I Don’t Give 10s

People

I cannot tell you how many times in the nine years I’ve spent as a Business Guide since exiting my manufacturing business I’ve heard leaders, when asked to rate someone or something on a one to ten scale say, “I don’t give tens.”

Whenever I hear that, I follow the statement with a question that always has the same answer, “Why don’t you give tens?” So far, 100% of the time, the answer is either, “People can always do better,” or, “If I rate their performance a ten of ten, they’ll stop pushing themselves.”

While that answer may be understandable, it is also highly debatable. If a basketball player goes eight for eight from the free-throw line, could they have done better? Of course not. On a scale of one to ten, that’s a ten. But I get it. The premise behind the philosophy is based on the fear that if a leader gives a team member a ten out of ten when they deserve it, that team member will slack off and stop trying to improve.

Sadly, that mindset assumes the worst of people, and it also shows a lack of understanding of how the limbic system works in the human brain.

The Unintended Consequence of a “They Can Always Do Better” Mindset

I follow this by asking the leader if they think that over time, always telling people they could do better, even when those people exceeded expectations, will inspire those people to continue to go to battle for them and try harder and harder. Then I ask if there is a chance that they will eventually give up and stop trying so hard because they start to feel like their best is never going to be good enough. The leader almost always admits that the latter is much more likely to be the result.

Every once in a while, I will encounter a harsh leader who refuses to consider an alternative approach and insists on just being overly tough on everyone. In every single case I have observed, and I never know if it will happen in weeks or if will take as much as a year or more, that leader eventually leaves the organization. They either leave on their own because it becomes increasingly evident over time, as other leaders grow to embrace a more positive way to build a Culture of Performance, that they are just not a good fit, or they’re asked to leave because the owner sees the collateral damage being done by their leadership style and finally takes action.

The Science Behind Appreciation and the Limbic System

When people are constantly being ground on by their bosses to do better, their amygdala starts to send signals to the brain that trigger a fight or flight response, and as a result, neurochemicals like adrenaline and cortisol are released into the bloodstream. Depending on the extremity of the situation, this can actually cause the pre-frontal cortex (the part of the brain that controls our cognitive abilities) to begin to shut down. When that happens, it becomes harder on those affected to think clearly and make good decisions, which is the exact opposite of what the leader usually intends.

Conversely, when team members feel appreciated and have a healthy relationship with the leaders to whom they report, the opposite happens. Different neurochemicals, like oxytocin, serotonin and dopamine are released. This will often cause the team members to feel a sense of belonging and engagement, which enhances their commitment to the team and leader, and often their performance as well.

The SCARF Model

Dr. David Rock has done extensive work on this subject and has created what he calls the SCARF Model. This Model shows how as leaders, our behaviors and the way we interact with our teams, can cause our team members’ brains to respond in ways that they normally cannot control. It explains how the results of our interactions and leadership style often have a significant impact on our team members’ engagement and performance.

In a nutshell, SCARF is an acronym representing five areas that a leader can affect others in ways that cause nearly uncontrollable chemical reactions in the brain and ultimately impact the effectiveness of the people around them. At a very high level, you just need to understand that when people are in an environment where they experience a threat response, chemicals are released which affect their brain in ways that make it harder to think clearly. Our brains work in this way to protect us…to make us want to move away from the threat. Conversely, when they are in an environment where they feel rewarded, or appreciated, they experience a reward response. The reward response activates different chemicals in the brain and creates a desire to move toward, or engage more closely, with whatever caused them to experience the reward response.

SCARF Explained

The following is a brief summary of each component of the SCARF Model.

They key thing to remember as a leader, is that if your leadership style and disposition are consistently creating threat responses in your team members, you are likely undermining their ability to perform at a high level without even realizing it, actually working against your objectives as a leader. On the other hand, if you are intentional about affirming and appreciating all of the positive things your team members are doing, you will get all of the benefits resulting from the reward response. Of course, there are times where you have to be firm and direct, but it is important to always do so within the context of the SCARF Model. The more you focus on balancing correction and coaching with appreciation, the more trust you will build with others, which makes difficult conversations easier and more effective when they do have to happen.

  • Status:  If a leader berates an employee, especially in public, that action diminishes the team member’s status and can make them think less of themselves, which causes a threat response. It actually makes it more difficult to think clearly, which has a negative impact on performance. When a leader shows appreciation for positive performance or behaviors, team members will experience a reward response. As humans, we want more of that, and more often than not, people will adjust behaviors and actions to do more of the things that led to the appreciation and created the reward response.

  • Certainty: If a leader creates an environment of uncertainty, like constantly making people feel that their job is on the line and they could be terminated at any time, it creates a threat response. The fear team members are constantly facing negatively impacts their performance because the constant fight or flight mode reduces the functionality of their prefrontal cortex. If, on the other hand, leaders establish clear expectations, coach team members where they need it, and help those team members feel that the leader has their backs and is supportive, they will have a sense of certainty, of security, and experience a reward response.

  • Autonomy: When a leader is constantly micro-managing a team member, that team member will often lose any sense of autonomy in their role, and the result is a threat response. Nobody likes to be micromanaged, and it often is something we perceive as a threat. But when a leader, again with clearly communicated expectations, allows team members the freedom to make decisions on their own and have a reasonable degree of autonomy in their roles, that sense of autonomy causes them to experience a reward response.

  • Relatedness: Human beings are “small group” animals. Most people do not like being in large crowds for extended periods of time, and also don’t like extended periods of isolation. When the environment at work pits people against one another in other to drive performance, they often feel isolated and alone at work. That results in a threat response. When people work in an environment with others who share common values and work together as a healthy team, even though most of us have some level of a competitive spirit, the clear common goals, under the guidance of healthy leadership, allow people to experience a reward response.

  • Fairness: Lastly, when team members experience a lack of fairness, whether they are the target or they observe someone else being treated unfairly, they will almost always experience a threat response. Conversely, when people feel that they work in an environment where they know that people are treated fairly, they experience a reward response, especially in challenging situations where fairness is put to the test.

You can download a one-page overview of the SCARF Model using the link below.

A Personal Story of an Organization That Gets It Right

At Next Level Growth, we work with our clients to build elite organizations…organizations on a path to being a “category of one” in their market. We do this by teaching them a principled approach known as the Five Obsessions of Elite Organizations®. The fourth of the Five Obsessions is a Culture of Performance.

Oftentimes, when I bring up the necessity of a Culture of Performance in order to truly build something elite, people initially think about a hard-driving culture that grinds on team members, much like the Jack Welch style at GE during his tenure as CEO, where he famously fired the bottom 10% of the workforce every year. In my belief, that kind of a fear-based performance culture not only isn’t necessary, but it also rarely works in the long run.

My youngest son, Zachary, started working at the Fairmont Scottsdale Princess resort as a temporary employee during their Christmas at the Princess event. When the event concluded, Zachary was brought over as a full-time employee and began working as an Experience Concierge in their exclusive Privado Villas division.

If you’ve experienced the Fairmont brand, and if you’ve been fortunate to have experienced the Scottsdale Princess, you will know that the brand has a very high standard for guest experience, and in order to protect and consistently provide that, they have a very high bar when it comes to the behaviors and performance of their team members. What has been so refreshing to see is the way they build a high-performing culture through intentional signs of appreciation and personal connection with their team members.

If you are a parent of adult children, you will understand me when I say that when your adult children work for a bad boss, you get to hear all of the complaints and horror stories. My wife and I have heard plenty of those over the years that we’ve had adult children. On the other hand, when you hear your adult children consistently talking about how wonderful their managers and bosses are, and how appreciated they feel not only by those they directly report to, but also but the organization as a whole, you feel a peace knowing that they are in a good place to grow and develop.

David Miller is the Hotel Manager at the Fairmont Scottsdale Princess, and Jack Miller (no relation to David) is the Regional Vice President. While Zachary is far removed from them in the organizational structure, every time Zachary sees either of them on property, they go out of their way to say hello and be friendly to him. Not just him, but everyone. At a recent training meeting in advance of opening their new Privado Welcome Center, David Miller noticed that he and Zachary were weary nearly identical sportscoats, so he grabbed Zachary and had one of their colleagues take a photo, which Zachary’s General Manager later posted on Linked In.

Zachary Erath

For a young team member who is just getting started on a career path in hospitality, small but intentional gestures to connect on a human level like this are incredibly powerful in drawing them closer to the organization, which creates significantly better engagement, and ultimately, performance.

Over dinner a few weeks ago, Zachary was talking with his mother and me about work, and shared with us that he has never worked in an organization where the team of leaders he reports to are as helpful and supportive as at the Fairmont. Throughout his onboarding and training, while he was being corrected when he would make a mistake, or not remember a step, it was always balanced with recognition and appreciation when he did things well. The team he reports to works with him and coaches him where he needs to learn and grow, and at the same time, they make sure he is very clear on, and appreciated, when he does things well. This leads to a more trusting relationship; where it feels safe to receive critical feedback; where he has certainty in where he stands with his managers; and where he knows that they support him and want to see him grow in his career.

