You can learn a lot from my second podcast interview with Lois Sonstegard on her Building My Legacy Podcast. Find out:
- How to create high growth, high performing businesses.
- The benefits of using the Verne Harnish One Page Strategic Plan.
- How planning 3-5 years ahead and working backwards is extremely effective.
- Strategic planning is a process that requires an entrepreneur and their team to get off site every quarter.
- When doing strategic planning, focus on the wins (what’s working) and then the challenges.
- High performing businesses have clear who, what, and when lists for the senior executive team.
- Key Performance Indicators give you real-time feedback about how your business is doing.
- Every employee needs to know week by week how their work is contributing to the corporate goals for the quarter.
Transcript
Lois Sonstegard:
Welcome everybody to Building My Legacy Podcast. I have with me today, again, David Greer. David is an incredible coach and intrapreneur. He has written this book, Wind in My Sails, and it is a lovely book drawing on his experiences as a sailor and applying it to business. He comes out of the tech field. He was founder, owner, president of Robelle, which is one of the world’s leading providers of HP 3000 solutions. He is an angel investor. He has worked with senior executives on a one-to-one basis and he works with entrepreneurs to help grow their business exponentially. So, you’ve got some so businesses right now that you’re working with that really have their eyes on the horizon far, but at an accelerated fast pace. So tell us that journey and how you go about helping people.
David Greer:
Sure. Thanks Lois. Hi, everyone, really happy to be here today and talk to you about business, high growth, high performance and how do you get there. Many years ago, I went and attended a training conference with a guy Verne Harnish, and he’s the author of Scaling Up and the Rockefeller Habits. Part of his planning template, he also is the author of the One-Page Strategic Plan, which is something I use a lot. But, I was with this company Robelle as an employee and a part owner for 10 years and then as a co-owner for 10 years. So, I was 20 years with Robelle and we plan like most entrepreneurs plan.
We did a little better next year than we did last year and we weren’t that strategic and we didn’t have much formalized planning process. And what I found fascinating about Verne’s concept was he said, “I want you to sit down with your or business, and I want you to look. I want you to pick a date in the future somewhere between three and five years out. So pick that date and then decide where you’re going to be.” And by that, we mean, what markets are you going to be operating in? What geographies, is it going to be? The same markets that you’re in today? What’s going to be your revenue? Then pick a number, your profit goals and just this big picture where you’re going to be in three to five years.
And when I heard that, I was blown out of the water. I had never thought of forward looking and really projecting where you’re going to be in the future. And to use that as a basis, a starting point, it’s like, if in three years I want to be a $20 million company and today I’m a $10 million company, then when I’m looking at the goals for next year, I have to choose some goals that are going to over the next three years, give me a shot to get to 20 million. Whereas at Robelle, we just said, “Well, we’ll do 10% better than last year,” rather than a much more lofty goal. And some of this is really important because, if you’re in a market that’s growing 10% a year and you’re not growing at least 20%, then you are losing market share, right?
Some of it is you’ve got to know your markets and what’s happening to them so if that market is going to compound and grow 10% a year over three years, so it’s going to be more than 30% bigger in three years time, then your revenue’s going to have to be compound 30% bigger in that time, and that’s to stay even. That’s not to actually gain market share or to be bigger. And so, that’s what I believe high growth companies need to start with, is a planning process that starts out like three years, works back to one year and if you’re really high growth then you need to be at least into quarterly planning. And my belief is that this is best done by a day offsite for a quarterly plan and two days offsite for an annual planning session, which is more than, and most people would put into planning.
I facilitate around Verne Harnish’s framework, so that I have a process that gets you with the plan out of that time. And, if you’re a company that’s growing at 20% per annum, then… No, if you’re just kind of a slow growth or steady company, you maybe can get away with planning once a year. But once you’re into at least 20 or 30% growth, you are running four times faster even though your revenue’s not growing four times faster. But the reality of that kind of growth, is that you need to change four times faster than a normal business, which is why you need to get offsite once a quarter.
