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“Every ceiling, when reached, becomes a floor, upon which one walks as a matter of course and prescriptive right.”

-Aldous Huxley

As you may recall, we have been exploring the notion that enduring success is achievable when one builds an organization that is both Smart and Healthy, and that one of the major aspects of creating a Smart and Healthy organization is getting every member of a senior leadership team on the “same page” with regard to the company’s vision.

Today’s post is about the power of having a senior leadership team paint a vivid picture of what their business will look like in just three short years.

What does a great 3-Year Picture look like?

While we love the inspirational power of a 10-Year Target™, it is imperative to have a medium-range goal that brings it closer to today. In our experience, companies have greater success in achieving long-term goals when they develop 3-Year Pictures that:

• are short and simple (our two page V/TO™ takes just one third of a page to “paint” a 3-Year Picture™);
• create full consensus on where the business is going;
• establish key measurables and goals that are consistent with and help legitimize the 10-Year Target;
• provide clear measurables and frameworks for the annual and quarterly planning processes;
• can be shared with all of the employees so that everyone has a better sense for how their role, measurables, and goals contribute to the longer-term plan; and
• enhance an organization’s ability to visualize the most important and compelling images associated with where they are going; because thoughtful visualization exercises have been proven to increase the probability of attaining goals.

So how do you develop a picture that does all that?

There are three steps to creating a great 3-Year Picture:

1- PREDICT & DEFINE
First, predict your revenue and profit in the third year and define the one, two or three “Key Measurables” necessary to achieve them. By Key Measurables, we mean number of units sold, customers served, etc. This gives everyone an idea of not only the scope and size of the company in the future, but what is really important – the Key Measurables.

2- KEEP, KILL, OR COMBINE
Have each member of the leadership team create a simple list of bullet points that provides a compelling snapshot of what he or she thinks the business should look like three years out. Consider more than just revenue and profit; include such notions as number and quality of people; added resources; office environment, size, and numbers; operational efficiencies; technology needs; and product, markets, and client mixes.

Once the lists are complete, go together as a team through each bullet point on each list and decide whether to keep it, kill it, or combine it with another item. When you are done, you should have 10 to 20 succinct bullet points that collectively convey a 3-Year Picture that is both compelling and realistic, inspiring and achievable, motivating and grounded; and that convincingly connects the 10-Year Target to the 1-Year Plan (our next blog topic).

3- VISUALIZE & VERBALLY COMMIT
A great 3-Year Picture is only complete when the entire leadership team is 100% on the same page with regard to every goal and Key Measurable and has verbally committed to making it happen. While it may sound a bit hokey, a very effective way to do this is by asking everyone to close their eyes as you read the 3-Year Picture out loud so that each of them really hears it, visualizes it, and understands it. Then ask each of them to commit verbally to it – one by one.

When this is done, you have achieved Same Page status on the 3-Year Picture, and you have taken a giant step closer to having all of the ingredients associated with creating a Smart and Healthy company.

“The older I get, the more I see a straight path where I want to go. If you’re going to hunt elephants, don’t get off the trail for a rabbit.”

-T. Boone Pickens

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

“You are the average of the five people you spend the most time with.”

Jim Rohn

While it’s easy to quibble with elements of the broader notion, there is no question there are people who make us better (and vice versa). Doesn’t it make sense to surround ourselves with these people?

My wife, Beth, likes to refer to the people she keeps closest as her “High Five.” She believes a strong High Five enhances our energy, passion, inspiration, enthusiasm, self-worth, hope, and curiosity–that we are simply better people around them. It’s not social climbing; these people just bring out the best in each of us (and hopefully us in them). It’s not a needy thing; it’s more pure. Being with them is similar to having a great meal where we enjoy the total experience and walk away refreshed, not bloated, tired, regretful or still hungry.

I love the High Five notion and submit it as a guiding thought for today’s blog: “What are your organization’s Core Values?”

