Podcast Episode 89 - Four Distinct Types of A-Players
What does the term "A" player mean? The term can apply to any role in an organization, and is determined by an individual's behaviours and productivity.
A players are typically understood to be high performers who fit your culture, and people love working with them. But within that category, four different types have been identified, and there are misperceptions about what an A player is. One size does not fit all.
In this podcast episode, Kevin Lawrence and Brad Giles discuss four types of A-players, and what leaders can do to understand and motivate them.
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EPISODE TRANSCRIPT
Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.
Brad Giles 00:13
Hi, and welcome to the Growth Whisperers where everything that we talk about is building enduring great businesses. Today as always, I'm joined by my co host, Kevin Lawrence. Hello, Kevin, how you doing today?
Kevin Lawrence 00:40
Well, awesome, Brad. Looking forward to our discussion. Talking about A players is one of my favorite things.
Brad Giles 00:46
Tell me what's your word or phrase of the day, Kevin?
Kevin Lawrence 01:02
Today is entrepreneurship. I'm down in the US this week. And everywhere you go, the entrepreneurial juices are flowing in this country. To me, my perception is even more so than Canada. And the things I see happens, like everyone's an entrepreneur down here, whether it's their own little chain of coffee shops or something substantial, just love the entrepreneurial spirit in the United States of America. That's my word of the day entrepreneurship.
Brad Giles 01:32
Well, you're going to love mine, is someone selling to you? And that was I thought about that before, not on the spot. So if you're in a meeting, maybe or if you're dealing with anyone, maybe just stop, pause, think a moment, if someone's selling to you is this person trying to get you to buy something, not that there's anything wrong with that. It's what makes the world go around. But you know, a tiger is going to act like a tiger, you should not expect a salesperson to be doing an acting in a way that encourages you to buy, and just being conscious of the moment. So if ever there was a stitch up between our two words of the day, it's entrepreneurialism. So today, we're talking about the four different types of A players. Some people might know that there is four different types of a players. Because last week, we spoke about A players and the cost of not having A players in your team. But within the A player category, there are four different types that you've got to know and understand as you apply it to your team.
Kevin Lawrence 02:55
Yes, so before we get into that, let's reground people that maybe didn't listen to the last episode, you can listen to episode 88 for more on the reasons why you need to have A player's and the cost of not, but we've defined a player, that is someone who is an A level fit on your culture, and an A level fit in terms or, or gets a level results consistently. So if you think of you know, a player being the top 90% So just like an A is, you know, in the US and a is 90% and higher as a grade, and we want you know 90% or higher on the performance 90% or higher on the on the fit. A B player is someone who does fit the culture really well. They just don't consistently get a grades on the on the quality of their of their work, or hitting their deadlines. Whatever's they're good. They're just not great. So A is the ideal B is just a lower performing version of someone who still fits that culture. And then, and then we have something called a C, which is sort of these little four boxes below because they don't achieve the results as expected, and they don't fit the culture. And then we got this real special one called a toxic A, that definitely gets awesome results, but they don't fit the culture and hence their toxicity, because they're off culture. And they create a lot of stress or drama in the organization because they operate under a different belief system or a different behavior system. And it's challenging for their coworkers.
Brad Giles 04:30
Most of the people in the organization probably wouldn't want to sit next to a toxic guy, and they probably wouldn't want to go to a meeting with a toxic guy.
Kevin Lawrence 04:38
Unless they wanted to watch a little bit of entertainment and see what the toxic he can say today. So the root of it is that A players are high performers who fit the culture and you love, love, love love working with them. But within that a category. There's different types and there's misperceptions because some people think and a player is As someone who is super motivated, and promotable and wants to rise up to the ranks and eventually be the CEO, and that's a misconception that we'll deal with in a minute. So the four types, and really, there's three types plus one kicker, and the kicker is that toxic one. So we can deal with that one right away. That toxic A is the high performing jerk, or at least jerk in your company because they're off culture. And I'll give an example of one who wasn't so much a jerk. But this is it was a very nice woman in a company that I worked with. And she was a toxic A. So she was on the support team of the company, and the support team processed all the orders. And in their busiest time, that team would have to stay late at night to catch up because they had one month where they did I think 20% of their business. So this person came from more of a quality union background or labor background. And, you know, they weren't, they sort of said, well, I did my job, why would I stay late to help you do yours, because they were super productive. So let's just say each person needed to process 20 orders in a day. Even in the busy time, she would get hers done by four o'clock. Yeah, but the rest were staying till eight. And so it created a lot of tension on the team. And I remember this because I was working with this company. And woman was brilliant, she was outstanding at her job. She may have been smarter than the darn CEO like this woman, she was amazing. But one of the core values of the company was team player. And Team Player means we all chip in and help each other. And if there's more work to be done, we we all stay together. Or we all leave early together, whatever it happened is, but it was this true togetherness of a team. So long story short, her manager talked to her a couple of times about it. But she wouldn't she wouldn't budge, she would not get on board and be a part of the team. She said, Why No, I'm doing my work. That's not my problem, that they're slow. So at the end of the day, she had to go because she was although incredibly good at her job. And she wasn't a jerk about it. She just refused to put in the time that was required to support the team. And they live that core values could so that's an example versus the arrogant sales person or the you know, all the other stories we know about toxic case. It just wasn't was off culture and wasn't willing to be a part of what the company was about. So that's the talk. Okay, we can take that off the list. There's tons of them.
Brad Giles 07:36
But they are not salespeople, necessarily. It's very easy to associate a toxic guy with a salesperson. And there's some great a player sales people who aren't toxic. Don't get me wrong, but just don't think about toxic as predominantly being a salesperson or in the sales field.
Kevin Lawrence 07:55
I have seen loads of funny job. But I've seen I've seen toxic a truck drivers, one of my clients had a toxic a truck driver, they delivered stuff from Vancouver through to the rest of Canada back when we had roads, no don't work. That's another story. But they would drive and in the dead of winter weather was incredibly tough conditions, he would drive the semi trailer over the mountains in any weather anytime, never damaged the truck. Best maintained truck, cleanest truck. Only a slight problem is that my client has their name on the sides of the trailers and the trucks, they will get two or three calls per week about him and his aggressive driving on the road. So you're a brand and you've got your name on the side, and you've got a very aggressive driver who's the best driver you have. But he's also very aggressive and you get a lot of complaints. That's a toxic and he's amazing. But that's not what the companies the company has a warm hearted culture.
Brad Giles 08:57
It's not it's not a sustainable position. Like you know how long he can't, he can't keep doing that forever. Those calls will add up. You can but there's a cost
Kevin Lawrence 09:06
There's and also we know what that kind of stuff at some point there likely could be an incident which we don't wish on anyone else that stuff happens. So but let's get into the three types of a players and they're not all wanting to be the CEO. That's the little clue. So once you're once you kick us off for the first one of the of the three.
Brad Giles 09:30
Yeah, so we've covered off toxic. Now let's look at the three within a quadrant. In other words, they're high on core values, and they're high on productivity. So the first one is what we call an a one and a one. So that means that they're a great fit, they're a great fit, and they're not necessarily promotable, so they're never going to escalate into other roles, but in that role, the great on the back I'll use an eighth grade on the productivity. You can, they're just solid, they're just, they're just like the beat in the background, they're always going to perform, you can rely on them. But when you look at them, they're not necessarily going to take on another higher role. You can't really promote them. And you, you want a lot of these people in your business. It doesn't mean that you can't get the other ones but but if you can get rid of the bees in the season, the toxic guys to get these people in, then that's a great way. They're the dependable.
Kevin Lawrence 10:38
Yeah, and there's lots and they're often misunderstood. Because some people think, well, if you don't want to get promoted, and you don't want to rise up to the next level, you're not an A player. It's not true. And a player someone's exceptional at the role. And they may or may not want to. So these, these a ones are outstanding. I know tons of them, and they're wonderful. Now, as the company grows, sometimes they end up if they're two layers away from the CEO, over time, they might be three, or four, depending on how the company grows. Because they generally don't grow in their role. They master their role, for example. And my father, when I was growing up was a mechanic, a karmic auto mechanic, he was an A player in that role. He was outstanding, high quality work integrity, got the job done, right took good care of the customers. But he had zero interest in moving through the company, he would stay in that role. Well, he did for his whole career, as long as as long as he worked. And that was the role that he was happy in. I was speaking with a guy on the weekend, who was an aircraft, it was a crew leader, for bowling building airplanes. Yeah. And he led crews there for close to 20 years. And he stayed leading the crews for 20 years, his role didn't change a whole bunch, he just helped to build a lot of airplanes, and he was happy and they were happy. So outstanding, nothing wrong with them. Only thing you got to watch with these people a sustained make sure their skills stay relevant enough for the role, because they're not as ambitious, you got to make sure they continue to grow enough just to stay to stay in that a spot.
Brad Giles 12:15
So do you want to take us on to number two, what is the second type?
Kevin Lawrence 12:21
Two is someone who can move up a level, maybe it's two, but generally, they can move up a bit. They're not going to go from being you know, a supervisor to the CEO, necessarily, but they can definitely move up a level. And that's the kind of category that we put them in. So these are people this could be, you know, one of your sales people who has the potential to be that sales manager. And he's, he or she is one of those rare people that you can see could do that, because that's a hard bridge to cross or, or maybe they're running one team. But they might be able to run two teams, or they're running one location, they might be able to run two locations or so it could go in there responsibly, could go sideways, I eat more breadth, or they could move up a level. And maybe it's someone who's a director is your director of finance, that could be your CFO, he could move up or she or he or she it could be your you know, your your VP of sales or your VP of Operations, that could be the CEO. So there's, there's, you can see that there's, there's another step in them for sure. And it's a combination of cat capability and ambition that's that that exists.
Brad Giles 13:35
And not necessarily today, not even perhaps in the next few months or even year. But you can clearly see that if I can invest in this person, this person has the capability to lead a team or to lead a team of teams or whatever it might be, we can push them one level up confidently. And so an AI is a great fit. Apparently, an A one is a great fit, but they're not necessarily promotable, but then an A to is promotable, perhaps one level.
Kevin Lawrence 14:06
At this point, that's what you could see. Yeah. And then there's, there's, then there's these ones called a three is, and this would be the kinds of people that, you know, you and I would have been throughout our careers, because we're super motivated and driven and willing to really, you know, push ahead and do that work for whatever positive or negative reason. And these are people that have high permeability, and it's at least you know, two levels or more, and you can spot these people coming through organizations. And you can see them when they're, you know, if you're talking an organization of a few 100 people, you can you can you see them and you hear about them, you know, they're two or three or four or five layers down the organization and they just keep, you know, gradually rising up and rising up. And it's, again, it's a combination of competence and desire to progress. in their careers, and these are your future leaders, these are your future executives, often sometimes they're the future candidates to be in that CEO role. Now, some people will call them their high potentials, all kinds of other things.
Brad Giles 15:13
That's exactly what I was gonna say. Some people call them "hypos", or high potentials. And maybe they've got a program around that. Maybe that captures that a twos promotable one level and that a threes promotable two plus levels.
Kevin Lawrence 15:30
There's a special flag, I want to call out on these ones that we have to be careful. Because sometimes these people are really keen to grow, and they're demonstrating all the right things. But we can have a tendency sometimes to overpower them. And over promotion is a challenge because you see this person who's gone from, you know, an A player, a player, a player, oh, B or B minus, because we promote and sometimes it works. Sometimes you promote people and they grow into it. And sometimes it doesn't. That's why we deeply scrutinize promotions before we do them to make sure that people are ready. And we'll talk about that a little bit more when we talk about how do you assess where they're at, it's in our next section here. And let's get ourselves in trouble.