And if you’re a hundred percent a year, you almost need to reset your plans monthly. You certainly need to take half a day and look at the strategic plan if you’re growing at that kind of pace, because things change so fast, that’s only how you keep up. So that’s how you keep up with the high pace, that’s the performance side, but how you achieve it is this longer term planning and this commitment to a strategic planning process. And then, I think most importantly is understanding your markets and markets you operate in which, like you mentioned in the intro, I come from a computer science background, hugely successful software engineer. So, marketing, that’s touchy, feely, it’s more art and science.
I actually was fairly decent at it because I relate to people, so I knew how to communicate things in the way people understood. But this bigger picture marketing, strategic marketing is what I call it, you have to be doing that I believe if you want to be a high growth company. So, where are your markets today? What are the biggest pain points in that market? How are you solving them? How are your competitors solving them? And where are the pain points moving to? Because it’s the famous Wayne Gretzky saying [one of the best Hockey scorers of all time], don’t shoot the puck to where the person is, shoot the puck to where the person’s going to be, and that’s in business. That’s why this, you need three to five years looking out and estimate, guessing where the market’s going to be, because that’s, you’re trying to set yourself up so when the market gets there, you’re ready to go. Because if you’re starting to invent products and the market’s already there, you’re behind,
Lois Sonstegard:
You’re behind. So, what kind of companies are ready for this kind? This is very hyper growth and you have to be conscious that this is your course of action and secondly, you have to have the mental resources to know that that’s where you’re headed. So, what kind of companies are those?
David Greer:
I think every company should have a formalized planning process, even if it’s just the entrepreneur once a year. I think again, if you’re the entrepreneur with the leadership team, I think it’s difficult to do it on your own but possible. I think it’s easier to hire a facilitator like me. I think if you grow into that 20 employee or 40 employee, and now there’s you and there’s three or four key individuals who report to you, the plan should come out of the group, not just your brain. Because at some point, those people collectively are smarter than you and that’s something I find most entrepreneurs have a lot of difficulty with.
You’ve grown it from the ground up and you are super smart and you have solved super [hard] problems because otherwise you wouldn’t have survived, you wouldn’t have got to where you are. But at some point, you hire enough people and you have enough people reporting to you that their collective wisdom is actually at equal or better than your wisdom on its own. Entrepreneurs have to grow to a certain point and then be willing to acknowledge that. And I’ve met lots of entrepreneurs who don’t. They’re like, “I’m still smarter than all the people who work for me.” And I don’t think that’s the way forward if you really want a highly profitable company, a really successful company. And high growth is not be all and end all. I think that I try and help entrepreneurs focus on profitability rather than revenue growth, because if you can’t make money, what’s the point?
Lois Sonstegard:
Right.
David Greer:
Right? Anyways, that’s my philosophy. That’s my belief system. You may not agree.
Lois Sonstegard:
Right. No, I absolutely agree. You don’t have cash, you don’t have much.
David Greer:
Yeah. And if you want a lifestyle business, I say, no problem, as long as you’ve got a really long runway, you see a way for your markets to last. If you want to have this be a business of finances, all of your fun things and your family, unless you do what you want, that’s all great, but will the business, will those markets sustain you for 30 years, 40 years, right? Like in IT and software, there’s no way, things change way too fast for that to be the case.
There’s other markets where that’s perfectly acceptable and there’s not a right or a wrong choice. I still think you want a three to five year plan because you want to say, “Where am I going to be in this space that I’m operating in, in that timeframe” and answer questions like, “How hard do I want to be working? And, should I be hiring some better people than me to take over some of what I’m doing so I can have more time with my kids?” Which I think when you do this strategic planning, you get offsite, you look farther down the road, I think some of these other issues have a chance to show up. Whereas when you’re just running as fast as you can go in your hair is on fire every day.
Lois Sonstegard:
Been there, we’ve all been there.
