Traction Stuff: Why A Scorecard Is Critical To Your Company’s Success

cockpit instrument panel

Photo courtesy of Nan Palmero

Imagine you’re the head coach of a basketball team and you get ejected during a really important game.  The good news is you can coach from the locker room.  The bad news is you won’t have access to the scoreboard or any data.  Did your job just get tougher?  Absolutely.

Or picture a plane flying from London to New York City.  A couple of hours out, way over the Atlantic Ocean, the captain announces, “I’ve got bad news and good news.  The bad news is only one of our plane’s gauges is working, and not only are we hopelessly lost, but I have no idea how much fuel we have left.  The good news is the speedometer is working, and boy, we are making great time!”

Nobody would want to be in either of these situations, yet this is exactly the kind of situation in which we place ourselves when we attempt to build a Smart and Healthy company without a scorecard.

Most organizations are flying with a woefully inadequate number of gauges to help them understand:

A- where they are,

B- how their critical functions are performing versus expectations/design/normal/plan, and

C- the best path to get them to where they want to go.

And scorecards are not just for senior leadership.  Great scorecards ensure that everyone is on the same page with regard to what is important and should not only be measured, but improved upon.

To build a great scorecard, there are some “scorecard truths” you must understand.

1. What gets measured, gets done.  Numbers create accountability. Enough said.

2. Managers must inspect what they expect It’s tough to inspect or improve what cannot be measured.

3. Everyone must have a number.  It’s one of the golden rules of building and scaling a smart & healthy organization.  People need to know what numbers they are responsible for if they’re going to understand what their role is in achieving the company’s vision.

4. We live in an age of transparency.  Assume everyone knows what is going on.  Scorecards enhance our ability to make sure we are all seeing, and talking about, the same thing because numbers cut through murky subjective communication between managers and their direct reports.

5. Trust, but verify.  Of course you trust your employees.  But, as one of my first bosses used to say over and over, “People are no damn good.”  He didn’t mean that we are bad (i.e., evil,) just that we are human; we over-eat, we forget, we get distracted, we make mistakes, etc.  “Trust, but verify” is just another way we acknowledge the human side of business.

6. Numbers create team work and healthy competition, so publish and share your scorecards.  To illustrate the power of this truth, I refer to a story related in Dale Carnegie’s book How to Win Friends & Influence People.

A gentleman named Charles Schwab ran Bethlehem Steel back in the early 1900s, and he had a mill that was badly under-performing every other mill in the company.  He felt the mill manager was capable, but he just couldn’t seem to figure out how to help him.  Schwab met with the manager late one afternoon and after having a relatively unsatisfying discussion, he asked the manager for a large piece of chalk, walked over to one of the workers, asked him how many heats they would have made at the end of the shift.  When the worker told him it would be six, Schwab chalked a big “6” in the middle of the floor and left.

When the night shift came in, they saw the big six in the middle of the floor and asked what it meant.  The day people shared that the big boss wrote it down after asking how many heats the day shift made.  The next morning, Schwab returned and found the “6” rubbed out and replaced with a “7”.  When the day shift returned they, too, saw the “7” and decided they would show the night shift a thing or two; they left an enormous “10” before they went home.  It wasn’t long before the mill went from last to first in production company-wide.

7. Scorecards tell your story.  Think about how much easier it would be to convey your story if you could share a two or three-year long chart showing the week-by-week progression of two or three key metrics for each of your core processes (e.g., sales, production, client service, etc.).

8. Embrace accountability.  Only one person really owns the scorecard, and only one person owns each of the key metrics.  If more than one person is accountable for something, no one is accountable!  One person must own the scorecard, and that means making sure every component is updated on time so the scorecard can be published on time.  Remember, per truth #3, everyone owns at least one key metric (e.g., sales owns the “new clients on-boarded” metric).

9. Scorecards must be current.  Numbers help you solve problems faster.  The most effective scorecards are based upon weekly numbers.  Who wants to wait until the end of a month or a quarter to find out that something is off course?