Brad Giles 16:17
Let's remember that an A player is in the top 10% of candidates at the pay rate that you offer. So these people aren't getting paid any more than their co-workers who could be B's or C's or even toxic owes. There is a defined role, you could be paying $85,000 for a role. As an example, these people will be getting paid the same amount as their co workers. That's a really important, we're not saying you need to pay a lot more. We're saying within the cohort of people at that pay rate. These people are in the top 10%. And then within that top 10% Are these three sections that we've identified. They're a great fit, but not promotable. They're promotable one level, and then they promotable two plus levels.
Kevin Lawrence 17:03
Yeah. And so just to clarify, by the way, that's top 10% of the people outside of your company, you ideally want way more than 10%. In this particular, yeah, in the market, in the market, yes, in this category. So these highly promotable people, these are the people that you know, you want to invest in and help them grow, but just sometimes we're so enamoured with them, is that we over promote them. And then we create a problem. And it's very, very hard for all of our egos awesome, myself and yourself included abroad, is that when you get to that higher level, to then go from being the VP to being not being the director, or from being the manager back to being the technician, whatever it happens to be. And, and that would go into our next piece of how do we assess where they're at, relates into promotions as well. And that's, you know, the the best technique ever, to one, see where they stand. And also to see if if the promotable type that they're ready for the next role is give them some projects that are consistent with the next role and see how they do. So I'll give you an example. We were working on succession for a CEO, I was working with a group in the Middle East. And we had two candidates that were currently had the potential to be the backup plan, and succession plan for the CEO. We had conversations about it, the CEO, we talked about it, the chairman talked about it. And as a result, we went and gave some additional projects with the CEO, I did a little bit of coaching with some minor, just helping them to settle their goals of what they were going to do, including feedback from the CEO, their boss, gave them both projects to help with their growth towards that CEO role. Knowing that could be five or 10 years in the future, but we were still just, you know, laying groundwork for them to get there. And then after a couple of quarters, it was really clear there was only one contender because and you never know who it's going to be. But they were both given opportunities to grow in their respective roles. One went click click, click and just rose up, moved up, you know, two or three notches in their role in nine months. Yep. The other one actually didn't move a bit. And there was one key thing that other executive needs to do. He just couldn't couldn't make it happen, which is okay. He's he was thriving in his role. Yeah, but But we knew for sure, at that moment, there was only one contender.
Brad Giles 19:34
Yeah, for sure. And so at every quarterly and annual offset that we facilitate, and hopefully people participate in, one of the outcomes of that is what are the top three to five priorities, or OKRs for each individual in the next 90 days? Yeah. And so that is, that is really what you're alluding to, I think, is that give them help them to take on priorities, projects within that arena that are going to challenge them, or give them a taste of the next level, see how they perform. And then in a, in a non overt way gives you the opportunity to really try before you buy.
Kevin Lawrence 20:23
Yes. So if if you've got an executive, for example, that is, you know, you're not sure they're going to do really well in dealing with a lot of conflict when it comes to dealing with your vendors, right, maybe negotiations or conflict, well, get them on the team that doesn't negotiation, and the next time and give them a roll and see how they do. Yeah, like if in doubt, test it out. And that's what we should be doing, deeper and use a top rating scorecard, evaluate them against it, and see where they stand on different competencies. That's the ultimate. But the simple practice is just test it. And in many ways, it's a test drive for them to try it and see how they like it. Because a lot of people are motivated and want the big title or the big job. But many people aren't suited for the work. So sometimes we can evaluate that sometimes we just got to give them a chance to show us and or themselves, and see how they like it, for example, or one executive, we're working with it, you know, the dealing with conflict is something that we haven't seen a good enough strength on that the person still thinks they can do it. It's not likely, but we're gonna put them in situations that have high conflict, and get them to resolve it and see how they do at resolving it. And then see how they enjoy having that being 20% of their job.
Brad Giles 21:46
Yeah, I've got another similar situation where there's a leadership team member. And we really need this leadership team member to step up to the next level. But this individual has problems delegating, so they're taking it all on, and they haven't been able to hire below them to give them the bandwidth. And, and so yeah, we're in a bit of a quandary. Now it's like, has this person reached their ceiling? And if they have, then we need to deal with it. But where we're, you know, we're working on the priorities or the projects that we're giving them to see, is it a structural issue? Is it an issue where they can't find the time because of some other reason, we're giving them every benefit of the doubt, benefit of the doubt, but we're trying to figure out what's really going on here.
Kevin Lawrence 22:40
And you unpack all the variables that when I when I told you about the two executives in the Middle East, and one of them was a delegation project? Yes, it handover this part of your role to someone else, so that you can move and focus on this other part. And they weren't. That is an example.
Kevin Lawrence 23:06
So we're talking about is the four types A players, right, the first one is a toxic A, that's the high performing jerk, that is challenging, because they're off culture. And although they do great results that create a lot of drama. Those aren't ones we want to keep around. Those are the ones we need to deal with me to give him a chance to step up and fit the culture. But usually they don't, and they won't, but still gonna try and if not, you know, find help them find a new home somewhere else where they can be a better fit.
Brad Giles 23:36
Yeah. And so that I too, can move up one level the aid to the promotable, you can look at them in a row, and you think, yeah, I can definitely see them at the next level, not today. But I can see kind of a bit of a path to get them there. But probably not too much further than that, at least in the foreseeable future, I can't really see that. Whereas the fourth type that I three, you can see they're just blazing a trail and a trail of success. They are taking something on the executing it amazing. And you can see if they took on the next level, they would nail that. And you can just see they can just keep on stacking on on those wins. At least people are a little bit like a horse with a horn, as I say to my daughter, which she calls a unicorn. But they're not that rare, but they're really are quite rare. But knowing that you've got one is really, it's good to know. And it's good to be able to tailor the work set to them.
Kevin Lawrence 24:44
We skipped over the a one and a one is a great fit for the job as is. They don't know. They don't want to or they're not capable of being promoted to the next level. But they could be excellent at that job for the next decade or two. The key thing we wrapped up with is you just want to test them in, to test them to calibrate to see which category they're in, whether they say they want to grow, whether they say they want to move up or not. You can give them projects and see how they handle it because they might not know until they actually do it themselves.
So this is the Growth Whisperers - thanks for listening. You know, Brad and I both have newsletters, which you can find on our websites. For the YouTube version, go to youtube.com If you have any requests for the show, you can also send a note to either of us, but to reach Brad and his newsletter evolution partners.com.au and myself Kevin Lawrence at Lawrence and co.com. So there you have it. A player's four different types, three that really count in a positive sense. Anyways, we wish you well with that. Have an excellent weekend. We'll see you next week.
Podcast Episode 88 - The Hidden Cost of Not Having a Team of All A-Players
Most organizations care about increasing performance, but they may not have enough people who are high performers to make it happen. In this episode of the Growth Whisperers podcast, Brad Giles and Kevin Lawrence dig into understanding clearly what an A-Player is, and the cost of not recruiting, developing and retaining enough A-Players.
Bringing high performers to the team can seem elusive, or too expensive - but instead, it's actually more expensive NOT to have A-Players. Brad and Kevin discuss five key factors that make up the costs to your business of not filling your team with A-Players.
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EPISODE TRANSCRIPT
Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.
Kevin Lawrence 00:13
Welcome to the Growth Whisperers podcast where everything we talk about is building enduring great companies. Because that's what Brad and I are passionate about. That's what we spend our days doing. And that's what we take a lot of pride in being a part of. I'm Kevin Lawrence. I'm here today, as always, with Brad Giles, my wonderful partner down in Australia, Brad, how's it going?
Brad Giles 00:36
Excellent. Lovely. Today, thank you. Lovely. It's warming up for summer. And that's a nice place to be.
Kevin Lawrence 00:42
Well, I'm, I'm warming up for summer-ish, because I'm down in Palm Springs, California for this recording of this episode, even though it's cold for them. It's warm for us compared to what it's like up in Canada. So let's jump right in Brad, what's your word of the day?
Brad Giles 00:58
Don't be afraid to Go Big. The reason being I had a client. And about five years ago, we set a goal. And it was certainly audacious, and it met all of the criteria. And then I will tell you the last two weeks, they made a very large acquisition. And this means that they're going to achieve their BHAG. And so the CEO emailed me and said, We're gonna hit our BHAG five years early. So we were delighted. What about yours, Kevin?
Kevin Lawrence 01:37
Mine is everyone has a story. And over the weekend, you know, got to know some sort of extended family of someone I know and, and having the time to sit and ask questions and hear people's life stories, what they've been through what they've experienced what they did for their work, their unique insights into the world. Everyone's got a story, if you've got time to sit and with them and the desire to hear it. And it's just fascinating. I just love hearing people's stories and experiences.
Kevin Lawrence 02:26
So for today's show, what are we going to talk about?
Brad Giles 02:35
It's the hidden cost of not having a team of all A-players. So maybe I'll start by just saying how this came about. One of the teams that I work with, were approached about a potential acquisition. And we had a discussion about the quality of the leadership team, because the quality of the potential Acquisition was second to none, they were absolutely impressive. And the person who is my client who I work with, they had a look around the room. And they were, you know, in a very different league, let's just say. And so we had a bit of a frank conversation about the quality of the leadership team and the impact that that is having on them. The impact is serious, and what is their B hag? And are they trying to achieve it? And are they going to be able to achieve it with the people that they've got, now that they've experienced, been in the room with a team of a players?
Kevin Lawrence 03:54
Yeah, and it's interesting, I am in Palm Springs. And as of tomorrow morning, I'll be meeting with one of my clients from the US. And they have a team of almost all A players, and the whole organization, and they're a solid organization, you know, more than 500 employees. And I'll find out tomorrow the current stats, but last we checked, it was over 60% of the whole organization was A-players. And the results they're getting even through COVID are astonishing, spectacular. I think in most organizations have based on the measures we used about 25 to 30% Maximum A-players because most organizations are you know, they care about performance, but they have a lot of people who just aren't outstanding. And so we're gonna dig into today is this thing of understanding clearly what a player is, which we'll define a bit further in a moment. But what is the cost if your team isn't all A players and we're talking about your direct team? So for example, in this organization, I'm with this CEO that I meeting with the team His direct team is all a player's. Yeah, and almost all of the people in that next layer are. But the whole organization is again, well, north of 60% of all the 500 plus people. So let's, let's define the difference between an A. and A. And by the way, this is something you know, I know, Brad, yourself and myself, I spend a lot of time on this with all of the companies we work with, because it's really about getting amazing people into those key roles or their or their was important jobs. Yeah. And obviously, anyone that reports the CEO, or is one layer away from the CEO is a pretty darn critical proof no matter what is going to be a critical role.
Brad Giles 05:40
Yeah, so the word A-player gets bandied around a bit. But really, really simply, we use the method of top grading, and we would advocate imagine a simple 2 x 2 matrix. On the one hand, on the vertical axis, you've got core values. And on the horizontal axis, you've got productivity or performance in the role. And then in the top right corner, you have a players. So then the people, as you move left to the top left corner, you would have a B player.
Kevin Lawrence 06:24
So fits that fits the culture and core values. Yes, but the results are iffy. There might be not consistent. And they're pretty good, too good.
Brad Giles 06:37
Yeah. So I want to hang out with them. They're fun to chat to. But they don't necessarily always produce the results that the company needs relative to their role, their product, you know, they don't really, their productivity isn't as good as it could be less than 50%, let's say. And then below them, we've got what we call the C players. So they are low on culture, and core values. And equally, they're low on productivity. And then obviously, to the right of that, we've got what we would call what some people would call B C's, but we would call toxic A's.
Kevin Lawrence 07:21
And those toxic A's are people who get excellent results, they get outstanding results consistently. They're just a nightmare for everyone they have to work with, or a lot of people they have to work with, they create a lot of drama, and they create a lot of friction in the business. They're often the hardest people to remove, because they are so darn productive and very good at what they do. Unfortunately, it just comes with the price for the organization. So when we're saying those A players in the top right, there are at least an 85 to 90% fit. Brad, you're good there in a very expressive face. There another has for those of you that are that aren't watching the video, Brad's face just opened up like a kid on Christmas morning. It was awesome.