As a result, he finds himself in a position where he has an emotional connection to his coworkers, his management team, and the brand as a whole. That emotional connection causes him to feel like he never wants to let down, or disappoint, the people he works with and works for. They got him to that place in his first ninety days not by browbeating him and grinding on him, but by coaching and mentoring him…by connecting with him. By taking time to understand how he learns best and guiding him accordingly. He has expressed to us that as his career advances over time, it is his hope that it will always be as part of the Fairmont family.

To create what they have at the Fairmont Scottsdale Princess takes intentionality. It takes a team of leaders who are values aligned and focused, and who have the emotional intelligence to create a genuine culture where people care about each other. When the team members feel this connected and supported, the guests will be very well cared for.

A Culture of Performance is critical in building an elite organization, and it does not have to be a punitive culture of fear…in fact…at Next Level Growth, we believe a high-performing culture built on a team of people who trust each other, who support each other, and who appreciate each other, in the long run, will always outperform a team whose performance is the result of heavy-handedness and fear.

Download an Overview of the SCARF Model by David Rock

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A Culture of Performance – The fourth of the Five Obsessions of Elite Organizations®

Entrepreneurial Freedom, People

Legendary college basketball coach, John Wooden, famously said we should, “Never mistake activity for achievement.” While it takes the right activities, done the right way, and the right number of times to achieve success, in my years as an entrepreneur and now Business Guide, I have seen firsthand that far too many organizations give teams and leaders a pass for too long because they are doing the activities, even when they are not achieving the desired results.

Building a high-performing culture into an organization is hard work and takes time. It requires a special discipline, focus, and drive to do things at a high level, and to a high standard, all of the time. It is also highly dependent on getting the first three of the Five Obsessions right. You must have Great People, united around and driven by an Inspiring Purpose, well trained on, and consistently executing, Optimized Playbooks, to even have a chance at building a successful Culture of Performance, the fourth of the Five Obsessions of Elite Organizations®.

Culture of Performance

Keys to a Culture of Performance

There are six key components to building a Culture of Performance. The first is to define what we call The Summit. What is at the top of the mountain you are climbing? In Good to Great, Jim Collins calls this the BHAG – the Big, Hairy, Audacious Goal. Once you know the long-term goal, the objective, then you can begin to focus on the remaining keys of building a Culture of Performance: The right strategy to become a dominant force in your strategic niche; an A-Player Recruiting and Onboarding System; Clear Expectations; Scorecards and Scoreboards; and a Coaching System to either coach people up or coach them out.

In my earlier post on an Inspiring Purpose, I discussed the importance of defining and driving the right strategy to differentiate yourself and provide consistent value in the marketplace. With the addition of a Just Cause and Daily Purpose, people can get clear on why you are in the game that you are in, and they can decide if they want to be a part of it. Adding in a clearly defined Summit helps them understand where this journey will take the organization, and then they can decide if successfully reaching that Summit will be worth the effort it will take. Some will be up for the challenge and others will not. You want to build on the former, and let the latter go on to other organizations. They will not help you drive your organization to its Summit because they don’t have the emotional connection, the passion and drive, to remain disciplined and focused on the journey.

An A-Player Recruiting and Onboarding System

 

The best organizations, whether in business or in sports, have a well-designed and executed system to attract and filter talent. It starts with having a very clear understanding of who your avatar employees are for each role in the organization, and the Next Level Accountability Chart™ is a great place to start. Once you understand the avatar, it is easier to figure out where they are and how to go find and attract them.

Many organizations offer referral bonus programs to compensate existing employees to recommend people they know. The problem is that few of the systems we have seen are really well designed to get ideal outcomes. As Brad Smart wrote about in Topgrading, A-Players will hire A-Players, but B-Players will only hire other B-Players and C-Players. They will not hire A-Players. So why do we incentivize our underachievers to recommend their peers? There is a high likelihood that their peers are also underachievers…so we end up paying our underachievers a bonus for helping us find other underachievers, and the cycle repeats.

At Next Level Growth, we regularly recommend designing a program that offers more lucrative bonuses for existing employees to recommend and recruit from their networks, but we always suggest that any such program should be tied to performance in a way that existing employees must be verified A-Players (both in terms of culture and performance) to even participate, and their bonus compensation on recruited employees should both be paid out over time, and only be paid if they maintain their A-Player status AND the new employee also remains a consistently verified A-Player (both culturally and in terms of performance). This way, you get two A-Players for the bonus you pay. As I wrote about in the article on Optimized Playbooks, every system is perfectly designed to get what it gets. If you want a better outcome, you need a better system.

Clear Expectations

As I wrote in my earlier post on Great People, I believe that most of our frustrations with people are rooted in uncommunicated expectations. The Next Level Accountability Chart™, with MMOs™ is a great tool to help clarify performance expectations of people in their roles. Once those expectations are clear, and you use them in the recruiting, hiring, onboarding, and continuous development phases of your employee journey, you will have the foundation of a system that is designed to help you drive performance from a team of great people.

As Nick Saban states in the video below, mediocre people don’t like high achievers, and high achievers don’t like mediocre people. If you don’t have a Culture of Performance, you cannot have any team chemistry within the organization, and you must have clear expectations if you are going to have a culture of performance.

Scorecards and Scoreboards

Imagine watching two teams playing basketball, but nobody is keeping score, there is no clock measuring the time remaining, and there are no other data points or statistics. It would be like watching practice, and probably would not be very interesting. I would also expect that the level of effort being put forth by the players would be less than their absolute best.

Compare that, however, to the way teams perform when there is a scoreboard, we know the score, the time remaining, what the team foul situation is, and how many time-outs are left. Suddenly, when we’re keeping score, the effort and focus improves.

Scoreboards and Performance: A Personal Example

It is a psychological fact that people perform differently when they know how their performing against certain goals, or against other individuals or teams. A few months ago, I took up cycling as a form of exercise. Since I’m purely doing this for the exercise, I passed on getting an expensive road bike and settled for a hybrid city bike. I’ve got a 10-mile route I ride several days per week and there’s about 500 feet of elevation change, so for a novice looking for exercise, it’s a good route. When I started riding, it was taking me about 45 minutes to complete the circuit.

I use an app to track my time, distance, average speed, and a few other points of data. One particular day, as I was climbing a 1.5-mile hill on the route, another cyclist passed me. Granted, he had a nice road bike and all the fancy gear and cycling clothes, while I was in gym shorts, a t-shirt, and sneakers…but I got frustrated at the thought of being passed. So in response, I put forth more effort, changed gears to pick up a little more speed, and was actually able to stay on pace with him for the rest of the climb.

What I realized was no different than what I observe with the teams I coach. When challenged, the competitive spirit that lives within most of us, will drive us to level up our performance. I also realized that when I was only competing against myself and my own stats, I was allowing myself to settle into something less than my best effort. Being passed woke me up. Now I know that I can push harder and go faster. Now I ride against the last version of me. When I finish a ride, I put the stats on a whiteboard in my office and I track them week by week. Every time I ride, I try to beat the guy I was the last time I rode. As a result, just last weekend I broke the 40-minute mark, twice. The prior version of me, the one that took 45 minutes to complete the circuit, would have been 1.1 miles behind me when I finished. That’s an 11% improvement in my performance, and I’m just a hack cyclist doing this for exercise.

Scoreboards and Performance: An Example From the Field

When I was President and CEO of Erath Veneer, we had four production lines, each running on two shifts, slicing hardwood veneer for the furniture, door, and panel industries. So in all, we had eight different production teams.

As we gained clarity around our Profit per X, which in our case was Dollars of Gross Profit per Board Foot Produced, we realized that of the many areas we could make adjustments and implement strategies to improve the ratio that drove our economic engine, focusing on and consistently improving our throughput in terms of board feet would be one area of focus that would make us more efficient and more profitable.

Note: This story, and many like it, are detailed in my second book, The Path to the Pinnacle.

We started by analyzing historical data on throughput, and supplemented that by running tests and time studies. This analysis allowed us to determine, by specie produced (think, “product line”), how much throughput per hour each production team should average for an eight-hour shift depending on the mix of species they were producing during a particular shift.

To make sure we didn’t sacrifice quality for the sake of efficiency, we added limit switches to each veneer slicer that would turn on a light at the same part of every log being sliced, and that would cue the team to pull a sample, which they would then label with the machine number, shift, time, and log number. The following morning, our production manager and sales manager (requiring the two positions to collaborate in the review prevented just operations from policing itself) would review the samples together and reject anything that did not meet our standards. For any mis-manufactured samples, the team that produced the damaged log would have the board footage of that log deducted from their prior day’s totals. So there was no incentive to sacrifice quality for volume.

