Here Are the 3 Key Metrics to Evaluate Your Performance as CEO

Everyone in the company needs a scorecard, even those at the top.

Performance management is key to any successful business. Making sure you have clear goals and responsibilities defined for everyone in the company is important to create alignment and focus. Without a good system of measuring success, results tend to be lackluster.

As a business coach, I work with leadership teams on defining strategic goals and outcomes and developing performance management systems for guiding the execution process. This includes functional and process accountability, standard operating procedures, and role definition.

Key to this are role scorecards. These define the core responsibilities and success metrics for each role in the company. With good role scorecards, management becomes much easier and you can ensure alignment across the organization.

Typically, one of the hardest scorecards to develop is for the CEO. As the head of the company it's hard not to put everything on your scorecard. And this is the mistake I typically see CEOs making.

As the company grows, the CEO roles need to be focused on fewer and fewer things. If you try to focus on too much and keep your fingers in too many pies, you'll hinder the development of your people and slow the growth of your company.

Here are three key areas that I advise CEOs to focus on and which I generally put on their scorecard. If you're looking to grow and scale more quickly, consider focusing on these and creating metrics to define your success.

1. Senior leadership team scorecards

One of my favorite metrics on a CEO's role scorecard is the percentage of leadership team members who are successful on their scorecards. I typically do this as a measure of the green, yellow, and red metrics across all of the leadership team. And if there are any empty seats, those count as zeros.

One of the most important jobs of a CEO is to design their leadership team structure and then find the right talent to put in those seats. By putting the average of their team's score on their scorecard, it forces them to either train and develop their leaders, redefine the roles so people are more successful, or recruit better talent.

2. Customer conversations

As your company grows, you need to spend more time on external strategy than internal processes. Too often, I see companies stuck in their growth because the CEO just can't give up control of operations and deliver.

If you want to grow your business, you need to get out of the office. One of your most important roles as CEO is to have an intimate understanding of the market and to develop insights and predictions about where it's going.

One of the best ways to do this is to spend time with your customers and deeply understand the challenges and struggles they have and where you can provide value and solutions. This is more than just going out to lunch. Go to their offices and watch their people working. The more time you can spend understanding their pain and struggles, the more opportunities and value you can create.

3. Allocation of time to strategic planning

The hardest part about strategy is finding time to do it. When you're a high-growth company, there are a thousand things vying for your attention. Salespeople want help to sell, delivery teams want you to provide insight, and HR wants you to interview and spend time with new employees.

Yes, you need to do all of those things, but you also need to dedicate time for strategy. And since nobody else is demanding that from you, you need to create the structure and discipline to make the time, not find the time.

I like a CEO to set aside at least one-two to three-hour block of time to focus on strategy development. This could be collecting data, developing insights, or creating potential paths for the company. This could also include products/service development and innovation if you have more time. The key is to have a larger block of focused and uninterrupted time to really steep yourself in creating the future of the company.

There are many other factors that show up on CEO scorecards, and each one will be unique to the company and the leader's unique strengths and weaknesses. But these three will drive your development as the head of the company and help accelerate your growth.

Want to Improve Your Company Performance? Improve the Performance of Your Teams

Talent is not the only requirement for success. Teamwork is essential.

Over the last several decades, the nature of work for many people has shifted from assembly line manufacturing to collaborative knowledge work. We are no longer an economy driven by raw production requiring a large quantity of manual labor. We are an economy of ideas and innovation where a small team of highly skilled experts can create enormous value by leveraging technology and networks.

The most valuable companies innovate by developing software, algorithms, connections, and intellectual assets. The challenge with this new type of business is that raw talent is not the only requirement for success. It takes teamwork and collaboration to create these sophisticated solutions.

As a business coach, helping companies rethink their approaches to how they design and manage teams is one of my main areas of focus. Gone are the days when managers lay out a defined work process and then focus on getting their people to follow standard operating procedures. Today's companies are based on self-managed teams with high degrees of autonomy.

For many executives, managing these types of teams is a challenge. Traditional management techniques don't work; in fact, they can hurt the success of a team. Here are five techniques I suggest that managers of modern, high-performance teams use to help them be more successful.

1) Set clear outcomes

The first thing you can do as a team manager is to set clear goals and objectives. Defining the desired outcome and work product will help a team understand where they need to go and what they need to do. By articulating good success criteria, you help evaluate their strategies and tasks and understand what will work, and what won't. Without clear outcomes, a team will struggle to decide what to focus on and increase conflict around the right approach.

2) Clarify boundaries

Once you've set a clear understanding of the final end state of the project, you then need to set the boundaries that the team needs to operate within. Don't overcomplicate these: focus on the hard edges the team needs to stay within. These could be dates, budgets, or tools/technologies that they need to either use or not use. Leave everything else up to the team and let them decide how to get it done.

3) Highlight success

Many managers love to give their teams critical feedback and focus on digging into problems and things that didn't go well. While it's important to reflect and retrospect, focusing on problems will demotivate the team and only draw more attention to the ways not to do things.

Instead, focus your time and energy on the things that went right and are going well. Catch them when they do something successfully, and reflect on what led to a positive result and how the team can leverage their learning to create even more success.

4) Don't interrupt

One of the worst things you can do as a manager is to interrupt a team in flow. Modern teams are engaged in complex and dynamic tasks. It can take a long time for a team to get into the zone and fully immerse itself in their work. Asking questions, getting updates, and making suggestions when a team is in the zone will disrupt the process, which can take hours to rebuild.

Instead, set up a time at the beginning and/or end of the day for check-ins and discussion. For the rest of the time, the best thing you can do as a manager is to protect the team from external distractions. Set up systems and policies that allow the team to have sustained periods of focused time.

5) Remove roadblocks

While a high-performance team is self-managing and can handle their own processes and workflow, they always operate within a larger company context. This can create external obstacles and friction. As a team manager, one of your most important jobs is to remove these blocks for your team. Find out what external forces are holding a team back and use your clout and organizational power to make things easy for the team to be effective.

As the nature of work in companies becomes more complicated and organizations become more team-based, these leadership skills will increase in demand. Effective leaders who know how to create and support high-performance teams will thrive in the future world of business. And companies that develop and promote these types of leaders will quickly become leaders in their own markets.

Every Brand Stands for Something. the Best Brands Make That a Promise.

Your brand communicates to your customers what you stand for. The best brands make it a promise to their customers.

One of my favorite parts of being a business coach is working on strategy. While many things need to go right for a business to succeed, without a solid and effective strategy, your business won't stand a chance of rising to the top.

The best strategies stand for something. They make a clear choice about what they deliver and what they don't. It's about differentiating yourself from the competition in a unique and compelling way. A strategy is about choosing to be extremely good at a few things and a willingness to be bad at many others.

Once you successfully do this, you can truly stand behind your brand in a way that nobody else can. Once you pick how you're going to be different, you create a powerful position that you can fully own. And since nobody does what you do, as well as you do it, you can confidently ask for a superior price and reap an above-average profit.

With a solid strategy, you can back up your brand with a clear promise to your customer. And if you're really good, you can back up that promise with a guarantee. This promise and guarantee communicate why customers should choose your product/service and should remove all buying concerns in their mind.

A great example is the famous Domino's pizza brand promise and guarantee. While there are many aspects of pizza delivery, their focus is on fast and hot. They don't have to have the largest selection of toppings or the highest quality ingredients, but they make a promise that they will deliver your pizza in 30 minutes or less (their promise): and if they don't, it's free (their guarantee).

Creating a brand promise and guarantee will allow you to be more effective in your market. It broadcasts your positioning and draws the right customers to your business and repels the wrong ones. It also helps align your organization to deliver on those key and select-few processes and services you need to get absolutely right.

Here are the key steps for developing your brand promise and guarantee. Done well, these can transform your business and fuel your growth.

1. Who is your best customer?

Before you develop your positioning, you need to know who your target customer is. That starts by looking at your current customers and identifying who your best ones are and what they need and how they think. Once you understand these you can decide which needs and preferences you want to focus on in your strategy.

2. What do you want to be known for?

By focusing on your best customers and choosing the handful of things they care about, you create your positioning. Your positioning is what you are known for and what your reputation is built on. And by choosing a few key areas of focus, you make it easy to communicate. You can't be all things to all people; it's better to be a few things to a focused market segment.