So there was in terms of, of a players were like, We're someone it's an eight, like an A student. You know, in Canada, it starts at 85%. I believe in us, it's 90. But it's, you know, 85%, or better fit on culture, ideally, 90 again, and in terms of performance, you know, they're in that top 10% of all of the performers. And they consistently deliver excellent results, and they are a delight to work with. You know, you've got someone who's an A player on your team, when you're so excited to work with them, you feel honored that they're on your team, and you would hate the thought of losing them, not just because you have to replace them because they're so darn good at their job. So that's the a player. Again, toxic a player is someone that is darn good at their job that is driving me crazy. or and or other people crazy in New York.
Brad Giles 09:03
So within a player's there's actually four different types that we're going to talk about next week. But this week, we're talking about the cost and again, born of this stark realization for this team that I work with when they actually saw what it's like to be surrounded by a players. So what are the costs? Well, first of all, if you aren't surrounded by a players in your team, he creates more work for you. Yes, more work. They're unable they are unable to take on tasks they're unable to, to confidently execute tasks and you can't really push them to the next layer. You can't really push them to two execute the things that the company so desperately needs, or the team desperately needs, because you just don't have that confidence in know that they're not going to be able to do or they're going to create mayhem perhaps.
Kevin Lawrence 10:15
So said, another way is you have to manage down, you have to be more involved than you would ideally like to because the, you can't trust that the job is going to get done as expected, whether it's that if it's a toxic A, that they're going to, you know, frustrate people and you have to stay involved to manage the conflict of the drama, or for the be that they're going to get it done on time, or on quality, or on budget or on whatever it happens to be somehow, you need to basically it's like a little bit of babysitting, you got to be involved. Like like it's a seven year old child, versus if it's a 28 year old child or 27 year old child, right, yeah, very different amount of time and energy. And it sucks up a lot. In some people. Interestingly, they're so used to being involved. Sometimes they might do micromanagers themselves, but somehow they're so used to being involved didn't even notice it. And when they work with an A player, they're shocked. Because there's actually not a lot to do with an A player at all, just a little bit of guidance.
Brad Giles 11:17
And that's fascinating that you say that, because for this particular client that I'm talking about, one of the biggest problems they've got is they are just having to take everything on. And one of the reasons they were willing to talk about acquisition was that they couldn't see, they couldn't see, imagine a future where they wouldn't have to take all of the responsibility.
Kevin Lawrence 11:42
When we talk to entrepreneurs, and they're fed up and frustrated and wanting to sell their business, most of the time, most of the time is because their team is driving them crazy. Because they don't have a team that is 100% a player's for sure. So look at it basically nothing of a team at all, it's gonna take a lot more energy than doing your real CEO job. And by the way, how do you know if this is true? You're focused a lot on short term day to day stuff. Yeah. Now, little caveat here. It could be you and your own bad habits of how you're leading. It could be it might not just be the team. So when we start with companies, we try to unpack that we try to unpack Could it be that the CEO is involved too much? Are the leaders involved too much? And the team maybe has more capability? Or is it you know, the team effectiveness? And the answer often is usually a little bit of both.
Brad Giles 12:44
And you can, you know, there's a very good chance that you can work through those habits, like this is not something that's often insurmountable if one is coachable, but you can overcome that, this is a solvable problem is my point.
Kevin Lawrence 12:59
It is yeah, so that's point number one, it makes notably more work for you. And again, you can take that concept of it's like having a seven year old child or a 27 year old child, they both take different amounts of energy, notably different second one is is less achievement for the company. Because A-players use less resources to get the job done, period. They're creative, and they find ways to efficiently get things done. Where others whether it's toxic a creates a drain on your organization other ways or a B or a C, they just like they get less results, less results per pound, right less results for dollar so your organization can't achieve is because the team actually isn't as strong Remember, a player is the top 10% of talent available at the salary you are paying it's not that they cost more you've got someone so here that's making 85,000 a year who was a bee and he got so and so here this making 85,000 a year who's in a same compensation but the A and doing a visual on screen and holding my hands up. But the A gets normally better results per dollar or results per pound whatever you want to look at it. Never mind the work you have to do just the net impact or value added into the company is notably different.
Brad Giles 14:24
The visual representation was good, but the words did it justice there was no there was nothing that you missed. So imagine that you are at an off site, annual or quarterly workshop. And what you're doing is setting the priorities and the strategy for the coming 90 days or a year. And you look around and you just can't give any big projects to the people who are on the team. You can't. Let's say that you're going to implement a new CRM or a new Counting package, or you're gonna start in a new geography or something that's quite chunky? Well, if you look around the team, and you can't readily hand over big projects to them with absolute confidence, there'll be only a little bit of guidance on your part, then, you know, this is how it translates into less achievement for the company. Because if everyone can't take on a big project, if most people can't take on a big project and confidently execute it, overall, the aggregate is that you take on less big projects.
Kevin Lawrence 15:39
I'll give an example. You know, one of the companies that I was working with this was back last year. And I'll generalize a story to protect the nice people that we work with. There was one executive in a company who wasn't an A player by any stretch that, you know, would have been a low B player. Yeah, like a low performing B. And that was, yeah. They weren't highly effective. And they weren't an expert at the project that they were driving. So as a result, the project took way longer, took way more time than it should, because it's almost like, it's like getting a three year old to go and paint your house. Yeah, they're going to use more paint and take more time, and then you're going to have to still fix it anyways. And that's what this was like. And again, not for lack of desire, just not they didn't have capability. And it was so cumbersome, and complicated. And the output was okay, we needed a bit of cleanup, but it wasn't, it wasn't great. And but for the amount of energy it consumed, it was almost a crime. Because they just they didn't know what they were doing. And they just made one three year old paint your house. Yeah, that's, that's what it was like, that's what happens. And as a result, it slows down the whole organization, and it makes it harder, because you just burn more resources to get the same thing.
Brad Giles 17:18
So yeah, you're gonna achieve less as a company. So let's move on to the next one. There's more stress for the whole team, there's more stress. Why? Because team of a players who are aligned and heading in the same direction, there's very little points of friction. But when you've got a B players who aren't as productive, C players who both aren't as productive, and don't align with the values and toxic A's who don't align with the values, and those people are all doing their different kind of thing, all of those little points of misunderstanding, they compound, and they add up. And that creates more stress for the team. So even if you've got one C player, I've, I've seen a team with one C player that was just cataclysmic, like, yeah, it was just terrible. Nobody wanted to talk to this person, or sit next to them. And they would avoid them actively. And this is a leadership team of, I don't know, $30 million business. And no one wanted to talk to this individual, no one wanted to go near them for, let's just say several years,
Kevin Lawrence 18:39
We had one in a company that I worked with where there was, we'll call it a very low B, probably a C player. Yeah. And I remember one of the other it was the executive and some of the senior leaders. So like, 15 people in the room, one of the executives was so frustrated with this person, he's like, You know what we're gonna do, we're gonna put you up there and we're gonna put you up there in a hot air balloon. And then we're gonna shoot you down.
Brad Giles 19:06
It's a bit harsh.
Kevin Lawrence 19:07
It was a bit hard, but it's some of this guy was such a misfit in the company. It was incredible. And, and the whole team was just had enough of it. And so the best metaphor to think about this is it's like in a relay race. Right? If you're, if you're doing a relay race, and you've got one person that can barely run, and definitely cannot pass the baton to somebody else. That creates a lot of stress for the team, because it screws up the whole team. And you've got these people who they might not be the fastest in the world, but they can run decently and they can pass the damn baton. But this person can't do that. Yeah. And as a result, they get frustrated because they don't when they get frustrated the other person and that's obviously bad for the person that's the weak player on the team. Because they don't feel good about not being able to, you know, grab the baton or hand the baton off. properly. And so the whole team pays a price for that. And it's, it's even worse, if you have a toxic A, that's just assuming a B player who's trying to do the right things in that in that in that relay race example. But if you've got a toxic a, they just bring in all kinds of other junk. I mean, and by the way, you know, you've got a toxic a, when people threatened to or talk about or actually quit because of them. Because they're just such a nightmare. And, you know, a force to be reckoned with. And if they've stayed for a long time, they generally have some sort of power, or relationship with the CEO are the right thing that is to be able to stay there. Because if they were, you know, that kind of bad behavior, and so you just, there's some other quirky, dynamic, or weird dynamic that has that person being able to keep their role as well.
Brad Giles 20:50
But here's the thing. If you're listening to this, and you have identified, perhaps in your team, someone who isn't an A player of whatever flavor, your inaction is preventing them going to be an A player at another organization. So most of the time, it's the fit, that is the problem. And this person can go to find another job where they'll be really happy, because most of the time C players or toxic guys aren't happy, where they'll be really happy, they'll be a really good fit, and they will be an A player in that organization. It's just that this individual can't be an n a player in your organization.
Kevin Lawrence 21:36
And the other piece of other sounds that came to my mind, Brad, is you're talking about that? Oh, yeah. And if you keep a B player, or even worse, a toxic a player on the team, you are endorsing them, your culture is not what you say it is the culture is demonstrated through your actions. So if you got a toxic jerk on your team, and you let them stay there, oh, being a toxic jerk is actually okay. Actually, the CEO subconscious, or sometimes, it seemed like the CEO was okay with it or endorses it.
Brad Giles 22:13
Well, people say, Why is this person not taking action? Correct? Why? You know, so in actual fact, you, the toxic, a, may be performing terribly, they may no one want my wants to talk to them. But it actually impacts the leadership much, much worse, because it's the inaction about that, that undermines the leader, and actually can be so much more detrimental for the leaders because of their inaction. So, yep, we could do a whole episode.
Kevin Lawrence 22:46
Basically, number one more work for you. Number two, less achievement for the company number three more stress for the whole darn team. And on number four, when you don't have a players, you got to fix a lot more mistakes. A players get the job done, right. So you're gonna have more mistakes to fix. Now, whether it's relational issues, service issues, quality issues, and it's not that a players don't make mistakes, but when they do, they generally fix them themselves, quite quickly. You don't have to get involved fixing those. And I've, I've seen with a couple of toxic gays like toxic jerks, and often, some of these toxic gays are very aggressive. And sometimes it's because they're trying to hide stuff. And I've seen a number of people who were taking the ripping the company off. Yeah, we had this one guy, and he was the one guy I remember it was, um, I won't name the country, but I remember having a meeting with him. And, and he was being so rude to some of the people and aggressive. And I just came up to him and I got in his face that hey, we don't do that here. Now the CEO wasn't in the meeting, I was running the meeting on the CEOs behalf. CEO wasn't there. And I like we don't do that there. i All I know is I started to wash his hands because I thought he might take a swing at me. And although I was ready, I was just gonna, if he hit me, it would have been a bad scene. Thankfully, that didn't happen. But the point of it is, is we found out I was on this guy because he was arrogant. He was all kinds of things the company wasn't. In the end, we found out that he was embezzling or doing some funky transactions in a way that millions of dollars went a direction that they shouldn't have. And, you know, it's not shocking. I'm not saying a players are crooks. I'm just saying that sometimes there's these people that are up to all kinds of weird stuff. And nice people can do it too. So I'm not saying that's always the case. But the point of it is, is that there's a lot of mistakes and messes from either their relationship issues if they're toxic or their incompetence or mediocrity.