After the samples were reviewed, our office staff would tally each of the eight production teams results from the prior day, and we would print a color bar graph that showed a thick black line where each team’s goal was for the prior day, along with a vertical bar indicating their actual results. If they fell short of their goal, the bar was red. If they met or exceeded their goal, the bar was green. We kept a rolling week of graphs up on the wall by the door to the break room, so every employee in the company saw the results. Nobody wanted to be on the teams that were consistently in the red.

Without any financial incentives, and just by displaying the data and letting everyone see how their team was doing relative to the other teams, we saw an 8% increase in average throughput per shift. That improvement in productivity, with a balanced focus on quality, lowered our unit cost, which increase our Profit per X – our Dollars of Gross Profit per Board Foot Produced.

Once we had consistent data to prove that we were doing the right things on our production lines and tracking the data properly, we reinvested some of the financial gains into a bonus program for the production teams that created a true meritocracy on the plant floor, increasing total compensating for the best performing teams. As a result of the clarity, visibility, and focus on results, team members would go out of their way to help each other as needed to keep their productivity up, and team leads would be quick to communicate with their supervisors when an underperformer was holding them back and needed to be exited from the team.

As an organization, it is critical to make sure that you are tracking, and providing sufficient visibility to, the right data to drive the performance you want, and using that data to create a healthy spirit of competition…something for which A-Players hunger.

A Coaching System

Every great performer has a coach. Many of them have multiple coaches. In his prime, Tiger Woods had four coaches – one for his long game, one for his short game, a strength coach, and a sports psychologist “performance” coach. What is your organization doing to develop your leaders into great coaches?

At Next Level Growth, we recommend that everyone who has direct reports be developed by the organization to coach their teams. As part of that coaching system, we recommend Quarterly Coaching, or what some of our clients call, Quarterly Calibrations. These are one-to-one meetings, once per quarter, between a leader and each direct report, where they discuss core values one at a time, and then performance relative to the defined Mission, Most Critical Outcome™, and Obsessions™ from the Next Level Accountability Chart™, again, each one at a time.

We encourage our clients to clarify and utilize a numeric rating system, with definitions for each of the numbers relative to expectations for both behavior in alignment with each core value, and then performance relative to each part of the MMOs. Is the team member exceeding expectations, meeting expectations, or not meeting expectations. We have some clients who choose to use a one to three scoring system, some that use a one to five system, and others that use a one to ten system. All that really matters is that the system is clear, it is consistently deployed throughout the organization, and the meaning of the numbers is defined.

When this is consistently done every quarter throughout the organization, you are validating with your high achievers how well they are doing, and you are identifying your under-performers so that you can work with them to understand their needs and help develop and coach them up. If, however, over time, you find that somebody is not responding to, or accepting, the coaching, then you can either coach them into another seat, or coach them out of the organization. This makes room for a new recruit to come through your onboarding processes and refill the seat with an expectation that the new, well onboarded recruit, will be able to perform at a higher level.

Never Settle

In the end, a Culture of Performance is a commitment across the organization, starting with leadership, to the same high standards and to the same high level of achieving results. You must commit to providing your team with the right strategy to become a dominant force in your space, an A-Player Recruiting and Onboarding System, Clear Expectations, Scorecards and Scoreboards, and a Coaching System to either coach people up or coach them out.

You cannot be great if you’re content with good.

Click to reac the next article in this series, Growing Profits & Cash Flow.

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An Inspiring Purpose – The second of the Five Obsessions of Elite Organizations®

People, Team Health, Vision

Steve Jobs once said that the most powerful person in the world is the storyteller. Great stories capture our hearts and bring inspiration. When people are emotionally engaged and inspired, they will bring more discipline and passion to what they are doing. The power of the second obsession of elite organizations, an Inspiring Purpose, while often overlooked, is very real.

An Inspiring Purpose - The second of the Five Obsessions of Elite Organizations®

Right People, Right Seats: A Missing Piece

After nearly a decade of guiding elite entrepreneurs, and that following more than two decades of growing my own businesses, I’ve come to realize that if you are really obsessed about Great People in your organization, the “right people in the right seats” analogy from Jim Collins’ 2001 book, Good to Great, is missing one important thing. In order for people to truly be their best, they must also feel an emotional connection to an inspiring purpose behind what they do and what the organization stands for. Yes, we need our team members to share our behavioral core values. And yes, we need them to have the skillsets, experience, and desire to perform their roles at a high level. But when you add in the third element, that they form an emotional connection to their company’s Inspiring Purpose, that is when they will bring the greatest effort, drive, passion, and creativity to their role. That is when they will resist silos in the organization and collaborate best with others, because they no longer see what they do as a job, but rather as their contribution to a greater cause that inspires them.
There are literally thousands of books on external marketing, and tens of thousands of consultants to help with external marketing. That is, of course, very important. But for that reason, I’m not focusing this article on external marketing. There are already lots of resources for that. This article is about what very few organizations do, and even fewer do well: internal marketing and storytelling.

Employee Engagement and an Inspiring Purpose

Think about it. What was your organization’s marketing budget last year? What percentage of it did you invest in marketing internally to your team members. What does that tell you about the value you place on inspiring and engaging your employees? What should you be investing to capture the hearts and passions of your teams?
At Next Level Growth, we use a combination of concepts from different thought leaders to help our clients articulate three key pillars of their Inspiring Purpose. They are a Just Cause, a Daily Purpose, and a Strategic Niche. When we incorporate this into Jim Collins’ hedgehog concept, by including an understanding of an organization’s Profit per X (what drives their economic engine), and then also overlay the business model as a flywheel, all of the components fall into place to help every employee in an organization understand how their specific role within their Next Level Accountability Chart™ is part of a bigger picture that advances the organization’s Just Cause. It also provides a strong framework for making better decisions.
From this, many of our clients will also go on to create what Collins referred to in his book, Great by Choice, as a SMaC Recipe. SMaC stands for Specific, Methodical, and Consistent, and is defined as, “a set of durable operating practices that creates a replicable, consistent success formula.” At Next Level Growth, our SMaC Recipe is something we call our 10 Promises and clarifies how we operationalize our strategic differentiating concepts in ways that are durable and replicable. If you would like to see ours as an example, just send us a message through our website and let us know.

Daily Purpose – Start with Why

In his 2009 best-selling book, Start with Why, Simon Sinek says that “Those who truly lead are able to create a following of people who act not because they were swayed, but because they were inspired.”
The second pillar of an Inspiring Purpose, but which I will speak to first, is what we call an organization’s Daily Purpose. It speaks to an organization’s “why,” it’s origin story. When working with clients, we start here because we find that the order in which we go through a discovery process matters in terms of both accuracy and efficiency. We start with Daily Purpose, then use the clarity of that Daily Purpose, or “why,” to uncover the Just Cause.
To begin to understand an organization’s Daily Purpose, we like to ask the founder why they started the company. The answer must be framed in terms of what you do with the company for the people you serve, not that you started it to make money. It should be about outcomes that you produce and that you focus on achieving every day. This often takes several rounds of questioning the answers we receive and asking “why” over and over again until we get there.
Then, we turn to the team and ask them to articulate why, beyond money, they choose to stay at the company. What is it about the work they do, what outcomes they accomplish, that brings them joy and keeps them committed to the organization.

Daily Purpose – An Example

As we work to get alignment among the answers, there is almost always an “a-ha” moment where the words become very clear. As an example, our “why,” or our Daily Purpose, at Next Level Growth is:

Helping Entrepreneurial Leaders Build Elite Organizations®.

In the video above, you will hear Nick Saban talking about what it takes to be elite. This is something we focus on with our clients at Next Level Growth, and explains well the mindset that is at the core of our approach to the Five Obsessions of Elite Organizations®.

As we see leadership teams come together and build something great, something that people want to be a part of, when we see them use the tools and concepts we teach them to overcome their biggest challenges, that is what brings us the greatest joy. This is the outcome we drive that inspires us on a daily basis.

In 2019, ten years after publishing Start with Why, Sinek published The Infinite Game. In this book, he introduced the idea of a Just Cause. As we began to understand and discuss the concept at Next Level Growth, we saw Just Cause as a key and missing piece to telling an inspiring story and one which would elevate Jim Collins’ Hedgehog Concept into what we call an Inspiring Purpose.

Just Cause

Simon Sinek describes a Just Cause as a “specific vision of a future state that does not yet exist; a future state so appealing that people are willing to make sacrifices in order to help advance toward that vision.” He goes on to say, “A Just Cause is not the same as our WHY. A WHY comes from the past. It is an origin story…A Just Cause is about the future and defines where we are going. It describes the world we hope to live in and will commit to help build.”