David Greer:
Yeah. We’ve all been there, but it takes… I swear that sometimes the clients that hire me for facilitation, a third of my work is to get everybody in a room on a given day once a quarter, because there’s so much pressure to give up that day or not make it. And people work with me for a while and then they start seeing the benefits that they’re getting from it and they go, “Oh, we’re never going to give up this.” But there’s a transition point, and even then, it’s always, there’s a challenge for me to make sure every person gets in that room on that day and that’s part of what they pay me for, is because I’m very good at hurding cats.
Lois Sonstegard:
Okay. So, you start by having a strategic planning session and looking at the three to five year goals and then with companies that are growing quickly looking at quarterly.
David Greer:
I think again, any company you still want to try and boil it down to a quarter.
Lois Sonstegard:
Got it.
David Greer:
Right.
Lois Sonstegard:
Okay. So, you’ve got that when you get them offsite and you start working on this, do you have key things that you want them to look at? We’ve talked about market a little bit and we’re…
David Greer:
Sure. So, I’ll describe my process, because anyone can do my process, well, in theory. So, I’m a big believer and I’ve written quite a bit and I’ve written Wind In Your Sails, I always start with the wins. So, I always start with the successes. Overachieving people overwhelmingly are into the next challenge and I believe you should start with the wins, the successes, what worked, because if you start with that, first of all, there’s a lot of evidence, the positive psychology works and that sets up the room and the people with their successes and a positive psychology experience. And then when you start looking at the challenges that helps right size them, because you can say, “Oh right. But look at this huge, massive unattainable thing that we thought we could never do. We did last quarter. So maybe this challenge is not… We’ve climbed a mountain that looks like this or somewhat similar.” So, I find that it right sizes the challenges.
I start with the wins and the successes and I start with demonstrations of core values. We haven’t talked about core values, but a lot of my work is about discovering and implementing and staying with a set of core values or behaviors, the way you want everyone in the company to behave. So share some specific people examples and people successes as well as, “We achieved this goal, but, hey, I really want to tell you about Tom and what Tom did so that we could achieve that.” And then I focused on the challenges. So, I then actually get people to just write down. I do some pre-survey work ahead of time so I already have a list of topics. But we get on the table, every possible topic that people think is an issue for the next quarter and then everybody goes and votes and we rank order the top five.
And it’s amazing, in a room that comes in, oftentimes they think that they’re very far apart and what the big issues are and the top three, everybody will be in agreement on. The next two, there might be some split but the really big challenges that almost always people coalesce around them, but you need this time to discuss them and also you need the time… Because someone will say, “The biggest challenge I see is X.” And then someone else will go, “Well, I don’t think it’s X, I think it’s Y” and then the discussion ensues and it turns out that X and Y are just flip sides of the same coin. So then we rename it.
Okay, we’re going to call it this so everyone… So, some of it is just everyone in the room agreeing what the challenge means, because if in the day to day and you’re flying by each other so fast, you lose this context. And so, what you thought that Sue was talking about was a challenge and Bob was talking about a challenge for completely different challenges, but they’re actually completely related. The language around them was different, but the core, the root.
Some of the work I do is actually getting to the root of what the real challenge is and then figuring out, “Okay, is that really the highest priority things?” And then we look at those in the context of the one year plan and where you want to go in three to five years. Do these still make sense or are we getting sidetracked for some reason? And it’s quite rare, but it’s always worth the sanity check. And then, so what the hell is the plan for the next 13 weeks to go kill biggest challenge? And then what can we do to ensure success? A lot of things is removing clutter and background and distractions and drains that pull us away from our day to day work. So, that’s the core of a quarterly planning session, is what I just described achieving it in seven and a half hour day?
Lois Sonstegard:
A lot of work in seven and a half hour day.
David Greer:
It’s actually quite hard, but that’s okay. That’s what I do.
Lois Sonstegard:
What I’m also hearing you say, is you put together basically an action plan, at least the broad strokes of the action plan so it gets accomplished in the next 13 weeks.
