“Goals without action are dreams. Action without goals is Chaos.”
– Japanese Proverb
1. Setting SMART Goals (Specific, Measurable, Accountable, Realistic and Time bound)
Goals are absolutely critical, but more critical is a commitment to those goals – doing whatever it takes to achieve them. Once your goals are in place (never more than 5, always numbers or metrics), the Actions that are essential to achieving them are obvious. I prefer Quarterly/Annual goals.
“The two levers of profitability that you have some control over are Gross Margin and Labor productivity.”
2. Revenue is for your ego, Labor is not an expense.
Start focusing on Gross Margin $, not revenue, as one of you your KPI/SMART Goals. You see GM$ pay the bills and produce the profit. Every dollar of GM carries the same value, while every $1 of revenue is different.
Look at Labor as an investment, not an expense you budget for. The one metric that drives profitability is called Labor Efficiency Ratio or Labor ROI. simply divide the cost of your labor into you GM$ and you will have a number like $2.00. That means for every $1.00 you invest in labor you get $2.00 of GM. You will find that metric is a predictor of profitability. More on this next.
“I don’t believe in paying people more, I firmly believe in paying Great people more.”
– Skip Tindell – The Container Store
3. Hire for tomorrow, not today. Topgrade, A Players, Virtual Bench
First of all, an A Player exhibits the following traits:
- They have a basic skill level
- They are eager to learn and get better
- They are engaged with the values, the team, the goals, the company.
- They fit.
A Players can cost 20-30% more, but they produce 2-3 times what the average employee does. See #2 above – look at labor as an investment. Tindell interviews 30 people for every one he hires. Pays them 30% more than the average retailer but runs his stores with 1/3 the number of people. You do the math.
Begin recruiting everywhere you go. Have everyone be looking for talent all the time. If you do it all the time it is not a chore. You don’t have to hire all the good ones you find, instead put them on your Virtual Bench. They already have jobs, but when the time comes to Topgrade a C Player, someone leaves or you need additional people, you will have vetted A Players on your bench. No stress, no pressure to take the first body. Recruit like a college coach. You cannot put out ads and have people come to you anymore. You have to go out and find the talent and then convince them working for you will be better than where they are now (i.e. they have pains/issues that you can solve).
“The caliber of your team is what sets yourself apart as an entrepreneur.”
4. Multiplication by Subtraction
We must set wrong fit employees free. This is the hard part of Topgrading, but C Players not only are not willing to learn and not engaged with the team (they don’t fit in), but they actually bring the whole team down and impact your company in many negative ways. There are many reasons why we don’t take action – as many as to why you have to. There are specific ways of doing it so that these people end up in a better place. Buy the book – Multiplication by Subtraction by Shannon Waller – it is one of the best I’ve read. But as always after you learn you must take action to see results.
“When people come to you with questions – answering them is like feeding a cocaine habit.”
5. Stop Answering Questions
Ask “What would you do if I wasn’t here”?
Think about all the interruptions you get every day because someone is unsure what to do. Why do they come and ask? Because you answer the questions. They don’t need to think, or be accountable for the results they just do what you say. They don’t learn. They come back again and again because you answer the questions – they think you want them to.
Stop answering questions. Instead ask them, “what they would do if you weren’t here?” They will start coming to you having thought of what they think they should do and you will, 90% of the time, say great idea. They learn and gain confidence in their decision making and come to you less and less. They feel accountable for the results because it is their idea.
“Saying no is uncomfortable for a few minutes, but saying yes can be uncomfortable for hours, weeks, months or years.”
6. Essentialism – The art of saying no. Not doing more, more, more – doing less, but better.
This is the key to execution, to finishing Rocks/Projects, to goal achievement, to building a great business. Over and over I see owners trying to do it all, now. In the end very little gets done. Steve Jobs said, “We said no to a thousand things to every yes.” When given a choice between two big things ,Tim Ferris says it is a binary decision…“If it is not a Hell YEAH! then it is a no”. Focus on one big Rock at a time, finish it and then do the next Hell YEAH!
“You can’t manage people. You can manage cows and things, but not people.”
7. Coaching instead of Managing – Weekly Coaching Conversations with Scorecards
The main difference in the two concepts is that coaches know they cannot play the game, thus they focus on helping every player be the best they can be.
Coaches are always recruiting talent, Topgrading and working with the individuals they have. In business we should be coaching. Spend 10-15 minutes a week with each direct report using a scorecard that ensures they are focused on essential Numbers, things to get better at, Rocks and Core Values. The only way to change behavior is frequent positive reinforcement of the behavior we want to see. Coaching is the only way to do that.
“If you want to be the best in the world, you have to make your world smaller.”
8. Ideal Customer/Prospect and Your Story
You cannot be everything to everybody or you will be nothing to nobody.
Marketing and Sales cannot truly be successful if you can’t differentiate yourself and deliver products and services in a way that your customer values. People don’t care about you and your company, they care about themselves. Their pains/problems/wants and needs must be understood and be the center piece of your messaging. That means there is a certain subset of your market that shares these characteristics and your messaging and offerings will resonate with. Profile your best customers and people/companies just like them will be your Ideal Prospects.
“The best way to convey your message/value proposition is through a story.”
9. Story – use the structure of story – people remember stories.
Every story or book or myth is structured the following way:
- Hero – (your ideal prospect)
- They have wants and/or problems
- Guide comes into their life (you)
- The Guide develops a plan
- The Hero takes Action
- The hero gets results they were seeking
Think Tommy Boy or Star Wars and put your messaging together in a Story format.
“Sports teams have playbooks but they don’t practice their plays against the other team on game day. Why do we practice sales plays with customers – Role Play your sales team to success.”
– Jack Daly
10. Traditional Sales Training is weak
Role Playing is powerful. Only 60% of sales people make quota each year. The key thing that separates the top 10% from the rest is they are asking the right questions and telling the right stories, overcoming objections and basically having quality conversations. You cannot impart that on others in your sales team by telling them what they do, riding around with them, sending them off to sales training. So build a Sales Playbook (write down the questions, the objections and stories etc. that the best are using). Then practice, practice, practice it via role playing. NFL teams don’t hand out the play book on Sunday morning for the game that day. They practice, practice, practice the plays until they do them without thinking about them so they can concentrate on executing the plays and reacting on the field.
So there you have it – the 10 things that have had the biggest impact on my clients in 2017. If you want to learn more about them and the tools to take action in 2018, sign up for my Online Vault where you can have 24/7 access to the learning and the tools to take action on these and other key initiatives that will address your pains and problems and take your business to the next level.