To summarize, it is a core belief around which an organization is built, and often starts with a phrase like, “We envision a world where…,” or, “We believe that…”

Just Cause – An Example

At Next Level Growth, our Just Cause stems from my own personal belief as its Founder. This belief was something that formed in me slowly over nearly 2 decades as the owner of a family manufacturing business in the hardwood veneer industry with 200 employees, and as a member in YPO and EO, with additional time spent in VISTAGE, where I got to know and observe hundreds of other entrepreneurs. What I realized during those years, is that most entrepreneurs achieve success, to some degree, at the expense of their relationships, their time with family, their physical health, or emotional health.

During my own entrepreneurial journey, I have experienced each of those things, and it almost cost me my marriage and family, something I wrote about in my 2017 best-selling book, RISE: The Reincarnation of an Entrepreneur. It was this understanding that helped me form and articulate the belief, or Just Cause, that drives us all at Next Level Growth:

We believe entrepreneurs deserve more than a return on investment from their business, they deserve to earn a meaningful return on life.

While the thought that one day every entrepreneur will experience a meaningful return on life is not realistic, a Just Cause is about a belief you hold so strongly, you will commit your career towards its advancement. I firmly believe that Next Level Growth has the opportunity to have a significant impact in advancing this Just Cause through at least the organizations we are able to work with and help. At the end of the day, it is the successes that our clients experience on their journey to what I like to call, “entrepreneurial freedom,” and sharing those stories among our team of elite Business Guides, that motivates and inspires us to do more, to dream bigger, and to push ourselves to learn, grow and evolve.

Connecting the dots between our Just Cause and our Daily Purpose in a clear way is very important internally to keep people focused on how they need to show up every day, and what, at the end of the day, matters most. When we put these two statements together, we have the foundation of our Inspiring Purpose:

We believe entrepreneurs deserve more than a return on investment from their business, they deserve to earn a meaningful return on life. This drives our Daily Purpose of Helping Entrepreneurial Leaders Build Elite Organizations®.

When we fully understand the interplay between these two statements, and when we both celebrate the wins we accomplish and use the failures as feedback from which we can learn and grow, we have a unifying and common focus that motivates our decisions and actions on a daily basis.


Our Just Cause and Daily Purpose, and the way we articulate them, is important because it ties directly to our Strategic Niche, which I will go into shortly. Our Daily Purpose is about an outcome, a result. Our focus is on helping build elite organizations, no matter what that takes. By maintaining a daily focus on how our clients are doing on their journey to build something elite, and not on how purely they are following a prescriptive system, our Guides are able to use their experience and our collective knowledge to improvise and seek out solutions, regardless of the source of those solutions.


When we “rope in” with a client, and this is something I repeat often inside our organization, we have to obsess about how they are performing and how they are doing at a deep level, and that is how we have to show up every day. When we do this well, and consistently, our clients win, and in turn, we win.

Strategic Niche

In Jim Collins’ “Hedgehog Concept,” he refers to an organization’s niche as “what you can be best in the world at.” While Collins was researching large, publicly traded companies who perhaps could be best in the world, most entrepreneurial organizations likely won’t achieve “best in the world” status. In our experience, when that is the underlying question an entrepreneur is faced with in clarifying their strategic niche, they often struggle. For that reason, we prefer to use Michael Porter’s definition of a strategic niche:  At what can you provide consistent, differentiated value in the marketplace?

When this answer becomes clear, and when you can show how it advances your Just Cause, it drives an incredibly powerful focus.

Strategic Niche – An Example

When we look at our own business, and survey the landscape of what exists in the world of business coaching and Business Operating Systems, the default is toward what we call, “one-size-fits-all” systems. While these systems often provide value for smaller companies and entrepreneurs who don’t have any systems or structures, they are usually more about the system than the user. Since breaking away from EOS® and Scaling Up, over the last few years we’ve talked to hundreds of entrepreneurs who feel that the Business Operating Systems they have tried are too rigid, or the business coaches they worked with were trying to force fit them into a system rather than making the systems fit their unique organizations.


We’ve also noticed that many Business Operating Systems have a relatively low bar for allowing people to become coaches within their system, and we think this is what drives their insistence on purity and a one-size-fits-all approach. At Next Level Growth, we only allow people who have been owners or C-Suite operators of businesses with at least ten million in revenue and fifty or more employees to apply to be a Business Guide. This level of real-world experience allows every one of our Business Guides to take a freestyle approach in working with their clients whenever it becomes necessary to achieve a desired outcome, and it protects our brand. Less capable coaches don’t have the experience to be highly flexible and meet clients where they are. They have to have a rigid system and structure, with well-defined guard rails, to fall back on.

To stand out and be different, we have formed our strategic niche around flipping this common frustration with Business Operating Systems on its head. At Next Level Growth, our Strategic Niche is:

An individualized, outcomes-based approach to customizable Business Operating & Scaling System implementation & ongoing guidance to the Summit.

Remember, a Strategic Niche should clearly define how you provide consistent, differentiated value in the marketplace. For us, there are four key differentiators.


One: Providing an individualized approach. To do this, we spend time in the discovery process getting to know and understand a potential client’s business, their ownership structure, and the unique challenges they face. We will often times pair them with a Next Level Growth Business Guide who has experience either in the same industry, or in a near-similar industry so that we can provide more unique insights and guidance.

Two: Taking an outcomes-based approach. While we have recommendations of best practices and offer key foundational concepts, not all tools and concepts work in all cases. If something we teach a client isn’t working for them, we seek out alternative solutions and work with them to achieve the outcome, not reteach the same tool or concept and hope they will get a different outcome.

We also challenge our clients to be accountable and do the work. If, over time, we feel that a client is not as committed to their own success as we are, and that they are not doing the work, we will call the end of an engagement and free up our capacity to work with someone who will be more committed and accountable. In my eight years as a Business Guide, I have personally fired four clients simply because they were not willing to do the work and were satisfied with being average to good rather than excellent or elite.

Three: As a result of our outcomes-based approach, our clients do end up with a Business Operating System, but one that is custom tailored to them and to their unique needs and circumstances. Everything fits better when it is custom-tailored.


Four: Because of our own experiences scaling our own businesses, for the clients who want us to remain roped in with them long-term, we are equipped to grow and evolve with them, continuing to provide significant value to them much longer than a typical business coach who can only teach them a certain set of tools and then runs out of value to add. As a testament to this, we have clients that are now in their 8th consecutive year of working with a Next Level Growth Business Guide, and we’ve only been in business for eight years. If we were not providing significant value, they would not be staying with us.

Inspiring Purpose – Pulling it All Together

So, when we put it all together, and frame it as a short message to not only clarify how we are unique to the marketplace, but also what we must focus on internally and why it matters, we have the statement that:

At Next Level Growth, we believe entrepreneurs deserve more than a return on investment from their business, they deserve to earn a meaningful return on life. This drives our Daily Purpose of Helping Entrepreneurial Leaders Build Elite Organizations® by providing an individualized, outcomes-based approach to customizable Business Operating & Scaling System implementation & ongoing guidance to the Summit.

This short paragraph defines the foundation of our unique business model and value proposition, and for those who are the right fit to be part of our organization, it provides inspiration and speaks to the essence of what incites passion in us all. As we make strategic decisions, we always weigh them against this Inspiring Purpose and ask ourselves, “If we choose A versus B, or it we move forward with something or choose not to, will it accelerate our momentum towards advancing our Inspiring Purpose, or might it distract us and cause us to dilute our focus?”

Please don’t overlook the importance of an Inspiring Purpose for your organization. Follow the steps above to discover and wordsmith your own, and if you would like help, we’re just a phone call or email away.

Click to read the next article in this series, Optimized Playbooks.

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Great People – The first of the Five Obsessions of Elite Organizations®

People, Team Health

Your A-Players are free, and they come with a financing option. This is something that my friend and co-author of the 2023 bestseller, The Path to the Pinnacle, Greg Cleary and I have been saying for years.

Think about it. Every time you upgrade a position in your company from being filled by an underperformer to an A-Player, the marginal value of the A-Player far outweighs the marginal cost of the upgrade. At the same time, you likely pay your team members over twenty-four to twenty-six pay periods, without interest, so while you are essentially financing the investment in the new A-Players, much of their value begins to come within the first few months of you bringing them onboard. With that as context, let’s dive into the first of the Five Obsessions of Elite Organizations®, Great People.

The Five Obsessions of Elite Organizations - Great People

Finding and Developing Your A-Players

The problem, especially in today’s labor market, is that most organizations have several “potential” A-Players already inside the company. They just aren’t getting the clarity of expectations and coaching they need to perform at their natural best. While true A-Players are highly aligned with your core values, have the skillsets and desire to perform their roles at a high level all of the time, and have an emotional attachment to your purpose, this article is going to take a deeper dive on the performance piece of the equation.