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As you may recall, we are now deep into a series on the power of getting the senior leadership team on the Same Page with regard to the answers to Eight Key Questions. Today’s blog focuses on a question to which the answer should never change: “What are your organization’s Core Values?”

So what are Core Values? Core Values are the behavioral norms, or philosophical beliefs, of a person or group. Well-defined and genuinely embraced Core Values:

•  Clarify who we are
•  Articulate what we stand for
•  Guide us on who we hire
•  Help explain why we do business the way we do
•  Guide us on how to teach
•  Inform us on how to reward
•  Help us to better understand why some people don’t fit
•  Help us let people go
•  Unify the whole organization
•  Inform our business processes
•  Require no external justification
•  Endure

As Jim Collins and Jerry Porass masterfully presented in Built to Last, enduring companies are founded by individuals who not only provide their organizations with strong and well-defined philosophical belief systems, but also endeavor to ensure that the systems persevere. Unfortunately, over time, many (maybe even most) organizational belief systems tend to decompose for a host of reasons.

If your organization’s Core Values are no longer clear, or genuine, it is imperative that you and your leadership team remedy this.

The first step is identifying the behavioral characteristics of your organization’s High Five. Use these behaviors to define three to seven characteristics—such as stewardship, collaboration, and enthusiasm—that best represent the Core Values you would love to see dispersed throughout the company. Once you identify, embrace, and live these values (e.g., make them integral to your hiring, firing, rewarding and promoting processes), you will not only be well on your way to creating a healthy and enduring company culture but working with an organization full of High Fives.

A note of caution: like any powerful tool, written Core Values are either accretive or destructive. Strong Core Values absolutely will make a company stronger and easier to manage. Platitudes or inauthentic Core Values make the senior leadership team look weak or worse and literally harm their credibility.

As Mahatma Ghandi said:

“Your beliefs become your thoughts. Your thoughts become your words. Your words become your actions. Your actions become your habits. Your habits become your values. Your values become your destiny.”

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

“No amount of money will induce someone to lay down their life, but they will gladly do so for a bit of yellow ribbon.”

— Napoléon Bonaparte

As you may recall, in last week’s post, we talked about the importance of getting everyone on the senior leadership team on the Same Page with regard to the answers to Eight Key Questions. In today’s blog, we are going to focus on asking “What is your organization’s Purpose, Passion, or Cause^[1]?”  In other words, what is your “Why?” I hope to demonstrate the ways in which a clear, compelling Why serves as an extraordinary cornerstone for every focused, energized, and enduring organization. The answers to all other questions follow in the wake of the answer to this one question—in the wake of “Why.”

Why?  Because one of the big lessons coming out of studies of successful companies is that, statistically speaking, flourishing and /or enduring businesses (e.g., the exemplar companies featured in Jim Collins’ Built to Last) have a clear reason for being. This purpose, cause, or passion creates powerful loyalties in employees, customers, vendors, and alliance partners, as well as a plethora of benefits including:

• A much better-defined and clearer brand: Apple versus Dell, Harley versus Kawasaki, Costco versus Sam’s Club, Google versus Yahoo, Southwest versus American or Delta or Continental or…
• Pricing power: Apple charges 25% more for basically the same products and virtually never resorts to discounts or promotions to retain customers
• Lower employee turnover: studies show close to one third lower versus peer groups
• Lower customer turnover: (“no one ever gets fired for hiring IBM”)
• Free publicity: Harley Davidson owners sporting Harley Tattoos

Each of these benefits enhances profitability and an organization’s ability to reinvest in products or services that are consistent with their Why. This in turn leads to much higher stock returns, as discussed in this series’ first post. 

So what is so powerful about Why?

As business people, we tend to think most decisions are rational and ultimately all about money, but, like Napoléon’s little yellow ribbon, we also know of so many examples where it’s more complicated than that. We get that if all decisions were purely rational, there wouldn’t be one tenth of the start-ups we see, no one would have ever gone to the moon, or climbed Mount Everest, or taken a submarine to the bottom of the ocean, or sailed around the world, or jumped out of a balloon from 128,000 feet above earth.  No, it’s more complicated than that.  (In fact, if you haven’t seen Daniel Pink’s wonderful video on motivation and purpose, I strongly encourage you to watch it by clicking on a link at the end of this blog.)