10. They take time.  Our experience in working with hundreds of companies has been that it takes three to six months to create a great scorecard, but it’s worth the effort because it helps us better see, communicate, and understand what we are doing.  Consequently, they take time to create and refine because they inherently help us get smarter with regard to how to look at and measure what’s important.  And they make us healthier as they help us all get on the Same Page with regard to who, what, where, when, why, and how.

11. Great scorecards make for great vacations!  Imagine sitting on a beach, looking at your weekly scorecard, and being able to relax knowing everything is humming.  What’s that worth?

12. Scorecards are a never-ending journey.  They change, just as everything does, and the metrics you’re measuring must be reviewed and revised, as necessary, on a regular basis.  Add “Review Scorecard” to your quarterly planning/review process.

13. Scorecards take work, but they are worth it.  Hopefully, truths 1-12 show why they are one of the critical components associated with building and scaling a Smart and Healthy organization.

Enough said.

Until next time, may you build with passion and confidence.

New Blog Series: Getting and Sustaining Traction

Tire tracks in sand

Photo by Daniel Oines

For months now, I have been writing a series of blogs describing the basics associated with getting the “People Stuff” right. The People series followed another series of blogs describing the basics associated with getting everyone on the “Same Page.” Today’s blog marks the begging of a new series on the basics associated with getting and sustaining “Traction®.”

At the risk of stating the obvious, I wrote the Same Page series first because we have a better shot at attracting and retaining great people if we are offering meaningful work that is compelling and rewarding. People Stuff came next because getting and sustaining traction is a lot harder to do if you aren’t getting the people stuff right, and because traction without direction often leads to really crummy progress to energy ratios.

With regard to the “Traction Stuff,” over the next several weeks, I am going to write about a host of topics, including highly effective ways to capture and leverage data; how to become world class problems solvers; a simplified approach to creating consistent, dependable and scalable processes; and a bullet-proof meeting system that will consistently earn ratings of at least 9 out of 10 from every participant.

As always, I will endeavor to make each article timely, interesting, and actionable while building on the insights, tools, and disciplines we’ve already covered.

Until next time, may you build with passion and confidence.

People Stuff: The Sum of the Parts and Developmental Feedback

Skills vs. Passion

What really distinguishes A Players, B Players, C Players, and D Players?

Generally speaking, and there are always exceptions, it’s skills and experiences versus passion.

A Players are not only great at all facets of their roles, but they tend to love them all.

B Players are generally really good at their roles and like them, but they aren’t as passionate about getting better or being the best.

C players are typically OK at best, but their indifference tends to bring down the energy within their organizations.

And as shared in a prior posts, D Players should never have been put into their roles in the first place.

The reality is, for most of us, we are in positions comprised of roles we love, roles we like and roles to which we are somewhat indifferent at best.  Yes, the truth is, even the best of us are part A Player and part B Player or worse.

That said, over time, as we rise through organizations, our goal should be to delegate and elevate ourselves into seats (aka positions) comprised of roles we are great at and that we love owning. Yes, it is very rare to love everything we do but we tend to flourish when we get ourselves in positions where at least 80% of our time involves doing things we excel at and love.

I have also found that the above skills and experiences versus passion model is a powerful tool when incorporated into one’s performance review and developmental feedback sessions.  My experience suggests that employees and managers are far more likely to agree on the placement of each of the seat’s roles into one of the 16 quadrants than they are to see eye to eye during a less focused, broader ranging, conversation regarding performance (note: no need to label the quadrant with letters).

I find it even more productive if managers encourage their employees to come to the meeting prepared to share a self-assessment based version of their review form (click here for a two page feedback form I share with my clients), especially if it includes allocating each of the specific roles associated with the seat to one of the 16 quadrants.  These self assessment based sessions tend to not only reveal that employee and manager are mostly on the same page but focus the conversation on the areas where there may be a difference of opinion, including where the manager perceives the employee stronger than she sees herself.

Finally, I am a huge believer that employees and managers should sit down at least once every quarter for at least an hour and share updated performance discussion forms.  One year is way too long to wait for a manager to provide, or for an employee to solicit, feedback.

Until next time, may you build with passion and confidence.