3. What gives the customer hesitation to buy?

Once you have your positioning, focus on what gives your buyer hesitation to buy. What gives them pause or concern? Maybe they aren't sure it will work, or that the motor won't last, or that the color will fade, or that they will change their mind next week when they get home? Figure out what gets in the way of them saying "yes" to your offer.

4. What promise can you make to them?

Take those key hesitations and figure out what you can do to assuage their concerns. If they are worried that you'll be out of stock of the right colors, promise that you'll have the colors they need. If they are worried that the fabric will stain, promise that your fabric is stain-free.

5. What are you willing to suffer on?

Now that you have your promise, you need to decide what you're willing to put on the line. A good guarantee communicates to your customer that you're so confident in your ability to deliver that you're willing to suffer serious pain if you don't live up to your promise. Maybe the customer doesn't have to pay, or you'll provide another one for free, or you'll redo the work until they are completely happy. It says to the customer, we stand behind our promise and put our money where our mouth is.

By focusing your positioning on just a few key customer needs and then building your promise and guarantee, you will communicate to the right customer what you stand for and why they should buy from you. But while a good promise and guarantee should be simple, getting them right will take hard work and tough decisions.

A Leadership Team War Room Creates Alignment and Focus. Here’s How to Create Yours

Like a great general, a great CEO knows that having the right information at the right time is key to success.

While military analogies have limits in business--and are often more cliché than practical--one that I find highly effective is the idea of a war room. A war room is a space where information is gathered and displayed where your team can meet to discuss and decide on strategies and objectives. Done well, a war room can be a powerful tool in creating focus and alignment in your team. 

As a strategic coach, I'm always looking for an edge that I can give my clients. And while more ideas and information can help, more often than not, it's about creating deeper insights and making a better decision with the information you already have.

The problem is that information can be buried in binders and folders or on hard drives (or the cloud these days) and inaccessible to the team. Making this information accessible and placing it in clear view allows it to be used more effectively.

This is what a war room does so well. It takes the key information, data, and plans that a team has developed and organizes it in a structured and visual way so that it's at the team's fingertips. Here are five aspects of a great war room.

1) Close to the action

The best war rooms are located in a central place close to where the work is being done. It should be easy to get to and easy to access. High-performance teams meet daily to review updates and action plans. If your space is too far away to easily access, you won't establish a routine that will drive the pace.

Your war room need not be physical. Several teams that I work with are virtual, with leadership located in disparate parts of the world. A virtual war room creates common data sets, meeting tools, reports, and documents that give everyone on the team the right information in the right format.

2) Common ground

It's important that your war room be accessible to everyone at all times. Don't put it in the CEO's office or the main conference room if these are closed or occupied during the day. You want your war room to be open and available to everyone on the leadership team at all times so they can access information, update plans and reports, and have a space to think about strategy and long-term goals.

3) Information radiators

Having spent almost two decades in Lean/Agile software development, I've borrowed many ideas and concepts and applied them to my business coaching strategy. One of the core ideas that I've borrowed is an information radiator. By organizing information and insights in large format charts, diagrams, and models and putting them on the wall, you create visual access to the critical resources the team needs to plan and make better decisions.

4) Meeting space, not working space

It's important to set up your war room as an ideal place to meet. Generally, war room meetings are short and focused. You need enough space for everyone on the team to be in the room and still see everyone and everything on the walls. I tend to like open spaces where people stand or sit in chairs that can be quickly moved around, rather than conference tables.

Don't encourage people to work in the war room. This allows other people to come in and quickly access the information they need without disrupting others. Quick meetings and work sessions are fine, but for focused work, use another space.

5) Invite change and updates

Everything in the war room should be easy to update and change. I like stickies on walls that can be edited, replaced, moved and reorganized as needed. Don't get attached to any particular setup or format. The key to a good war room is the ability to adapt quickly to changing situations and strategies. Whiteboard and glass walls create great surfaces where diagrams, sheets, notes, and documents quickly posted and edited.

In today's rapidly changing business world, having the right tools and information at your fingertips is key. With the right information in the right format, teams will be able to gain insights and quickly execute strategic moves that will win in their market.

6 Things to Consider Before You Decide to Promote Someone

When a company grows quickly and talent is in short supply, the pressure to promote people is high. Here are six things to consider before you do.

Over the last two decades, I've worked with hundreds of founders and CEOs of high-growth companies, helping them with strategy development and execution. And while we can come up with amazingly effective ideas for how to grow the business and highly developed processes for scaling the companies, the one challenge they all end up facing is finding enough of the right talent quickly.

The fact is, talent quickly becomes the limiting constraint for many high-growth companies. And the biggest demand is for management and leadership. As a company grows from a few dozen to a few hundred people, finding the right people who can manage teams and departments becomes more and more difficult.

One of the common strategies for these companies is to promote from within their existing ranks and then backfill with new, entry-level talent. It's a good strategy when it works, but too often I see companies promoting the wrong people into the wrong roles, and suffering because of it.

Here are six questions I ask when a leader is thinking about promoting someone into a management or executive role. While the answers don't need to be perfect, they will help you understand where you'll face challenges and need to provide support.

1. Do they really want it?

The first thing to consider is if your prospect really wants the new role. While people always want to advance and feel like they're making progress, you'll want to make sure that this is really the role for them. This might take some digging and frank conversation, but make sure you ask the question.

Too often I've seen someone promoted because they were "perfect for the job," only to find out that they took the role under duress and miss their old position. Without a real desire and internal motivation to take on the role, the results will be lackluster at best.

2. Can they manage themselves?

Moving up the management ladder will mean more projects, more people, more issues, and more demands. If someone hasn't developed the skills to deal with multiple--and at times conflicting--priorities and learned how to allocate their time effectively, they can quickly become overwhelmed and ineffective. Make sure they have the management skills to take on these new challenges.

3. Do they have the skills?

If the promotion you're considering involves new skills and capabilities, you need to make sure they are trained and ready. Moving someone into a management role that requires project budgeting and forecasting when the person doesn't know how to use a spreadsheet will be a disaster.

While many of these skills are trainable, make sure you know the gaps and have a plan before making the decision. When promoting someone with clear deficiencies, make their training part of their development plan and set specific goals.

4. Can they manage people?

The classic misstep many companies make is taking a starting player and making them a manager. Just because someone is a great salesperson or a brilliant coder, that doesn't mean they will make a great team manager. In fact, the best technical people often make horrible managers because their expectations and standards are far beyond anyone else on the team. Make sure they have the people skills to lead the team before you put them in charge.

5. Do they embrace the culture?

One of the big risks in promoting someone is that the promotion gives them a much bigger impact on the culture of the company. If they are not a good cultural fit, you'll be exacerbating the problem by giving them a more powerful and influential role. And you'll be sending a message to the team that this person represents what is acceptable within the organization. If your employee doesn't reflect your company's desired culture, think twice before promoting them.

6. Can they make strategic decisions?

As you move up from individual contributor to management and leadership, one of the big changes is your shift in focus from day-to-day operations and tactics to strategy and long-term thinking. Before you move someone up the ladder, make sure can think strategically and see the system-level perspective of the business. Much of this is trainable, but be aware of how much work it will take to get someone to the level you need.

Promoting from within existing ranks is a highly effective and desirable strategy for most organizations much of the time. You know the person well, can assess their capabilities more easily, and can determine culture fit with a high degree of confidence. But if you promote without asking yourself these six questions, you'll likely run into problems down the road.

Hiring is one of your biggest business decisions. Here are five ways to do it better

Hiring has a huge impact on your business. Here are five ways to make sure you're making the right decisions and bringing in the best people possible.

As a strategic coach, I spend the bulk of my time with CEOs and leadership teams of high-growth companies, helping them set strategic goals and driving accountability on execution. Again and again, I see these companies struggle with finding the right people and effectively onboarding them. 

Getting hiring wrong can be a nightmare. Lost time, energy, and money are all immediate and obvious. But less visible is the frustration and hit to team morale that a mis-hire can lead to. Over time, this can cause a business to develop a bad reputation in the market and hinder its ability to grow.

There are a few core strategies that I've seen work really well in most cases when a business needs to hire and onboard a new employee. 

