Optimized Playbooks – The third of the Five Obsessions of Elite Organizations®

Process

“Every system is perfectly designed to get the results it gets.” W. Edwards Deming

Where are you frustrated within your organization?

Are you frustrated by people? Then your systems, or processes, for recruiting, hiring, onboarding, developing, and removing people are designed, or at least being executed, in a way that frustrates you.


Are you frustrated by a lack of growth? Then your systems and processes to attract target market leads, convert them into customers or clients, keep them happy, and retain them is designed, or at least being executed, in a way that frustrates you.


Are you frustrated by a lack of profit and/or cash flow? Then your systems and processes to optimize profit and net cash flow are designed, or at least being executed, in a way that underperforms expectations and frustrates you.


The Root Cause of Almost All Your Business Issues

Since leaving my career as an owner and CEO of manufacturing businesses in the hardwood industry and transitioning into my work as Founder of Next Level Growth and Business Guide, it has become very clear to me that the root cause of almost all issues in business is either one of people or process, and if you don’t have optimized Process Playbooks for people to train on and follow, you cannot always be certain that people are your problem.

Imagine a scenario where you took the best professional NFL football players by position, assembled them as a team, and put them up against a team randomly assembled of NFL players who were all backups for their positions. All things being equal, the All-Star team would likely win almost every time. If, however, the All-Star team did not have playbooks, was not allowed to practice running plays, and did not receive any coaching, while the team of backups was given well thought out playbooks, studied them regularly, practiced running the plays on a regular basis, and received consistent coaching, I would put my money on the backups to beat the All-Stars every time.

There is incredible power in using Optimized Playbooks, which is the third of the Five Obsessions of elite Organizations®.

Optimized Playbooks

Onboarding or Waterboarding?

Why is it that outside of the business world, every professional has some version of a Playbook? Sports teams draw up and practice set plays. Actors have scripts. Musicians have compositions and set lists. Each of them spends countless hours studying and practicing their plays, scripts, or compositions so that they can perform at their absolute best.

Only in the business world, do we, as professionals, avoid creating defined, documented, and optimized Process Playbooks. We expect people to come into our organizations and perform, but we don’t onboard them through a great process and train them on optimized playbooks for their role. Instead of being well onboarded into an organization and a job, most employees get waterboarded. We may expect excellence in our outcomes, but our systems are often designed for mediocrity, at best. As a result, employees suffer, their teams suffer, their leaders suffer, the company suffers, and in the end, the customer suffers.

Process Playbooks versus Procedures

The third obsession of elite organizations is Optimized Playbooks. When we talk about Playbooks, we are not talking about hundreds, or thousands, of pages of highly detailed documentation. Those are what we call Work Instructions, or SOP manuals. Documents like those can be helpful in onboarding and training new employees who are deductive learners, or to satisfy some regulatory requirement, but documents like those are rarely, if ever, referenced once they are produced.

Process Playbooks are essentially checklists, or a sequential outline of the high-level steps, in order, to go from a triggering event, like receiving a purchase agreement, to delivering a product or service and collecting a payment, a desired outcome. At the very front end of most businesses, there are Process Playbooks for the Marketing or Business Development Team…they define how the organization attracts target market prospects. Then comes a Sales Playbook to map out and define how to convert those prospects into customers or clients. Following the Sales Playbook comes the Operations Playbooks, everything about how to make the products or deliver the services once there is an order to fill or a new client to onboard. The outcomes of the Operations Playbooks typically serve as the inputs to the Finance or Accounting and Admin Playbooks, everything about how money moves and reporting flows through the organization.

Overarching all of that, it is important to have an Employee Journey Playbook that covers everything from the time a need to fill a seat is recognized, through recruiting, hiring, onboarding, development, and eventually offboarding.

Do It Yourself

When thinking about Playbooks as high-level checklists, think about the Pareto Principle, also known as the 20/80 Rule, that 20 percent of your inputs get you 80 percent of your results, so document the 20 percent that gets you the 80 percent. Where more detail would be helpful, we suggest creating a video library to supplement the Process Playbook. So many people are used to learning from content like YouTube videos, consider creating screen share videos for detailed instructions on how to do things within your CRM, ERP, or HRIS systems as part of the training for employees.

You can even use simple cell phone videos to show employees how to complete steps of your Process Playbooks that will provide them the greater detail. Some of our manufacturing clients use cell phone videos to show the details of how to set up a machine, and other technical aspects of production. We have hospitality clients who use simple videos to provide the training details on how to greet a guest and how to address and work with an unhappy guest. If a picture is worth a thousand words, a video is worth many, many more.

A simple approach to begin documenting your processes and building out your playbooks is to think about what action triggers certain things to happen in your organization. Then, before you start documenting what you currently do, get clear on what the optimal outcome of the process should be. As a side note, this exercise is best done with a small group of high performers from each team rather than by one individual. The group approach both brings a diversity of ideas and also creates greater buy-in through participation.