People Stuff: The Seven Ingredients of a Gorgeous Accountability Chart

“Simplicity is the ultimate sophistication.”
Steve Jobs

Ironman_house2

Thank you, Steve Jobs.

I love great design. The first career I considered, besides being an astronaut, was architecture. While I know that great designers have been around for centuries, I believe Steve Jobs deserves some credit for bringing great design to the “masses” (that word seems pejorative but I could not find a better word).

The beauty of great design is the marriage of form, function, and simplicity. When achieved, great design is simply elegant. As I say quite often, “Less is better, until it’s not.”

For me, the BIG IDEA behind great design applies to your Accountability Chart (A/C). A great A/C conveys to everyone in the organization how you have designed the what, the why, and the who that go together to make up your business.

A well-designed A/C also helps you avoid hiring people who may be wonderful individuals, but don’t fit any of the seats in your company. I don’t buy into the notion that you should hire great people even if you don’t have a position or a role for them. It’s like adding a fifth leg to a beautiful desk. Why do it? Are you really going to hire great talent without being able to give them something meaningful to do? I hope not.

So what does a gorgeous A/C look like?

A gorgeous A/C possesses the following characteristics:

  1. Clearly delineates which seat is responsible for what, from handling the loss of a valued customer to replacing the tissue paper before it is out;
  2. Clearly delineates the five to seven key roles associated with every type of seat;
  3. Contains the exact amount of seats needed to get the business to where it will most likely be in 6-9 months and shows which seats are open or being temporarily occupied – because we value transparency (the lack of it fuels politics);
  4. Has every seat filled by someone who clears your core values bar and GWC’s the roles associated with the seat;
  5. Has the right amount of layers so that everyone is being lead and managed by someone with just the right level of context (aka time span capacity);
  6. Has a proper load balance so no one is working less than 80% of capacity or more than 120% of capacity; and
  7. Accommodates an appropriate amount of A and B Players.

So what do you think; is your Accountability Chart a thing of beauty?

Until next time, may you build with passion and confidence.

People Stuff: The Pros and Cons of Building an A-Player Organization

math formulas

Photo by Joao Trindade

Business is math. By that, I mean that if we really wanted to, we could create a mathematical model to depict almost every aspect of a business and then connect those models to build projections and assist with performance analysis. Realistically, most of the work associated with building such models doesn’t generate enough value to justify the investment, but even rough mathematically-based models can be highly informative. One of the areas where this comes into play is in analyzing supply and demand in terms of homegrown talent.

Last week, I wrote about A Players as well as B, C and D Players, and shared my definitions of each:

  • A Players do their job exceptionally well and add energy to the organization,
  • B Players do their jobs well, but don’t consistently add energy to the organization,
  • C Players may or may not do their job well but they always drain an organization’s energy, and
  • D Players never should have been in the job in the first place.

I also noted that in my estimation, both A and B Players, using EOS® terminology “GWC™” their role; they “Get it, Want it, and have the Capacity to do it.” Finally, I proposed that leaders should think carefully through the consequences of having an organization comprised solely of A Players before they set out to build one.

The consequences of employing A Players only

Remember that A Players are high-energy, driven individuals who will do whatever it takes to progress to the next level. With that in mind, consider this: if you had only A Players and your business reached a stagnant phase, how long do you think it would be before you started to lose talent? Could you calculate the probabilities based upon your current accountability chart and your expected rate of growth?

The answer is relatively easy to determine, especially if you buy into the broader theory associated with time span capacity and the time spans associated with each layer of an organization. Allow me to drill a little into the math…

  • For the most part, if you truly had all A Players, your first layer of talent (assuming those are “grinders” who are in jobs that require time span capacities of less than three months) will give you no more than a year before they want to move up or get out.
  • Your second layer of talent will be sitting in “minder” (manager/supervisor) seats that require time span capacities of 3 – 12 months. These seats take a little more time to learn, so these A Players will likely give you 12 – 18 months before they want to move up or get out.
  • Your talent at layer three (minders in jobs typically requiring time span capacities of twelve to 24 months) will probably give you no more than 30 months before they start heading to the hills.