1. Define the process

Being thoughtful about how you're approaching the process, getting clear on the role you're trying to fill, and designing an interview process that ensures you'll have a good cultural fit, in addition to the skills for the job, is all time well spent.

By specifying the stages of the interview, the number of people the candidate will be meeting with, what questions will be asked, and how the information is processed will ensure that things run smoothly and that you'll be able to compare candidates effectively and fairly.

2. Define your expectations

I've seen many companies cycle endlessly through candidates because they haven't clarified what they are hiring for and what criteria they are prioritizing in the process.

Take the time before you even post a job opening to define what the role is, its key responsibilities, how success will be measured, and any other expectations or performance requirements. Being able to clearly articulate what the job entails before you hire someone will make it vastly easier to manage them once they're on board.

3. Set the bar

The fact is that there is always a better candidate out there somewhere. The challenge is in making the decision about how much time and energy you are willing to spend trying to find them. The search for perfect is a never-ending and impossible task.

The best strategy I've seen to overcome this challenge is to set a minimum number of candidates to interview for a given role (usually five to eight people). Chances are you've interviewed as least one person in the top twenty percent of the market. Then set your standard to the best of that lot and hire the next person who meets or beats that bar.

4. Engage your team

Take the time and effort to have your team involved in the process. While not everyone needs to have a formal say in the hiring decision, it's important to have the folks who will be working with your new hire to have a say and to get to know them, and vice versa.

This can happen in the form of group/team interviews where people get a chance to meet a candidate and ask some structured and unstructured questions. It can also be casual, where the team takes a candidate out to lunch or coffee to get to know them.

5. Don't oversell yourself

Too often I see companies working very hard to sell themselves in the interview process. They hype up the company and the role and talk about all of the amazing benefits and opportunities. And while you do need to put your best foot forward, you also need to be careful of overselling yourself.

Good interview processes make it very clear what it's like to work at the company and what is expected of people. If the company is really competitive and everyone is highly driven by personal performance, there is no good reason to try to sell yourselves as a highly collaborative culture. While you might be able to convince a candidate that you are, it's going to be bad for both of you in the end.

I like the final stages of the interview process to be a frank conversation. This is basically where I list out the downsides and difficult things about the company and make sure the candidate is really ready and willing to take on the challenge. It's best for anybody to start a new job with their eyes wide open.

Hiring is tough and no company I've worked with has nailed it every time. However, those companies who can get it right more often than the competition will have a strategic advantage when it comes to growing quickly and effectively over time.

Making the Wrong Hire Is More Than Just a Waste of Money. Here’s Why

Hiring the wrong people can cost you much more than lost wages. It can impact every part of your business and cost you in ways you might not realize.

As a business coach for high-growth companies, I work with organizations that are often starving for talent and under a lot of pressure to grow quickly and make hires fast. However, without truly understanding the costs of making a bad hire, many companies fail to ask the right questions or take the right precautions in their recruiting and interviewing processes.

Here are a few of the considerations you need to keep in mind when designing your strategy and process for making new hires. Putting in steps to assess and evaluate these risks will serve you well in helping you make sure you're making the right people decisions as you grow.

1. Wasted investment in hiring

The first obvious consideration is the time, energy, and money you put into hiring. If you're using a search firm, you could be spending upwards of 30 percent of a first-year's total compensation to make a key hire. For most companies, this isn't chump change. But even if you're doing your own search and recruiting, you're still spending real dollars and significant time on the hiring process.

2. Onboarding effort

While making the hire takes time and energy, most companies end up spending just as much time, if not a lot more, training and onboarding new people. This includes the time your new hire is spending learning the ropes, getting up to speed on projects, learning your software systems, and generally acclimating to the new environment. Even the most experienced and skilled person will need time to become productive.

And don't forget all of the time and energy your current employees will be spending getting your new hires up to speed. At a minimum, I double the time of the new employee, and in some cases, that could be two or three times the work effort. If you're spending hard dollars on training and certifications, then that's money you'll never get back if they don't work out.

3. Team disruption

While it's difficult to quantify the hard costs of team disruption, the productivity drag of a new person on a team is very real. A well-oiled team will be thrown off by a new member and it will take a while for the team to find its new groove.

Some of this is about process design and roles on the team that need to be adjusted. Rebalancing workloads and reassigning projects and clients will take time and a thorough thinking through. There are also changes to the team dynamics and communication structures that will need to be reestablished and optimized with the new players.

4. A-player disengagement

One of the key costs of a bad hire has nothing to do with the hire themselves, but rather their impact on the rest of the team. If you hire someone who's not a good fit or who just can't pull their weight in the role, it will be a drag on the rest of the team. As a result, your current high performers will suffer and become frustrated.

A-players want to work with other A-players. And if they feel like they need to tolerate and pull extra weight for the underperforming team members, they will quickly disengage. Ultimately, one of the biggest costs of making a bad hire is causing one or more of your best people to leave the business.

Finding and developing A-players is very, very expensive, and you should be protecting them at all costs. The last thing you want to do is suffer the costs of a mis-hire and also lose a great employee. 

5. Poor reputation

If a company consistently does a poor job of hiring and cycles through candidates quickly, word will get out. With sites like Glassdoor.com and social media, combined with people's willingness to openly share their hiring and employment experiences, companies are highly exposed and vulnerable to developing a bad reputation.

While potential candidates will write off one or two bad reviews in a long list of positive ones, if they see a trend of companies letting people go quickly, they will think twice. Nobody wants to leave a job, even a bad one, to work for a new company if they are worried they will be on the street again in a matter of months.

Hiring is not easy and you'll never get it perfect. But don't take the job lightly and don't assume you can just hire someone and hope it works itself out. The direct and indirect costs of making the wrong decision will ultimately cost you more than what it would take to develop a clear strategy and effective hiring process.

Every high-performance team needs people in each of these four basic roles

Regardless of the project, your industry, or your company culture, these four roles need to be filled on every team for it to be highly effective.

As a strategic business coach, one of my main goals is to level up the performance of the senior leadership team. There are many models and frameworks I use to assess team behavior and performance. Each of them has pros and cons in different situations.

One of my favorites comes from the psychologist David Kantor and is called the Four-Player Communication Model. It applies to any team solving problems and collaborating to reach common goals. Each role is fairly simple to understand, yet getting them working together on a team can be a balancing act.

Here are descriptions I give to senior executives so they can be more aware of what role they are playing and what roles other people are playing in the situation. Once they are more aware of the roles, they can start adjusting their behavior to balance out the dynamic.

1. The Mover

The primary role in any discussion is the mover. They are the ones who initiate action for the team. This could be a question, a suggestion, or putting an issue on the table. Their role is to encourage the team to engage in discussion and debate and move things forward.

Without a mover, a team will get stuck and become apathetic. They will lack the ability to advance, come up with new ideas, and turn ideas into action plans. While many teams are made up of highly driven executives, it's important that the mover help the team advance, not just be impatient and pushy. A good mover serves the team, not their own personal agenda.

2. The Supporter

I like to say that while the mover is key, the hardest role on the team is the supporter. This is the person who seconds the motion. They take a stand and get behind the idea, opinion, plan, etc. A mover can kick things off, but without a supporter, they will make little impact or progress. 

The key here is that the supporter needs to support the idea, not the person. If the supporter comes across as a sycophant currying favor for political gain, it won't work. They need to put their weight behind the merits of the idea and provide a good rationale.

Often when a senior leadership team is struggling, I see this role missing. Because members of a top team are often used to driving and making decisions, they all want to be movers and nobody wants to take the role of supporter. On really great teams, members know that the supporter role is key to effective decision making and jump into it when they see the need.

3. The Opposer

If it's the supporter's job to add momentum to the mover, it's the opposer's job to provide a check and balance for the team. It's a key role to help make sure that all angles are being considered and possible risks and downsides are fully evaluated. A good opposer will help the team avoid pitfalls and prevent the team from missing other opportunities.

Typically, finding enough opposers is not a problem on a senior leadership team. However, this is not just arguing for argument's sake. A good opposer brings up legitimate concerns and risks and is there to help the team assess all options. Too often I see executives opposing without making a strong case or providing sufficient rationale. Bad opposers will make ad hominem attacks that will destroy a team's trust and effectiveness.