Brad Giles 24:57
Well it's quite possible that what you're saying as a leader, and the team is the the top of the iceberg, that then under the surface, there's a lot more mistakes and problems that you're just not aware of, because of a whole range of reasons. So, yeah, there are definitely more mistakes. And ultimately, they're coming back to you in some form or another to sort out. So that's definitely a cost. But then we've got a bonus one. There's a bonus. So if this is our four, okay, more work for you less achievement for the company, more stress for the whole team, and then more mistakes for you to resolve. But then the bonus is that if you've got bees in your team, or even C's, and if they've got anything to do with hiring these higher, low B's, and C's, right, so you're not going to have a B player on the team who's going to hire an A player. So your maintenance, you're maintaining a team that has people who aren't a player's actually compounds downward in a negative loop. Like, the more b's you get, the more low B's and C's you get, and it just continues to spiral downwards.
Kevin Lawrence 26:21
And people genuinely weak, not so good people generally hire weak not so good people who generally hire weak not so good, right? Yeah, it's it takes a confident person to hire someone more capable than them. Yep. And a lot of these B players are smart, they know that they're not, they're not performing at a spectacular level. And so many of them are intimidated by people who would be because make them look bad. And I don't fail, I don't blame them for that. There's an element of self preservation that people have, and that's understandable.
Brad Giles 26:49
But if you drop an A player into a team of B's, and C's, there's two things that's going to happen, they're either going to drop down to the level of the B's, and C's, or they're going to be out of there quickly, because they're going to look around and say, I'm not at the same caliber of these people, right? I'm in a different level, I'm out of here, like, I want to be in a winning team.
Kevin Lawrence 27:12
Or they're gonna come and tell you, this is not good, and they're gonna be frustrated with their teammates. And if you don't fix it, then they probably at some point, I have no choice but to leave. Yeah. You know, people, high performers want to work with high performers. So you had to summarize that up, is that there's, you know, lower be performers or be performers hire people like them or less, they don't generally hire people better. You know, and if someone is performing at a 78% level, they're less likely to hire someone who's going to perform at 110% level. Yeah, it's just it's and there's always exceptions. So let's kind of summarize these. So number one is, you know, top five reasons why he gotta have a team for a players because if not, it creates more work for you. There will be less results or achievement for the company, because resources are getting wasted and squandered. It just takes more energy to get stuff done. More stress for the whole team, because they're on a team with people who aren't all really strong at their roles. More mistakes for you to resolve. And then the kicker of the bonus one, and I love that. One is that those B players can tend to hire lower B's, or C's. And even if they want to subconsciously they they have, they're less likely to be hiring ace.
Brad Giles 28:27
And that's a cost that you might not have factored in to your inaction around people who aren't performing. Awesome. What a good chat, something that, you know, certainly we're passionate about, because we've seen it played out so many times over time. So interesting, quick point. This was about the hidden cost of not having a team of a player's and then next week, we're going to be talking about the four different types of a player's so be sure to look out for that episode, Episode 89 Next week. And as another quick note, Kevin, and I both produce a newsletter each week. So you can go to our websites to subscribe for that. And there's various updates and blogs and stuff that's in there. So Kevin, you can find at Lawrence and co.com and myself, you can find it evolution partners.com.au good chat today care. And thanks for listening everyone. This has been the Growth Whisperers Podcast. I'm Brad and Kevin is my partner in crime here. For the video vision, you can go to YouTube as well and find us talking on there. So good to chat. Have yourselves a great week. Look forward to chatting with you again.
Podcast Episode 87 - How to Avoid These 5 BHAG Mistakes
What common mistakes are leadership teams making with Big Hairy Audacious Goals?
If your BHAGs aren't alive, driving growth and inspiring the team, then you've probably gone down the wrong path. BHAGs should be like a North Star that helps guide you.
If a goal is worthy of the next decade of your team's creative effort, you feel great about it, and driving towards it encompasses intrinsic rewards - then you're on your way.
In this podcast, Kevin Lawrence and Brad Giles discuss why Big Hairy Audacious Goals matter, and how to make sure they are ingrained in the hearts and minds of your people.
SUBSCRIBE TO THE GROWTH WHISPERERS:
EPISODE TRANSCRIPT
Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.
Brad Giles 00:12
Hi there, and welcome to the Growth Whisperers where everything that we talk about is building enduring, great companies. As always, today I'm joined by my co host, Kevin Lawrence, who lives in Vancouver, and I live in Australia. Kevin, Hello, how are you doing today?
Kevin Lawrence 00:30
Today's a great day where I got to get out and, and hang out with some, some family and get out in a boat and get around town, do a few things. Have some time to get organized for the week, because it's my Sunday.
Brad Giles 00:54
Good to hear. So as always, we'd like to start with a word or phrase of the day, what might you have today?
Kevin Lawrence 01:03
I would say is the magic of modern science. Oh, my mom was going through some health stuff right now. And she's had a pretty rough week. And what's amazing is how quickly the medical system and science and how they know how to help people. Like it's incredible. They can quickly diagnose things, figure things out. And you know, you trust it's quite easy, at least to trust, that there's very, very highly capable people that can deal with almost any situation. So I'm just really impressed by doctors and nurses. And that's a field that I couldn't ever see myself doing. But just yeah, the what science is capable of doing is spectacular. And I'm very in awe of what they can do.
Brad Giles 01:46
That's good. I'm fascinated to see how you're going to stitch these two together as you normally do. Mine is about digging into the numbers. And I've got a client we were working earlier today. And we discovered that they've switched from b2b to b2c model. They don't really have a lot of competencies in that area. And we discovered that when they're talking to a customer, and the customer says no, in fact, we're just letting them go, rather than putting him into some kind of marketing funnel to because it's no it's really short for not right now. And so we wanted to we identified that and we've built that out. And you know, we could really, perhaps even double our conversion rate. So that's, that's what's on my mind today. Love it.
Kevin Lawrence 02:37
So it's using them is how using numbers to help improve the miracles of modern science, because they use a lot of data. Yeah, there's a lot of data. So it's numbers and science, and how they work together to come up with better conclusions. A bit of a week. So together, but we're gonna run with it. So let's dig into today. This is a topic that will be a lot of fun today, and a short one
Brad Giles 03:09
We have not yet spoken about big hairy, audacious goals on the podcast. So today, we're talking about the five main big hairy audacious goal or BHAG mistakes, the five main BHAG mistakes, because we, you know, for a lot of people, they know the phrase has become common in business culture, obviously coined initially by Jim Collins. Yeah. But so many times I see people just butcher BHAGs.
Kevin Lawrence 03:52
Yeah, that we see. And so let's just start with defining what a BHAG is a big, hairy audacious goal. It's it's a goal that's meant to lead a company into the future. And what Collins found in his research and Good to Great, the Great, good, great or built the last. One of those two earlier books is that the enduring great companies, one of the things that he found is that many of them had B hags were in the comparison companies they didn't. And the whole idea is it's a massive goal of what yeah, what you want to be when you grew up, but they're usually, you know, pretty, pretty, pretty hairy and audacious. Like, they're really, really things that you can't see happening with lots of organizations that are run with them. And we first set them It almost takes people's breath away, and they people can't even believe it. But it's a massive mechanism to be a catalyst to stimulate progress and keep people really engaged. Much like, you know, the US had that that version of it was like to put a man on the moon. Right? Yeah, a human on the moon would be a more appropriate way to say it today. But that was an initially it was a B hag where they just they said we Want to do that and they rallied like crazy. And you know, most people believe that they did it. You know, there's always the people who believe things didn't happen, but you know that they have the they have video footage and that they achieve that massive goal.
Brad Giles 05:13
Yep. So Jim Collins has this Yin Yang symbol I'm sure you've all seen the Yin Yang, it's a circle, and it's got one side of it is black. And once I've it is white, one side says, protect the core. So that's about the values and the purpose and the ideology. The other side is stimulate project progress. A part of that stimulating progress is this big, hairy, audacious goal. I like to say to teams, when we're setting and B hag that there's perhaps a 70% chance that we could hit it A and then B, there's someone in the room who's kind of muttering, I think you guys might be a little bit insane. Like that sounds a little bit too far out there. Now, doesn't mean it needs to be completely unrealistic. But it needs to be audacious within it. Yes. Definition. Yeah,
Kevin Lawrence 06:01
absolutely. So we got, you know, five points here to really are five common mistakes. Number one is that it's generally entrepreneur who's motivated by revenue, and they pick the well, we're going to be $100 million company or a billion dollar company, two of the most common ones that we see. But there's that's not tied into anything. Besides, we're just going to do big numbers. That's not I mean, look, if that works for you, please go ahead. We fight hard not to have that because based on really doing it, well, it should sit right in the center of what Collins calls your hedgehog principle. Hedgehog is kind of three intersection intersecting circles in a Venn diagram. And it's What can you be the best in the world at? What do you deeply passionate about, and what drives your economic engine or what he calls profit per X? No, a profit driver in your company now figured out your hedgehog is your own his exercise, and we normally set that initially before we do the B hag, but the B hag should be right in the middle of all those it should, it should relate nicely to all of those things. Doing 100 million of revenue or a billion of revenue doesn't relate to much of that.
Brad Giles 07:14
Because in terms of underlying strategic logic, all that we're doing is saying, what's the next biggest incremental number? And then we'll just call that our goal. So there isn't an underlying set of Yes, prevailing evidence and logic that can tell us how, why that makes sense. So it when, as practitioners for many decades, between the two of us, we look at these types of big numbers, like 100 million or a billion as just being this is just like, primary school, this is just this is yes.
Kevin Lawrence 07:53
What does it No, it says, it just says, we're gonna get big, which is not a bad thing. But when you do it through the Hedgehog, you're applying a strategic filter to it and weaving it into the strategy of your business. So that's the first big mistake is it doesn't fit into or relate to your hedgehog.
Brad Giles 08:11
So what I like to say on that is, imagine that the Big Hairy Audacious Goal is a mountain that we're climbing. And the Hedgehog is like you're driving a car up the mountain, that the Hedgehog is the guardrail that stops us falling off the mountain. So the hedgehog maintains the discipline through that journey over and over like time, yeah, over time. And therefore, to reverse engineer that when we begin to set the be hag, what we're doing is we're looking, and we're saying, If we maintain discipline at the center of that Venn diagram, for 10 to 30 years, where could that possibly take us and that's how we set
Kevin Lawrence 08:50
the goal some way, awesome way to put it. And so that's the next piece number two, the mistake people make is they get the timeframe wrong. Oh my god. And now it's meant to be 10 to 25 or 30 years, which means it's far enough in the future that logic shouldn't prevail. It shouldn't be about logic. So there's two mistakes on the timing one, people don't think far enough out, and they have a three to five year goal, right, or a short term goal. That's not what this is. It's meant to be very far in the future. So you can think big, dream big, and not be caught up in today's environment. The second mistake that people make on that is they pick a specific date, they're going to achieve it. And they say we're gonna achieve, you know, 2500, whatever it happens to be by 2025 because it rhymes and it sounds good. The one thing I've seen with B hags and I think we had a conversation with this before, but what I've seen is to be able to predict the year where you land it. It's incredibly, incredibly difficult. And especially when you're looking that far out to plan how something's going to land in 12 to 15 years. Good luck, you know, and And so that's the second mistake. So the two mistakes, not having a long enough time frame, and to picking a specific year.
Brad Giles 10:09
So many times I've heard people say, so our BHAG is in three years to do X, or in five years to do X. Okay, that's not a BHAG, that's just a three year goal or a five year goal. And that's fine, it's good to have those things. But it's it, it is a completely different conversation to think this is what we want to achieve in 10 to 30 years, acknowledging that there's a 20 year gap in between, this is where we want to get this is the mountain that we're climbing, this is not a short term goal, three years will come around quite quickly. So you know, you, that's a fundamental rule there. So let's move on to number three. They don't know or Cape aren't capable of making it happened. So there has to be a connection within the Hedgehog, of what you can be the best in the world at so that's drawn from your competencies, what are you competent in achieving? Now, maybe you could buy in another, another business, you could acquire a business to help with that. But how can we continue on this path, executing relentlessly on the boring basics and continuing to get better around what we can be the best in the world at what drives our profit per X ray, our sole kind of economic profit focus, and what we're deeply passionate about? That connects to that first one, but you've got it, if you can't be the best in the world at it, then it can't form a part of your core business.