And so on (see my Time Span Capacity in Management post for the time spans associated with each layer in an organization).

The truth is when you have an organization comprised of all A Players, you have to feed these “learning animals” continuously with challenging opportunities for growth or they get bored and leave. If you truly want an organization of all A Players, then you must commit yourself to growing fast.

If you cannot imagine growing as fast as the math suggests, you may be better off with a mix of A and B Players. B Players can GWC a seat and are much more likely to be happy sitting in it for a longer period of time. But be careful; if you surround yourself with too many B Players, you can be less likely to attract A Players, because A Players don’t like to worry about B Players blocking their path to the top.

Until next time, may you build with passion and confidence.

People Stuff: “A Players”

A Player
Back in the early 1990’s, I had the great fortune to be a client of Brad Smart, author of the book Topgrading and creator of the Topgrading® system. Brad is probably the person most responsible for coining the term “A Player.” I have used Brad’s system to hire nearly 100 professionals with virtually no regrets. Needless to say, I am a huge fan of Brad and the system he invented.

For Brad, if you really want to build a successful and enduring organization, one of the most important things you need to do is ensure that your talent acquisition and talent management processes focus relentlessly on identifying, hiring, promoting, and retaining A Players at every salary level in the organization.

So what is an A player?

According to Brad’s definition, it is someone who represents the top 10% of the talent available at a given salary level. One of Brad’s early clients, a guy named Jack Welch, described A Players as people who are:

  • filled with passion,
  • committed to “making things happen”,
  • open to ideas from anywhere,
  • blessed with lots of “runway” ahead of them,
  • have charisma, the ability to energize themselves and others,
  • can make business productive and enjoyable at the same time, and
  • exhibit the “four E’s” of leadership:

1- high Energy levels,
2- Energyze others to achieve common goals,
3- the “Edge” to make difficult decisions, and
4- the ability to Execute consistently.

While I have immense respect for Brad and Jack, I have never been able to make their definitions work for me. Brad’s wasn’t powerful enough to help me swiftly and effectively illustrate the concept, and I found Jack’s definition too much to memorize, so I came up with my own definition. I have always described A Players as people who not only do their job exceptionally well, but add energy to the organization. Then, depending upon how much time I have, I may describe many of the things that Jack does above, plus other notions like “going above and beyond the job description.”

In my book, defining those who aren’t A Players is just as important. For me, a B Player is someone who does his or her job well, but doesn’t consistently add energy to the organization. C Players, on the other hand, may or may not do their job well, but they always drain an organization’s energy. I have also come to believe that there are D Players. These are people who simply should never have been in the job in the first place.

As you may recall, EOS®’s talent assessment and people management system strongly encourages hiring and retaining people who meet or exceed your cultural bar and who GWC™ the job (Get it, Want it, have Capacity to do it) and all its roles. There is nothing contradictory in the two systems; in fact, they are rather complementary. I would suggest, however, that both A and B Players can GWC a role, and that there are some important questions leaders need to think through when deciding whether or not they want to purse an organization comprised solely of A Players; a topic we’ll address next time.

Until then, may you build with passion and confidence.

People Stuff: Workload Capacity and Managing Expectations

Photo by Mr. Thinktank

Photo by Mr. Thinktank

Woody Allen once said that 80% of success is showing up.  I am more inclined to believe that 80% of success is managing expectations.  If you manage expectations and then consistently deliver, if not exceed them, people are likely to be OK with virtually whatever happens, even if sometimes you are preparing them for bad news or the possibility of a bad event.  They were prepared and you did what you said you would do.

Every organization has an unwritten norm regarding the amount of hours people are expected to work.  These norms aren’t universal across the company for obvious reasons.  Generally, there are exempt and non-exempt employees.  The non-exempts, at least in the U.S., tend to work 40-hour weeks and get overtime if they put in more hours.  The exempts, however, tend to work hours that are more consistent with the culture.  For instance, there are some companies where everyone works 40 hours or so, including the senior leaders.  There are other companies where 50-hour workweeks are not uncommon, and still others where 60-80 hour workweeks are typical for certain levels.

