BIG, believe BIG, act BIG. As that realistic proverb says, “Aim for the roof, you fall on the floor. Aim for the sky, and you fall on the roof.”
  5. Find a Strength. Instead of looking at weaknesses, look for strengths in yourself and others.
  6. Build on Past Successes. If you have to face a difficult or challenging task, take time to recall your past successes. This will give you encouragement for the future and help turn a difficult situation into a positive one.

As you can see, it’s all in the mind. Start with positive thoughts, and the rest will follow.

At Activate Group we help clients achieve quick, efficient and profitable growth through the easy implementation of proven methods. For more information, please contact us at [phone link=”true”] or send an e-mail to pjperez@activategroupinc.com.

Coaches’ Corner – Are you winning too much?

Winning too much is one of the most common issues we see in successful people, from the executive suite to the top salespeople. The suggestion that this might be a detriment is usually followed by an incredulous look from the recipient. After all, shouldn’t everyone want to win all the time? Actually, this one behavioral problem belies many others. Common indicators that this issue exists are as follows:

  • One does not realize that winning in a particular situation is more damaging than losing.
  • Someone shares a great experience, and the over-competitive person has to add one of his own better experiences.
  • One person takes credit for another person’s good deeds.
  • Someone tends to be argumentative in their desire to get you to see things their way.
  • An employee that is seen by most employees as hard-working, committed, and driving positive change is suddenly fired.
  • Belittling people who have a skill not possessed by the spoiler.
  • Regular withholding of information that is needed for others to be successful.

We are not suggesting that one should eradicate competitiveness or the desire to be the best. With that said, by engaging one of our coaches you might shift from “good to great” or “great to greater” performance by realizing when it is important to win and when it does not matter. Overcoming this issue has resulted in the following benefits:

  • More personal power in their organization
  • Greater sales performance
  • Lower employee turnover
  • Higher customer retention
  • More and stronger friendships
  • Higher degree of personal satisfaction
  • Stronger teamwork

We help executives deal with behavioral challenges like these on a daily basis. Review our website to understand how an executive coach or business coach can help you increase the success of your career and business, or contact Howard Shore at [phone link=”true”] or shoreh@activategroupinc.com.

* This concept is adapted from and explored more deeply in What Got You Here Won’t Get You There, by Marshal Goldsmith. We recommend reading this book.

Convincing Others To Willingly Accomplish Your Goals

Great leaders have mastered the art of getting things done through others. Even more impressive, their people do things required of them because they want to. This is a foreign concept to the many leaders and managers that seem to only get things done by doing it themselves or by brute force. Great leaders are able to achieve amazing things while the masses find themselves awake at night.

A key difference between great leaders and everyone else is found in understanding the distinction between “power” and “authority” and how to utilize them effectively. Unfortunately, these two words are typically used interchangeably. Understanding the difference between the two concepts can result in very large returns for you personally and financially. Before I begin, I have two questions:

Would you rather have “authority” or “power”? Why?

Authority derives from organizational title or position the right to enforce the rules, exact obedience, and command, determine, or judge. On the other hand, power may be defined as the ability or capacity to perform or act effectively in ways that influence the behavior of others. This is a personal talent that can be developed. It has little or nothing to do with title, rank, or authority. We can see this in our everyday world. How often do you see people in the same organization with the same position, title, or rank, yet one possesses far more influence in the company than the other? I have even seen those with far lower rank exact much more influence than their superiors.

Authority is necessary and serves a very important function in the operation of any organization, and it can be an efficient tool of management when used judiciously. However, I have seen many powerful leaders and managers allow authority to go to their heads. They get themselves so caught up in their own self-importance and expeditious attitudes that it destroys their power and ultimately company value. In other cases I see people trying to get promotions and accepting new positions to obtain authority when it is power they are really craving. While the ideal situation is to achieve both, every employee should start out each day asking “what can I do to increase power (influence) today.” The result will eventually lead to more power, job satisfaction, results, authority, personal growth, and profits.

How Do You Increase Power?

Power is earned, not given. It begins with building trust. A person that is not trusted unconditionally by others will never have true power over them. There are a lot of factors that go into building trust. However, my own coach actually shared with me a very powerful secret to earning more power that I would like to share with you. It is best illustrated through an exercise.

Exercise:

On a piece of paper draw a 3 inch line, and label this line “responsibility.” On the left side, write “least,” and on the right side, write “most.” Think about an organization where you have worked. Now in that organization I would like you to think of the person that took the most responsibility and write his/her name next to “most.” From that same organization, I would like you to think of the person who took the least amount of responsibility. Underneath the first line, I would like you to draw a second line and label it “power.” On the left side of that line, write “victim,” and on the right, write “master.” Thinking back to the same organization, if you are like most of my clients, you would put the person who took the least amount of responsibility next to “victim” and the person who took the most responsibility next to “master.”