So what compels us to join a firm or buy a product when there are readily available alternatives?  According to Simon Sinek’s thought-provoking book Start with Why, there are only two ways to influence human behavior: we can manipulate it (through price, promotion, fear, peer pressure, etc.) or we can inspire it (there is also a link to Sinek’s “Start with Why” Ted Talk at the end of the blog).  Consequently, a strong Why inspires and unites all of our stakeholders.

A strong Why gives meaning to our work (and customers take note and flock to our brand).

A strong Why appeals to our collective values and our beliefs.  It makes us feel like we belong. A strong Why makes us feel like we are part of something special and thus special in our own right. It appeals to both our hearts and our minds. We all get this to some extent. Apple fanatics are some of our best examples (below, please find a link to a short, funny, slightly off-color parody on Apple fanatics) but we see this idea illustrated with lots of other companies like Harley, Google and Southwest Airlines.

A strong Why not only inspires, and gives meaning, it provides clarity. Specifically, don’t most people want to understand “why” they are being asked to do something so they can grasp the implications and answer other key questions like what, when, who, how and where? And, generally speaking, don’t we want our people to provide suggestions on how we could do things better? Wouldn’t it be difficult to ask for such suggestions without giving a sense of why they are being asked for?

A strong Why enhances discipline. It provides guide posts that help us avoid chasing shiny objects, being reactive, pursuing vanity projects, or becoming overly dependent upon a product or service.

A strong Why helps us build a consistent and authentic brand.  It helps ensure that everything we do—the type of products or services we sell, the marketing messages we create, the people we hire, the customers we pursue—is consistent with our Why.

A strong Why helps us hold one another accountable so we are better able to not only “walk the talk” but also avoid trying to be all things to all people and end up standing for nothing.

A strong Why helps us articulate the emotional context for decisions that otherwise may have been made more on a gut instinct or not made at all.

A strong Why helps us attract and retain the right people by providing guidance for what types of personal characteristics are conducive to fulfilling our Why and what types of personal characteristics are antithetical to our Why. It helps us find kindred spirits who are attracted to our purpose and passion, giving us a sense of community and a strong culture.

A strong Why binds us together when times are tough and reminds us of why our journey is far from over when things are going well so we don’t become complacent or arrogant.

A strong Why reminds us that our mission is bigger than any one of us.

A strong Why minimizes the egos, the petty, and the parochial as the members have a clear reason for why it is important to leave the company better than they found it.

A strong Why reminds our leaders that this isn’t their company/organization; they are temporary stewards of something exceptional and on loan to them from future generations.

A strong Why dramatically elevates stakeholder trust. When they have a clear sense for our Why and see that we adhere to its pursuit with discipline and consistency they know that no one is “above the law.”

So how do we find and articulate our Why if we don’t already have one?  We need to create one with the following in mind.

Rule #1: First, as Patrick Lencioni wrote in his book The Advantage: “Leaders must accept the notion that every organization must contribute in some way to a better world for some group of people, because if it doesn’t, it will, and should, go out of business.”

Rule #2: Most founders have a compelling reason for starting a company. If possible, look to that reason.

Rule #3: Know that anything short of an authentic Why will breed cynicism and contempt for the senior leadership team. Don’t take the exercise lightly, or worse, come up with anything jargon-y, empty or down right bogus.

Rule #4: Don’t expect employees to get out of bed every morning with a sense of enthusiasm and purpose if the organization doesn’t have the same sense at its core.

Rule #5: Be prepared to stick with the answer for as long as the organization exists.

