To deal with these challenges, the company needs to increase the capabilities of the leadership team throughout the organization; install staggered. EXECUTIVE SUMMARY: "The bottleneck is always at the top of the bottle," notes management guru Peter Drucker. The second tool with a People page—the Function Accountability Chart (FACE)—focuses on ensuring you have the right backs in the right seats at the top of the organization.
THE TEAM Attracting and Hiring
It is important to revisit and examine one process every 90 days as part of the quarterly planning process. In conclusion, the power of your people comes from the right leadership doing the right things right (FACe); and the right systems and processes to support these people to maintain. With the combination of the right FACe and the right PACe, you have the key people and process ingredients for a great company.
These central elements of the Job Scorecard – the results and competencies – drive the recruitment, interview and selection process. That's why it's so crucial to discern the true core values that underpin your culture; and create the elements of an industry-dominating strategy. The key to finding the right people is to create a recruitment strategy that reflects your core values and purpose and then use your marketing skills to reach the right potential talent pool.
Once you're down to the top three candidates, it's time for the chronological in-depth. Although not always possible, the best way to select the right people is to have candidates work with you for several weeks.
THE MANAGERS Keeping and Growing (Educating) the Team
Critical number — the main bottleneck that each employee or team must eliminate during the quarter. Don't demotivate; "relief." The best managers are less concerned about motivating their people and more about NOT demotivating them. The #1 demotivator for talented people is having to work with B and C players who slow them down and sap their energy.
A strength isn't just something you're good at; it's only a force if it literally gives you strength, gives you energy. And that investment in people is the single biggest predictor of a company's ability to beat its direct competitors and the overall market. One of the biggest opportunities to grow and connect your people is when they first start working for you.
It is most effective when it is organized around doing real work while emphasizing the company's values and purpose. As Google's people analytics team discovered, one-on-one coaching is the #1 factor associated with good leadership.
SCALING UP STRATEGY
THE CORE: Values, Purpose and Competencies
Core values are the rules and boundaries that define the company's culture and personality and provide a Do/Don't test for all behavior and decisions by everyone in the firm. Identifying core values is a DISCOVERY process, not creating a people-pleasing wish list. If core values are the soul of the company, the core purpose (some call it a mission) gives it heart.
Storytelling – stories provide the explanation for core values that may seem unusual or hidden on their own. Design your interview questions and assessments to test how candidates align with your core values. The key is designing the process around teaching your core values and purpose.
Newsletters - use a word or phrase from your core values to create a catchy headline. Daily Reinforcement (Most Important Step) - Hiring managers who are engaged, every day, in reinforcing the value and purpose of the company through their decision making is the most important routine of the eight.
The 7 Strata of Strategy
Once you have formulated your values, objectives and skills, you must put them to work creating a committed and focused team. It's all about iterations: making a few decisions, testing them, and coming back to the table the following week for discussion. In addition to a few key members of the senior team, you can include someone with specific industry or domain knowledge that supports your strategy.
Ultimately, strategic decisions have to be made, and it is the CEO's job to make them. Still, it's advisable to recruit several pairs of eyes (and have regular contact with the market to help you navigate).
Strata are
- Factor (10 100X Underlying Advantage)
- THE ONE-PAGE STRATEGIC PLAN – The Tool for Strategic Planning
This phrase was coined by Jim Collins and he placed the BHAG at the center of the Hedgehog Concept, noting that it must fully align with all components of your strategy. The payoff is huge when you discover all the features of the 7 Strata. For larger companies, the Vision Summary provides a one-page format to communicate key aspects of the company's vision to employees, customers, investors and the broader community.
Core Values, Purpose, Brand Promises and the BHAG are the strategic components of the Vision Summary. They represent key components of the company's vision that every employee must know and understand thoroughly, making the executive summary useful as an important onboarding tool for new hires. It is designed to help a team get the technical aspect of the strategic plan correct.