Kevin Lawrence 11:45
Yeah, so there's two mistakes people make. One is that they're not focused on things that are in their capabilities, ie, things that they're amazing at and can be the best in the world that they're focused on. Secondly, is that they limit themselves based on those same things as well. Because if you can see a nice little easy path to get your B hag, it's not right. It should challenge your existing capabilities. And there should be massive holes in your plan that you don't know how to fill yet. So this should be massive. So within your capabilities, but dramatic stretches and big gaps, because if it's too easy, it's not going to get you to make you're not going to make the changes required to continue to get better and better and move towards that behind. So we need to really challenge you, although I really challenge you on stuff that you're good at.
Brad Giles 12:37
The fourth mistake is the big hairy, audacious goal actually inspiring? Is it something that people think that'd be awesome if we could do that? Because if your bag is simply something like, we're gonna sell 2 million pairs of glasses, that that might be just a number, but does it actually get the creative juices of the team flowing? Is it a worthy Northstar? And what I like to say to teams is, is, as we sit here today, if you could look back 10 years and say, I've devoted 10 years of creative energy, and we all have short careers, like 40 years or something, I've created 10 years of my creative energy to this big, hairy, audacious goal. Is it worth the effort? And if they're not vigorously saying, yes, then I'd say is that really a good BHAG?
Kevin Lawrence 13:38
Right. And many people will have they'll call it a mission, which is, you know, a term Colin's used earlier on, but the be hag is a very specific way of looking at it is that we're going to be the leading supplier of paint products to the consumers of Canada and United States, and be great corporate stewards, and take care of the environment. And do this and do this through sustainability. And purple butterflies, and green puppy dogs, and happy days, and a wonderful rainbow. Like people have these kind of mission statements that are in this. It's just a bunch of corporate blah, blah, blah. There's nothing in it. That is a single point of excitement that you can drive people to is just everything including, it's like people bring brainstormed, hey, we'll be really cool to achieve in the company. They put it up on a big whiteboard, and then they made it into one paragraph. It doesn't work. It's not engaging, it needs to be boiled down to simple impactful things. And you know, and if you take for example, the best b hags are connected to the company's purpose. So if it was to sell 2 million pairs of glasses, maybe you landed on that, you got to bring it to life. You know if the company was about the book, the joy of seeing life vividly. just made that up. ends up, we're gonna change the life of 2 million people. And we're gonna allow them to more easily and affordably Enjoy, enjoy the world vividly. And there was a story and a reason behind that. And we were doing a countdown to how many people were happening to help them every week. And we were donating extra pairs are old pairs to charity. And now that like, there's a whole thing around that you can build. But just 2000 glasses, isn't that exciting there? It needs to mean something. And that's where ideally it taps back into the purpose. And that's what the best companies do. But then it takes us number five. You got to breathe life into these things constantly. It becomes wallpaper before you know it wallpaper meaning words that disappear, you don't even see it. And it's got to be ingrained into the hearts and minds of the entire company. And he got to keep it there and keep it alive. Because it's like our rallying cry. Yeah, it's like who we are and what we're about and the difference that we're making. And for a lot of companies, they sometimes start strong, but then it fades really, really quickly, just like culture, it fades away and slips into mediocrity before you know it.
Brad Giles 16:40
Oh, it does, it does, we've got a tool that we use called actions to live, which is what we need to do in the next 90 days to get more people to more deeply understand core values, core purpose, big, hairy, audacious goal. And it's like brushing your teeth, it's something that you always need to do, I want to just touch on an example of a big, hairy, audacious goal. Tesla, the electric car company, to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible. And so for that big, hairy, audacious goal, the employees in the leadership team, the employees in the business, they can all get behind that. And they all believe in that. And they all must think to themselves, this is worth devoting my creative energies to, and that's what we want. We want it to be inspiring and compelling. And not just another blah, blah goal that's placed it up on the wall, as you said, turning, you're turning into wallpaper.
Kevin Lawrence 17:49
Yeah, there's lots of ways a lot of our client BHAGs don't want to share them, because that's very, you know, it's private strategic tools that they're using. But there's a lot of great ones, it takes a bunch of time to get it right. It requires a lot of debate. But if you go through and get your hedgehog nailed, and then you go and work on your behalf, and then you, you know, sync it back with your purpose to make sure it's in sync with that. It's incredibly powerful. And it keeps you focused for the long haul, which is inspired and focus for the long haul, which is what it's about. So as a reference is a great article from Harvard Business Review, Jim Collins, wrote, I think Jerry Porras was also part of it, it was called Building your company's vision. It's a great article, we recommend people use it all the time. And it walks you through purpose B hag. And some of those other tools in there are really, really, really is very powerful. It just it's bothersome when it's misused. And it's not that compelling, powerful tool it can be or it's also bothersome when they have a good one. But it fades to wallpaper like we've talked about. So a question to leave you with is, is your it? Hopefully you have one? And if you do is it relevant? does it align your team? And is it inspiring the growth that it should in your company? And when sometimes you might need your updated or dusted off, which obviously we can help you with if needed. People that we work with can help you with it. But if you don't know what it do you think it would make a difference to how your company operate if you don't think you need it, and that's your choice. But if you don't have one, consider it and go and read that article and we'll give you some great ideas to start.
Brad Giles 19:27
Awesome. So let's review do a quick review of the five main BHAG mistakes that we see. Number one, it should fit your hedgehog. You can't build a BHAG with any substance unless you've nailed your hedgehog unless you're confident about the hedgehog. Number two, it should be 10 to 30 years and you've said before 10 to 25. But the point is it's not three and it's not five years it's at a minimum 10 years at a maximum 30 years. And then number three is that you must be you must know that you can draw a parallel to the capabilities to execute on that even if it takes a long time, kept you want to walk us through four and five.
Kevin Lawrence 20:13
Yeah, and needs to be inspiring, kind of like a North Star Southern Cross that helps to guide you. And it's worthy of the next decade of you and your team's creative effort that you'll feel great about it. And driving towards this needs to be that intrinsic reward. And finally, it needs to be ingrained in the hearts and minds of your people. You may have an awesome one that's faded into the background and needs to be alive and kicking in the company. So thanks for listening. This has been the growth whisperers podcast with Brad and I'm Kevin if you haven't subscribed, please hit the subscribe button and even share it with some of your friends and colleagues that might find it valuable. For the video version youtube.com Search the growth whisperers to reach Brad evolution partners.com.au and myself, Lawrence and co.com Hope you have an awesome week.
Podcast Episode 86 - What is Productive Paranoia, and Why it's a Critical Leadership Tool
What is productive paranoia and why is it so important in leadership?
Many leaders think that optimists are the best people to lead companies, but in fact the data says that optimists have a much higher chance of failing. Instead, the leaders who always ask 'what if, what if, what if?' are the ones who build enduring great companies.
You can only learn if you survive your mistakes, and the only way to survive your mistakes is to be constantly on the lookout for things that can impact your plans.
In this episode, Brad Giles and Kevin Lawrence talk about the concept of productive paranoia, and why it's a critical leadership tool.
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EPISODE TRANSCRIPT
Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.
Kevin Lawrence 00:12
Welcome to the Growth Whisperers podcast where everything we talk about is about building enduring, great companies. That's something that Brad, my co host and I are very passionate about. We spend a big chunk of our life helping people to do that. And we're here to talk with you about it. So I'm Kevin Lawrence and I'm joined by Brad Giles. We're on episode 86 - getting close to 100. Brad, how are you doing today?
Brad Giles 00:42
Very good. I seem to be in the winter, that doesn't seem to end normally. Two or three months ago, we'd be having a change in the season, but the winter just keeps on going.How you doing today?
Kevin Lawrence 00:55
I'm doing great. Yeah, we're doing a beautiful white snow on the mountains across from us here. And you can see them on it. It's just beautiful. It's a little chilly, but I'm doing great. I'm insanely grateful. Today we'll talk about as we get into the show. Today, we're talking about productive paranoia, a concept that Jim Collins has written extensively about in his books, in particular, his book, Great by Choice, something that I live in breathe. And I was affirmed, by the way he wrote about it and has talked about it with us, and which has made me realize that my paranoia is a healthy thing, especially when you put it to work. So we're gonna dig into that today. But we'll get to that in a minute before that, what is your Word of the Day?
Brad Giles 01:38
It's hiring. Hiring people. It seems like every meeting I go to, we're talking about hiring, we're talking about people who are leaving, we've got 2% unemployment here now. So even the people who don't want to work, actually not working if sorry, they are working, if that makes sense. Even the people who who have no interest in working are somehow been forced to work. Every single meeting, it's about how can we get people? Some people have left? Yeah, hiring is absolutely front of mind at the moment. What about yours? What's your thought or?
Kevin Lawrence 02:19
Well, mine is keeping strategic is similar to the to where you're coming from we are in an incredibly booming time where people are frantically executing, trying to keep up and many are so busy getting things done, they don't have the time to zoom out and keep strategic when situations, you know, even need to go into hiring one is someone, one of the clients who work with one of his key leaders is like, we just need to hire people. Let's just pay whatever it takes. We just got to get more people. Yeah, well, that is a tactical response, which may not be very smart in the long term. But you know, it's not very strategic, potentially. But you know, getting lost up in tactical and panic kicks in. So keeping strategic around hiring would be a great theme for today's show. If we were to blend those two together. In day, we could do another one just on that. So hey, let's jump right into today. We're going to be a real, real quick episode here today. So let's talk about this thing called productive paranoia a bit. And I'll just maybe start off with an example. Just before you do. So of course, if you sit with and be worried about things and paranoid and just cycle in cycle on those thoughts. Yeah, that is a really bad thing, because you'll drive yourself absolutely insane. Although Collins talks those called productive paranoia, where you are, you could call worried or scanning the environment and worried about what could happen. But then you could do something about it. So instead of staying an obsessive worry mode, you notice a risk, boom, let's put this counter piece in there. We notice a risk, let's put something else in here. So it's scanning and then actively doing something versus scanning and scanning and then scanning and scanning and not doing anything.
Brad Giles 04:19
And I guess the opposite of constantly scanning for something bad to happen is not scanning, and then not finding things that pop up,
Kevin Lawrence 04:32
which we would call the optimists in our society. And you would think that optimists would be some of the most successful people and they're not. They're generally successful for short periods of time. Yeah. Not enduring. No, because pure optimism and you know, and pure optimism is really dangerous. It's wonderful. And you have to have that optimism. But you also need to be looking at the other side of the coin. In the right amount, otherwise, you know, you're going to get taken out by things that you tried to optimize think you just Optimally optimistically bounce over. Yeah, though it's it's that combination, but pure optimism is correlated with great taking risks that often take your game.
Brad Giles 05:19
So the only way to survive is to have an element of productive paranoia, or you can't build an enduring great business, unless you constantly scan to use your word constantly scanning saying, Well, what if this happens, or whatever that happens, because if you're not doing that, and you're an optimist, you can get taken out.
Kevin Lawrence 05:42
Exactly. And so for example, we were in a meeting, I'll be a little bit general about it just generic, because it's a private client issue. But we're in a meeting talking about a massive move ahead for this company. And everyone's excited about it, and they get to do something new, and they're really excited about it, the bank is more than willing to give them the money for their aspiration, all this stuff. I'm like, I can't support it. I can't support it. Because I haven't seen the scenario planning, where we come up with a list of all the brutal things that could take us out on this new expansion. And until we can see it, and to see that we can either mitigate it, or we can absorb it. Um, we shouldn't do it. And it's, it's not that I don't believe in this project, I believe in the project. But they haven't done the work because they're going to lever up the balance sheet with a lot more debt. And, and they but they haven't done the work to show is this gonna put us in a situation where it could kill us? ie we, you know, we lose the company? Because we haven't done that yet. So, but everyone else is all excited and pushing ahead. And I'm like, no bloody way. I mean, the CEOs also on this, and some other people are there. But a lot of people don't. And next thing you know, you do this big expansion. And next and you're sitting there going, oops, we over planned it or overbuilt at or overestimate?
