More on this book
Community
Kindle Notes & Highlights
Mark Zuckerberg’s personal development priority in 2015 was reading a book every two weeks, exceeding by two the number of books (24/year) Topgrading author Brad Smart found separated A-player executives from B and C players.
All these great biz leaders know one thing — nothing interesting can come out of your brain that you don’t put in first. Having a natural curiosity and thirst for learning separates the good from the great in our experience. Happy reading!
The key to scaling this curve: 1. Attracting and keeping the right People; 2. Creating a truly differentiated Strategy; 3. Driving flawless Execution; and 4. Having plenty of Cash to weather the storms.
The best leaders have the right questions, but turn to their employees, customers, advisors, and the crowd to mine the answers. Every business is more valuable to the degree that it does not depend on its top leader. For more on these topics, read Margaret Heffernan’s book Willful Blindness: Why We Ignore the Obvious at Our Peril and Liz Wiseman’s Multipliers: How the Best Leaders Make Everyone Smarter.
In leading People, take a page from parenting: Establish a handful of rules, repeat yourself a lot, and act consistently with those rules. This is the role and power of Core Values. If discovered and used effectively, these values guide all the relationship decisions and systems in the company.
In setting Strategy, follow the definition from the great business strategist Gary Hamel. You don’t have a real strategy if it doesn’t pass two tests: First, what you’re planning to do really matters to enough customers; and second, it differentiates you from your competition.
In driving Execution, implement three key habits: Set a handful of Priorities (the fewer the better); gather quantitative and qualitative Data daily and review weekly to guide decisions; and establish an effective daily, weekly, monthly, quarterly, and annual meeting R...
This highlight has been truncated due to consecutive passage length restrictions.
In managing Cash, don’t run out of it! This means paying as much attention to how every decision affects cash flow as you ...
This highlight has been truncated due to consecutive passage length restrictions.
“most people overestimate what they can do in one year and underestimate what they can do in ten years.”
To effectively execute, there are three fundamental disciplines (routines): Set Priorities; gather quantitative and qualitative Data; and establish an effective meeting Rhythm. It’s in these meetings, debating the data (the brutal facts!), where the priorities emerge.
KEY QUESTION: Are the stakeholders (employees, customers, shareholders) happy and engaged in the business; and would you “rehire” all of them?
In retaining employees and keeping them engaged, we’ll cover the five activities of great (vs. good) managers (we prefer the term “coaches” — more on this later): Help people play to their strengths. Don’t demotivate; dehassle. Set clear expectations and give employees a clear line of sight. Give recognition and show appreciation. Hire fewer people, but pay them more (frontline employees, not top leaders!).
KEY QUESTION: Can you state your firm’s strategy simply — and is it driving sustainable growth in revenue and gross margins?
KEY QUESTION: Are all processes running without drama and driving industry-leading profitability?
You know you have execution issues if three things exist: 1. There is needless drama in the organization (e.g., something shipped out late; the invoice was wrong; someone missed a meeting; etc.). 2. Everyone seems to be working more hours, spinning his wheels, or spending too much time fixing things that should have been done right the first time. 3. Most important, the company is generating less than three times industry average profitability.
Who, What, When (WWW): Improve the impact of your weekly meetings by taking a few minutes at the end and summarizing Who said they are going to do What, When. This isn’t about micromanagement; this is about excellent management and being clear in both communication and accountability.
We recommend that each senior leader formally talk to one employee each week and ask, “What should the company Start/Stop/Keep doing?” Pay particular attention to the “stops.” These are the roadblocks you need to eliminate from the company to keep people motivated.
The company’s plans and performance are visible to everyone. We’re not big on sports analogies, but we strongly suggest stealing one idea from that industry: having huge scoreboards visible to everyone.
Successful delegation requires four components, assuming you have delegated a job to the right person or team: 1. Pinpoint what the person or team needs to accomplish (Priorities — One-Page Strategic Plan). 2. Create a measurement system for monitoring progress (Data — qualitative and quantitative key performance indicators). 3. Provide feedback to the team or person (Meeting Rhythm). 4. Give appropriately timed recognition and reward (because we’re dealing with people, not machines).
Serious communication issues surface when employees on different floors no longer bump into each other. The goal is to increase the cross-interaction (accidental collisions) of various individuals and functions.
Each cell within the organization must have someone clearly accountable for it. This doesn’t mean the person is boss and/or gets to make all the decisions. In fact, it’s important to delineate the differences between accountability, responsibility, and authority.
you want to delegate the functions listed on the FACe tool to leaders who pass two tests (including culture fit): 1. They don’t need to be managed. 2. They regularly wow the team with their insights and output.
For help in selecting KPIs appropriate for your industry and/or function, visit KPILibrary.com. For more general KPIs, we recommend the book Key Performance Indicators: The 75 Measures Every Manager Needs to Know, by Bernard Marr.