The EOS® Accountability Chart

In his 2007 book, Traction, author and founder of EOS Worldwide®, Gino Wickman, made a significant improvement to the well-known Org. Chart when he introduced the idea of an Accountability Chart. The purpose was to clarify what the roles and responsibilities were for every seat in the company by adding a few short words or phrases as bullet points in the box for each seat.

In the example of a Sales & Marketing Leadership seat from the book Traction, those bullet points are: LMA, Sales Goal, Selling, Marketing, Sales & Marketing Process. While a good step in the right direction, when I implemented EOS® in my own business over 10 years ago, I felt this was an oversimplification and needed to be stronger if it was truly going to set clear expectations to help leaders and managers really identify the right people for the right seats, and either coach people up, or coach people out when they were not performing to expectations.

All of the companies I have worked with over the years have heard me say that I believe the root of most of our frustrations are based on uncommunicated expectations. This applies in all areas of life, and especially in the relationships between a leader and their direct reports.

The Next Level Accountability Chart™

This led to the creation and evolution of what we teach at Next Level Growth as the Next Level Accountability Chart™. The critical difference, and in fact the key value of, the Next Level Accountability Chart™ is in establishing what we call MMOs™:  Mission, Most Critical Outcome™, and Obsessions™. With MMOs in place for every seat, both the leader and their direct report will have absolute clarity on what is expected of them, so that they can truly understand if they are in the right seat, and if necessary, get the coaching and development they need, and be clear about where they need it.

Let me share an example, using the same Sales & Marketing Leadership position mentioned from Traction above. First, to the Mission.

Establishing a Clear Mission

We define the “mission” for a seat as a one-sentence description of the consistent, high-level deliverable a seat on the Next Level Accountability Chart™ must achieve to be successful. For example, the Director of Marketing and Sales, or Chief Revenue Officer (insert whatever title you want) might have a mission to:  Consistently grow Target Market lead generation and conversion to meet or exceed revenue goals. It is a simple statement, and should be fairly obvious, but this is high level, and highly measurable, which creates clarity and accountability. We have a budget for the year, and if this leader drives sufficient target market growth in lead generation and successfully converts the leads at the conversion rate necessary to meet our budget, the company will likely meet or exceed its revenue goals, and we can measure, track and discuss performance around this mission on a consistent basis.

Most Critical Outcome™

Second, the Most Critical Outcome (MCO™) is defined as the single most important and measurable outcome for a function. At the Leadership Team level, the MCO is almost always a lagging indicator and typically should be tracked on a monthly team scorecard, by person. The 2-4 primary drivers of each MCO are usually measurable leading activities and should be tracked on your team’s weekly scorecard. The Most Critical Outcome should also answer the question, “If you were asked to measure one thing that most accurately proves you are getting a return on investment for the fully burdened human capital cost of a specific person in a given seat, what would you measure?”

In the case of our Director of Sales and Marketing, their MCO may be as simple as “Revenue Dollars to Goal (budget/forecast).” If the company is consistently meeting or exceeding revenue forecasts, it is very likely that the Director of Marketing and Sales is performing at a high level in leading their team and generating a sufficient return on investment.

Defining Obsessions

Lastly, we define Obsessions as anywhere from 2 to 6 things that a seat-holder must obsess about on a daily basis to be successful (usually around 4-6 at a senior leadership level and as few as 2-3 for a front-line employee). While the EOS Accountability Chart uses just a single word or short phrase for each of the roles or responsibilities, I believe there is still too much ambiguity and room for interpretation and confusion. If you look at the example from Traction above, it can be difficult to truly hold people accountable to “selling.” What exactly does that mean in terms of how you measure a person’s success?

When you have a clearly established Mission, with the right MCO, the obsessions become a strong way to align expectations around where a team member must focus in order to be successful at the level of an A-Player. For example, the Obsessions I might suggest for a Director of Marketing and Sales could be:

1 – Lead, manage, retain & hold my team accountable. I personally prefer to start with this one for anyone who has a direct report. When I work with companies who have used EOS and later upgraded to Next Level Growth, many people cannot articulate and explain what LMA really means. With our approach, we can specifically evaluate a team leader on how well they are “leading” the team. Is there dissention, harmony, etc. There are things we can observe and use to provide feedback to help the leader improve if needed. We can look at how they “manage” the team on a daily basis and provide coaching and feedback. We can look at “retention” on the team. Most people go to work for an organization but quit their boss. If a team lead has trouble retaining their high performers, then they need to be coached in that area. Finally, in the LMA concept from EOS, accountability is a byproduct of effective leadership and management. While I agree in theory, in the real world, I have found that when leaders are not willing to have the tough conversations to hold their teams accountable when needed, the teams underperform. Measuring how well a team lead holds their team accountable is actually not very difficult at all.

2 – Own the Marketing and Sales Strategies, Plans and Outcomes. If the person in this seat focuses their energy on getting the marketing and sales strategies right, developing and updating the right plans to execute on the strategy, and tracking outcomes to make adjustments where needed, we have them laser focused on a strategic approach to growing our pipeline, conversion, and revenue. If, over time, they cannot get the right strategy and plan in place to achieve the desired outcome, they are likely not the right person for the seat.

3 – Own the Marketing and Sales Process Playbooks and Execution. With the right strategies and plans in place, to be successful in this role, an A-Player will obsess about the playbooks and making sure that everyone on the sales team is following them. So many times, when I start digging into a company’s “sales playbook,” I find that they really don’t have one, and everyone on the sales team is more or less doing their own thing. With a strong leader in place, the team can develop some best practices and optimize how they run their sales plays to help improve conversion throughout the sales funnel and accelerate growth.

4 – Consistently meet or exceed goals and metrics. While this one may be implied, I like to include it anyway. If I’m going to give a person in this seat four things to obsess about on a daily basis, I want one of those to be their goals and metrics.

So, if on a daily basis the Director of Marketing and Sales truly obsesses about leading, managing, retaining and holding their team accountable; owning the marketing and sales strategies, plans, outcomes, playbooks and execution, and meeting or exceeding their goals and metrics, they are very likely to be highly successful in the role, or else it will become very obvious, very fast, that they are not right for the seat.

Next Level Accountability Chart™ – Going Deeper

Now that we understand what the Director of Marketing and Sales must own, let’s look at how a direct report, perhaps an Outside Salesperson’s seat, might be established.

You may notice that each Obsession in the Next Level Accountability Chart™ contains a verb. That is because these obsessions are about taking action, and it is important to get the verbs right if you’re going to create clarity. When we suggest the verb “own,” for a Leadership Team member, what we mean by that is if something isn’t working, and they own it, it is their job to fix it. If they get stuck, the rest of the team is there to help, but the vast majority of the time, they should have the competence to fix what they own when it isn’t getting the desired result, or they may be in the wrong seat.

For an outside sales seat, we may establish their Mission as something like, “Consistently grow and convert my pipeline to meet or exceed my new revenue goals.” This mission, when achieved, supports the mission of the person to whom they report. The corresponding MCO would likely then be, “New revenue dollars to individual goal.”

When rolling out their Obsessions, we start by looking at the seat to which they report. Since this person will have no direct reports, the Obsession around Leading and Managing does not apply. They might, however, have an Obsession that stems from the second Obsession of their leader, and that might be to, “Follow and successfully execute my sales plan.”

Notice that the verb changed to “follow.” This is important, because for this person, you don’t want them making up, or modifying their sales plan without working with their boss. You want them to buy in to the plan, and then obsess about following and successfully executing it.

Another obsession might be to, “Follow the Sales Process Playbook.” If the Director “owns” the Sales Process Playbook, you likely want the salespeople to obsess about following the Playbook.

Finally, I like to suggest including the Obsession to, “Meet or exceed my goals and metrics.”

It’s really that simple.

When you have a salesperson in the field, if they will just obsess about executing on their individual sales plan, following the sales playbooks, and meeting or exceeding their goals and metrics, and if their boss has taken ownership of creating great plans and playbooks, they have a much greater chance of being successful in their role. With this level of clarity, consistency, and focus, the employee wins, their boss wins, the customer wins, and the company wins.

Coaching Up or Coaching Out with Clarity

Remember, the root of most frustrations is based on uncommunicated expectations. Use the Next Level Accountability Chart™ approach to improve the clarity of expectations within your organization, coach people who need to be either coached up or coached out, and level up your overall performance, profitability, and growth.

Click to read the next article in this series, Inspiring Purpose.

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Unlocking Greatness: The Five Obsessions of Elite Organizations®

Entrepreneurial Freedom, People, Process, Team Health, Vision

Jim Collins opens his 2001 best-selling book, Good to Great, by stating that, “Good is the enemy of great.” Having spent more than 20 years growing my own businesses, followed by more than 10,000 hours across well over 1,000 days facilitating strategic meetings with the leadership teams of more than 100 entrepreneurial organizations, I could not agree more.