Brad Giles 07:08
Yeah. So imagine you're in a leadership team that's really positive, you've got an exciting big, hairy, audacious goal, a strategy that you believe in, and you're not perhaps doing as well, we've spoken about the qualitative and quantitative aspects of employee and customer surveys. So you're kind of in an ivory tower a little bit, you're kind of separated from the data, but you're in this super positive environment. That's a great way to get knocked out. Because you're not always saying, Well, what if this happens, or what happens if that happens? And I come off a series of big wins.
Kevin Lawrence 07:43
Yeah. And the market is booming. And there's the demand and the customers want more? All that good stuff. You just got to keep looking over your shoulder and not just blindly pushing ahead.
Brad Giles 07:59
Yeah, so I, we were speaking before the show, and I mentioned that before the Coronavirus really took hold at the end of March 2020. I sent out my first email on February the second, which was really, I guess, six to seven weeks before it started to significantly hit the headlines, let's say. And I was primarily looking at it thinking, if this is happening in China, if we've got this virus, what's it going to do if it gets out of China, I obviously, but then be really primarily thinking about if a number of the people in your firm or get it or get the virus at once. It's going to mean that you're not going to be able to continue to operate for a month or two. And that's going to have devastating consequences. Now, it obviously went on to do other things. But that was absolutely born of productive paranoia.
Kevin Lawrence 09:03
Yeah. And Brad, we're brothers in paranoia were similar. You know, I was ordering in addition to additional supplies from my place. I was ordering in 95 masks. Yep. And it was late Feb. I believe I used to go back and look at my Amazon history. I was I know I ordered six of the last n 95 masks available on Amazon Canada. Yeah, I got the last ones that I could find. And they were the three M and 95. And I was already doing those things because he can see it coming. Yeah, but that's my nature. It's um, it's interesting and even as we talked about earlier, but in Western Canada, where I live, there's been a set of anchors with a devastating storm. There are four main arteries that can highways that take you from Vancouver to the rest of the country. All four got washed out on Sunday night as I was driving through them. It's almost like in the movies, where the you know, the road is falling away or the bridges falling away and behind you We didn't see it happen. But we can see that this was a really bad scenario as we're detouring. And even the main highway, we take the cold, the Coca Cola was washed out. So we were taking another one. And you know, within an hour or so after we went through it all, it all came up, flow came apart, and we were some of the last people to make it through. And, you know, the point of it being is that as that's happening, and I and my son normally drive back and forth between Vancouver and a place called Kelowna, every week, separately, but we also have we call emergency bags, we got a 72 hour bag in the car in the winter, because it's a mountain pass. And, you know, that's part of that productive paranoia. And I've talked about this in other shows, not only do I have the best snow tires, on my truck that you can get, and they're studded. And I have sandbags. And I have a 72 hour bag and a bunch of other safety emergency stuff in there. And if I go to a different car, I just transfer everything up sandbags that stays in the truck, but for different reasons. But it's because you know, you can get stuck in those highways for a long time. And some people just go there with, you know, with nothing. And that's okay. All I know is if some people got trapped, we would have been fine for a couple of days wouldn't have liked it, when we had all the supplies we needed. Because it's unknown, and no one would have expected this to happen. You just expect in the winter bad stuff happens on these mountain roads. And it's being super prepared. And it's a mindset. And it's a healthy mindset. When you do something about there are some people that would be so paranoid that they wouldn't drive over a mountain pass in the winter. That's a that's that's almost a debilitating paranoia versus constructively taking steps to set yourself up to win.
Brad Giles 11:43
Yeah, that's an excellent, excellent analogy. So the point here is that the only mistakes you can learn from are the ones you survive. Yes. Otherwise, you get taken out. And so bad things or dangerous things happen all the time. And by embracing the myriad of possible dangers, people with productive paranoia put themselves in a superior position to overcome danger.
Kevin Lawrence 12:12
Because they're just more prepared. Yeah, that's it. That's all that it is. It was interesting, even I've got a guy I know fairly well, that it has his own helicopter implies is one helicopter. And I wasn't sure the first time I wanted that one. When I went up, he's got one. He's amazing jet helicopters. It's outstanding. But you know, when I went up with him, and I'm watching how we do it, man, he's full of paranoia. Yeah, he's a fun loving guy. Normally, when he's in a helicopter, he's like, he's all business. All concerned, Tom, watch out for this, you know, and it's like, and for a recreational pilot, they're not as experienced. But if that's what that paranoia helps you to the point where he's taking the course, where you can land a helicopter with no engine, there's a special technique where you can put them on the ground fairly safely. Anyway, the point of it is, is it's a certain attribute that's very, very helpful in business. And that's it, we'll talk a bit more. And so some of the main points, like one point main thing is, you know, you're doing this when you're asking, you know, what if, what if, what if you're looking at different scenarios? And what could happen again, versus just the bold blind optimism?
Brad Giles 13:23
Yeah. And being distracted by other things. Because what if this end? What if 90% of the time or 99% of the time you're not? Right? It's the 1% of the time that enables you to survive. It's okay. People may think, oh, that person's always worried about, you know, all these things, and nothing ever turns out until the 1% of the time that they do. And that's, that's a great way to kind of summarize productive paranoia. What if? What if? What if, what if this customer fails or doesn't pay? What if our product doesn't get delivered on time? What if our employees, half of our employees resigned, I had a leadership team that I know of where they're in, I don't work with them. But 40% of the leadership team and mid management team all resigned within about a month because they were targeted by the competitors. That's why one of the reasons my chicken was was hiring. So what if that happens? What if we have it's the what if, what if, what if the plane crashes?
Kevin Lawrence 14:36
And that's why we don't have the whole executive team play on the same plane? Right? Like all of these different things, where people look at things and have plans to mitigate unforeseen, foreseen and unforeseen risk? Yeah, and that's the idea. Like, I remember, I was talking with one CEO, he was like, you know, I don't know when the next crazy thing is going to happen in In our business or our economy, but I knew it, I do know that it will. I don't know what or when, but I know that it will. And I want to be prepared for that.
Brad Giles 15:11
So there's a really sorry, tip, there's a really important thing that that's between the lines of what you just said, Okay. And that is the difference. Jim Collins said that the difference between the great companies and the good companies in his studies was that the employees in the great companies felt that they had a responsibilities, they had a responsibility, whereas in the other companies that executives felt that they had a job. And that responsibility leads to and connects to productive paranoia. Like, what if this happens, what if that there's a real important connection there,
Kevin Lawrence 15:52
there is add, but we also want to say the other side of the coin is someone who's always worried about everything, and just an absolute downer, where they worry about it, whine about it, but they don't take anything to counteract it, we are not saying that no team should continuity look exactly look for the problems, and then have plans to mitigate them, so that you can handle it. So the second point is be prepared for everything that comes up, and especially the things you can't expect. And that's why, you know, for a lot of companies, now making sure that you know that they keep extra cash and Collins found in his research companies that were in during the Great had fat balance sheets, basically. So they could weather any storm, and still be good. And that's the key piece. How do you weather any storm a once in 100 year storm? How do you weather it so you can continue to build your organization going forward?
Brad Giles 16:47
I remember I started working with a client must have been seven or eight years ago. And they were like, many small kind of to medium businesses. I mean, they were like a 20 $40 million business in that region. And, you know, they had cash reserves that were very thin, as is often the case. And I kept harassing them about building their cash. And I said, Don't worry, just build it up, build it up, build it up. And then heaven forbid, let's go two years into the future. And what had happened is the industry changed something big happen. And suddenly they needed those reserves that we'd built up. And it was, you know, one of the reasons just by saying what if,
Kevin Lawrence 17:35
like I said, we're brothers in this, Brad, because I push people to build cash reserves like crazy, you know, and a rule of thumb I've been playing with is about 10% of revenue in cash, or equivalent 10%. So if you're a $200 million business, that's about 20 million bucks cash. Yeah. And that's a range where it starts to be decent. Now, I had a whole conversation about some of my clients cash, or 30 Day Cash or 60 Day cash assets that can be liquidated. And one of my clients has a great strategy, he looks at some assets that the company has. Yep. And says what's the 30 day price? In a bad economy? Hmm. And so he looks at it. So basically, if he's got $20 million of equity in this asset, yep. But the 30 day price in a bad economy, you know, he might have 12 million, let's call it 10. So he looks at that's a $10 million cash reserve sitting there because I can liquidate that asset if I have to. Yeah, but he's doubled, discounted it based on those factors. But that's again, that's part of that productive paranoia.
Kevin Lawrence 18:43
And I'm going when I talk about cash reserves, people would say, Oh, we've got an overdraft or we've got something else doesn't count. It doesn't count. Because in the bad times, the banks are not necessarily Yes. Or no, your friend. No. So exactly. Interestingly, yes. And a lot of people even when it comes to cash, I get very passionate about this, you know, they might have, you know, if they're doing really well, they have $100 million of cash, but then they'll go use the bank's money to do what they need to do to keep the 100 million, because they won't have access to it, it depending on you know, how up and down a particular industry is or what they're doing, right. They're in a fairly up and down business, and industry. So the point of it is, that's another piece of productive paranoia. Yeah, um, you know, so the third point here is really is all this great thinking, but you got to act on them. You got to plan A, B, and C, and you don't want to spend a lot of time obsessing over these risks. You quickly want to find a way to mitigate them and know that you're good. And then if you're still good, then proceed optimistically. But it's getting the mitigated up front and looking at all the ugly stuff up front. Again, that's not rocket science is key piece. And then the other four were the result of this is you can generally be more More aggressive and positive because you know, the worst case scenarios are covered. Yeah, already got it handled, and you're good, almost no matter what you think, could happen, because you don't want a lot of Colin's his research, he found a lot of these companies are actually were risk adverse and very, very careful hence this concept. So just for time, Brad, I've got an example here, maybe you want to share a couple examples you want if you want to share the example about growth.
Brad Giles 20:27
Yeah, Andy Grove, any Grove, founder and CEO of Intel, the micro chip maker, or computer chip maker. He was one of the examples in terms of productive paranoia. So his quote was, he's always looking for the black cloud in the silver lining. And if we go back to the optimist remark that we made before, the silver lining is driven by optimists, they always see the silver lining, but there's always something else that we've got to look for. So that's a it's a really, it's a good way to look at it. And to think, yeah, there are silver linings, but there are also black clouds as well. And we need to know both.
Kevin Lawrence 21:15
Yes. And Andy Grove, you know, another thing I love from him is that he had his book, I think it's called high output management. You're the one you're talking about from his book, only the Paranoid Survive, but high output management, he talked about, always having we call the helpful Cassandra. That's someone who would criticize his ideas in every team or project he was on. He wanted the person that would speak up and look for the problems and look for the gaps in the thinking. And that was He's nice, very, very, very successful CEO, Herbert Keller is known for predicting 11 of the last three recessions. That was in Colin's book, Great by Choice. Yeah, he's the only buddy west, southwest airlines, amazing CEO, amazing company. But he predicted 11 times he predicted recessions, but they only happened three times, because that's how his brain is wired. Looking at. There's lots of other examples. I know I'm remembering. And an amazing CEO that I've had the chance to work with for more than a decade. I remember I gave him a copy of Great by Choice Collins's book, and we talked about this. And then he instantly grabbed his pen and put his name. And he wrote his name on the inside of the book, like, what are you doing? I was wondering what some of the ticket. So it's a prime example. And the CEO who's making you know, he's making a seven figure income, he's not short of cash, but he's writing his name in the damn book, because he doesn't want his book to get stolen. Right. And, and this guy was a great example of productive paranoia, and an outstanding CEO. So there's lots of different examples of bookkeeping cash, you know, doing risk analysis, taking small steps, like Jim calls, you know, bullets, then cannonballs, and things like suppliers, you know, you know, having multiple suppliers for a different piece. That's why some companies don't want one supplier to be you know, 70% of the business, they want to carve it up amongst a few different ones. It's just it's risk management.
