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5 Tips to Cultivate a Culture of Resilience

5 Tips to Cultivate a Culture of Resilience

June 6, 2023• People, Process, Team Health

There is one common trait that all successful entrepreneurs share—resilience. 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

Align and Measure Employee Results with Most Critical Outcome®

May 16, 2023• 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

Confront the Brutal Facts to Create a Culture of Commitment

April 25, 2023• 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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the empty chair lesson for business processes

The Power of the Empty Chair

January 31, 2023• Issues, People, Process

Over the past decade, the entrepreneurial world has seen a significant increase in the availability, and use of, business operating systems like EOS®, Scaling Up®, Pinnacle Business Guides, and Next Level Growth® to help entrepreneurs and their leadership teams run better businesses.

The Problem…

While companies utilizing a business operating system will almost always, in the long-term, outperform competitors who do not use a system, there is one common component of almost every business operating system that is both extremely important yet often the lowest priority in the organizations who use them…Process.

Why does Process take a back seat in most organizations? Because the urgent gets in the way of the important. Ironically, that is exactly why you need to focus on process.

Most leadership teams in organizations running on a business operating system like EOS, Scaling Up, Pinnacle, Next Level Growth or one of the many other systems out there, find themselves so busy firefighting that they deprioritize process documentation and optimization, even though it is one of the most important tenets of their operating system’s model. Ironically, optimizing their process playbooks and training is the very thing that would eliminate so much of the firefighting that is keeping them from doing the work to get them done and operationalized in the first place.

The Empty Chair Metaphor…

One of our client’s COO’s recently shared an idea they tried to drive the importance of prioritizing Process Playbooks with their Leadership Team and CEO. It was November of 2022. The COO of the company was having difficulty getting her CEO and the rest of the leadership team to really buy in to the idea that they needed to prioritize 2023 as the “Year of Process Playbooks.”

To make her point and get her CEO and team to see what they were missing, she started adding an empty chair at the conference table for their weekly tactical meetings. On the backrest of the chair, facing the table and the team, she taped a large piece of paper with the word “PROCESS” written on it in big, bold letters. The team found it odd when they came in for their first meeting with the new seat at the table, but they proceeded as normal.

When it came time in the agenda for issues solving, for each issue they prioritized to tackle where she felt the real issue was their lack of Process, she would point to the “Process Seat” and ask the team, “Is this issue actually “their” fault?”

Much to the team’s surprise, the more often she did this, the more they realized that if they focused on process, rather than the dozens of different “symptoms” they often focused on and talked about, their issues list would be much shorter, they would be fighting fewer fires, and they would have more time to elevate to a more strategic focus on growing the business.

As the meetings progressed over the following few weeks, the team became more and more aligned around the reality that many of their issues were rooted in a lack of clear, optimized processes that their employees could easily follow. That gap, a result of their procrastination around working to improve their process documents and training, was creating the bulk of busy work that was causing the majority of their frustrations.

A key question to ask yourself…

If somebody were buying your business and they asked to see your process playbooks and training, would the quality of those documents, whether digital or physical, allow you to negotiate an increase in valuation because they are of such great quality and impact, or would the buyer see them and be able to negotiate a decrease in value because they are so weak or non-existent?

Let that question resonate. If you know that your business would be more valuable with optimized process playbooks and training, and if you know that your current state process playbooks are not helping increase the value of your organization, then what are going to do about it? As a leader, it is your job to make decisions and take action.

The Solution…

While your organization is completely capable of documenting your processes on your own, the reality is, you probably dabble in process at best. Because of that, you will likely spend anywhere from nine months to nine years getting your processes documented, and you will almost certainly end up with a mediocre result. It is not your expertise or what you do every day. The time, energy, and fully burdened payroll it costs you to take the “do-it-yourself” approach will likely produce a very low return on investment.

What if there was a better way? A way to get full teams of people within the organization involved and engaged in helping not only define and document your processes but optimize them along the way…reducing wasted effort…improving the steps and handoffs…establishing clear triggers and optimal outcomes…improving scorecards and data through a better understanding of process and what to measure.

What if you and your teams could do that in just 90-to-120-minute breakouts, engaging team members all the way from leadership to front-line employees, spread over a 2-day period, as part of a workshop facilitated by a Lean Certified expert? What if that facilitator would then take all of the work done over those two days and produce and deliver your process documents within just 7 days of the onsite workshop? Would that be easier than the “do-it-yourself” approach? Having your process document in hand, and truly optimized, in just nine days, versus nine months to nine years?

Our friends at Process Optimizer® do just that. They have helped hundreds of companies using EOS, Scaling Up, Pinnacle, and Next Level Growth create outstanding playbooks for a fraction of the time and expense those companies would have incurred doing it on their own. In addition, they also remain engaged as a resource for an entire year following the delivery of the documents to make sure that you and your team have everything necessary to get your processes fully implemented into both initial and recurring training as well as ongoing continuous improvement. As with anything, it’s not about the idea or the tool, but how well you optimize and operationalize it that makes all the difference.

Next Steps

  • Learn more about Process Optimizer®

  • Not ready to reach out to the Process Optimizer team just yet? Take our Business Health Checkup and see how you score, especially in the section on Playbooks. We won’t bombard you with unwanted emails. You’ll just get a great self-assessment of how you’re performing and, only if you want it, a free, no-obligation call with one of our elite Next Level Growth Business Guides™ to discuss your results and learn some things you can do to Take Your Business, and Your Life, to the Next Level™.

  • Meet our team of Elite Business Guides 
    If you want to go fast, go alone.
    If you want to go far, go together.
    If you want to go fast and far, go with a Guide.
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Hard Work Doesn’t Always Work

November 4, 2020• Entrepreneurial Freedom, Issues, People, Team Health

Hard work is an inherent part of what makes every entrepreneur tick. It’s that mindset telling us if we just keep working harder and harder we can accomplish anything. It’s true — but only to a point.

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