The Trap of Contentment

So many entrepreneurial leaders become content with good as being good enough and end up trapped in their own businesses. Having spent nearly 20 years of my career as a member of the peer groups YPO, EO and VISTAGE, one thing has become very clear to me. Most entrepreneurs, to some degree, achieve success at the expense of their relationships, their time with family, their physical health, or their emotional health.

I created Next Level Growth because I believe it doesn’t have to be that way.

Build an Elite Organization

At Next Level Growth, we focus on Helping Entrepreneurial Leaders Build Elite Organizations®. What Collins refers to as “great.” In his book, Collins shares from the findings of his research, that the organizations who made the leap from good to great had something in common. They were all lead by a team of disciplined people, engaged in disciplined thought, taking disciplined action. It’s important to break this concept down if you are going to be able to apply and operationalize it in your own organization, and it is from this concept that the Next Level Growth Approach was formed.

The Five Obsessions of Elite Organizations®

This is the first post in a series of six, which will walk you through each of the Five Obsessions of Elite Organizations and how to use them to create a custom-tailored system from which you can build your own elite organization. But first, let me clarify why building an elite organization is worth the effort.

When entrepreneurs follow the Next Level Growth Approach and begin building elite organizations, they are more able to begin delegating to a capable team, aligned around a common set of values and a common purpose, in a systemized and scalable business, where expectations are clear, performance is measured and reported on, and leadership constantly invests in coaching and developing people, while providing them an environment where they can perform at their natural best.

When this happens, entrepreneurial leaders begin to experience a sense of freedom. Their organizations become more efficient, more self-managing, and less dependent on the founder and the leadership team to be deep in the minutiae of the day-to-day.

Hear from long-time Next Level Growth client about his experiencing Return on Life.

We find that these elite organizations bring a special discipline, commitment, drive, and passion to excel in each of the Five Obsessions, to a very high standard, all of the time. Simply put, the Five Obsessions are: Great People, aligned and driven by an Inspiring Purpose, consistently training on, executing, and improving Optimized Playbooks, in a Culture of Performance, while proactively Growing Profit and Cash Flow.

The Five Obsessions of Elite Organizations

Most people have heard the “Right People, Right Seats,” analogy made popular by Collins in Good to Great. While I agree that you need Right People, those who share your values and whose behaviors consistently align with those values, in the Right Seats, meaning they have the skills and desire to perform their roles to a high level, I believe there is a 3rd leg to this stool that is missing: an Inspiring Purpose. When you have the right people, in the right seats, and they are inspired by and emotionally connected to your purpose, they will bring an even greater level of effort to the work that they do and will ultimately be even greater ambassadors for your organization.

1. Great People

In the first of the Five Obsessions, Great People, we use two concepts to help organizations excel at Right People in the Right Seats. First, The Next Level Accountability Chart™ is an advanced version of an Org Chart that we have created over several years of refinement with hundreds of clients ranging in size from just a few million in revenue to organizations nearing $1 billion, and from every industry segment imaginable. What specifically makes it unique and valuable is the inclusion of what we call MMOs™, an acronym for the 3 critical components of a seat on the Next Level Accountability Chart:  Mission, Most Critical Outcome™, and Obsessions™. With this in place, team members from the CEO to the front lines will have absolute clarity of expectations for success in their roles. What’s more is that you can also use this concept to clarify expectations of Board seats, which can be helpful especially in the early days of forming a Board of Directors.

When the Next Level Accountability Chart is in place, it is used to feed Quarterly Coaching Conversations, which utilize the second concept for Great People, the A-Player Talent Assessment. Our next blog post will dive deeper into this obsession. The tools around these two concepts help create exceptional alignment around expectations and consistent communication to drive alignment throughout the organization and provide coaching on a continuous basis.

2. Inspiring Purpose

The second of the Five Obsessions, Inspiring Purpose, is about storytelling. As humans, we are all storytellers. Most organizations make significant investments in PR and marketing, but it is almost always externally focused. Elite organizations also make investments in understanding, articulating, and in fact, marketing, their Just Cause and Daily Purpose internally. This provides team members something that they can emotionally connect with, and when you bring an emotional connection to what you do and why you do it, you get better, more consistent performance, and you can accomplish even more and at a higher level.

3. Optimized Playbooks

Optimized Playbooks is the third of the Five Obsessions. Outside of the business world, every professional has playbooks and a practice schedule. Whether it is an athlete with a playbook to study, or an actor with a script, they have playbooks and they are consistently practicing so that when it is gametime, or time for the performance, they are ready to execute flawlessly. Only in the business world do most professionals operate without playbooks and without any meaningful practice. Our fourth blog post in this series will dive into playbooks and practice schedules.

4. Culture of Performance

The fourth of the Five Obsessions is a Culture of Performance. When you have a team of A-Players, and they are inspired by the purpose behind what they are doing, they want to know how they are doing – if they are winning or if they are falling behind. It is important that they know the score and the key details, in real time, to know how to adjust the way they are playing the game. Imagine watching a basketball game with no scoreboard and no stats. It would be like watching practice. But when you add a scoreboard, and everyone knows the score, the time remaining, the team fouls, and the teams are tracking statistics and checking in at every time out so they can review the data and make real-time adjustments, that is not only more interesting, but it drives our competitive human nature and leads to higher level of performance. To build an elite organization, we must obsess about a Culture of Performance.

5. Growing Profits and Cash Flow

The last of the Five Obsessions is something that, unfortunately, most Business Operating Systems and many entrepreneurs view as a byproduct of everything else…Growing Profits and Cash Flow. While in theory one could argue that this mindset is correct, we live in the world of reality, and in reality, to be a truly elite organization, you must consistently obsess about Growing Profits and Cash Flow. The best organizations are constantly fine tuning and evolving their pricing strategy, their cash conversion cycle, and improving the financial literacy of their teams and leaders. You have to think of both profit and, even more importantly, net cash flow, as the fuel that feeds the engine you are building in your business, and that engine is what drives your Inspiring Purpose. No profit, no purpose.

Over the next 3 months, we will be releasing blog posts diving deep into each of these Five Obsessions, unpacking the specific tools and concepts we share with the organizations who are members of the Next Level Growth ecosystem and working with an elite Next Level Growth Business Guide on their journey to the summits of their business mountains.

Click to read the next article in this series, Great People.

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The First & Second in Command Relationship (Founder & Operations)- Building Trust

People, Process, Team Health

As a former “Second in Command/Change Agent” inside organizations working directly with, and for, CEOs, I know what it’s like to feel as though you’re on a whole different planet, or at least speaking a different language. These relationships are typically Yin and Yang, and when operating in harmony, can bring beautiful balance. But when forces are opposed, this can create chaos and destruction.

Now, as a Next Level Growth Business Guide, I often see this dynamic play out as an outsider witnessing the Integrator/Operations Leader/Second in Command (insert #2 title here) feeling frustrated that the Visionary/CEO doesn’t trust them to do their job for one reason or another.

From my experience if you’re the Second in Command, here are 3 ways to build trust with your CEO:

  1. Start by asking the right questions and listening to their story. Understand their WHY.
  2. Make them feel heard before moving on to implementing a solution- sometimes they are not looking for the execution of an idea, but rather a sounding board. When in doubt, ask.
  3. Choose empathy. Before approaching a topic, try figuratively sitting in their seat. Attempt to understand their perspective, needs, and fears. Assume the best intent.

Zoom out and try to see things from their vantage point. Remember…

  • Trust is scary. The stakes are high.
  • Handing over a piece of your business and putting someone else in charge can be nerve-wracking.
  • They may not be able to see how the pieces come together in the same way that you can.
  • They need to feel included. Consult and inform them on the decisions that are important to them using a Decision Matrix (available below). Ultimately, it’s their name, reputation, and resources on the line.

If you’re working with an entrepreneurial founder or CEO, and you’re saying to them, “just trust me,” stop. They want to be able to trust you. That’s why they chose you to work as their right hand, they just might not know how. It’s your job to figure that out. You’re the one who puts ideas to action, you may also need to be the one to extract their ideas and implement the right ones effectively. Be their guide, and make it a safe place for them to live 25,000 feet above the business.

No matter how invincible a CEO might feel, they should never underestimate the value of having a partner. You need someone you can trust, be vulnerable with, and open up to. The yin to your yang. You need someone who will tell you the truth, including when they think you are wrong, so you can keep moving forward in a positive direction.” – The Second in Command, Unleash the Power of Your COO by CAMERON HEROLD

If you’re a Senior Operations Leader in the Second in Command role, remember, you were hired for a reason. The relationship is about trust, and it may require you to manage up so that you have what you need to be successful in your role and execute with the organization’s best intentions in mind. I also recommend picking up a copy of The Second In Command, by Cameron Herold. Read it to learn more about the relationship dynamic between you and your CEO and how to build trust in the relationship.,

Free Next Level Growth Decision Matrix Worksheet

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How to Create an Employee Engagement Process

People, Process, Team Health

I recently met with a CEO and, among other things, we discussed issues with engagement on the Board level of his organization. He was finding it difficult to get them committed to showing up, participating, and doing the work that was required. Ultimately, it was resulting in more work on fewer people’s shoulders.