4. The Observer

Finally, every team needs to have people who maintain a higher-level perspective and keep the bigger picture in mind. These are the team's observers. They help guide the process and make sure the team is considering all of the options and factors. A team with good observers will have a strong process and be much less likely to go down rat holes and spin their wheels.

Every effective team I've worked with has demonstrated the use of these four roles consistently. However, members don't need to stay in each role forever. In fact, in the best teams I work with, members will move between roles as the conversation shifts and they see the need to balance out the dynamic.

3 Common Thinking Traps That Derail Many Leadership Team Discussions

Leadership teams can fall into thinking traps like any other team. Here are three common pitfalls and how to avoid them.

As a strategic coach, I spend a lot of time helping leadership teams assess their current situations and find key areas that need focus. At the core of my role is helping teams identify and articulate the issues and then facilitate the discussion between members. I make sure the conversation stays constructive, that all of the issues are being addressed, and that everyone is contributing their thoughts and ideas to the discussion.

Having worked with dozens of leadership teams and held hundreds of strategy and planning sessions, I've found a key set of ruts and bad patterns that teams fall into. These are common thinking traps that every team can find themselves in. However, for leadership teams, the costs of these traps can be very high and impact everyone in the organization.

Here are the three most common ones that I come across and how I typically help teams get out of them. For all of the teams I work with, my initial step is to help them see that they are in a trap, which can be a challenge. From there, we can change their setup and behaviors to get out of the trap and avoid falling in one again in the future.

1. Anchoring

This one is rampant in most leadership teams. Usually, it comes in the form of the CEO or another powerful executive dominating the conversation and leading with strong opinions that everyone else needs to then argue for or against. The problem is that this sways everyone's thinking and will suppress other comments and ideas, which is exactly what we don't want if we're striving for perspective and constructive debate.

The solution to this is to have a clear process for articulating the topic and gathering data and success criteria before launching into solutions and decisions. I also typically have the CEO or other influential executives on the team speak last so they don't skew the discussion.

2. Correlation = causation

It's easy to assume that just because one thing relates to another there is a causal relationship. My favorite example is a study that appeared in Nature in 1999 that showed that parents who leave the lights on in their infant's bedroom at night cause myopia. One year later, Nature published a new study that showed that the lights have no impact, but rather there is a strong correlation between nearsighted parents having nearsighted children. The lights were just something that nearsighted parents left on so they could see better.

Leadership teams fall into this same trap. Just because one thing goes up at the same time as another, it doesn't mean that one causes the other. Making that assumption and failing to find the true cause can lead teams down bad paths.

The way to avoid this is to assume temporarily that the opposite is true and try to prove that by looking for evidence. If you can make a plausible argument, you might be looking at a correlation, not a causation situation.

3. Polarization

As humans, we love drama. It's what makes for compelling movies and page-turner books. But on leadership teams, it's typically a liability. Unfortunately, it can be human nature to take one event or one case and to assign a disproportionate meaning or weight to it in order to make a point or advance a personal agenda.

Key giveaways that this is happening are when I hear people using "never" and "always" in their arguments. This technique is usually employed to emphasize a point or to strengthen an argument, but, instead, they are just setting things up for an argument.

Instead, I encourage teams to speak with realistic data and probabilities. If you know that 82 percent of the deals close within a month, don't say "we always close." And if you know someone was late to the daily huddle three times last week, don't say they are "never on time." While you may think you're making a stronger point, you're just going to pick a fight over the data.

While there are many other traps a team can fall into, these are the top three that stymie most leadership teams. Knowing what they are and when you've fallen into one of them can help you get out more quickly. And once you get better at seeing them, you can start avoiding them altogether.

Three Questions to Ask When Setting Your Organizational Priorities

When you're setting annual or quarterly priorities, here are the three areas to consider and the questions you should ask yourself.

Every successful company that I've worked with as a business coach has mastered the art of setting organizational priorities on a regular basis. They realize that while they can do anything they want, they can't do everything they want. And if they don't choose a few things to align the company behind, they will see little progress and marginal success.

Each year and each quarter, these high-performance companies collect input and insights from inside and outside the business to figure out where there are needs and opportunities for improvements. Through discussion and constructive debate, the leadership teams choose a set of key areas of focus and a set of priorities for the organization.

Once determined, they cascade these down to the different departments and teams, allowing each level to define a set of more focused efforts to support these key objectives. By doing so, everyone in the business knows what to pay attention to and how they can contribute.

The challenge with this process is that there are many potential areas of focus a business can choose from. If it doesn't choose the right ones in the right order, key dependencies and opportunities can be missed. Good companies consider the following questions in the following order to figure out what they should put at the top of their lists.

1. How is your cash-flow engine running?

The first thing to consider is your core cash engine. Ask yourself, what are the key five to eight activities that give the organization momentum and put money in the bank? Look at each one of these steps and assess how it's working and what can be done to improve it.

You also want to make sure each step is reasonably balanced. If your marketing team is generating more leads than your sales team can process, you might need to beef up sales or have marketing do more work qualifying leads so salespeople are not wasting time with low-potential leads. Focus on system-level optimization, not local performance. Spending too much attention only on local performance is tantamount to worrying about your sprained ankle when you have a bullet wound to the chest.

2. Can you improve your operational excellence?

Assuming your core cash-flow engine is working well, you can start looking to key areas where you can drive operational efficiencies. At this level, you're looking for processes that either consume a disproportionate amount of resources or have frequent quality and consistency issues.

The key focus of this stage is continuous improvement and process standardization. Checklists and SOPs (standard operating procedures) will become critical tools to find efficiencies and reduce errors and omissions. Pay particular focus on cross-department handoffs and coordination of activities.

As an example, if your installation team is having problems installing your equipment because the onsite specifications are different from what was specified on the drawings, take a step back. Go and talk to the design team and site managers in order to figure out a better way of documenting the initial conditions and capturing more details. It's far better to get the information right from the beginning than to retrofit changes when installing.

One key tool at this stage is to find a handful of KPIs (key performance indicators) that will tell you how efficiently you're running. I like ones that focus on profit such as profit per employee, profit per customer, profit per delivery, etc. These get you thinking about ways to drive bottom-line results, not just reduce costs.

3. Where can you advance your long-term strategy?

Finally, once your cash engine is running well and your operations are smooth and consistently producing quality results, you can focus on strategic initiatives. These are the things you need to implement in your business that will bring the company in line with the key position you want to own in the market and the capabilities that will drive value with your core customer.

If you've created a good strategic plan, you'll have a set of priorities around key capabilities and differentiating activities that will give you a unique and valuable position in the market. Use these to assess your current situation and map out several quarters of projects and milestones. Then use these to create annual and quarterly priorities to guide your focus.

While you will likely start with things at the top of this list and move down as you work through the process to more strategic work, don't forget to keep going back and asking these questions each time you plan. Things change, and if you stay focused on strategic work and fail to see a problem with your core cash-flow engine, you could be in for a rude surprise.

One of the Most Important Roles on Any Team, That Most Get Wrong

Every high-performance team needs someone to keep things in check and balance the discussion.

Every team has roles that need to be filled to be successful. A good team has a diverse set of members who have different perspectives, experiences, points of view, and styles. This prevents blind spots and groupthink that can lead the team down dangerous paths and to poor performance.

One of the key roles that teams often get wrong is that of the devil's advocate. This is the person on the team who takes an opposing point of view and brings up contrary evidence and perspective. It's a key role to help make sure the team isn't missing a critical piece of information or failing to consider other options.

In 1587, the Catholic Church established the role of advocatus diaboli as part of the process of declaring someone a saint. The purpose of the role was to present counter-evidence of sainthood and to find holes in the events presented as miracles. One of the most famous examples was when the atheist author Christopher Hitchens was asked to testify against Mother Teresa.

What the Church has long realized, and what good teams come to learn, is that without someone to present contrary evidence and an alternative opinion, you risk missing other opportunities and making big mistakes. It's a risk that you can't afford to take and one that's easy to avoid.

However, many teams get the role wrong. Instead of inhabiting a key role necessary to improve decisions and results, a bad devil's advocate will just be argumentative and create friction on the team. Here are the right ways to make sure your team is taking everything into consideration.

1. Attack the ideas, not the people

Ad hominem attacks are not helpful. The goal of the devil's advocate is not to question a person's character or credibility. In fact, doing so will only hurt personal relationships and prevent others from presenting their ideas or opinions.