David Greer:
Yes. And then the out of the Verne Harnish stuff. So, out of it comes this one page strategic plan, which has your core values, has where you’re going in three years, where you’re going in one year, where you’re going to go in the quarter. But then separately, we create a document called who, what, when. And that’s like, as much as you can in the quarterly session, you fill in all of the details for the big picture rocks and only at a level of detail that everyone on the senior leadership team needs to know about.
So, if it’s like deep down into engineering, that’s the engineering group, or maybe the engineering and the manufacturing group needs to talk about that. So, there’s an art to keeping the who, what, when list at the right level of detail and then part of what I coach around is a weekly management meeting where you discuss the biggest, the toughest, brutal facts that are in front of you and what you need to do about them and then coming up with next week’s who, what, when.
Lois Sonstegard:
So, Verne Harnish talks about reviewing your key numbers. Everybody has a key number and reviewing it weekly. Talk a little bit about that, because I think that is one of the weaknesses of many of us entrepreneurs.
David Greer:
The idea is that only a few numbers drive your business. I’ve had clients I’ve worked with for quite an extensive period of time and they still haven’t, we put a lot of time and effort and we still haven’t figured out what the key number is. We’ve measured a whole bunch of things, but then they haven’t turned out to be as impactful as we thought. So, Verne is right, but it’s harder than it looks, is what I want to want to say. So, here’s an example and it’s probably in my book, Wind In Your Sails. Let’s take it from sales.
So, in most complex sales if you work it all out, you work out a sales process and at the end of it, you get a close. So, your company and the client signs an agreement for what’s going to get delivered, but you keep backing that up and first of all, you have to figure out, do they have a real need? Is there real pain and all of these. And so, how do you measure progress against these?
Well, some of these are very hard. Sometimes you can have certain documents and you can say, “If this document is signed off by us and the client know we’re halfway through the sales cycle, but in a lot of cases, you just boil it down to, are you having conversations? Are you Mr. Salesperson having conversations with the prospects? And in many sales situations that is the key leading indicator, is how many conversations a day has every salesperson had.
And then if you look at a week, say five days, I, I know we’re recording this on the US Memorial day holiday, so it will only be four days for them this week, but if we look at five days, if say your goal is 10 conversations a day and you have none on Monday and none on Tuesday. So, your goal then is going to be 50 for the week. I got to tell you, it is really hard in Wednesday, Thursday, Friday to hit your 10 conversations each day, plus make up 20 from Monday and Tuesday. So, this hyper focus on this very innocuous sounding number, the number of conversations you’re having per day, actually drives the whole sales process.
Lois Sonstegard:
But that’s true of everything, I think.
David Greer:
It is true of everything, the tricky part is figuring out what is the number that has that biggest impact, that has that biggest leverage and that’s a discovery process. And I work with a lot of engineering organization, so they measure the crap out of everything. So, they have 30 numbers, 40 numbers, 50 numbers, and I’m like, “Okay, great. So what’s the number one, most important one.” “Oh, we don’t know.” And so, my belief is that everything in life, especially in business is an experiment, there are no real failures. You experiment, you learn stuff, you course adjust and you slowly get better and better, right? Right. And so, I think with KPIs, you pick KPIs, you try them for a quarter, two quarters.
Is it impacting the business? Is it helping people focus on the right things? No, it’s not. It’s not moving us ahead. It’s not giving us advanced notice. Okay. Well, what’s the next one we’re going to try. And in fact, before we set the goals for a quarter, I challenge my clients with, what’s the KPI you’re going to focus on? So, I always start with the KPI and sometimes the goal this quarter is to be able to measure that. Because oftentimes, the most important one’s you’re not actually measuring yet and to put a system in place to measure it is actually a significant body of work. But it’s a process over time.
Lois Sonstegard:
It is a process and you have to be very clear about your goal to get there, which is part of the beauty of identifying your KPI.
David Greer:
Yes. And it’s also a lot of the work that I do with clients, why you might want an outside facilitator like me, is that people are very bad about setting clear goals.
