Do you get a hit from new ideas? Does your serotonin peak when you think about a different approach? And take a nose-dive when you have to implement the activity? You’re not alone. We see these qualities in so many of our new CEO clients.
When businesses start, the emphasis is on chasing revenue. Until they’re on an even keel, there’s little thought about core customers or good/bad profits. Everything’s pretty disparate. Selling to multiple core customers can spread your resources too thinly. Before you know it, you’re overwhelmed.
As a result, when we speak to front-line staff in these businesses, there’s a pretty common response. ‘We start loads of great new initiatives, but they never get finished’. This is cultural and it needs to stop. Whenever a CEO says to us, ‘There’s a lack of accountability in my business,’ we sit back and take a deep breath. And then tell them, ‘You need to look in a mirror. That’s where you need to start.’
If you’re naturally enthusiastic and driven, saying ‘no’ can be hard. Really hard. But if you want to scale your business, you need to get good at this. You need to build your ‘no’ muscle. Here’s how:
1. Have a clear strategy
So, you’ve established your business and it’s starting to grow. It’s time to get really clear on your strategy. You can’t start saying ‘no’ to things without an unambiguous sense of where you’re heading.
Work out your core purpose – why you’re doing what you do. There’s only going to be one ‘why’ in your business. What’s your mission or BHAG? Where do you see your business way out into the future? Make this ultimate goal a thing that will guide future decisions. And then, importantly, work out your core customer. The one customer that will drive the most profit. Get clear on the problem that you’re going to solve for them.
Everything flows from this. It’s crucial work that takes time and effort to unravel. But it will be time and effort well spent. Take one of my client’s, who we discussed in last week’s blog. Their exponential growth came from focusing on a new solution for a core customer. Once they had this, they were off – racing ahead of their competition.
2. Set clear objectives (and not many of them)
When you set objectives at an organizational level, they should always take your business in a meaningful way towards fulfilling your mission. You can bring these down to the team level and divide them into 90-day blocks of work. We recommend deciding on one theme each quarter and sticking to it like glue. Just one. No more. One measure or number that’s going to make a material difference this quarter. And just do that.
Companies find this really hard. That’s often because the Executive Team isn’t really a team. It’s a series of people at the head of silos. Yes, they might sit in a room and intellectually agree on a quarterly theme. But then they go back to focusing on their priorities in Sales, Finance or Marketing.
If you’re nodding when you read this, you need to make sure there are consequences. Hold retrospectives after each quarter. Ask your Executive Team to be honest – did they really give the theme their all? Or were they only 60% committed due to other distractions? Any departmental objectives need to be aligned with the overall theme. If they’re not, they’re pulling apart not together.
3. Put in a framework
It shouldn’t be up to you, as CEO, to hold your team accountable. There needs to be a framework where people hold themselves accountable and it’s required of each other at the team level. Work through functional and cross-functional accountability. Assign people to every item of the P&L and bring accountability to processes. Decide how you’re going to measure this accountability, working out leading and lagging indicators for each.
For consistent success, this framework needs to stop you from starting too many things. It’s about forcing you to prioritize. Typically in a 90-day window, you might spend the first month doing research on the single theme you’ve chosen, the second running a pilot and the third rolling it out. In the research phase, ask yourselves what you need to do, how does it need to look, what are your assumptions, how can you test them, and how do you manage any risk? Roll it out in one department, make the change and evaluate whether your hypothesis was correct. Did it have the impact you wanted? Then you can roll it out to the whole organization.
When Steve Jobs went back to Apple in 1997, it had 210 products. He got rid of nearly all of them. Every year when they did their strategic planning, they’d end up with 8 things on the list and he’d cut off the bottom 6. That’s what this is all about. Less is more.
Sometimes it’s not a company-wide change that you might be focusing on. It could be about something more specific. Maybe it’s an issue in sales or a recruitment challenge. Perhaps you need to adjust the customer experience or you have an issue with profitability. Whatever it is, bring laser-focus to sorting it out.
4. Hire someone to say ‘no’ for you
Spend time working on the strengths of each member of your Executive team. As CEO, it’s likely you’re a visionary. Be honest about what that means. It’s probably not in you to hold your team accountable, which is why you need the framework mentioned above. You’re likely to be eternally optimistic and enthusiastic. You’ll read a book over the weekend and come in on Monday with a new idea that you think is a silver bullet. I can really relate to this – it describes me. I’m constantly reading and learning. I am pretty strong at Execution, when time allows.
This is why you need someone else on the team who is. Someone who’s good at saying ‘no’ and keeping people focused. If you’re CEO of a large company, you may need a COO as your right-hand person. Or, if your business is smaller, a Chief of Staff can be invaluable.
When I owned ILM, I will given fifteen minutes at the standing weekly staff meeting. ‘What’s happening in the Executive Team? What smart things have you been thinking about?’ I would spout enthusiastically about the new ideas I’d had, and many would respond, ‘All great but not for today. And I did because I knew his meeting was about Execution. About doing the one thing we had agreed to do in the next 90 days. I’m shit at that. I hate agendas and standing meetings. Let alone only doing one thing in the next 90 days. But I know the incredible power of this approach.
5. Force everyone to prioritize
I got really good at saying ‘No’. Our situation couldn’t have been more brutal. We had 90 days to save the company. I had to tell people if this thing you’re thinking of doing doesn’t drive break even, we’re not doing it. No matter how much future value you think it has.
Most of my time in those early months was spent saying ‘no’. ‘What are you doing that for?’ I would say. ‘How can I be clearer?’ The responses came thick and fast, ‘But it’s important’. ‘No, don’t do it’. ‘But we have to do it for this reason or that reason.’ ‘No, don’t do it’. ‘But, but, but’… Unless you’ve been on a burning platform, it’s easy to let these things go. You have to get everyone to focus and prioritize the work that will take the business forwards. This is how we survived and eventually thrived at ILM.
Maybe it’s a cash flow problem that’s affecting your profitability. This would be a good place to start as it’s fundamental to your survival. Often people will tell us they have a sales and marketing challenge. Well, maybe they need to focus on their proposition or a customer value chain issue. You might have to do some insight work, talk to customers, develop and test a new value proposition.
Whatever changes you need to make, you need to prioritize one thing and one thing only. And divide it up into 90-day chunks. Here’s the plan, this is how we’re going to execute, this is where we’re going, this is how far we need to go. Communicate, communicate and communicate some more. Keep the drum-beat going.
Progress will only come if you’re consistent and repetitive. In his book, ‘Great by Choice’, Jim Collins compared Amundsen’s polar expedition to Scott’s. One of the things he highlighted was Amundsen’s insistence on a 20-mile march. Every day, without fail, they moved 20 miles. On days when it was hard, they slogged it out. On days when it was easier, they finished early. And this, along with better planning and equipment, is what eventually won him the race to the South Pole.
It’s like getting fit. You don’t train once a week in a big blast. You turn up six days a week and gradually increase the intensity. Force your organization to focus its change effort and energy on one thing in 90 days. Make sure this one thing takes you towards your ultimate goal. This is how you make lasting changes that act like compound interest. Sit back and watch your business grow.