Unlocking Greatness: The Five Obsessions of Elite Organizations®

Entrepreneurial Freedom, People, Process, Team Health, Vision

Author: Michael Erath

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.

Our Focus: Building 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.

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.

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

People, Process, Team Health

Author: Jessica Holsapple

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

Author: Jessica Holsapple

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

Author: Jessica Holsapple

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

Author: Michael Erath

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

Author: Jessica Holsapple

“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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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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Less But Better

Entrepreneurial Freedom, Process, Team Health, Traction

Are you spread too thin? Do you feel like you’re spinning your wheels? You may be a victim of the Paradox of Success.

It was Socrates who said, “Beware the barrenness of a busy life.” I remember as a child observing my parents, and as I reflect back on those days, a piece of me longs for the simplicity.

My father was a very successful entrepreneur. Born in 1927 and growing up dirt poor in Chicago following the Great Depression, my father went on to build multiple successful businesses, chair multiple boards and foundations, and was honored both with the High Point University baseball field carrying his name and being voted High Point, North Carolina’s 1987 Citizen of the Year. He was a great philanthropist and accomplished a great deal.

But every evening he would come home from work around 6:00 pm and watch the news. At 7:00, we would have dinner at the dining room table as a family…and talk. We traveled often. In the summertime after dinner, he and I would throw the baseball or football until dark, and in the winter months, we would watch TV as a family or just talk. He never stayed up late working after I went to bed. He never missed a game because he was too busy. Success did not require busyness in the 1970s and 80s—nor does it need to today.

I recently turned 49. He was 44 when I was born. In the passing of a generation, so much has changed. Our work follows us home because we are constantly connected. If we don’t make an effort, our family time is overrun by screens. Even on our weekends, we get lured into checking email. And with our family, we rarely, as Mr. Miyagi said in Karate Kid, “Look eye!”

Henry David Thoreau once wrote, “I do believe in simplicity. It is astonishing as well as sad how many trivial affairs even the wisest thinks he must attend to in a day…” Touché.

The Paradox of Success

In his book Essentialism: The Disciplined Pursuit of Less, author Greg McKeown describes a “paradox of success.”

With success come opportunities and more options. But these options and opportunities often distract us and lure us away from what is truly vital in our life. Oh the temptations…I have heard their siren songs many times, and wrote about it in my Amazon Best Selling book, RISE: The Reincarnation of an Entrepreneur. Our clarity begins to fade. We take on too much and find ourselves juggling too many things. No longer able to go a mile in one direction, we find ourselves fighting to go barely an inch in a million directions.

Ultimately, our success becomes the foundation of our failure.

Less but Better

Finding your way to a life based on the idea of less but better will yield three significant outcomes: more clarity, more control, and more joy.

More Clarity

One way to begin the process of shedding the things that have become distractions is to think about the handful of things in your life that are truly vital. For me, it is time with my wife, connection with my adult sons, travel, time for health and fitness, time for living my faith, and time for helping others. What are yours?

Once you know the answer, you can begin to make a list of all the things you pack into a day, a week, a month, and a year. Of the things on that list, which of them actually increase your capacity to spend time on what is vital and which things on the list detract from the same? Start small, but start. Begin the process of saying “no” and shedding the things that are taking away from your time to focus on what is vital.

When you do this, as Greg McKeown says, “Every day it becomes more clear than the day before how the essential things are so much more important than the next most important thing in line.”

More Control

As you continue to shed the distractions, you will find that fewer people have control over your time and your life, and instead, you become increasingly in control. If you don’t prioritize your life, someone else surely will.

More Joy

When you are able to focus with clarity on the handful of things that are vital in your life, you will find yourself more focused in the moment. Free from distraction, you will be able to live life more fully. It was the Dali Lama who wrote, “If one’s life is simple, contentment has to come. Simplicity is extremely important for happiness.”

I think he is right.

Next Steps

Learn more about how Next Level Growth can help you and your organization clarify, simplify, and achieve your vision. Schedule a discovery call to see if Next Level Growth is a good match for your organization.

