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 guiding 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. I was fortunate to spend fifteen of the first twenty years of my career as a member of the peer groups YPO and EO, with a short time also spent in VISTAGE. From my time with each of those organizations, one thing became very clear to me. Most entrepreneurs, to some degree, achieve success at the expense of their relationships, their time with family, their physical health, or their emotional health.
I created Next Level Growth because I believe it doesn’t have to be that way.
Build an Elite Organization
At Next Level Growth, we focus on Helping Entrepreneurial Leaders Build Elite Organizations®. What Collins refers to as “great.” In his book, Collins shares from the findings of his research, that the organizations who made the leap from good to great had something in common. They were all lead by a team of disciplined people, engaged in disciplined thought, taking disciplined action. It’s important to break this concept down if you are going to be able to apply and operationalize it in your own organization, and it is from this concept that the Next Level Growth Approach was formed.
The Five Obsessions of Elite Organizations®
This is the first post in a series of six, which will walk you through each of the Five Obsessions of Elite Organizations and how to use them to create a custom-tailored system from which you can build your own elite organization. We call this the Next Level Growth Approach, and it is not a prescriptive system, but rather a principled approach. When you follow a prescriptive system, you are bound by the system and forced to make tradeoffs to fit within its constraints. When you embrace a principled approach, primacy is placed on outcomes relative to your goals and vision, within the flexible framework of a set of principles. This unlocks tremendous freedom and creativity, and allows the user to design a custom-tailored system in which to operate relative to the principled approach – the essence of greatness. 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 consistently excel to a very high standard in each of the Five Obsessions. 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.
Most people are familiar with the “Right People, Right Seats,” analogy made popular by Collins in Good to Great. While I absolutely 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 have discovered a 3rd leg to this stool that is missing if you truly want to build an elite organization: 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 creativity, passion, ingenuity, and 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 teach what we refer to as an “A-Player System.” It consists of five foundational concepts to help organizations excel at Right People in the Right Seats: Behavioral Core Values, The Next Level Accountability Chart™, an Onboarding System, Quarterly Calibrations, and a Performance Solutions System designed to either coach up, or coach out, the under performers. I will expand on three of these five here.
The Next Level Accountability Chart™ is an evolved and advanced version of both an Organizational Chart as well as the EOS® Accountability 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 foundation 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, or what we call Quarterly Calibrations, 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.
W. Edwards Deming once said, “Every system is perfectly designed to get the results it gets.” If you want a better result, you need a better system. The Performance Solutions System was specifically designed to help leaders and managers overcome the two most significant barriers to a Culture of Performance: The emotional cost, and the story-telling trap. Most leaders and managers tolerate mediocrity far too long because they are either resisting difficult conversations with team members because such conversations come with an emotional cost to the leader of manager, so they naturally avoid what they know will be difficult, or, they fall into the story-telling trap, believing the excuses and reasons they are given as to why a team member consistently misses their goals and fails the meet expectations. Having a well designed system that helps overcome these barriers is crucial if you want a Culture of Performance, and at Next Level Growth, we believe that our A-Player System is the most comprehensive approach to building a high-performing and values aligned culture.
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 things like their Just Cause, Daily Purpose, their vision, their strategic initiatives, and their Flywheel 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, you 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, you 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. They understand what drives their economic engine, have identified what Jim Collins calls their “Profit per X,” and are analyzing their decisions and strategies through that lens. 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.i
Next Steps
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