Lois Sonstegard:
Yes, yes.
David Greer:
Right? They’re like, “I want to improve customer service.” “Hmm. Okay. That’s a laudable goal. I have no idea what it means.” What does it mean to improve customer service? Does it mean that you respond to every call within 30 seconds? So, when you work with me, I am sure that when you look at your five, and I don’t let people choose more than five things that you’re going to do as a company for this quarter, what I ask people, how will we know we got across the finish line? Unequivocally, the person waved checkered flag and we knew unequivocally, either we’re over it or we’re not and so, then you, you get crystal clear about setting these goals where it’s totally unambiguous and leadership teams start to get uncomfortable because they’re going to publish this to employees and then employees, there’s no wiggle room. If you have really clear cut goals, there’s no wiggle room, your employees are going to know you made it or you didn’t.
Lois Sonstegard:
And then you got something else to deal with. Okay. So, I want to talk about one of the things I think that kills a lot of this, and that’s the people. So you develop this, you are working with the executive group or the top tier of the company management company, how do you get this communicated all the way down to the bottom? Because I see a lot of organizations giving up, I got 30% down, that’s enough it’ll be carried from there and you know that’s not enough. But how do you help companies deal with that people issue?
David Greer:
So, the first way I say is, I want you to be able to answer this question which will probably take you a few years to get there, but I want every single employee, every single day to be able to show how the work they did that day related to one of your key goals. And so, now part of what I work on with clients when they get big enough, is we take the overall corporate goals and then I get them to split off and do a separate half day department meeting after the senior team has set the goals. Then the department set no more than like five goals for themselves that are related to the corporate goals.
So, they now have these clear target finish lines for them that’s department specific and then that gets much easier for the people in the department to say, “Oh, what I’m working on today is department goal number two.” And then what you coach with the senior leadership team is that, they can demonstrate to their team, to the people who report to them and even to the person that works the shipping dock, for example, how this second goal for our department relates to the corporate goal in this way so that people can see this linkage between everything and the supervisor layer has a lot of like, “I’m going through this with a client. It’s taken them six months to a year to really get the supervisor layer to realize they have to own the department goals and they’re responsible for making them come true and they’re responsible for communicating it to the people that work for them.”
And it’s been an ongoing education ongoing process to get the buy-in and to make them… And part of it is, you’ve got to give them more responsibility. More responsibility in the setting of the goals and the decision making and, and you have to keep circling and then it’s just this constant communication. I mean, the CEO of this company writes kind of a biweekly employee update and he struggles in all the things that are going on to get that out. But inevitably, when he sends it out, the questions to get back shows him where they’re off track in their communications. And so many employees have come up to me and said, how important, because a lot of what he writes, he writes only a screen in a bit. He’s trying to relate where they are to their goals and how it relates to what everyone’s working on. We’re trying to finish this product release to go to this trade show so that we can show it to this client so that we can achieve this goal of sales in the quarter.
Lois Sonstegard:
People want to be involved, I think in the business. They want to understand how what they do fits into the business.
David Greer:
Mm-hmm (affirmative).
Lois Sonstegard:
As leaders, we fail them often by not really providing that information. So, it’s beautiful that you provide this opportunity for management to really look at, how are they communicating, how do you get this translated so that everybody’s goals are being met?
David Greer:
And if you look in Verne’s stuff like the best practices in the Verne Harnish stuff and the scaling up, there’s like, I can’t remember if it’s every day, every week, but it’s one of the other, like every employee will know… I mean, you said it first. I mean, when you get really good at it, every employee has their own key number and they know how that key number relates to everyone else’s key numbers so they can see a linkage. They’re not just operating in a vacuum and they know every day, whether that a number went up or down. It’s building systems that can give this kind of real time feedback. There’s a company I feature in Wind In Your Sails, it’s an alarm company based in Vancouver, who there’s a dirty little secret in the alarm business, which is when an alarm goes off, generally nothing happens. No, that’s the secret and he founded the company called Providence Security with the brand promise, five minutes to your door or your money back.