Brad Giles 23:12
So I actually in my book, the fifth chapter was about succession planning. And that's not for your kids to take over the business that's exactly around productive paranoia. And so I cover off within my Thrive this book that I've written, it's about the roles, it's about the products and services that are at risk. It's the suppliers that are at risk. It's evaluating opportunities, new stuff against a set of criteria, and each leader in the business has a clear successor. So that's another way to another angle to think about it. Yeah, is that it's forcing yourself to say, what if, what if, what if?
Kevin Lawrence 23:55
Yep. And I will tell you, I share one example where you know, and productive paranoia is always good, right? It's healthy. But sometimes we relax around things and lose it. And that's the risk, we get complacent. And I remember one time we were with a group of people going on a drive and one of my passions is driving. And we're going on this amazing drive through the northern US and Canada and going up to the racetrack. And my son and I are in a car that's a very very fast car. We got to back for dealership, they did a service, it was all good to go. And we're going at like we're really driving past and at one point we started to notice the car started to feel funny. And actually my son was driving at the time sort of feel funny, we pull over well, the wheel was coming off. And, and the wheel nuts were already backed off. Like if you know if the bolt say would have been, you know, an inch and a half two inches sticking out with us not only Oh, it was already halfway out like the wheel, the wheel was destroyed and you know, as much as you know, when I'm gonna drive like that and going to the One of the habits we have at the racetrack is we check the torque on the wheel nuts before we go. Hmm. Yeah, you know, just to double check, because if something comes loose, it can be devastating. You know, and even though you take it to the dealership, which is the brand you bought the car from, which is one of the top car brands in the world, all these things, you should be able to trust them. But you shouldn't, you should still double check your torques and things like that. It's just a good habit, and I didn't, and it could have destroyed the car or killed us, you know, if that will come off at high speed. And it's just one of these things productive. If I was productively paranoid, I would always check those things. And there's a discipline to this, versus just getting comfortable and casual. And there's one other saying would be trust and verify when my case I didn't verify. So the question to leave you with is, what could you do to be more effectively paranoid, productively paranoid, hopefully paranoid? What could you worry about in your business that could wipe your business out? Or, obviously, if it's a safety of safety, and it could harm someone, that's a whole other piece? But what could you do in your business to be more productively paranoid? And then maybe what could you do personally?
Brad Giles 26:10
Yeah, indeed, it's, it's such a powerful concept. And I'm so glad that we've covered it up today. So let's have a quick review of some of the key points here in order to wrap up. So really, the it's about asking what if, what if, what if, but the only mistakes you can learn from other ones use survive, every business will go through an experience mistakes, and this purpose is to help you to survive. So as I said, first of all, it's about asking, what if? What if, what if it enables you to be prepared for everything that comes up, and especially the things that you can't expect kept doing to take us on to three and four and onwards?
Kevin Lawrence 26:53
Yes and he basically you just act on his risks and how plan ABC or a plan to mitigate it so that you can put them to the back of your mind and push ahead aggressively, and as a result, be more confident. Because you've stared the worst case scenarios in the face, you make a better decision to start with. But then you have more confidence because your decisions are built on granite, versus, you know, floating on a pedal on the water, exaggerating a bit. And then you know the examples we've talked about. And you know, just to wrap up the quote from Andy Grove, only the Paranoid Survive. And as your business becomes bigger, not always about survival. It's about your responsibility to your customers and your employees. And your job is to make sure this organization exists, and is healthy years from today.
Brad Giles 27:41
Awesome, good episode talking about what is productive paranoia, and why it's a critical leadership tool. So we hope that you've enjoyed today's episode, as always, our podcasts are available on YouTube, obviously searching for the Growth Whisperers and you can find Kevin at Lawrence and co.com
Podcast Episode 85 - Get the Most From Your Strategic Planning Framework
There are many frameworks and systems that claim to have the tools to help entrepreneurs get what they want from their business. But how do you know which strategic planning framework you should use for your business?
In this episode of the Growth Whisperers podcast, Kevin Lawrence and Brad Giles discuss the six things to consider when evaluating which strategic planning framework is best for you.
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EPISODE TRANSCRIPT
Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.
Brad Giles 00:13
Welcome to The Growth Whisperers where everything that we talk about is building enduring great companies. I'm Brad Giles. And today, as always, I'm joined with by my co host, Kevin Lawrence. Hello, Kevin, how are things today with you?
Kevin Lawrence 00:27
Things are great, Brad. It's a beautiful day in the early part of our winter here in Canada, a little bit of sun shining through life was good. Lots of great things happening. This is busy time for us.
Brad Giles 00:43
Same here. But the opposite! Obviously, we're heading towards our first weekend over 31 degrees. So we're looking forward to that. Tell me, we always like to start with a word or phrase of the day, what perhaps potentially might be your word for today?
Kevin Lawrence 01:01
Yeah, it's competitive advantage. You know, we did a show last week show, we talked about some things around strategy. But it's about competitive advantages in a meeting with a great company that I work with today. And we were talking about strategy. And I noticed the conversation was about brand and positioning. But not the core competitive advantage of the enterprise and how it's hard when you're in the middle of a business, and you're fighting battles and making things happen to stay focused on competitive advantage. So yeah, that's where I'm at today. Just how important that is.
Brad Giles 01:36
Awesome. Yeah, I, since we recorded that last week, I used last week's episode, which was episode 84, the seven common strategy mistakes from Michael Porter. So I use those as a stress test with the team for the first time. Are you falling into one of these strategy mistakes, and it worked really, really, really well. So my thanks for asking my word of the day is web three, web three. So we've got web two at the moment. And web three involves the blockchain and a whole range of those types of things. But I think it's going to have a very big effect. I've done quite a lot of research in it lately. And I actually spent the last two days with one of my clients who is involved in the blockchain. And so yeah, I've, that's what's on my mind is web three, and how it's going to impact all of business and society.
Kevin Lawrence 02:34
So how web three can help improve your competitive strategy. We weave these things together. And being tied into these trends and things in the world is a big part of competitive strategy. In all seriousness, yeah, is knowing you know, how fast or how slow do we move towards these new technologies, or new platforms or things that are happening? So let's jump into today's show? What are we talking about? Brad? And this is something we did funny for everyone listening. And thank you for listening, by the way. Um, you know, we went, you know, we this is episode 85. Five, or like, of course, we've talked about this topic. This is like the core of what we spend our days doing. And we haven't so the first time and almost, we're almost at episode 100. And we haven't talked about the power of strategic planning, and what you need in a strategic planning framework.
Brad Giles 03:25
There is a lot you didn't when we did the review, you didn't believe me? You were like, Come on, we must have done it. I'm like, No, we didn't do it. Yeah, so today, we're talking about how to get the most from a strategic planning framework. It's like I said, it's our bread and butter. It's what we do every single day is work with tools to help companies build strategy, a plan, everything that they do. And so yeah, that's, that's what we're talking about today. Interesting, that we haven't spoken about before, but very interesting subject. Because I think that there are lots of frameworks out there, from, you know, a tiny coach who's just out there having a go through to the big four accounting firms. And there are different flavors for different customers at the buffet. Some people like the chicken, some people like the beef, some people like to fish, but you've got to have the right framework to suit your kind of organization. If you're a little local coffee shop. Maybe some of the stuff that we do may not be appropriate, if you've just got one store and two employees.
Kevin Lawrence 04:46
But you want to have 20 stores and 200 employees.
Brad Giles 04:50
Very, very, very good pickup there. Thank you. Yeah, so there are different models in terms of strategic planning and you've got to find the right fit.
Kevin Lawrence 04:59
Yeah, and we had a model is important because it gives you the keyword framework to help you with your thinking. All it is, is it's to help improve your thinking and organize your thoughts. So you don't lose sight of your plans, once you get them clear. And often frameworks help you to get clear. And stay clear would be a great way of putting it. So we got a whole bunch of points. But the main thing of strategic planning, and it's, you know, you don't want to have to convince people to do it, because it works because it aligns your thinking and with the rest of your team and rest of your company. Ideally, one of the main things is helping people to get time to zoom out and focus on the business versus being in the business caught up on all the issues and the fires and stuff. And it's interesting. We found when we implement the strategic planning frameworks that we work with mostly framework, it takes about 18 months on average, until the system settles down, things get calm and clear. And that people can actually get more strategic, because they're just catching up on all the fires and the tactical, and, but they think the machine starts to go and he gets into a nice rhythm. And again, it's a rhythm of being able to be more on it. So then you can have better perspective and think farther ahead and think more about how your business will be enduring and great.
Brad Giles 06:20
Yeah, so a strategic planning framework is the framework that you apply to work on the business, rather than in the business. That's the distinction, right?
Kevin Lawrence 06:30
Yes. And the core of the work that we do is a framework called Scaling up that originally was called Rockefeller habits. And, and you know, Brad, that's where Brad and I met is around that framework. And I was writing the new book scaling up and doing a lot of work on building the next iteration of that framework. And Brad was a super keen coach wanting to learn everything to master it. And that's, and that's where we connected. And we have other frameworks that we use around that, around that. Around that scaling up framework, or with a one page strategic plan. We have lots of other frameworks. But that's like a core backbone. That is a commonality that Brad and I have. But there's lots of other ones, Brad does more work with one called Three hag that a friend of ours, Shannon has, has developed, and lots and lots of other ones. But the point of it is, is having a simple framework, which we'll talk about more that allows you to get on the business, and help improve your business. Yeah. So the first point that we want to make here is no matter what the framework, and there are some bad ones, I mean, we see a lot of really bad ones. And, again, they usually fall into category and point two, which we'll get to in a minute. But the thing to get more important in framework is the coach, or the facilitator, or the advisor, who is the expert in it, and who will lead you through it cuz you can have the perfect framework. But if you have the person walking through it, that doesn't know what they're doing, they're kind of an amateur or they're just, you know, for whatever or they just not a good fit for you. They could be excellent, but not the right person for you, because fit matters as well. Yeah, it doesn't, it doesn't really matter how good the framework is, you won't get the value out of it.
Brad Giles 08:21
A friend of ours, Martin Green, who's based out of New Jersey, he has a great saying around this. And he likens it to kitchen remodelling. And he will say, if I'm going to get someone to remodel my kitchen, I'm not really worried about what the tools they're going to use to do it. Because I'm guessing that some people use one tool and others use another. But broadly, what matters is how the kitchen turns out, and what's the quality of the workmanship. And so it's a really good way to look at it. Because different there are different types of coaches, there are many different types of coaches, and they all use their own tools, and that's okay. But it's not all about the tools. Because the tools, the people who own or develop the tools want you to think that it's all about the tools but in terms of the results that you really want. It's actually all about the quality and the experience and the mastery of the advisor or coach.
Kevin Lawrence 09:20
Yep 100% So a couple things that that that that coach or advisor will do consultant is they'll own the agenda for the meeting and make sure you talk about the right things. They will make sure the right preparation is done so the meeting is effective. They'll run the meeting and love many examples of what great looks like that's what we call in my book your oxygen mask first we call 14x advisors, which is episode 60 You know you want these masters to make it easier so I was talking with one CEO about this today. And any finally got someone to start doing this for him. But we're talking about I said why are you doing all the planning He's got a booming business, and why are you doing all the planning for these meetings and all the organizing and figuring out the agenda and the exercises, that's not your job. Your job is to delegate that someone else. So just you know, the coach makes a big difference, because they just pull it all together and make it work. And they got to be a good fit. And ideally, they're very, very strong and very experienced at what they do.