Instead, focus on the idea being presented and stick to the merits and soundness of the arguments being made. Question the evidence and the conclusions by providing additional or alternative data, logic, or experiences. Do so respectfully and avoid making your comments personal or demeaning.

2. Provide solid logic and rationale

A good devil's advocate will present new and valid data and sound thinking. It's not just about being argumentative and saying you don't like something. Focus on providing different examples and data sets that can be used to draw different insights and conclusions. Your goal is to get the team to consider other options and positions, not to personally discredit someone else on the team.

3. Offer new alternatives

One of the best things you can do as the devil's advocate is to offer new and alternative options. Instead of just undermining and undercutting another idea, focus on providing a different path. Even if the suggestion isn't totally viable or thought out, it can promote discussion and debate that can lead to other ideas and directions.

4. Serve the team, not your personal agenda

One of the situations I see a lot on dysfunctional teams is when an individual uses the devil's advocate role to advance a personal agenda or grind an ax they have with another team member. This is neither appropriate nor helpful. Instead, focus on serving the team's agenda to efficiently reach a better outcome.

If you see someone not acting in the best interests of the team, the best thing to do is to ask that person to clarify their logic and rationale. If they can't articulate a valid reason, the team should consider their point and then move on and focus on other issues.

5. Know when enough is enough

The point of the devil's advocate is to advance the team's thinking and the quality of their decision making, not to grind discussion to a halt and stymie the team's progress. When you feel like you've exhausted the value of a line of reasoning or that the team is ready to move forward, it's time to step out of the role and move on.

6. Switch it up

The devil's advocate role is key on any team and it's important that every team has one. However, it's best not to let it be the same person every time. If one person is always the naysayer, it will create a rut for everyone. Instead, switch it up and make sure everyone develops the skill and can take the role when needed.

I often see teams who are "playing too nice" and fail to engage in critical debate and challenge one another. Introducing the idea of a devil's advocate will help raise the bar on the team's discussion and help them reach better solutions more quickly.

The Easiest Way to Innovate Is to Pivot. Here Are Your Two Best Strategies

Here are two basic strategies every organization can use to expand their business.

As a strategic business coach, innovation is a key subject that I teach and work on with my client companies. Once we assess the market and a company's current strengths and weaknesses, we look to find new business opportunities that remain unnoticed or unexploited by competitors.

While startups have many challenges, they do have the luxury of the blank slate. They can explore and try to build a business based on just about any model and address any possible problem they see in the market. Since they have no existing business or customers, they have very little at stake and can try radical ideas and take big risks.

Existing companies, however, need to get creative about exploring new ideas and business models; if they extend themselves too far, they will lose footing and overextend their resources too quickly. To innovate well, a business needs to find levers and pivot points from its existing model.

There are two dimensions a business can innovate on: first, the company's current customers, and second, the company's current products and services. While you can innovate on either, trying to innovate on both at once is extremely risky and fails to leverage your current knowledge and assets. 

1. Find new products/services for existing customers.

The first way in which a company can innovate is by keeping their existing customer base and finding new products or services that these people might find valuable. In this direction, you leverage your existing relationships but consider new lines of business to develop.

In some cases, these can be subtle but important changes. Say you're a fitness center that provides unique fitness programs and classes and you have a strong and dedicated customer base. While those customers don't need more fitness classes, they may need nutrition coaching, apparel, or at-home workout services. Same customers, but new products and services.

In some cases, these new directions are quite different. Say you're a staffing company that provides candidates for companies to hire. However, you see that companies need more than just people, but also training and project management. You can develop online certification and testing programs to help your clients train and level-up their current staff. Same customers, but you're solving a different, more valuable need.

The trick with this approach is to have deep relationships with customers and to develop insights into what really drives value for them. You need to understand the bigger, more important problems they are facing and then find new and improved solutions to offer them.

If your business is transactional and doesn't provide deep customer insights and strong relationships that you can leverage in the sales process, this approach might be difficult.

2. Find new customers for existing products/services.

The second way to drive innovation is to take your current products/services and find a new customer segment or a new market for them. While you might need to tweak them and/or repackage them to fit the new scenario, you're leveraging your current capabilities and solutions and finding new problems to solve.

This might be as simple as looking at adjacent and related markets. If you provide cleaning services to offices, you can try selling to universities. If you provide accounting services to multi-store retailers, you can try selling to chain restaurants. Think about who else has similar problems that your skills might be a good fit for.

Some companies can make bigger jumps using this strategy. One of my favorite examples is Gore, which started with making high tech fabrics but branched out and found all sorts of applications for its material technology in medical, biotech, automotive, and electronics. They even figured out that their waterproof fabric product Gore-Tex works great as dental floss which is now sold as the product Oral-B Glide.

If your core strength is in services and development of products, then this might be a more fruitful approach to finding new ways of expanding your business. To be successful in this approach, you need to explore many businesses and industries looking for problems that haven't been solved, that also have significant value to companies with money.

While either approach to innovation can yield good results, trying to do both at the same time is extremely difficult. Changing both your customers and your products and services leaves you with no stable leg to stand on. You'll basically launch yourself into start-up mode. And with an already existing company to operate on top of that, you'll make your life extremely difficult.

Growing and expanding a company requires a smart strategy and clear process. Good companies stumble on opportunities and take advantage of them. Great companies make innovation a core process and invest time, money, and energy into finding new ways to expand their reach and the value they create.

How COVID-19 Will Permanently Change the Cannabis Industry

One of the hottest industries of the past decade is not immune from the effects of Covid-19.

As a business coach, I've worked with dozens of cannabis businesses on growth strategy and business operations. I also run a podcast focused on the cannabis industry and have interviewed over a hundred leaders in the space. With the Covid-19 pandemic in full swing, every industry is feeling pain; however, the cannabis industry has a unique set of challenges as well as opportunities in this crisis. Here's what you need to know about the current state of the industry:

1. Cannabis sales will continue to be erratic.

While cannabis companies have been declared essential services in most states where it's legal, hoarding is creating swings in demand. When Massachusetts ordered dispensaries closed, there was a run on stores, and more than 1,300 applications for medical marijuana cards were made within 10 days.

Other states such as California allowed dispensaries to stay open. Denver's mayor initially ordered adult-use marijuana dispensaries closed, but then quickly reversed the order after lines formed creating a health risk.

Changing government policy and consumer fear will continue to cause swings in sales. Coupled with disruptions in the labor force for cultivation, processing, and shipping, cannabis product inventories will be unpredictable for some time to come.

2. Buyer behaviors will change.

Shelter-in-place and social-distancing orders have meant that customers are not going into retail stores. Many dispensaries have moved to curbside pickup. And in states where it is legal, delivery is taking off. Technology companies that provide delivery technology are seeing a huge spike in inquiries as stores scramble to provide this service.

While some consumers will go back to visiting the store to get their weed, many will stick with the ease, convenience, and safety of delivery services long after the crisis has passed. This will also be fueled by stores that see the benefit of marketing to customers with loyalty programs provided through delivery apps.

3. The crisis is driving people to ingestibles .

As it became clear that Covid-19 affects people with respiratory issues harder than most, consumers have become wary of inhaled products. Vapes, concentrates, and smoked flower sales have flattened or even dropped in some locations while edible and tincture sales have increased.

In addition, orders to shelter in place mean that people are inside with other family members much of the time. Smoking and vaping are being avoided while people remain in close quarters.

While some consumers will go back to inhaled products after the crisis eases, it's likely that some users will change behavior permanently as a result of new habits.

4. CBD use is on the rise.

The focus on staying healthy and boosting immune systems is driving consumers to all sorts of health-focused products, and CBD is no exception. While there's a lack of significant clinical research and conclusive data on the health benefits of cannabis products, CBD has clearly been positioned as having several health-related benefits by manufacturers and retailers.

And while CBD stores have not been considered essential businesses, online orders are up significantly. In addition, those brands that distribute through pharmacy and health food stores have remained available to consumers, showing strong sales that will likely continue.

5. Consumers will look to value products.

Over the past year, there has been a glut of high-end premium-priced brands in all cannabis categories and product types. Even before the Covid-19 pandemic, experts have said the top of the market was crowded and not sustainable.