Finally, to get your creativity flowing, the following is a list of the most used Why categories along with some decent examples:

• Customer:
  • Southwest Airlines (to champion the common man)
  • Amazon (to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online)
  • Starbucks (to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time)
• Industry:
  • Boeing (to eat, breathe, and sleep the world of aeronautics)
  • LMVH (to provide the world with luxury products, elegance, creativity and “Art de Vivre”)
  • Chick-fil-A (to be America’s best quick-service restaurant)
• Greater Cause:
  • Disney (to make people happy)
  • Merck (to preserve and improve human life)
  • Google (to organize the world’s information and make it universally accessible and useful)
  • Johnson & Johnson (to alleviate pain and disease)
• Community:
  • Facebook (to give people the power to share and make the world more open and connected)
  • Nike (to bring inspiration and innovation to every athlete in the world)
  • eBay (to provide a global online marketplace where practically anyone can trade practically anything, enabling economic opportunity around the world)
• Employees:
  • Marriott (to make people our #1 priority: treat them well, expect a lot, and the rest will follow)
• Innovation:
  • 3M (to innovate: thou shall not kill a new product idea)

In our opinion, a company’s Why and its Core Values are the only two things that should never change. Everything else can and should evolve over time.

Finally, to state the obvious, while most great companies begin life with a compelling Why, many do not. That’s okay, but hopefully this blog has made a strong case for why you should schedule time to articulate your Why now.

Until our next blog, be well.

P.S. For the very observant of you, you will note we have changed the title of this series from Smart + Healthy = Enduring Success to Smart x Healthy = Enduring Success since being healthy not only makes it easier to take advantage of being smart, it also has a multiplier effect on productivity. 

Click here for Daniel Pink’s The Surprising Truth about What Motivates Us video

Click here to check out Simon Sinek’s “Start with Why” Ted Talk 

Click here for a short, funny, slightly off-color, parody on Apple fanatics

Whether you are a large company or a small one, the probability that you will have enduring success increases dramatically if your organization is both “Smart” and “Healthy.” 

“Smart” means being really good at the hard skills: strategy, sales, marketing, product development, customer service, finance, etc.  “Healthy” means excelling at the soft skills: communicating well, collaborating well, cooperating well; minimizing politics and confusion; and fostering an open and honest environment where people genuinely enjoy working together.

Want some proof that healthy pays?  If you invested $10,000 in the S&P 500 at the beginning of 1997, your investment would have grown to about $17,400 by year-end 2011.  If you invested the same $10,000 in Fortune’s 100 Best Companies to Work For, you would have had $39,500. 

Why? Healthy organizations excel at tapping into the collective knowledge, experience, and intellectual capital of not only their employees, but those of their customers and vendors as well.  Consequently, relative to their peer group, they have lower employee turnover (typically less than half as much), higher productivity (less shrinkage, better safety ratings), less customer turnover (higher customer services ratings) and better reputations (making it easier to acquire new customers).

So how does a company become “Healthy?” By getting everyone on the “Same Page.”  By that, we mean Healthy organizations have an overall integrity with regard to what the business is, where it is going, how it is going get there, and who is responsible for what. Collectively this is known as the What, Where, Who and How.  It’s actually really simple but most organizations don’t take the time to make sure everyone is on the Same Page at the senior leadership level with regard to these fundamentals—let alone throughout the entire organization.

Why is that? Our experience in working with over 550 companies suggests that 95% of leadership teams are not even halfway to being on the Same Page.  There are a range of reasons for this. It may be too complicated—leadership feels there are too many things to worry about and doesn’t even know where to start. It could be that leaders simply have not done the hard work to get everyone on the Same Page. They might be reluctant or afraid to address issues, or they may not have the time or appreciate the value. Another possibility is that they may be waiting to add or change out one of their senior leadership members. Whatever the reason, many leadership teams struggle to get everyone on the same page and achieve Health in their company.

So what does it take to get everyone on the Same Page and, maybe just as importantly, is there a simple way to periodically measure Organizational Health?  Stay tuned…

Until then, be well.