The 4 Things That Really Move the Needle
Recently, my business mentor Gary Pica of TruMethods posted an eloquent piece about four essential concepts in business, mastery of which almost guarantees success when coupled with discipline and consistency:
In business, the basics are command, business planning, execution and accountability. Until you master these things, you’ll never fulfill your potential, no matter how smart you are or how hard you work.
I've been ruminating about this ever since, and thought I would share how we implement these four crucial concepts and how it's helped Indevtech Incorporated on our journey to become a better company every day.
- Command. (Forgive me in advance for cliches and buzzwords. Most times they are thrown around to make one look smart, but sometimes it's the right word when you need it.) This begins with a 360-degree view of all aspects of the health of the business, and I'm talking about objective KPIs coupled with deep understanding of what drives these metrics and how to change them. Areas we monitor at the executive level: Service Delivery, Resource Utilization, Finance, Profitability, Leverage.These will be different for every company, so I won't bore you with ours specifically. Identify the key metrics that actually have an impact on what you're trying to achieve, whether that's net profit %, labor cost, etc., track them with accurate data in real time, and take action to effect change. We use a metric in our peer group called "What One Thing." What one thing, if you could change it, would have the highest impact on your success right now? Okay, got it? Now set a target and proceed to step 2.
- Business Planning. This is not a "come in on a Saturday in December and put it in a drawer" proposition. We create an annual plan in Q4, identifying our high-level vision and strategic objectives for the upcoming year, tying each goal to a measurable KPI. Then our annual plan becomes the basis for our Quarterly Action Plan, which is our roadmap for exactly how to implement the plan, along with who's accountable.Pro tip: We share our high-level vision items with all staff members. They don't need to know the specific financial metrics, but we need everyone on the same page throughout the year. This fosters an important sense of inclusion and belonging, though maybe not in the way the terms are commonly used. It's important for us that everyone know they are part of something much greater than any one of us, and we're all on the same journey working towards the same vision.
- Execution. Once we have an annual plan, we meet quarterly to compare our YTD results to the plan (usually only one or two of these metrics have a dollar amount attached, the rest are operational goals or progress toward implementing a vision). We take honest appraisal of where we are off course and how to make improvements, and agree on next quarter's plan."Is the business plan set in stone?" NO! This year we've had to modify the plan each quarter, sometimes during the quarter due to new and unexpected challenges that threw us for a loop. If we were to adhere to our best-laid plans too rigidly, we would have missed the trees for the forest a dozen times in 2023 leading to missed opportunities due to myopia.
- Accountability. I'm told many people do, in fact, leave their annual plan in the desk drawer until December, when it's frustrating and depressing to look at all of the great ideas that never came to fruition. It's too easy to get discouraged and abandon the whole process, not because the process doesn't work, but because you didn't!. Our Quarterly Action Plan specifies the who, what, how, and most importantly why something will get done to move one of the needles. The why is crucial--if our team doesn't know how their work fits into the bigger picture, they are less likely to rely on common sense and critical thinking to push through.Accountability is not assigning blame nor a disciplinary program; it's an ongoing process to help those tasked with executing goals by making sure they have the resources and guidance they need, especially when they get stuck. And to remind them how their everyday work fits into the grand scheme.All told, our executive team meets 8 times a month, early in the morning or on a Saturday, to review our progress and make adjustments. Each employee has a one-on-one at least bi-weekly, or anytime necessary in between.
Are we experts at this process? NO! Are we getting better every quarter? Yes, to the extent we are willing to adjust our targets as needed and remain agile, open-minded, and listen to our team and advisors. We strive for consistent progress, not perfection. We celebrate the small wins.
Ever heard of the BHAG (Big Hairy Audacious Goal)? I have the utmost respect for Jim Collins, who coined this term in his 1994 best-seller Built to Last. But for a company our size, I find the term a bit pretentious and unrealistic.
I prefer BHAG: Bite-sized Humble Achievable Goal. It helps me stay right-sized and remember to start where we are at. There are no cheat codes to go from zero to $10M ARR in under a year, despite LinkedIn posts to the contrary.
Is there an easier way? Sure, I call it the 4 Rs, and a vast majority of business are run exactly this way (you probably know some): React, Reprimand, Reflect, Ruin. But where's the fun in that? I got into business to have fun and build something we can be proud of, a place employees want to come to work every day. I also had fun working at Starbucks when I was 18. My idea of "fun" may have changed in 22 years. To each their own!
So as someone said recently, know the prize of the game you're playing and make sure it's what you want.
Thanks Gary Pica for the inspiration to think and write about such an important topic. Let's go, people!