He said to me, “when I make a commitment, I follow through.” I told him I agreed and that’s how I operate as well, and it’s disheartening that others don’t do the same. I said, “It’s up to us to make sure the team knows that engagement IS the expectation and that nothing less is acceptable. We need to look at the process, not the people. Our recruitment efforts should help ensure the right people, but we need to look at our process around engagement too.”

When I hear Employers, Managers, and other Leaders tell me they are experiencing “engagement issues” saying participation is just not at the desired level, they often follow it up with one of two reasons why they think it’s happening:

Reason 1: People.

We have the wrong people.

Reason 2: Expectations.

Our expectations are too high, the world of work is different these days.

I have another Hypothesis.

When I ask Leaders what their employee engagement process consists of, I almost always get a blank stare or some fumbling of information about how they host company-wide team-building events, do surveys, gift cards or other incentives.

Those might be a PART of the process, but my follow-up question is, “what is THE process for getting and keeping employees engaged? And, is it documented and communicated with the right people on the team?” Developing a strong process that is focused on employee engagement makes all the difference.

Your Employee Engagement Process needs an update.

Leaders, remember that you must set AND hold the standard for all expectations in your organization, including engagement. When engagement is the expectation, and you have a process to support that, you will have no choice but to have engaged team members. You’ll know when you have it right when the feeling is… engagement is our culture – it’s just the way it is around here.

When you’re faced with a problem like employee dis-engagement, approach the problem systematically… state the problem, get clear on the specifics of the problem and revisit your process.

When we can clearly identify the problem, and commit to doing something about it, it’s already half solved.

Here’s an example of how to set and keep a standard of engagement inside your organization with an Employee Engagement Process.

HR (or someone responsible for this function) owns the process.

  1. Starting from the Interview Process – check in with the applicant to gauge their interest (monitor the follow-through of candidates in the hiring process as a KPI).
  2. A warm welcome in Onboarding Process.
  3. Set the expectations for engagement in Orientation and all Meetings.
  4. Have a process for gauging training success and onboarding satisfaction within first weeks of new hire onboarding.
  5. Monitor meeting attendance and Average Meeting Scores (if you’re not scoring every meeting, you’re missing a real-time opportunity for engagement feedback).
  6. Formal and informal employee/ manager feedback process. Example: Annual Performance Evaluations and Quarterly Coaching Conversations.
  7. Recognize engaged employees company-wide (positive feedback loop).
  8.  Make it a two way street- ensure their feedback is heard, addressed and implemented where appropriate.

The result?

Engaged employees, by design. Don’t blame the people if engagement is off, blame the process. A well-designed process will help you identify if you have the wrong people.

Free Quarterly Coaching Conversations Download

A key to employee engagement.

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5 Tips to Cultivate a Culture of Resilience

People, Process, Team Health

There is one common trait that all successful entrepreneurs shareresilience. There are two definitions of resilience I like: “the capacity to recover quickly from difficulties – toughness,” and, “the ability of a substance or object to spring back into shape; elasticity.”

It can be challenging for entrepreneurial spirits to understand why others stay stuck or get defeated easily because we see the opportunities for change all around us. When we, as entrepreneurs, face difficulties, we do our best to spring back and recover quickly because we have no other choice. We get a sense of enjoyment from the challenges because we know it leads to growth.

This mentality can be difficult to carry into your organization. When people feel defeated, how do we inspire them to keep pushing through? How do we not allow minor setbacks to stir up negativity and cause major issues?

There’s a unique characteristic many visionary founders have. They are charismatic. They have the ability to inspire others to see what they see through their rose-colored glasses, past the reality of what’s happening in the present. They can paint a picture of a colorful world that does not yet exist through only their words and passionate delivery. They can leave people in awe and excited to follow their lead. They are the changemakers.

These visionary types have a way of understanding people and their needs. When the organization is small, this charisma is what continues to inspire their team to keep going.

But what happens when you’ve grown so quickly that you now have an army of people? At any given time, half the team could be seeing what you see, on the train moving quickly toward all the possibilities in the colorful promised land. The other half, dragging the team down thinking about jumping off at the next station or slowing it down by grasping tightly to the fear of derailment.

If you want to create a culture of resilience and avoid the inevitable setbacks that come from scaling an organization, you need to prepare for this occurrence and prevent poor performance before it starts.

James Baker, former Secretary of State introduced the 5 P’s: Proper Preparation Prevents Poor Performance.

You need to cultivate the type of environment where development, growth, toughness, and elasticity exists, thrives, and becomes the norm.

You’ll need to teach resilience by naming it, discussing how it shows up inside your organization, and explaining why it’s critical to everyone’s success.

It can no longer come from just you as the visionary founder. Resilience will need to exist in every member of the team and be strengthened by its leadership.

“Resilience comes from deep within us and from support outside us. It comes from gratitude for what’s good in our lives and from leaning into the suck.” Sheryl Sandberg, Option B: Facing Adversity, Building Resilience, and Finding Joy.

As people that embrace the suck, we know the trait of resilience comes from within, but we can forget that the support outside of us is what keeps that light on. This is what we need to be for our team. The light that helps others see what’s possible.

How do we cultivate resilience in our organizations?

Brene Brown, American professor, lecturer, and best-selling author writes in the book Gifts of Imperfection: “having a sense of purpose, meaning, and perspective in our lives allows us to develop understanding and move forward. Without purpose, meaning, and perspective it is easy to lose hope.”

If you are working towards building something great, you have a sense of purpose that keeps you going. You may or may not have named exactly what that purpose is, but it gives you hope of a brighter future which helps you overcome adversity more easily.

We know that external motivation only gets us so far. Motivation from outside yourself can be helpful, but being internally motivated by your own values and goals is the only sustainable approach that provides long-lasting and more meaningful results.

To build an organization that cultivates resilience start here:

  1. Help individuals find their own sense of purpose.

Purpose comes from deep within. It’s personal. As leaders, it’s our job to help people discover their own purpose and tie it to their role in the organization.

  1. Create meaning around goal setting.

When people know their purpose, they need to set goals that allow them to live out their purpose. Help your team develop a deeper connection to their goals through the lens of their personal purpose.

  1. Show people they can remain optimistic through gratitude.

A practice of gratitude helps people see the good in everything. When something doesn’t seem great on the surface, we can help others shift their perspective to gratitude and away from negativity.

  1. Tie the company’s goals to the individual’s goals.

Real buy-in only occurs when personal goals and values are aligned with organizational goals. To tie your team’s internal motivations with the goals of the organization you help people show up as their best selves and continue to perform at a high level.

  1. Support internal motivation through external motivation.

Helping people connect with their sense of purpose creates internal motivation. As humans, it can be hard to sustain motivation. High-performers seek out coaches, advisors, and accountability partners but your team might not see that as an option. Weave coaching, mentorship, and accountability throughout the company so it’s reinforced at every level.

Cultivating a culture of resilience strengthens your team’s ability to overcome obstacles and turn threats into opportunities. When everyone inside the organization practices resilience your team will be unstoppable.

Free Quarterly Coaching Conversations Download

A great starting place to cultivate a culture of resilience is to integrate quarterly coaching conversations. Download this overview to get started.

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Align and Measure Employee Results with Most Critical Outcome™

People, Process, Team Health

For most companies, the biggest investment they make is in human capital. As important as it is to get this substantial investment right, few organizations are actually tracking, or know how to measure, the value they are getting in return. And when that’s the case, they can’t truly know if they’re getting an adequate return on investment (ROI) for their human capital expenditure.

Understanding ROI on Your Human Capital Expense

Most Critical Outcome™ (MCO™), a concept I initially began to develop in my manufacturing business in 2011, and later evolved as part of Next Level Growth over more than eight years of working with entrepreneurial organizations, fills that gap.

MCO offers a way to effectively measure and validate ROI on team members across an organization, from the CEO to the front-line employees. It’s simple, powerful and has the potential to be a transformational tool when it comes to developing team members, creating clarity throughout the organization, and increasing profitability.

When I was a top-performing EOS Implementer®, I was frustrated by how many organizations failed to execute the “Measurables for All” concept under the Data Component™ of the Entrepreneurial Operating System®. There just wasn’t a clear way to operationalize the concept, so for many companies running on EOS®, it was more theory than anything put into action. As we tell our clients at Next Level Growth, success lies in your ability to operationalize the concepts that you believe in. If you cannot operationalize the concepts you espouse, and measure the outcomes, you’re wasting your time and energy talking about them.