I am not here to judge what is right or wrong in terms of expected hours.  I worked 60-80 hours for years, as did many of my colleagues.  It was the game we enthusiastically played.  If we didn’t play it, we would lose an opportunity to someone else.  Not everyone played, but those who didn’t tended to reap less of the rewards.  So it goes.

The real issues are:

  • What is the norm for your organization?
  • What, if anything, are you communicating to your colleagues and your candidates for hire?
  • What are the implications for your accountability chart (A/C)?

Are you being candid?  Are you being open and honest?  Are you managing expectations?

The reality is that just like we imperfectly balance the needs of our personal and professional lives, we will never have a perfectly balanced A/C.  All we can do is endeavor to keep balancing it in a manageable manner so we can attract and retain great people.  For example, you may decide to build your A/C so that every seat works anywhere from 80% of expected capacity (i.e., 50 hours if your culture is 50 hours) to 120%.

We owe it to our employees to give them an understanding of our load management philosophy.  I am confident that every one of your great workers would be willing to go to 120% of capacity for some period of time before you give them help, and that everyone of them would be asking for additional work if they got below 80% of capacity.  80/120% isn’t an absolute by any stretch; it is just a model for not only managing expectations, but also for having a decent grasp of when you need to create another seat.

Until next time, may you build with passion and confidence.

People Stuff: Taking Your Business to the “Next Level”

hitting the ceiling slide

For several weeks now we have been drilling into the notion of time span capacity and some of the key implications related to your Accountability Chart. As you may recall, I think time span is a BIG IDEA with some huge implications. Today, I want to talk about one of the implications in terms of what it really means to take your organization “to the next level.”

For most of us, taking our company to the next level means ratcheting up some component of performance, like revenues, productivity, or communications. A less common, but more precise use of the phrase means adding a level to your organizational strata (e.g., going from four to five layers of people).

Assuming you generally buy into the notion of time span – including the notion that we always want to have people sitting in seats that are just right for them (i.e., neither too big nor too small) – think about what happens when you add a layer to an organization. Either someone has to “jump up” in terms of their innate time span capacity (assuming they were in a seat that was just right), or you need to bring in new talent for the new layer. Both options will cause a tremendous amount of stress. Many refer to this stress as “hitting the ceiling”, and if you think about it, you will hit the ceiling on three levels: as an organization, by departments, and as individuals.

While taking your business to the next level can be extraordinarily rewarding, it is almost assured that you will hit the ceiling in some way. Businesses either grow or die when they hit a ceiling; they ultimately either push through the ceiling, downsize (if that is an option), or they go out of business.

The good news is you can minimize the pain of hitting, or breaking through, the ceiling if you and your team master five abilities:

  • Simplification. Keep things as simple as you possible can: leverage models, visuals, acronyms, processes and checklists to make sure things are as simple to understand as you can make them.
    ____
  • Delegation and Elevation or Hiring. “Delegate and elevate” wherever you can. Each member of your senior leadership team should delegate work that can be done by someone else so that his/her own performance can be “elevated” by focusing on things that represent his/her highest and best use. If you really don’t have someone who fits into one of the new seats, bring in new talent to cover it.
    ____
  • Predicting.  Embrace a disciplined, but simple process around leading, planning, and managing.  Our free Vision/Traction Organizer* is a great aide for leading and planning, and the world’s greatest weekly meeting system (Level 10 Meeting™ Agenda*) will make you a better manager by providing a framework for staying appropriately connected, maintaining a structure of accountability, and increasing productivity.  (*You can download the Vision/Traction Organizer and the Level 10 Agenda here.)
    ____
  • Systematizing.  Make sure everyone is clear on the most important core processes in every single functional area and how they are integrated into the whole. Keep things simple; document the 20% of the activities that generate 80% of the value, and get everyone to follow “your way of doing business”.
    ____
  • Structuring.  Make sure your company is organized in a way that reduces complexity, creates clear accountability, and has the right people in the right seats.

In summary, once you decide to take your organization to the next level, you and your leadership team need to get ready to hit the ceiling. The good news is you now know what you need to do to break through. Even better, know that EOS has been specifically designed to help entrepreneurs like you successfully take your business to the next level.