With uncertain economic futures and massive rates of unemployment, consumers will become cost-conscious. This will drive purchases into the value-priced mid-tier categories and even down to the lower price points. Even if we see a strong recovery, consumers will likely stick to budgets for some time.

6. Some businesses won't make it.

While the cannabis market has been booming, it's still a fiercely competitive space with many companies struggling to make it. Many cannabis companies have relied on the capital markets to fund growth. Unfortunately, it's clear that capital markets are going to take a while to recover, leaving many businesses starving for cash. And because THC cannabis is still federally illegal, these companies are not eligible for the PPP and loan programs designed to aid recovery. 

In addition, companies were hoping for banking reform to remove the punitive 208e tax code regulations, which will now be pushed into the distant future. Businesses that have overextended themselves will feel the pinch. Expect many of them to go out of business or get bought up by healthier competitors.

While every massive disruption to an economy will cull the herd and put many companies out of business, it also creates opportunities. Those who are in a good financial position to weather the storm and who can pivot their business to take advantage of openings will go on to grow quickly and dominate the new industry.

Now Is the Time to Figure out How You’ll Thrive in the New Normal Post COVID-19

Good companies are finding smart ways to survive Covid-19. Great companies are planning how they are going to thrive once we're out of the woods.

Covid-19 is upending every business in every industry, with many doing everything they can just to survive each week. As a strategic business coach, I've been logging long days on video calls with CEOs dealing with operational fires, right-sizing expenditures, and finding new, quick revenue streams to keep businesses afloat.

And while this is all-consuming and at times completely overwhelming, now is the time to start thinking about what the world will look like post-pandemic. Even if it's just a few hours a week, taking the time to develop a strategic plan will give you a better map to make smarter decisions in the short term.

Here are the questions that I've seen future industry leaders are asking themselves. Use these to kickstart your strategic planning process and create a plan for a quick recovery. 

1. How will life change for your customers?

If you're going to be successful in business, you need to deliver value to your customers. COVID-19 will change many businesses' and people's lives for a significant period of time. Understanding how these changes will re-shape your customer's needs, desires, and decision-making criteria will be key. Anticipating how you need to change your products and services, or create new ones, to deliver value will be key to your success.

2. What will happen to your current competition?

Your competitors will make changes to survive as well. Make educated guesses about what kind of financial position they will be in, what resources they will have or not have, and what strategic moves they are likely to make. While you won't know for sure, you want to steer towards the open ocean and away from bloody waters.

3. Who might be your new competition?

While you need to assess what might happen to your current competitors, you'll also need to consider who might choose to pivot into your space. And if you're thinking of making a pivot yourself, you'll need to assess who's already in your new market. Everyone will be making moves and you'll need to strategize to see all the moves.

4. Where will you get new talent?

With around 17 million filing for unemployment, this crisis has been one of the largest talent shakeups in the last fifty years. Many good people with amazing talent have found themselves without jobs. If you've shed your workforce and will need to rebuild, have a plan for getting the best people quickly before everyone else starts snapping them up.

5. What will your supply chain look like?

If you are dependent on suppliers to run your business, you'll need to take a hard and careful look at your supply chain. And don't stop just with your provider, you'll need to look back several layers to assess what's working and what's not. While some parts of the system might take time to recover, others will change altogether. Have a plan that will strategically support your recovery and future growth.

6. What specific things will set you apart in the new market?

Once you have a plan for refocusing your core customer and core product or service, you'll need to reassess how you're going to win in your market. The best companies have a unique and valuable differentiation strategy that sets them apart from their competitors. Otherwise, you'll be competing on price, and that's an ugly business place to be. Identify the two to three factors that will make you stand out to your best customers.

7. What specific things will you need to stop doing or let go of?

If you're adjusting your product or services or if you're making a pivot, you'll also need to figure out what capabilities you need to stop doing. These are the things that may have served you well before but are not going to be an asset in the new world. The sooner you identify and stop doing these things, and the sooner you redeploy your resources to new strategic capabilities, the better. Holding on to these will only drain your finances and dilute your focus.

8. What are your new monthly forecasts and key milestones?

Once you have a new positioning and key capabilities, you'll need to forecast the next twelve to twenty-four months of key metrics and operational targets. You'll also need to set key milestones for implementing any business changes and capacity building. These will be key for your leadership planning sessions and establishing your priorities.

Working through a crisis is not easy, and can be harrowing for many. But the sooner you stabilize your current situation and start focusing on what the world will look like in the new world, you will not only have a better chance at future success, you will have the confidence and motivation to keep going today.

5 Most Common Problems With Daily Huddles and How to Fix Them

Daily huddles are key to high-performing teams. To keep yours focused and on-point, avoid these five pitfalls.

One of the hardest parts of team performance is coordinating and aligning individual efforts. Too often everyone is working hard and trying to be as productive as possible, but they are crossing paths and conflicting on resources. If members are pulling hard, but in opposite directions and stepping on each other's toes, the team will go nowhere fast.

The key meeting that helps a team get on the same page and coordinate their efforts is the daily huddle. You might call this meeting something different, but the huddle is a quick meeting once a day, usually in the morning, where everyone checks in and talks about what they've accomplished and what they are working on next.

Unfortunately, I've seen many daily huddles that are ineffective. Below are the five most common issues in huddles and how to fix them.

1. They go too long.

The key to a daily huddle is to keep them short: under 15 minutes, ideally under ten. Too often, I see huddles that stretch to 20 or 30 minutes. If the huddle turns into a major meeting and chews up a big part of the day, people will become unfocused and will start to skip the meeting.

I'd rather see a huddle cut short than run long. I have teams set a timer for 15 minutes and have them stop the meeting regardless of where they are on the agenda. Even better is a large digital count-down timer that shows everyone exactly how much time they have left.

2. They lack focus.

It's easy for the huddle agenda to go astray. People have long lists of issues and topics they want to address and it's natural to try to resolve issues as they come up. However, this is what bloats huddles and causes them to drag out.

Keep your huddles on point by just focusing on the key items that happened since yesterday, what items are happening today, and what issues are standing in people's way. No more, no less. Anything else should be handled after the huddle.

3. People are not prepared.

Everybody needs to be prepared to make a huddle operate well. This means that they need to know what they are going to say and they are focused only on the key items that need to be communicated. If it's someone's turn to go and they have to think about what they are going to say and end up droning on about what they had for lunch, it will kill productivity.

One trick that I use is that I have a stack of index cards or sticky notes and I make everyone write down what they are doing to say. I limit them to two or three points for yesterday, today, and 'stucks,' or what they're stuck on for ongoing projects. Then, when the huddle starts, I make everyone hold up their cards to show they've written down their comments. And anyone who doesn't have written notes can't speak. This keeps everyone on point and focused.

4. Nobody is facilitating.

While anyone can facilitate a huddle, someone should be the designated facilitator each time. This person calls the meeting to order, establishes the order, keeps things moving, and identifies the items that will be followed up on after the meeting and by whom.

I like having team members rotate facilitators each week. This gives each person a chance to hone their skills while having a set routine. And by making sure everyone on the teams takes a turn, anyone can step in to facilitate if someone is missing. It also makes people appreciate how hard it is to facilitate and encourages them to come prepared and stay focused.

5. The wrong people speak.

Huddles are for team members to coordinate their work. It's an internal working meeting for the team and not for reporting on progress or coordinating with people outside the team. Often I see executives or members of other teams at huddles and they begin asking questions or bringing up topics. This will quickly kill the meeting.

Instead, I have anyone who is not on the team but who wants to attend stand back and away from the group while they meet and ask them to remain completely silent. The only reason they should speak is if they are asked a direct question by someone on the team. This will allow them to hear what's going on without interrupting the flow.

While huddles aren't rocket science, they aren't easy to master either. It's easy for them to meander and have them drag on. The best teams work hard to keep their huddles short and sweet. Done well, they will increase a team's focus and pace. Done poorly, they will become just another meeting everyone tries to avoid.

Successful companies don’t worry about market share. They focus on this instead

Here's why market share may be a false measure of success.

You might think that with a market capitalization now of over $1.1 trillion, Apple owns the vast majority of the smartphone market. Logical, but wrong. In fact, Apple had under 25 percent of the total handhelds shipped for most of 2019 and was actually the number two in the market that year.