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

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Hard Work Doesn’t Always Work

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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One Simple Key to a Strong and Healthy Visionary/Integrator Relationship

Entrepreneurial Freedom, Team Health

Are you running your business on EOS® (Entrepreneurial Operating System) but not yet getting the level of Traction® you had expected? Until your Visionary and Integrator™ start prioritizing their relationship, you won’t. Here’s one simple thing they can do to help your Leadership Team and your organization gain Traction®.

In my years as an EOS Implementer™, having helped more than 50 businesses Implement EOS® and gain Traction®, one of the top attributes I see in the most successful organizations I work with is a strong and healthy relationship between the Visionary and the Integrator™.

When the relationship is strong, the leadership team benefits and is able to cut through all the noise and solve their issues at the root quickly and efficiently. Their B.S. meter is well-tuned when the Visionary and the Integrator™ have a strong and healthy relationship.

When the relationship is weak, however, there is typically a lack of accountability, a damaging tolerance of people issues, and a lack of focus on building and implementing clearly defined and consistently followed processes to systemize the business.

Which of those best describes your organization?

If your Visionary/Integrator relationship is less than ideal, please make a renewed focus this quarter on the following key to a stronger and healthier relationship:

Hold a Regular, Calendared Same Page Meeting™ to Increase Traction®.

The Same Page Meeting™ is a special meeting designed to help the Visionary and Integrator™ in a company running on EOS® smoke out and resolve issues that weaken their relationship. Visionaries often feel that their ideas are not fully understood or being implemented. They often feel frustrated by slow progress, missed numbers or goals being off track and important things simply not getting done.

On the other hand, Integrators often feel like their Visionaries are too deep in the weeds – getting in their way as they attempt to run the day-to-day of the business, sending mixed signals to the troops as to whom they are directly accountable. At times Integrators feel unclear of the direction the Visionary wants to go, which leads to fits of starting and stopping and changing directions.

While the Visionary and Integrator™ may interact with each other on a near daily basis, if they are not taking time monthly, bi-weekly or even weekly to get out of the weeds, focus on their relationship, and look at things from the outside in, they will never effectively break this cycle.

Here is how I teach the Same Page Meeting™.

The most common cadence in the early years of the EOS® journey I have found to work well is bi-weekly for 2 hours. Ideally, you have to play around with the cadence until you find what works best for you. But as with your Level 10 Meeting™, what you must do is pick a day and time and block it on your calendar consistently.

Same Page Meeting™ Agenda:

1. Check In (Deeper check in than in the L-10 – this is a very important relationship and an important step): Ask each other questions like, “How are things going with you professionally? With family? Friendships? Personally, with time to focus on yourself? How balanced are you feeling?”

2. Build an Issues List on a whiteboard or flip chart:

a. Integrator asks Visionary: “Where do you feel frustrated/disconnected? Where do you feel like your vision is not being executed? Where do you feel that people don’t ‘get it’? What else has been keeping you up at night?” Use any other questions you can think of to pull out the issues.

b. Visionary asks Integrator: “Where do you feel unclear on my expectations? Where do you feel stuck? Where do you have people issues? Are you 100% certain we have clear expectations of each other? Are we communicating well? Do you feel like I am undermining your authority in any way?” Use any other questions you can think of to pull out the issues.

3. Build an Issues List from the responses to the above questions. Ask additional questions, if necessary, to get the issues out of your heads. Try to stay “on” the business and “on” the relationship more than “in” the business.

4. Prioritize and IDS™ the Issues until the list is clear.

5. Conclude: Recap any To-Do’s, close the loop with cascading messages and rate the meeting (1-10). You should both leave feeling clear and aligned. If not, talk about why and solve for that. If either of you feel the meeting was not a 9 or 10, ask what a 10 would have looked like and modify future meetings to increase value, always striving for a 10.

Being diligent and consistent with the Same Page Meeting™ will build trust, clarity and harmony at the helm of the organization and that alignment will naturally filter its way through the rest of the organization. In a family, if the parents are not on the same page and both pulling their weight, then the children suffer. Your business is no different. Increase Traction® by getting on, and staying on, the same page.

Next Steps

Visit the Process Optimizer™ website to learn more about the fastest and most efficient way to get your core processes documented, optimized and followed by everyone in your organization.

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

LIKE WHAT YOU READ? SUBSCRIBE AND NEVER MISS ANOTHER ARTICLE.

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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