Brad Giles 10:25
We know we've spoken before about how coaches or advisors make the difference. But it's not all about the framework or the tool, the framework is really a very important tool to get the result that you want. But But knowing that it's not all the framework.
Kevin Lawrence 10:48
Exactly. So let's go into the second point. And it's that simple frameworks of scale another. Now this is the part where the framework doesn't matter. Because it needs to be simple in some of the stuff I've seen from companies that our firm started to work with. My gosh, are they complex, and they got four goals of this type, and then three drivers of this type, and then seven initiatives. And it's just like, you've got 27 things going on at once that that's not simple enough. And unfortunately, you know, people who aren't masters of things create a lot of complexity, because that's not their thing. So we had years ago, simplicity, scales, and we're looking for minimum viable products, what's the least you need to make this effective? Because you'll be more likely to be able to follow through on it.
Brad Giles 11:39
Anyone can make these things more complex, but only when you've got mastery or a really deep understanding, can you actually make it simple. And it's the deep insights, when you make it simple. That connects to all of the other pieces. When I'm working with teams, I always use the word jigsaw, because whatever built bit, that we've just built, whatever component of the framework we've just built, it has to interlock with all of the other ones. Simply, yes. And so yeah, it's simple really matters. But it can't be simplistic. Like you can oversimplify things. And, you know, we've certainly seen examples out there without naming any, from anybody, maybe it works for them. But sometimes, some people can make it too simplistic. And it doesn't have a deep rooted understanding,
Kevin Lawrence 12:39
or it doesn't have enough teeth to it or enough to make it work. And yeah, it's a great point, Brad. So we're, you know, Brandon iron. And you know, we're simple hunters, who are looking for simple, impactful tools all the time. And then we test them, make sure they create the value. Interesting. As a side note, you know, I also say to new people that join our team, is that you need to do something close to 100 times before you'll be a master. Yeah. And when you get closer to 100 times, it'll get so simple. And so obvious. Yeah, it's almost like learning to ride a bike.
Brad Giles 13:15
Yesterday I was running a workshop two day workshop, and I happen to spill apple juice on my laptop. And the CEO was what she was terrified. He was really, really worried. And I said, Look, even if the laptop completely stops working, I can just keep going. Like I know this stuff. I've got the agenda. All I need is to know what are the points we've got to cover off? I could do it without the laptop, no worries, because I've done it so many times.
Kevin Lawrence 13:45
There you go. Yeah, so it gets the and it gets easier. Er, as again, the CEO today says, you know, it's like nobody situation I know, I've seen situations three or 400 times where a new coach or advisor will have seen it three or four times. Yeah. And it's just it's because we're pattern recognition, people that you know, seeing it again and again and doing it's just it's mastering. Okay, let's bring that point up. Boy, I got lots of quick points. We love this one.
Brad Giles 14:15
So with the one page strategic plan, the tool we both know really well. What I've seen people do is butcher that. And if they take things out, okay, so they'll pick something, I don't know, brand promise or the actions or the Prophet parex. And they don't really understand it. And so they'll take one or two or three or four things out of it. And then they'll make it their own in their mind and the prevailing
Kevin Lawrence 14:43
and they're proud of it, and they're proud of it because they don't know any better.
Brad Giles 14:47
Yeah. And I look at I think, why have you taken those things are so important and
Kevin Lawrence 14:52
critical in and that's the point is that it's got to be simple but not simplistic. It will be like somebody's removing the radiator from the car, because they're removing weight, and I don't think it's important. And that's why I have a rule, that's a good one. And that's why I have a rule, a rule with people is, until you've used a framework for a few years, don't touch it. Because touching, it assumes that you're smarter than the person who built it.
Brad Giles 15:26
And that is rarely the case,t that could be your best analogy that I've heard you like that. And I actually really liked that one.
Kevin Lawrence 15:32
That's a good one, huh? You know, metaphors powerful. All right. So the point of it is, is that, you know, keep it simple. And, and, and experience will help you to keep it simple as is as well, a good framework. So so the next thing is visual and culture to align number three, vision and culture to align again, it's not rocket science, the challenge is a lot of people will create a vision and map out a culture. And it's a squishy, not sharp, it's not distinct in terms of the way your company is. And it's sometimes it's just it could, you could just replace your company name and put any company name into it. So there's lots to that. But the idea behind it is, you know, it's like you're kind of building the bus that people are going to get on to go on this journey with you. And they got to be clear about the bus and excited about the journey.
Brad Giles 16:29
So your strategic planning framework must incorporate culture and helping you to build an aligned culture, because culture eats strategy for breakfast.
Kevin Lawrence 16:43
Yes, if you don't have the right people that are lined up and engaged, it doesn't matter what your strategy is.
Brad Giles 16:48
Yeah, it's got to include your culture, your strategy and your execution.
Kevin Lawrence 16:54
That's for sure. Um, so let's go on before. And we're probably say, the strategy to win a look at we've talked a lot about this in Episode 84, the last episode, but the root of it is a lot of people make a lot of strategic mistakes, and many people don't eat, they have a certain level the have a strategic plan, and they can spell the word strategy. But there ain't no strategy in any part of the plan. It's just goals. It's just an execution plan. It's a plan that will have them competing directly against their competitors, with no differentiation that allow them to make a healthy profit or healthy sustainable profits. So look, we've done lots of discussions around strategy, last episode is one of the best ones.
Brad Giles 17:48
But it's the strategy that allows you to win in the medium to long term, your strategy is not writing a date three years from now, and then doubling your revenue, and then writing it on a piece of paper and saying, Yep, that's our strategy. That is only setting a goal strategy is how you will be different. So the strategic planning framework isn't goal setting, it's not just saying what we're going to do, it should encapsulate and incorporate things like what can you be the best in the world at what are we deeply passionate about? What our single economic denominator or profit per eggs, and then beyond that, how we're going to be different in the market, which is a deeper dive into our strategy. So it's got to include all of the strategic aspects of your business.
Kevin Lawrence 18:34
Awesome. So is number four, number five, then you get to the goal setting part that Brad just mentioned, and where it helps you to prioritize your goals to the top three, or four or five, not more than that, because it's too complex. But this is the more common piece that we will see in companies, although it's usually loose, but you know, prioritize those top goals for three to five years, when you probably will double your business at least, and for the year, and ideally for the quarter. And this is the good old stuff about knowing what matters most and smart goals. And believe it or not, time and time and time again, SMART goals specific, measurable, realistic, time bound, missed one. Attainable, Realistic time bound. It's very hard to do because people have conceptual goals, project goals, but not goals that have a tangible outcome for the business.
Brad Giles 19:30
Yeah, many simple, overly simple strategic planning frameworks, as we've alluded to, are only about goal setting. Okay, but what our framework has to be able to do is to incorporate the strategy and the culture and the goal setting and the execution as well. How are we executing it? It's not just what we've got to do, why we've got to do it, but also how we're going to do it. And part of the reason it comes from Harvard Business School, they said that 92% of strategy Geez, fail due to poor execution. So it's got to incorporate all of those things. Yep.
Kevin Lawrence 20:07
As Jim Collins says, you know, success is relentless execution of the boring basics. It's not rocket science. And in companies who work with getting the execution engines is going well as strong, which takes us into number six, which is a key driver of the execution engine, which is the accountability and learning loop. It's basically standing deliver every month on your progress, and standard, deliver every quarter on accomplishment of your quarterly goals, financials, KPIs, your goals and projects around your people. And then the actual company execution goals, and how and how you did if you're not
Brad Giles 20:47
looking at the business plan that you built a year ago? And thinking how simple that was, it was perhaps too simple, or what was the problem there? I can't believe that we were so simple, then. Then are you really growing as a team? A stretch on your strategic thinking muscles?
Kevin Lawrence 21:09
Yes, and this is where a coach can add a lot about you. It's hard for some CEOs and leaders to do this. Because in order to create growth, you have to create tension. And accountability should create tension, because then it leads to learning and improving. So it's the tension meeting where you, you can celebrate. And then you got to look at the things that can be better next time around and you go through these quarterly cycles and things do should get better and better and faster, but without a whole pile attention. It doesn't work and my favorite, favorite question to ask at these meetings when someone doesn't achieve a goal. And this is from another coach that you and I know in common Dave Bini, who was in Chicago. Now he's in Las Vegas. Love Dave, you know, an ex corporate executive. And he said, You know, when someone doesn't deliver, here is the question you ask? Was it bad strategy? Or was it bad execution? And those are the only two options either you didn't think well, or you didn't work? Well. Yeah. But both of them are you. And everything else is just a dog ate my homework excuse. So anyways, thanks, Dave, for that one, bad strategy, or bad execution, which was it, which again, forces the learning to be better next time.
Brad Giles 22:30
There's actually a nuance to that second part from Dave. And that is, my, my team didn't do the things that I told them to do. I didn't set the goal, right, in a smart manner. I couldn't be bothered. I was distracted. Like, he's got about five or six other little selections that really hone in on. So tell me, why did you not achieve that goal? Yeah, shout out to Dave Biney. And he's got a book called 55 questions, which is excellent. Correct?
Kevin Lawrence 22:59
Yep. Yep. We know a lot of great people that, again, where we've picked up lots of these little simple things. And again, Dave's question, instead of yelling and screaming, instead of insulting someone that doesn't deliver whatever it happens to be, when you ask that question, it just puts all the pressure back on their shoulders. And then their brain has to do the thinking to fix it. So it's great.
Brad Giles 23:21
So to close that one out, what we're saying is that the strategic framework has to include an accountability loop. If it's with a coach, then that's even better.
Kevin Lawrence 23:35
So that's our stuff on what you know what you need to get the most from a strategic planning network. So we'll go maybe we'll go for the first three, Brad, you go through the last three. First of all, the coach, the coach counts more than a framework, the frameworks got to be good. Ideally, the coach is great. And ideally, there are 14 Extra, they've done this 14 times before. Second is when he gets to the framework, simple framework scale, and you don't want to home bake this, you don't want to make it yourself. You want a real simple tool that's proven, and that you can work with to get the meaningful clarity and focus you need. And then three, it's got to help you to define a vision and culture that you're going to align people around so they can drive that bus towards wherever you want to achieve next.
Brad Giles 24:19
Number four, your strategic planning framework must include a clear strategy to win not just goals, but how you're going to be different relative to the competitors and meet the customers needs. Number five, your strategic planning framework must be clear about the top goals that you've got, it must include how you're going to execute that strategy. And then number six, it must include accountability in a learning loop. There must be some kind of mechanism within there that can help you to be able to close the accountability loop so that you're able to do the end Coaches are a great mechanism to help with that.
Kevin Lawrence 25:04
Awesome. Well, it's great discussion Brad's Pakatan a concept that we're both very passionate about because we spend a lot of time using and developing and enhancing these tools. So thanks for listening. This has been the growth whisperers Podcast. I'm Kevin Lawrence and Brad Giles is my co host here. For the video version go to youtube.com Search for the growth whisperers to reach Brad evolution partners.com.au and to reach me Lawrence and co.com Hope you have an awesome week and find some things in the show to dial in and improve your own strategic planning process and to make sure it's got enough strategy in the planning. Have a good one!
Podcast Episode 84 - Seven Common Strategy Mistakes
How do you know your strategy will be effective?
This week Kevin and Brad discuss Michael Porter's Seven Strategy Mistakes - and how & why leadership teams often make these common strategy mistakes.
Michael Porter is one of the greatest strategy thinkers from the last century. We can all use his simple checklist to help ensure our business strategy is on the right track.