So why do people admire and extol Apple as the leader in the handheld device market? It's not because of their dominance in the overall market. It's because while they don't have the lion's share of the market in volume, they do have the vast majority of profits.

While Apple had under 25 percent of the market by units, it took home over 60 percent of the total profit-share of the industry. By focusing on high-value customers and creating high-value products, it focuses on the higher end of the market where the majority of the profits lie. As a result, the remaining 85 percent of the handhelds shipped have to fight over the crumbs that remain.

Which would you like to have? A bigger percentage of the overall revenues or of the profit of your market?

Smart companies don't worry about market share. They focus on capturing the most profitable segment of the market and leave the rest to their competitors. Here are several ways that they do it and how you can do it too.

1. Focus on your ideal customer.

Trying to sell everything to anyone is not a profitable or scalable strategy. Yet, I see many companies that chase anyone who has a budget to spend. Not only does it make your own operations difficult, but it also makes it impossible for people to know why they should buy from you and who to refer you to.

Figuring out who your best customer is and what their needs and fears are will allow you to align your business to what they want. This will also make it easy for you to target your messaging and sales strategies. And when people know who your target customer is, it's much easier to refer you to the right prospects.

2. Create a high-value product/service.

Once you have your ideal customer dialed in and well-understood, you can hone your product or services to meet their needs. The key at this stage is to understand both the practical logical needs as well as their emotional needs and fears. Remember, people buy based on emotional needs and justify based on a logical rationale.

Once you have them well mapped out, review all that you do to meet those categories. Re-design your processes and procedure to maximize the delivery of value to your ideal customer. By focusing on just this one most important segment, you'll be able to keep things simple while delivering significant impact.

3. Differentiate yourself in the market.

The key to strategy is to carve out a well-differentiated position in your market. If you want to command a better than the average profit margin, this is a must. If you don't stand out from the crowd, you'll be in a price war that will only undermine your profits.

Find two to three areas where you can provide superior performance relative to the key competitors and work to operationally deliver on these better and more consistently than anyone else in the market.

4. Strive for operational excellence

A great strategy is worthless if you can't execute on it. Once you've developed a way to differentiate yourself, dedicate yourself to delivering on that strategy through bullet-proof operations. Consistently delivering a quality product on a consistent and reliable basis is what will make you successful in the market.

Develop standard procedures and operational playbooks to ensure that standards and processes are met. As you grow, these will help drive quality and efficiency as you add people and scale up the organization. Without these, quality will suffer as you grow.

5. Don't leave money on the table

Many of the companies I speak to end up leaving money on the table. They typically haven't done enough market research to understand the market value of the products/services they provide, and instead use a cost-plus approach (raw materials plus labor plus fixed profit) to set their prices. If you have a well-defined position and a targeted offer, you should be charging far more than standard rates and getting much higher than the standard profit margin.

While it can be impressive to quote your total revenues and what percentage the market share you command, these things are vanity metrics. Real business leaders know that long-term, sustainable success comes from having a solid strategy that carves out the most profitable customers.

The Best Companies Out-Think Their Competition by Becoming Learning Machines

The best organizations are learning machines. By focusing on continuously getting better, they outthink and outpace their competition.

A core principle that I learned from over a decade as a Lean/Agile coach is that one of the best sources of learning is your recent past. However, most teams don't learn from this fountain of knowledge because they don't have a system in place for analyzing and processing results.

By reflecting on what you've accomplished and where you've failed, you can find key patterns and discover the sources of your outcomes. Once you can see these root causes, you can begin to make strategic changes to improve and get better results going forward. 

Once this is fully embraced and adopted, it creates a powerful strategic advantage. Reviewing results closely, finding insights and patterns, choosing key changes to make, and implementing them with commitment will fuel innovation and remove waste in a business.

Here are the six key steps to embrace a culture of continuous improvement and build a true learning organization.

1. Eliminate shame and judgment.

The biggest blocker to embracing a continuous improvement mindset is the tendency for people to look for problems and assign blame to individuals. The need to figure out who's at fault is a powerful human tendency.

if you really want to create a learning culture, you need to push that aside and focus on insights rather than judgment. Setting good ground rules will help keep things focused on learning, not witch-hunting.

2. Make it okay to talk about failure.

While I'm not a big advocate for failing per se, I am a big fan of learning from failures by openly talking about them and learning from them. First, you need to capture them and the surrounding data. Like the Federal Aviation Administration (FAA) after an airplane crash, you want to collect as much data as you can as quickly as possible. This will be important fodder for your analysis and insight development.

3. Get good at root cause analysis.

As an architect, I like to tell the story of my college professor saying, "If you see water in the basement, the first place to check is the flashing around the chimney." Why check the chimney? Well, just because you see water in the basement doesn't mean that's where it's coming from, and chimneys, which are often the core cause, are notoriously leaky.

Similarly, you need to dig beneath the surface of the presenting problems that you see at first glance. Ask "why" several times to uncover the underlying source of the problems you've identified. Once you've dug down, identify the areas that really need to be addressed to fix the problems at the source to create long-term, sustainable improvements.

4. Distinguish between decisions and outcomes.

One of the key skills I work on with executives is the ability to separate the evaluation of decisions from outcomes. All businesses have varying levels of uncertainty, which means that not all good decisions lead to good outcomes and not all bad decisions lead to bad outcomes. Luck and chance play a role. Just because you had a bad outcome, don't assume you made the wrong decision. And don't lull yourself into a false sense of security by assuming all good outcomes were the result of brilliant decisions on your part.

5. Commit to improvements and changes.

Once you identify areas that need improvement and changes you could make, focus your efforts on a limited and specific set of priorities. Don't spread yourself too thin. Better to get a few things done quickly and completely than to have a long list of partially completed projects.

It's also important to track and monitor changes being implemented. Have a plan of action, milestones, and follow-ups to make sure things are really being implemented, and that they are having the impact you intended. If need be, don't be afraid to take a step back and rethink your approach.

6. Make it a regular habit and commitment.

The most important thing you need to do to become a true learning-based organization is to make a habit of reflecting on results and finding insights into future changes. High-performance teams set aside time each and every week to run retrospectives and identify the improvements that they will commit to. Great leaders reflect on their habits and behaviors to find ways to improve. Great companies bake these activities into the regular rhythm of meetings and reviews.

These strategies will increase your company's learning velocity and ultimate ability to improve and innovate more quickly. If you're in a high-growth business and/or a quickly changing market, these skills are not just nice-to-have, they are critical to your survival. In fast-paced markets, the company that can learn the fastest will be the one to rise to the top and dominate its competitors.

Innovation Can Become Stifled by Knowledge. the Best Solution Is to Think Like a Beginner

Executives in growth companies need to be constantly learning, and the best way to do that is to develop a beginner's mindset.

One of the biggest challenges in growing and scaling a business quickly is raising the bar on the CEO and the senior team. If the leaders of the business don't continuously learn and expand their thinking, the company will be stuck and growth will be anemic. Grow the leaders and the company will follow naturally. But it's not easy.

As a leadership and strategy coach, one of my first jobs is to make sure the right people are in the right seats. But I also need to make sure they have the right mindsets. I can have the best experts in the world with decades of experience, but if they are closed to new ways of thinking and new strategies, all of the coaching in the world won't make a difference.

I often get brought into situations where the business is stuck and performance is lackluster. And when I speak with the executives in these situations, what I typically find is that they tell me they've studied every angle of the business and have tried every possible option.

In these cases, I encourage them to adopt a beginner's mindset and look closely at the business and the challenges they face. By doing so they will see new information, reveal new opportunities, and uncover possible strategies they've missed to date.

Here are the three key principles that I explain in my meetings with senior teams in order to help them embrace a beginner's mindset and unleash their growth.

1. Forget what you've learned.

One of the first things I encourage executives to do is to forget what they've learned. The best way to do this is to pretend you're an intern on your first day of work and think about what questions you would be asking. What would you want to know, and what would be the most important thing for you to understand about the business?

I will often do an exercise where I have them explain the situation and problem to me as if I'm just out of school and this is my first job. How would they break down the situation, information, and the options under consideration?

Invariably, we stumble on a few things that either don't make sense or they can't answer very well. And therein lie new opportunities to discover and learn. These usually lead to options that haven't been considered before.