Therefore, the secret to earning more power is taking more responsibility. If you find yourself feeling or acting liking a victim, ask yourself, how can I take more responsibility? In the end, you will find that you and others with more power find ways to take ownership when things go wrong and set things on course. Pointing fingers and placing blame on others, even when justified, does not earn you any power.

How do I know if I have Power?

Look at behavior and see how you answer the following questions:

  • Are my people regularly performing at exceptional levels?
  • Do I get what I need from others when I need them?
  • Are people on time for meetings with me?
  • Do people regularly cancel meetings with me?
  • How happy do my people seem to be when they are in my office?
  • How frequently do my people want to be in my office?
  • Do I have regular turnover in my departments?
  • What is the absentee rate in my department?
  • Do people in other departments regularly seek out transferring to mine?
  • Do people that do not report to me regularly seek out my input? Would they do this if they did not have to?
  • Am I invited to meetings that do not directly involve my department?
  • Do others regularly invite me to lunch at all levels in the organization?
  • When I invite others in the organization to lunch who are at or above my level, are they regularly too busy?

The decision is up to you! Master the art of earning power or using authority sparingly, and the results will speak for themselves.

Review our website to understand how an executive coach or business coach can help you increase the success of your career and business, or contact Howard Shore at [phone link=”true”] or shoreh@activategroupinc.com.

Reference and excerpts taken with permission from Leadership published by Resource Associates Corporation, Mohnton, PA.

Create A Habit of Goal-Setting

One of the most beneficial habits you can create in life is goal-setting. As an executive coach, one of my biggest priorities with clients is to get them to set and write down goals on a daily, weekly, monthly, and annual basis. By setting goals they dramatically increase success.

We are all creatures of habit and actually operate over 85% of our daily lives through these habits. For example, we drive to and from work pretty much the same way every day. This is because our brains are trying to operate efficiently. Once we find the best route, it is logical to stick to it. It takes less time and energy to follow a familiar route than to try to learn a different way to accomplish the same task.

If you make a habit of goal-setting you can increase your success level by at least three times what it would be without that new habit. Goal-setting works for the simple reason that human beings are goal-seekers by nature. Starting from birth, we behaved or didn’t behave in certain ways for the purpose of getting a parent’s approval or attention. As we got older we did things to seek our friends’ approval, or worked hard to get good grades to get to the next level of school. It is very unlikely that someone would get a law degree, for example, if they did not believe that it was integral to achieving a desired goal.

Goal-setting has five important benefits:

  1. Defines Winning – Sports give us a great example of the importance of being able to define winning. Watching the score while rooting for your team to win is an integral part of the allure and excitement of any sport. How many people would want to go and watch the Miami Heat for 82 games with no scoreboard? Even when a fan cannot watch the game, you will find them checking the newspaper or online to see which team won and how the players on their team did.
  2. Keeps You Focused – The most common obstacle to success is that people naturally gravitate to the symptoms of poor focus; day-to-day “fire drills.” By having goals and visiting them daily, we are better able to prioritize.
  3. Makes For Better Decisions – In simple terms, how can you make a decision without knowing what you want the outcome (e.g. goal) of that decision to be? By setting goals you are in a better position to know how much time to spend on the decision, what information you need, and which alternative is best.
  4. Increases Self-Motivation – As mentioned above, we are goal-seekers by nature. Once a person has decided on a goal, self-motivation begins.
  5. Develops Self-Confidence – Once a person has set and achieved a goal, it increases self-confidence. Higher self-confidence leads to more goal-setting, and as the next goal is achieved the pattern continues.

A great example of the benefits of goal-setting is a lawyer I worked with who wanted to increase his firm revenue without working any more hours. He actually wanted to work less. Prior to hiring me there was no firm goal for monthly billing. All that was known was that more was desired. The first step in our process was to establish some preliminary goals for monthly billing that, in this case, was 50% more than current levels. Within 150 days this attorney doubled his billings and was working no more hours than he was previously.

Once a goal is established, an organization or individual is in a position to have regular discussions that can focus around where actual results are compared to a goal. When on target, thoughts and discussion should focus on future trends or obstacles that can throw us off track. When not on track, it is important to identify causes and develop action plans to get back on track.

There are many examples of organizations and individuals who found that our goal achievement process dramatically improved their careers and business. Review our website to understand how an executive coach or business coach can help you increase the success of your career and business, or contact Howard Shore at [phone link=”true”] or shoreh@activategroupinc.com.