Upgrade From “Measurables for All” to Most Critical Outcome

MCO provides specific clarity throughout an organization’s accountability chart, and ties the outcome of each seat back to the most critical impact it has on the organization’s financial performance. In essence, MCO is a “measurables for all” approach that ensures everyone in an organization has a clear understanding of what winning looks like in their role relative to performance expectations, and helps clarify the path needed to achieve the desired result.

The best way to think about and understand how to operationalize MCO is through the lens of ROI. For any seat in the organization, there is a fully-burdened human capital investment the company is making in putting a person in that seat. The MCO clarifies the measurable outcome that, when met or exceeded, will validate a sufficient ROI for the investment the organization is making in the specific person in the seat. A person who consistently meets their MCO goal is a good investment for that seat. A person who struggles, is either not in the right seat, or needs more coaching and development. The data doesn’t lie and gives leaders greater clarity in where they need to spend time coaching and developing, or sometimes changing, team members.

Most often a lagging indicator, the MCO of a seat should support the seat which it directly reports to on the Accountability Chart and is often tracked as part of a team’s monthly scorecard. On a daily or weekly basis, the two to four key drivers associated with a specific MCO (think daily or weekly activities that drive the MCO) are generally tracked on scorecards or scoreboards, as they are the leading activities.

MCO In Practice

Sandy has been a Next Level Growth client for several years and is the owner of a manufacturing business. We began developing MCOs across the organization with the company’s leadership in 2019. We began by asking them to imagine they were no longer employees of the organization, but were instead members of a Board of Directors and they were hiring a CEO to run the organization. In that situation, we asked them, “What would be the single Most Critical Outcome they would expect their CEO to deliver for the company?”

The answer was growing the enterprise value of the organization, in real dollars. For the CEO to achieve that, the MCOs of each member of the leadership team must support, based on each team member’s area of expertise and focus, driving the MCO of the CEO to whom they report. So as we worked through the same exercise for each seat we ended with a President, reporting to the CEO, whose MCO was “EBITDA dollars to goal (in their case, budget).”

There were four seats reporting to the President, a VP of Business Development, whose MCO was “revenue dollars to goal,” a VP of Operations, whose MCO was “net operating income dollars to goal,” a VP of People, whose MCO was “percent of right people/right seats to goal,” and a VP of Finance, whose MCO was “net cash flow dollars to goal.”

The finance seat is often an interesting one, as the role is more about reporting and analysis, so the VP of Finance does not as directly control the components of net cash flow in real dollars the way the VP of Operations would control the inputs and outputs of net operating income. The logic with this MCO for the VP of Finance was that the leadership team wanted this person to be so obsessed with protecting the net cash flow of the organization, that the moment they saw an indication of a future concern, by focusing on their specific MCO, they would be coming to the weekly leadership meetings raising their concerns and ensuring that the entire team was aware of the future risk and taking early action within each of their areas of focus to stay ahead of the concern.

Beyond the Leadership Team

As we began rolling this out through the organization, we followed the same logic for each seat. In operations, for example, there was a Production Manager directly reporting to the VP of Operations. To support the VP of Operations’ MCO of net operating income dollars to goal, the Production Managers’ MCO was established as a ratio of “throughput per direct labor dollar to goal.” They measure their production throughput against the direct labor dollars being spent to obtain the throughput, and if the Production Manager meets or exceeds goal, the VP of Operations is more likely to meet or exceed their MCO of net operating income dollars to goal.

Taking it one layer deeper, there are several machine operators reporting to the Production Manager. For each of them, we established an MCO of “throughput per shift to goal.” Again, if each machine operator met or exceeded their individual MCO, the Production Manager was likely to meet or exceed their MCO, and the VP of Operations was more likely to meet or exceed net operating income to goal.

In each of those cases, the MCOs for individual positions reflect the Most Critical Outcome they can achieve that impacts the MCO of the person they are directly accountable to.

There’s a reason why this level of specificity is important for success. I often tell the teams I work with that, “the root of most frustrations lie in uncommunicated expectations,” so by creating clear expectations there will likely be fewer issues and frustrations. In fact, at Next Level Growth, we believe that organizational leaders owe it to their employees to create clarity that lets them know if they are winning or successful in their roles and to be able to know how and where to help them.

Most Critical Outcome – A Vehicle for Clarity

At Next Level Growth, MCO is a concept we teach on the very first day we work with a client. At the end of the first working session, everyone on the executive team has identified their MCO and we document it in their Next Level Accountability Chart. Their homework is to begin building it out for the rest of the organization. Within the first 90 to 120 days, and with our help and guidance, most have it established, communicated, and tracked for every seat in their company.

Chris Connelly, owner of the architectural firm Pinnacle Design, has seen the efficacy of MCO first hand.

“We’re only three months into our work with Next Level Growth and I have not been this excited about the future of Pinnacle Design since it was founded almost 28 years ago,” Connelly said. “I’m so thankful for our amazing leadership team and everyone at Next Level Growth. We are all very excited for the journey ahead.”

At the end of the day, there has to be an outcome that creates success for an organization. Business success has to factor in measurable results. If an action doesn’t eventually generate profit and positive net cash flow, it doesn’t help an organization achieve its purpose. No cash flow and no profit…no purpose.

Learn more about how Most Critical Outcome could help your organization effectively measure employee productivity by requesting a free consultation with a Next Level Growth guide.

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Confront the Brutal Facts to Create a Culture of Commitment

People, Process, Team Health

“Leadership does not begin with just a vision. It begins with getting people to confront the brutal facts and act on the implications.”   – Jim Collins

In his best-selling book, Good to Great, Collins talks about the need for leaders to investigate the brutal facts and realities of the organization and to have the discipline to call them out. Here we’ll outline the 3 things Elite Organizations do differently to resolve problems swiftly and climb their business mountain with greater speed and agility through a Culture of Discipline.

Many fast growth companies move quickly, but stall in reaching their full potential. There are many reasons why, but often it’s simply a matter of not using their most critical resource wisely: time. We waste time listening more to opinions than facts. We weigh opinions and prioritize emotions, leaving us feeling drained, without truly accomplishing anything. It takes time to think clearly and articulate the facts of the issue. Time spent confronting the brutal facts is time well spent, which increases your forward momentum, and helps you take the right actions, quickly.

3 things Elite Organizations do Differently to Create a Culture of Commitment:

Build a Team of Disciplined People.

The magical power of Elite teams does not exist without great people. People who share the organization’s values, are aligned and driven by an inspiring purpose, and who work towards a shared vision. Great people need to be in the right seat in the organization to excel to their full potential. High performers desire to have their focus on excellence and thrive in a culture that creates, supports, and rewards these efforts.

“When you have disciplined people, you don’t need hierarchy.”   – Collins

 

Train Disciplined People to have Disciplined Thought.

“Simple can be harder than complex. You must work hard to get your thinking clean to make it simple.”   – Steve Jobs

Using a framework of rigorous thinking and communication helps identify the true facts, not opinions. When everyone is on the same page using a shared language and structure for communication you get the right things done.

Remember, opinions are not facts. Encourage the team to better define their statements with facts. When you’ve clearly identified the real issue, the problem is nearly solved.

Here is an example of how to state the brutal facts in place of opinions.

“I think we’re growing too fast”

We grew 50% last year, and our capacity only grew 30%

“We’re not looking for the right people.”

We’re not using the Core Values Hiring Guide and Accountability Chart in our hiring process

“Our owner is checked out”

Owner missed half of the Leadership Team meetings the past two Quarters

“We aren’t generating enough leads”

Our sales process requires 30 leads a week to meet our annual targets. We are getting 10.

“Our processes are too complex”

Our production process has 22 steps and 8 of those steps are unnecessary.

“When you have disciplined thought, you don’t need bureaucracy.”   – Collins

Disciplined People with Disciplined Thought Must Take Disciplined Action.

Accountability of a project or task requires clear ownership. Projects that move you toward your larger goals often require involving multiple people in the organization, but only one person should be ultimately accountable for it getting done. When in doubt, consider using RACI. Responsible, Accountable, Consulted, Informed.

      • The Accountable Person– owns the completion of the project and is ultimately accountable for the outcome.
      • The Responsible Person (or people)- own tasks or components of the project.
      • The People Consulted– who needs to provide input for the project? These people should be consulted.
      • The People Informed– these are the members of the team that need to be informed of project status/completion. For example, in your Weekly Tactical these are the people receiving the high level updates.

When you’re laying out projects (ROCKS) it’s important to know who owns the Project and what is the definition of successful completion? Consider using the Next Level Growth Project Planner to clarify the important milestones, timelines and desired outcomes.

Free Next Level Growth Project Planner

Clarify your important milestones, timelines and desired outcomes. ​

When you have disciplined people on your team, involved in disciplined thought, taking disciplined action, you have a better understanding of what is important to achieve and what is not. Your time and energy is better channeled into the things that move the organization forward.

When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great performance.

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