2. Sharpen your observation skills.

I have a Youtube video of two teams each passing a basketball. One team is wearing all white and the other team is wearing all black. The instructions are to count the number of passes the team in white makes in the video. I sometimes offer a reward for the people who can count correctly for added emphasis.

What they don't know is that a few seconds into the video, a person in a gorilla suit begins dancing through the frame. Then I ask how many passes people counted and often get several correct answers. But when I ask how many people saw the gorilla, everyone stares at me with blank expressions.

When I go back and show them the video and they see the gorilla as plain as day, they are dumbfounded. Then I explain that their business problems are in the same situation. They are focused on seeing only a certain type of information. And by slowing down, taking a different perspective, and noticing more, they can uncover new insights.

3. Ask why, a lot. 

When I first introduce this idea, people laugh and say, "We should just add a 5-year-old to the leadership team and they can ask why of everything, ad infinitum." But it's more than that. Yes, you need to ask why, but you need to target key assumptions and then drill down strategically. 

One of the key techniques developed by Sakichi Toyoda at Toyota along with its now-famous just-in-time approach to production was the Five Why's method of problem analysis. By asking why a problem happened and looking at the possible answers and asking why again to find the next level of answers and then repeating that until you're five levels deep, you get to the core causes of your problems.

Leadership teams can use this same recursive questioning to dig deep into situations and uncover the root cause of their issues and thus find root solutions to the problems they've been facing.

While developing a beginner's mindset is not easy, individuals and teams that learn to do it well will discover better ways of doing things and will solve problems at a deeper level. And in a high growth industry that is quickly changing and evolving, the company that can learn and change the fastest will naturally win in the market.

6 Key Steps to Increase Your Team’s Accountability on Its Commitments

A great strategy is worthless if your team doesn't deliver on its commitments. Here are six ways to increase accountability and progress on goals.

As an executive team coach, one of my first jobs is to make sure a team has a clear and effective strategy for how they are going to grow and scale their business. This involves zeroing in on their ideal customer, understanding the key forces in the market, selecting a handful of attributes to differentiate around, and then determining what operational capabilities to focus on.

However, even with these key strategic questions answered perfectly, the company will fail to achieve its goals if the team can't deliver on its plans. And unfortunately, many teams struggle with following through and staying accountable to their commitments.

When I see issues of follow-through, I have the team step back and look at the habits and culture they've built around accountability. I have them focus on these strategies to raise the bar.

1. Set a compelling vision

Before we dig into the details of commitments and follow-ups, I start by making sure the team has a clear vision for success and the future state. It's extremely difficult for people to invest and take risks to achieve something that is unclear or lacks passion and desire. Without a compelling vision, you get compliance at best and sabotage at worst.

2. Define clear priorities

It's impossible to make smart, strategic decisions without a clear set of team priorities. Without them, people are left having to do their own analysis and assessments and choose what to focus on. And when members of a team focus on good, but different priorities, you create confusion and conflicts. After a while, people will stop stretching and taking smart risks and instead play it safe and avoid big goals.

Make sure you have your top priorities set and agreed to as a team. Define them in clear language and make sure everyone understands the rationale. Make sure the team is truly committed and behind what you choose and understands the tradeoffs and benefits.

3. Encourage healthy debate

One of the reasons teams don't follow through on their commitments is that there isn't adequate debate before making the decisions. I see CEOs push through on their plan only to be disappointed in the outcome and lack of delivery. This happens because concerns were not voiced and issues not addressed beforehand.

To get healthy, open debate, you need to create an environment where it's safe to disagree and voice conflicting ideas. Set good ground rules and focus on getting voices heard from each and every team member. Dedicate time and space for debate, don't rush this process. And remember, letting people be heard is important, but you don't need to make everything a vote.

4. Ask, don't tell

One of the most important ways to increase your team results is to make commitments a real choice and not force the process. If you pressure people into doing things, you're getting compliance, not true commitment. True commitment is only possible when someone has the legitimate option to say "no" to the request. If they have the option to say no, then it really is a choice. Otherwise, you're just pressuring them to accept the task, which they will resent you for afterward.

5. Give frank feedback.

Great teams hold themselves and each other accountable. This should happen upfront when people are committing to tasks: other team members would make sure the person committing to a task really has the skills, capacity, and resources to be successful. If someone on the team sees someone else sign up for something they are not likely able to deliver, they speak up and make sure the team member has what they need.

When the project is in flight, team members actively check in on each other to make sure everyone is on track. They know that their success is based on everyone else's success and the team staying on track as a whole. When they see an issue, they don't just call it out, they step in and provide help and resources to get things back on schedule.

6. Set a common standard.

Great teams have high standards that are set early in the process. When I work with teams that are struggling, I start by scaling back the scope and ambition and get a few rounds of good delivery. Once we have established a pattern and expectation of success, we can then build and expand. Trying to increase accountability by heaping on more work will only make things worse.

High-performance teams don't develop a culture of commitment and accountability by accident. It takes intention, focus, and work to build that muscle and flex it to deliver on goals. Without constant focus and discipline, the muscle will quickly atrophy and wane.

Good Leaders Are Powerful Systems Thinkers. Here’s How You Can Become One

Seeing your business as a system can help make you a better strategist and a more insightful leader. Here are five ways to get started.

I wasn't always a businessperson. My training was in architecture. While this didn't put me directly on the path of becoming an entrepreneur and an Inc 500 CEO, it has served me well in many ways. The one thing my architecture training has taught me which I've been able to leverage as a business leader is my ability to be a systems thinker.

Every business is a system, a collection of elements and forces that interact with each other to produce a given set of results. People implement processes that produce products and services, which create value. That value creates money, which allows you to hire more people. Change one element and you impact all the others.

Systems thinking seeks to understand the subtle and long-term impact of how one change can all the elements over time. And being a good systems thinker can help make you a better strategist--and a more insightful leader. Here are five ways it can improve your ability to create and deliver results in your business.

1. Search for connections.

Business is a combination of customers, employees, processes, products, competitors, investors, and many more. Knowing the factors that drive your business results is key. Missing one will mean you'll miss key elements that can make your business successful and hinder your ability to effectively plan.

When faced with a business problem, start by mapping out the key elements that are in play, then look for how these are connected--how they impact each other. If you want to increase quality with more quality checks, know that your development time will increase, as well as your production costs.

2. Understand the cause and effect of decisions in your business.

In business, you can increase your prices but that will likely decrease the number of deals you close. However, you may make up for it through the higher profitability of the remaining customers. A good systems thinker understands how these types of decisions can affect multiple areas of the business.

When faced with a business problem, build your map and then ask yourself how changes might change the system. Do elements have direct or indirect relationships? Does one factor increase or decrease as another one changes? Is there a time delay? Is the rate of change continuous or varied over a specified range? These types of questions will give you key insights into what might be impacted by the changes your considering.

3. Find feedback loops. 

These are often situations where two or more elements in your business feed each other. For example, if you develop a great product and people love it, they will tell other people, which will increase the number of customers who will love your product and so on. These positive feedback loops are what you want more of because they will naturally grow and scale the business.

However, you might find reverse loops. Cutting salaries to save money will lead to your best people leaving, which will decrease your ability to deliver, which will lead to unhappy customers, and so on. When you're business is in trouble, you need to find and correct these vicious cycles.

4. Look for balancing forces.

In business, growing sales is a good thing, but without also increasing delivery capacity, you'll run your business off the rails. And if you don't hire more people as you grow, you'll overwork your existing teams and they will likely quit.

Business is full of short-term strategies that can lead to long-term problems. And unless you have a good understanding of how your business works as a system--and where you need to balance and level the forces at work--you'll run the risk of digging holes and painting yourself into corners.

5. Learn through experiments

The best way to know if you have the right system model for your business is to experiment and measure. If you're not sure how many customers will stay with you if you raise prices, don't make the change all at once. Pick 10 percent of your customer base, try it, and see what happens. Once you're confident, then roll it out en masse. 

If you get your predicted results, then you probably have a fairly good model. If you don't, then you're missing some factor that's at play or interaction that's changing the system. Take measurements and observe each component so see what you're missing.

Whether you're trying to increase sales, hire more or better people, enter new markets, or bring on new investors, having a good understanding of your business as a system will help you with both developing and correcting your strategy and empower you to achieve the success you want.