Start with the trigger and work with the team to determine what the very first step should be and document that. From there, talk through what the next step should be, and look for areas where things break down, issues arise, or there are frustrations. Try to come up with a better, or more consistent way to handle that step to eliminate the problems, then go to the next step and repeat. At the end of this, you should have a clear process that, when followed, gives you a very high likelihood of consistently achieving the optimal outcome you desire.

Once your processes are documented and organized, you need to distribute them to everyone and work through them with every employee so that, for their role, regardless of tenure, all employees are clear on the processes they are expected to follow. This also allows you to clarify what you need them to do when they encounter nuances, or situations, that are non-standard and require deviation from the process. How much room do they have to figure out a solution on their own? How much input do they need to get from management?

That last part is summarized beautifully in a quote from Isadore Sharp, Founder of the Four Seasons, who said, “You systemize the predictable so you can humanize the exceptional.” The more we can systemize the predictable things that happen within our organizations, the more we free people to use their creative minds to humanize everything else and create exceptional experiences both inside and outside the organization.

Faster and Better Path to Done

In my experience, it takes most organizations who go down the do-it-yourself path of documenting their Process Playbooks anywhere from nine months to nine years to get the work done. The problem is that they often overcomplicate it, or ironically, they get too busy in the day-to-day firefighting that would be significantly reduced if they had their Process Playbooks in place. As my friend and co-author of The Path to the Pinnacle, Greg Cleary likes to say, “Process takes pressure off of people.”

At Next Level Growth, we often introduce and refer our clients to our friends at Process Optimizer, a team of certified Lean experts with specific training in working with organizations to build Process Playbooks. When our clients bring in the experts from Process Optimizer, they get their Process Documents done and delivered in just nine days, start to finish, and they also get a full year of follow up coaching to help ensure they get their Playbooks fully optimized and embedded in all of their training systems. Follow this link for more information on working with Process Optimizer.

Remember, almost all of your issues can be traced back to either a people issue, or a process issue, and without Optimized Playbooks, you may have people with the potential to be great actually being penalized, or exited, because you failed to give them a key resource to be successful. Once you have your systems designed and aligned to create excellent outcomes, with effective training (practice) and coaching in place, only then can you truly create an accountable Culture of Performance, the fourth obsession of elite organizations, which I will explore in the next article in this series on the Five Obsessions of Elite Organizations®.

Click to read the next article in this series, a Culture of Performance.

Download a full sample of a great Employee Journey Process Playbook

And receive a $500 coupon towards a workshop with our friends at Process Optimizer, courtesy of Next Level Growth.
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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 Organizations

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.

Next Steps

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Clear the Fog for Better Decision Making

Entrepreneurial Freedom, Process, Vision

How often do you pay “Dumb Taxes” in your business?

I just finished the Audio Book The Road Less Stupid by Keith J. Cunningham and, spoiler alert, the book is about why smart people do dumb things. The author asks the reader, “how much money would you have right now if I gave you the ability to unwind any three financial decisions you have ever made?” Cunningham calls this “paying a dumb tax”. He says, “we don’t need to do more smart things, we just need to make fewer dumb mistakes. Every one of those three decisions you would love to unwind was an avoidable mistake.” The vast majority of our dumb tax is a direct result of emotional, overly optimistic, and poorly thought-out decisions. The solution to paying these types of taxes is allowing yourself thinking time.  

When we run ourselves to the ground by constantly “doing”, we are not thinking at our highest level. We are much smarter than we allow ourselves to be at times. True wisdom is tapped into during dedicated moments of deep reflection, what we at Next Level Growth call a “Clear the Fog” Break.

What is a Clear the Fog Break?

Keeping your head clear and your focus strong is what this tool is all about. Great leaders have the habit of taking quiet time to think. That means escaping the office on a regular basis for 30 minutes or more. By working on yourself and the business, you will rise above feeling frustrated and overwhelmed, to a clear-headed and confident state. As a result, when you come back into the business, you will be laser-focused and in the right leadership frame of mind. 

During your next break, use any one of the Clear the Fog Questions to get started:

  1. What is one thing my business, my team or I should start doing that we’re not?  
  2. What is one thing my business, my team or I should stop doing?  
  3. What is one thing my business, my team or I are doing that is going well?
  4. What is a major hassle (for our team members, for our customers/clients, or for our vendors) that needs to be resolved?
  5. What can we do to be more proactive versus reactive?

So, instead of paying avoidable “dumb tax”, choose the road less stupid by scheduling regular Clear the Fog breaks for better solutions than what your emotional, untamed brain will come up with in a reactive moment.

Free Clear the Fog Worksheet

Use these questions to help to see clearly in your business and gain the confidence to simplify procedures and efficiencies.

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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

Get aligned with the decisions with important decisions using the Decision Matrix.

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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.

Next Steps

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The Power of the Empty Chair

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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6 Steps to Achieving your Goals

Process, Team Health, Traction

According to a recent article by Douglas Vermeeren in Reliable Plant magazine, only 20 percent of the population actually sets goals for themselves. Of that 20 percent, roughly 70 percent of those goals are not achieved. That equates to only 14% of the population setting and achieving goals. While I see better success rates from the business I work with, in the early stages of our work together, most entrepreneurial businesses are only accomplishing around 40% of their goals on time.