One of the keys to keeping people engaged is making a connection between their daily efforts and the company's goals and vision. You want to continually improve your processes to achieve better results, but you don't want to seriously upset any groups of people while you do so.
Scaling Up Execution
The Priority: Finish Lines, and Fun
Maintaining this balance between the demands of the people and process side of the business while scaling up your reputation and productivity requires frequent feedback and metrics. You cannot implement anything taught in this book unless Rockefeller Habit #1 - "The Executive Team is Healthy and Aligned" - exists. Many of the Rockefeller habits reinforce routines that keep the team healthy, like taking a few minutes to share personal and professional good news at the start of a weekly or monthly meeting.
Repeat the critical figure in the next quarter if it is still critical that the organization achieves the goal. Move on to another critical number if you sense that enough momentum was created with the previous goal to keep the organization moving in the right direction. As the business matures in using quarterly and annual themes, you can dial up the rewards.
The Critical Number, like the rest of the organization's strategy, cannot be isolated from the realities of the company and the marketplace. Rockefeller Habit #4 – Each facet of the organization has a person(s) assigned with responsibility for ensuring that goals are achieved.
THE DATA -Powering Prediction
The senior team does not need another job, and it is best if an employee-managed team manages the theme activities. Without a formal routine to prompt members of your team to share their experiences, you run the risk of those ideas walking out the door at the end of the day. Collecting employee feedback and ideas will backfire on the company if management does not close the loop and act on their suggestions.
Hold a middle management team accountable for responding to employee feedback on all obstacles and opportunities. Each team member should be able to objectively answer the question, "Did I have a great day or week?" Key: Each person should report on one or two KPIs each week. The magic of the Scaling Up process is that everyone in the company does one additional thing that is aligned with the company's focus every 90 days.
Like the company, all employees or teams must set a set of priorities (known as stepping stones) that will help them reach their critical number (ie, each individual/team must have three to five stones that match those of the company.). At some point, when the company is larger than 50 employees and expands to multiple locations, it is important to have a system for tracking and managing Cascading Priorities and KPIs.
THE MEETING RHYTHM: The Heartbeat of the Organization
Who participates - the main rule is that there must be more to fewer meetings rather than fewer to more meetings. The idea of the weekly meeting is to keep everyone focused on priority number 1 – the big rocks that support this mission. You want to tap the collective intelligence of the team for 30 to 60 minutes on one or draw important topics.
2 to 5 minutes • Who/What/When Assessment - The leader should review the list and confirm completion of the accountability items. 2 to 5 minutes • Who/What/When Review - The leader confirms and summarizes the Who/What/When commitments of all meeting participants and summarizes all commitments for the coming week. 5 minutes • Quickly review the WHO/WHAT/WHEN from the previous meeting and check items off the list.
30 minutes • One page review - Go through the quarterly section of the one page strategic plan and review the details of each of the key performance indicators. 5 minutes • Quickly go through the WHO/WHAT/WHEN additions from this meeting and reconfirm commitments in WHO/WHAT/WHEN format.
SCALING UP CASH
- THE CASH: Accelerating Cash Flow
- THE ACCOUNTING: Driving Profitability
- THE POWER OF ONE: 7 Key Financial Levers
- Drivers
This allows the team to view gross margin, profit and cash flow by category such as individual customers, product lines at a location, etc. Managerial efficiency: contribution margin divided by managerial costs. Understand the 4 forces of cash flow. When a company is on its way to 15% profitability, as defined by the simple numbers formula, it faces additional cash flow challenges.
The power of one refers to the benefit in cash flow if a 1% or one day change is made for each of the 7 levers that affect it. A healthy income statement can mask unresolved cash flow issues that will only get worse as the business continues to grow. You need to change aspects of the business - the driving forces if you want to change your returns.
Our final cash flow measure highlights in simple terms the key difference between profit and cash flow. Operating cash flow reflects the impact of movements in your working capital on your earnings before interest, taxes, depreciation and amortization (EBITDA) over a certain period of time.