To navigate this organizational transition, the functional heads, who have been used to driving the business, need to adapt. They need to become more like coaches/advisors to the business unit leaders, rather than acting as their “bosses.” In turn, the heads of the business units need to lead as if they are individual CEOs.
Here are the seven processes for Barcelona-based Softonic, the world’s leading Web portal for downloading free, safe software: Recruitment Product development Sales to cash Innovation People development Customer satisfaction Content creation and publication
For each key process you’ve identified, decide who within the organization will be accountable. These people are then accountable to the head of operations.
A Job Scorecard details a person’s purpose for the job, the desired outcomes of this individual’s work, and the competencies — technical and cultural — required to execute it. This tool is part of Topgrading, a methodology for hiring A Players, co-created by Brad and Geoff Smart.
An A Player, by the Smarts’ definition, is someone in the top 10% of the available talent pool who is willing to accept your specific offer.
Once you’re down to the top three candidates, it’s time for the Chronological In-Depth Structured (CIDS) interview — a thorough three- to four-hour interview covering a candidate’s entire career history, with the objective of discovering behavioral and performance patterns that are likely to repeat themselves at your workplace. When hiring, bear in mind that past performance is the best indicator of future performance.
A three- to four-hour interview is appropriate for a middle or senior leader; one to two hours might be more suitable for entry-level or less experienced candidates with limited work history.
Though it’s not always possible, the best way to select the right people is to have candidates work with you for several weeks. For frontline hires, temp-to-perm placement firms are popular because they allow you to test-drive candidates. For management hires, see if they can work with you in the evenings on a consulting basis. The founders of Google appointed Eric Schmidt chairman of the board of directors four months before making him CEO.
five main activities of successful managers/coaches. In reverse order of importance: 5. Hire fewer people, but pay them more. 4. Give recognition, and show appreciation. 3. Set clear expectations, and give employees a clear line of sight. 2. Don’t demotivate; “dehassle.” 1. Help people play to their strengths.
How you structure the compensation — variable vs. fixed — should fit your culture. If your culture emphasizes rugged individualism, like Nordstrom, you might want to have a high-commission/bonus-based compensation plan driven by internal competition among employees. Given the culture of teamwork at The Container Store and its emphasis on customer service, paying store employees a straight (and high) hourly wage without commissions makes sense.
The best managers/coaches are less concerned about motivating their people and more concerned about NOT demotivating them. They consider it their job to prevent the hassles that block their team’s performance. Such demotivators are usually related to issues with people or processes.
Finding employees’ strengths and focusing workers on those assets is the most powerful people-management tool we can suggest.
And how much should you spend on training? It obviously depends, but 2% to 3% of your payroll is a good benchmark. Who should you spend it on? Senior leaders, middle managers, frontline employees? They all need training, but focus first on your middle management. In most growth companies, they have the hardest jobs and are critical to employee engagement and retention, yet get the least preparation for it.
“a true differentiator can only be defined as something your competitor won’t do or can’t do without great effort or expense. Often these can take years to develop since if it can be done cheaply, easily and quickly it provides little or no competitive advantage.”
NOTE: 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.
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.
The executive team is healthy and aligned. Team members understand each other’s differences, priorities, and styles. The team meets frequently (weekly is best) for strategic thinking. The team participates in ongoing executive education (monthly recommended). The team is able to engage in constructive debates and all members feel comfortable participating.
At the celebration, skip the usual speeches by the senior team about “How we couldn’t have done this, that, or the other thing without so-and-so’s help, etc.” Instead, ask the most powerful question a leader can pose when a team has successfully completed anything: “How did you do it?” Stand up and say “Congratulations. We said we would do X, and we did it!! How did you do it?” Then pick someone who you know contributed to reaching the Critical Number, and have that person share his or her story.
However, quantitative metrics alone provide an incomplete view. Qualitative insights from conversations with the market and observations of customers and competitors fill out the data set needed to guide decisions. Input from advisors, experts, and “the crowd” also contribute. Piling all of this data into computers and our brains and engaging in healthy, frequent debate helps leaders make decisions — regarding hiring, product, marketing, etc. — with a high degree of confidence.
The faster you’re growing, the faster your meeting rhythm should pulse. In general, if you’re growing less than 15% per year, you can treat each year like a year from a strategic-thinking standpoint. If you’re growing 20% to 100% a year, view each quarter as if it were a year.
One-phrase close. End your weekly meeting by asking each attendee to sum up with a word or phrase of reaction. It creates a formal closing for the meeting, ensures that everyone’s had a chance to say something, and gives you a window into what people are thinking and feeling. If you find there are lingering issues or conflicts, you can follow up.