Lois Sonstegard:
Oh, wow.
David Greer:
And believe me, he’s had to put a lot of systems in place to do that, but I’ve been in his op center and there’s literally screens along the wall with six numbers and they are green, or they are orange, or they are red. And if they’re green, everything is going well, if there’s orange, at least one person in the ops room better be focused. Like say, there’s one number that’s orange, better be focused on getting that number back to green and if there is a red number, then everyone in the room better be focused on getting it back to at least orange.
Lois Sonstegard:
Got it. Wow.
David Greer:
Yeah, I mean, now it’s taken him a lot of years and blood, sweat, and tears to get it to that point. But, no one is in any question. And then there’s certain exceptions, like a massive wind storm that brings down a lot of trees, and which then cuts off electricity and cuts off lines to houses. He says, basically, the op center goes nuts and every number is red and I have to hire people that can actually cope with that chaos. So, they have to be really good at this dealing with the critical numbers and improving them, but then they also have to have this capability of, to just total, total chaos for an evening or a day and not let it phase them. So, he interviews a lot of people and doesn’t hire very many.
Lois Sonstegard:
Wow. It’s really crisis management, people who are supposed to do that. Yeah.
David Greer:
Yeah. So…
Lois Sonstegard:
David, our time is really going very fast. What have we left out that we need to talk about that people should know about?
David Greer:
I think what we left out was more talk about people, culture, hiring for culture which to me really is about hiring for certain behaviors and then I think that’s another way, how you create high performing businesses. But I think that’s a whole podcast in itself. So, we’ll have to leave that for another time.
Lois Sonstegard:
So, big picture, two things that you should think about are three things relative to that and then we’ll come back to that.
David Greer:
Nice. Oh, it’s a couple things just for that to come back, culture in is a discovery, it’s not people trying to be altruistic. We should be nice people, which if that’s in your culture, that’s great. That should be part of your culture. But there are many examples of companies, Bill Gates was not known for being a nice guy when he was CEO of Microsoft. I mean, people feared him coming in the room and hoped he ‘d come in the room, even though they were going to totally dress you down and call you stupid and a useless software engineer. Because he was so smart, he’d see every hole in anything you did.
And so, culture is a discovery process. What is your culture? If you want to change it, then that’s a different issue. And then how do you keep culture alive in your business? Are you prepared to actually fire people if they violate your cultural norms? Do you make sure you only hire people who fit your cultural norms? I coach a lot around hire for culture first, skill second. And almost all of our hiring process is what we advertise for, all of that is flipped. Oh, you got to have this skill and you got to be able to do this thing. And oh, by the way, are you this kind of person? No, no, no, no, no. Are you this kind of person? This is the kind of company we are, would you like to work for a company that has these characteristics and behaves this way? Great. Then we should talk and then let’s find out what skills you’ve got.
Lois Sonstegard:
We’re going to come back and talk about this, because this is huge and I think a lot of companies start down this road and then they kind of, after several years of working on it, go on to the next big trend and never really deal with culture because it’s not easy to define and it’s a lot of people things. And people, we like to avoid as much as we can.
David Greer:
Just like marketing. Just like strategic marketing. It’s not cut and dried, it’s got a lot of nuance.
Lois Sonstegard:
We like the cookie cutter.
David Greer:
Yes.
Lois Sonstegard:
David, thank you so much for being with us on Building My Legacy Podcast today. And those of you who are listening, we will have information about David’s book in the show notes and also information about how you can contact him. He’ll be a great resource if you are looking for a coach for your business. So please, we encourage you to follow up and connect with him and if you have trouble, just let us know, we’ll be glad to make that connection for you. Thank you so much for being with us on Building My Legacy Podcast and be sure to see our website build2morrow.com and David, thank you. You are wonderful.
David Greer:
Thank you so much. It’s been fabulous and a privilege to be here on your show today.