Until next time, may you build with passion and confidence.

People Stuff: Time Span Capacity in Management

Woman behind giant clock

For several weeks now, I have been drilling into the notion that to get great people for your organization, all you need to do is get the right people into the right seats. Easy, right? (Yes, pun intended.)

Last week, we went beyond looking at the individual and what makes him or her appropriate for a seat – i.e. that he/she clears your cultural bar and GWC™’s the role – and started to drill into the layers or strata of your Accountability Chart. In summary, I suggested that time span capacity is the predominant characteristic separating one layer from another; specifically, that even the largest organization should have no more than seven layers with the following time span capacities associated with each of the layers:

  1. Layer (L) one (1) has a time span capacity of less than three months,
  2. L2 equals 3 months to one year,
  3. L3 equals one to two years,
  4. L4 equals two to five years,
  5. L5 equals five to ten years,
  6. L6 equals ten to 20 years, and
  7. L7 equals 20 to 50 years.

Assuming you generally buy into the broader notion of time span and its applicability in terms of delineating one layer from another, you probably won’t be surprised to learn that research shows that both managers and subordinates tend to suffer if their time spans are not adjacent (i.e., L3’s should manage L2’s). The evidence suggests that over time, a manager operating at L3 will become frustrated managing someone whose time span is an L1, and vice versa.

Typical manager issues include:

  • Lack of patience
  • Feeling like they are being held back
  • Feeling like they are not being given the opportunity to use their full potential capability in their work so they can progress toward the next level

Typical subordinate issues include:

  • Lack of attention
  • Inadequate development
  • Feelings of inadequacy

Consequently, if you want to maximize the effectiveness of each of the layers of your organization, you should make sure your right people have not only the appropriate skills (e.g., a CPA) and experiences (e.g., management), but also the capacity (e.g., mental, physical, emotional and time span capacity) to effectively lead and manage his or her direct reports.

As I wrote about several weeks ago, one of your roles as leader and a manager is to make sure that you are putting the right people into the right seat, and that means making sure the seat is neither too big nor too small, but just right for both the manager and the subordinate.

Until next time, may you build with passion and confidence.

People Stuff: The Layers in All Organizations

Grand Canyon

My last post introduced an optional fourth dimension, time span, to the notion of “capacity” in terms of making sure someone is right for a seat.  Today, I am going to share some food for thought regarding the implications of time span capacity and your Accountability Chart.

If you accept the notion that every seat has a time span capacity for each of the roles associated with it, you will probably not be surprised to learn that the vast majority of us – regardless of political, economic, cultural or social systems – strongly prefer to be led by someone with a longer time span capacity than someone with a time span capacity equal to or less than our own.

In fact, you probably won’t be to surprised to learn that in his 55-year study of time span capacity, Elliot Jaques consistently observed that subordinates working for managers with the same time span capacity almost always looked to someone else within the organization as their real manager because they didn’t perceive their “on-paper” manager as having sufficient context to lead and/or manage them effectively.  I suspect you don’t find this shocking since many of us have personally experienced this at some point in our careers.

Now, here is where it gets really interesting…

Jaques also uncovered what he referred to as a “universal, underlying pattern of stratification” in managerial hierarchies; specifically, that there were clear-cut boundaries that demarcated true managerial layers or “strata,” as he called them.  These boundaries were found at time spans of 3 months, 1 year, 2 years, 5 years, 10 years, 20 years, and 50 years.

In other words, even the largest organizations in the world should have no more than seven managerial layers, unless they find it useful to employ needless “in-between” persons who inevitably will be regarded as “straw bosses,” “administrators,” or something other than the real manager.

This applies to all organizations, including militaries.  Want some proof?  In 1982, Collin Powell presented Jaques with the Joint Staff Certificate of Appreciation for his “outstanding contributions in the field of military leadership theory and instruction to all of the service departments of the United States.”

For me, time-span capacity is a BIG IDEA with huge implications, more of which I will touch upon in weeks to come.  Give it some thought in terms of your own organization.  I suspect it can’t hurt.

Until next time, may you build with passion and confidence.

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