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July 17 - July 23, 2020
Recordkeeping: Relevance, speed, and ac...
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The Balanced Scorecard™, popularized by Robert S. Kaplan and David P. Norton
Many nonaccountants struggle with understanding the basic functions and structures of a balance sheet and an income (profit & loss) statement. Considering the People and Process sides of the business from an accounting perspective often gives them a better grasp.
the First Law of Business Dynamics: Growth sucks cash!
the Second Law of Business Dynamics: Buy low, sell high!
You need data detailing the profitability of every customer, product, service, salesperson, location, etc., so you can see where the business is making a profit and where it is not.
You can download a detailed bonus chapter on how to prepare for and run a strategic planning offsite, including a sample of a completed OPSP, from scalingup.com.
sends its leadership team and members of its business team to Fortune’s Leadership Summit in the spring and its Growth Summit in the fall.
there are four main activities in preparing for a strategic planning session (quarterly or annual): 1. Managers at all levels gather feedback from employees and customers. 2. Middle management completes a SWOT analysis and submits a Top 3 Priority list. 3. Senior leadership completes a SWT analysis and submits a Top 3 Priority list. 4. Everyone aims to keep learning and growing as a team.
The first preparatory activity is to send out a short Start/Stop/Keep survey to all the employees: 1. What do you think [company name] should start doing? 2. What do you think [company name] should stop doing? 3. What do you think [company name] should keep doing?
Clayton M. Christensen labeled the “innovator’s dilemma”
The SWOT, with this introspective focus, isn’t the right tool to spot the trends in other industries and distant markets that CEOs must factor into their plans.
the strategic planning process comprises two distinct activities: strategic thinking and execution planning. Strategic thinking is coming up with a few big-picture ideas. Execution planning is figuring out how to make them happen.
planning — the focus of middle management — resulting in a laundry list of accolades and fixes.
Leaders should look at major trends, such as significant changes in technology, distribution, product innovation, markets, and consumer and social developments around the world that might shake up not only the business but the entire industry.
At Amazon, one of the questions founder Jeff Bezos asks his team each week is what competitors have entered their market in the last seven days!
Hardy advises CEOs to review the Checklist every three months.
Jim Collins and Morten T. Hansen, in their book Great by Choice: Uncertainty, Chaos, and Luck — Why Some Thrive Despite Them
“Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice, and discipline.”
1. Priorities: Less is more in driving focus and alignment. 2. Data: Qualitative and quantitative feedback provides clarity and foresight. 3. Meeting Rhythm: Give yourself the time to make better/faster decisions.
It’s particularly critical for the senior leadership team and middle managers to engage in weekly conversations with customers and employees
the importance of setting a routine of daily, weekly, monthly, quarterly, and annual meetings to address the communication challenges that exist whenever you get a group of people together.
Who, What, When (WWW): Quick summary of actions and accountabilities — the only “notes” you need to keep from a meeting of an hour or longer
“The main thing is to keep the main thing the main thing,”
Individuals or organizations with too many priorities have no priorities and risk spinning their wheels and accomplishing nothing of significance. In turn, laser-focusing everyone on a single priority — today, this week, this quarter, this year, and the next decade — creates clarity and power throughout the organization.
“Don’t be concerned if you’ve only finished two or three, or even one, by quitting time. You’ll be working on the most important ones, and the others can wait.”
Confucius said, “He who chases two rabbits catches neither.”
The key is sequencing a series of #1 priorities that keep everyone focused and heading in the same general direction together.
On the One-Page Strategic Plan (OPSP), there is a progression of #1 priorities: 1. Core Purpose: the one word/idea/speech driving the business 2. BHAG®: the one 10- to 25-year goal for the company 3. Profit per X: the one overarching KPI representing the core economic engine of the enterprise 4. Brand Promise: the one most important measurable promise (of three) representing the brand 5. The Critical Number: the one key driver for the year and the quarter
if you have a killer strategy and/or heroic people willing to work 18-hour days, eight days a week, these will make up for the messes created by sloppy execution and lack of discipline.
you can’t implement any of what we’ve taught in this book unless Rockefeller Habit #1 — “The executive team is healthy and aligned” — exists.
Choose just one or two each quarter, based on what will give you the most immediate benefit, as you would with the rest of our crossword puzzle-like tools.
Patrick M. Lencioni’s best-selling book The Five Dysfunctions of a Team: A Leadership Fable
defines the unhealthy situations that can derail your leadership team: an absence of trust, fear of conflict, lack of commitment, avoidance of accountability, and inattention to results.
At a minimum, require all leaders and managers to read his book once a year.
Other ways to help the team build trust: • Personality and leadership style assessments, which help team members appreciate each other’s differences • Meal and social time during offsite planning sessions and monthly management meetings • Shared learning experiences
“The #1 habit is the most important and first.”
there are two main vision decisions: the BHAG® (Everest) and the measurable next step (one with a 90-day to one-year focus). Everything else in between is just a WAG — a wild-ankle guess. The BHAG®, derived from your strategy, is the main long-term priority anchoring the strategic thinking in the vision. The quarterly or annual Critical Number is the main short-term priority anchoring the execution planning side.
Jack Stack’s classic book The Great Game of Business: The Only Sensible Way to Run a Company.
The Goal by the late Eli Goldratt.
Scaling up is all about eliminating constraints — in the business and for customers.
It takes several quarters to master choosing and setting Critical Numbers.
1. Repeat the Critical Number in the next quarter if it’s still crucial that the organization achieve the target.
2. Move on to another Critical Number if you sense that enough momentum was created with the previous target to keep the organization trending in the right direction.
3. Do a root-cause analysis to uncover the reasons your organization didn’t achieve your Critical Number.
it isn’t uncommon for teams to fall short of their goals in the beginning.
no one’s paycheck should suffer because the senior team chose an overly aggressive goal or one that the team was not prepared to achieve.
Stack’s book The Great Game of Business,
The Critical Number, like the rest of the organization’s strategy, cannot be set in isolation
ask the most powerful question a leader can pose when a team has successfully completed anything: “How did you do it?”