After 6 years of working with over 80 organizations in over 900 full days of Planning Sessions, I am finding a very common thread among those who are succeeding and those who are not – a lack of capacity. All of the systems and planning in the world will not work if you do not first create capacity.

6 Steps to Achieving your Goals

Step 1: Create Capacity

In their book The 4 Disciplines of Execution, authors McChesney, Covey and Huling cite what they call the “whirlwind.” The whirlwind is all of the massive amounts of energy that are required to keep your operation going on a day-to-day basis. It is the #1 enemy of strategic execution.

The problem is that most entrepreneurs and their leadership teams spend nearly 100% of their capacity in the whirlwind. When you do that, you are not prioritizing your time to focus on the big-picture strategic goals that will grow your company and are choosing instead to prioritize staying in the weeds, doing work that could be delegated to lower cost per hour employees. As leaders and managers you must first focus on a skill we teach as part of EOS® called delegate and elevate. You must learn to delegate what drains you and focus on doing what fulfills you.

Step 2: Identify the Vital

Many things are important, but in business and in life, only a precious few are truly vital. You must understand and focus on the difference and prioritize accordingly.

Start by painting a 3-Year Picture™ of where you want the organization to be in 3 short years. Then, thinking about where you want your company to be in 3 years, where does it need to be in 1 year? In order to get where you need to be in 1 year, and to set yourself up to achieve your 3-Year Picture™ while at the same time focusing on your issues (I suggest doing a SWOT analysis and building an issues list), what are the 3 to 7 vital goals that must be accomplished in the next year? Write them down. At EOS®, we teach a tool called the Vision/Traction Organizer™ (V/TO).

Step 3: Set Quarterly Rocks

Following Steven Covey’s analogy from his book First Things First, as an EOS® Implementer I teach quarterly goals as Rocks. The 3 to 7 (less is more) most vital things that must get done in the next 90 days in order to reach your annual goals and/or remove the obstacles and barriers (Issues) that are standing in the way.

To set successful Rocks, they must be SMART Rocks.

Specific – It must be crystal clear to the entire team exactly what “done” looks like for each Rock

Measurable – You must be able to measure and define the finish line

Attainable – Everyone must be 100% committed that the Rock is attainable, even if a stretch, and the team must agree to hold each other accountable for getting the Rocks done

Relevant – The Rocks must be relevant to the Annual Goals or to removing an obstacle or barrier. This ensures alignment to the Vital Goals.

Timely – The current quarter must be the right time to focus on the specific Rocks

Step 4: Set Milestones

During the quarter, on your way to accomplishing your Rock, define what “on track to win” looks like. Think about the few major hurdles you must cross to accomplish the Rock. Establish a timeline that includes SMART milestones with due dates and focus on one milestone at a time.

Think about it like golf. If you want to shoot par, you have to take it one hole at a time. In order to par the hole, most golf professionals will tell you to focus on 3 “milestones”: fairways hit, greens in regulation, and putts. If you hit the fairway off the tee, make the green in regulation, and get in the hole in no more than 2 putts, you will par the hole. That’s why if I’m playing golf and there are wagers on the line, I hit my 3-wood off the tee rather than my driver. I don’t focus on the entire hole, just hitting the fairway. My fairways hit goes up, which sets me up to more likely hit the green in regulation which increases my odds of finishing the hole in no more than 2 putts. It’s when I get greedy on the tee and start thinking about eagle on a par-5 and try to cut the woods and carry the pond that I snap-hook and end up taking a penalty along with the ridicule of the rest of my foursome.

Step 5: Create Accountability with a Meeting Pulse

Create a weekly cadence for a high-value, focused meeting of the leadership team. Report on measurables and Rocks and solve issues for anything that is not on track to be 100% done by the due date. This allows healthy teams to hold each other accountable and execute at a much higher level than teams who do not.

I teach my clients to hold what we call Level-10 Meetings. These meetings are on the same day and at the same time each week, start on time, end on time, and follow the same agenda. As my clients progress in running solid Level-10 Meetings, they find that on a scale of 1-10, the value of their time meeting together goes from an average of around a 4 or 5 to a consistent 9-10.

Step 6: Establish a Quarterly Rhythm

Every 90 days, before you set your new goals for the quarter, meet as a team offsite to avoid distractions and reflect on the prior quarter.

What did you accomplish? What did you do that helped you succeed? What didn’t get done? If you had it to do over again, what would you have done differently in order to be successful? Have you created the capacity to spend the necessary time focused on the vital things, or have you sacrificed the vital to spend your time buried in the whirlwind?

Parting Thoughts

Focus on the lessons learned and carry those lessons forward as you repeat the steps above. Focus on continual progress over perfection because growing a business is all about positive momentum. And don’t forget to celebrate your wins!

Written by Michael Erath, Certified Scaling Up Coach, Pinnacle Business Guide &
Former Record Holding Certified EOS implementer®

Next Steps

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Entrepreneurial Operating System® and EOS® are registered trademarks of EOS Worldwide, LLC. Next Level Growth is not affiliated with EOS Worldwide, LLC.

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