DO THEY SEE WHAT YOU ARE SAYING?
A few years ago, my dad made a humorous observation: People have a habit of firming up their convictions in conversation by asking the question, “Do you see what I’m saying?” On the surface, a question like that doesn’t really make any sense—you really can’t see what someone is saying. Later it dawned on me that the expression made all the sense in the world.
My dad is a visionary. He was my first mentor, and he taught me how to lead, manage, communicate, and deal with people, whether it be one or one thousand. He is one of only 140 Hall of Fame members of the National Speakers Association. He also built the number one real estate sales training company from the ground up and is a two-time finalist for the Ernst & Young Entrepreneur of the Year award.
As he well knows, most entrepreneurs can clearly see their vision. Their problem is that they make the mistake of thinking that everyone else in the organization sees it too. In most cases, they don’t, and as a result, leaders end up frustrated, staff ends up confused, and great visions are left unrealized.
The process of gaining traction starts here. Clarify your vision and you will make better decisions about people, processes, finances, strategies, and customers.
Entrepreneurs must get their vision out of their heads and down onto paper. From there, they must share it with their organization so that everyone can see where the company is going and determine if they want to go there with you. By getting everyone on the same page, you will find that problems get solved more quickly. In The Five Dysfunctions of a Team, Patrick Lencioni credits a friend who built an organization from a start-up to a billion dollars in revenue with the following observation: “If you could get all the people in an organization rowing in the same direction, you could dominate any industry, in any market, against any competition, at any time.”
A technology company that recently began The EOS Process came to me after hitting the ceiling for two straight years. The biggest problem was that the leadership team couldn’t put its finger on why. There ended up being many reasons, but the key factor was that the company had no central vision. It was providing three very different services to the market, and because people had to change hats up to several times an hour to cater to different clients, the internal operations were needlessly complex.
With EOS, the company made the decision to focus in one direction. In two sessions, the leadership team clearly defined their vision of who they really were, what they really wanted to do, and where they really wanted to go. In a very short time, they simplified the organization and freed up resources by shedding two of its services. This allowed people to focus and excel in one area with one type of client. Now the company has clear goals and a laser-focused marketing strategy. Not surprisingly, it’s once again beginning to grow. As a result of these decisions, it recently had its best first quarter ever, generating a 125 percent increase in revenue over the previous year’s first quarter.
The first step is letting go because the vision you’re about to clarify can’t be about you. It has to define something bigger. You need to create a vision that points the way to a greater good. The sooner you do that, the sooner you will make better decisions that build an enduring company. To learn how to create a strong vision, you must first answer eight important questions.
Let’s start by dispelling the myth that a company’s vision has to be a hundred pages long. You might need that level of detail for financing, but rarely is it necessary to build a great company. By simply answering eight questions, you and your leadership team should be able to clearly state your vision and ultimately enable everyone in the organization to “see” where you want to go.
The first tool in EOS is the Vision/Traction Organizer (V/TO). Not only is the V/TO designed to get your vision out of your head and onto paper, it will help you answer these eight questions. It’s meant to help you create a clear picture of where the company is going and how it will get there. Most importantly, it does so simply, by boiling your vision down to only two pages. An example of a V/TO appears on the next page, and an electronic version of the V/TO can be downloaded free at www.eosworldwide.com/vto.
I first learned the power of simplicity in planning from my previous business partner, Ed Escobar. Along with my dad, Ed and I used to co-own and run a real estate sales training company. Once, Ed told me about the time prior to my joining the organization, when he had presented a quite lengthy business plan to my dad. After the first look, my dad said, “Can you condense it to 10 pages?” A little frustrated, Ed replied, “Sure.” After some work he came back with a 10-page business plan. My dad liked it, but wondered aloud, “Could you condense it to two?” A little more perturbed, Ed complied once again. After some more work, the two-page business plan was created. When my dad’s request to condense it to one page proved impossible, the idea of a two-page business plan was born. That simplistic business plan was the catalyst for the creation of the #1 real estate sales training company in North America. This led Ed to create a simplified business planning tool known as the Life Business Management Plan. It was the first tool I ever used for business planning.
That notion was eventually helped along by Verne Harnish. Author of Mastering the Rockefeller Habits, highly sought-after growth guru, founder of the Young Entrepreneurs’ Organization (now the Entrepreneurs’ Organization), and a regular contributor to Fortune Small Business, Harnish introduced me to his One-Page Strategic Plan, an additional inspiration for the V/TO.
In his book The One Page Business Plan, Jim Horan also deflates several popular myths, two of which are that “business plans must be long to be good” and that they take “six months, a significant amount of the owner’s and key staff members’ time, and expensive consultants” to create. As Horan understood, neither of these things is true. The simplified approach to strategic planning is generally the best approach.
What is vision? It’s clearly defining who and what your organization is, where it’s going and how it’s going to get there. It should be simple to articulate your vision, because it’s probably already in your head. Unfortunately, if there are five people on your leadership team, there may be five different variations of the company vision. The goal is to get you all on the same page. To the degree everyone on the team can answer the following eight questions and absolutely agree, you will have a clear vision.
By answering the following eight questions and filling out the V/TO, we will clarify exactly what your vision is. Let’s get started. The eight questions are as follows:
1. What are your core values?
2. What is your core focus?
3. What is your 10-year target?
4. What is your marketing strategy?
5. What is your three-year picture?
6. What is your one-year plan?
7. What are your quarterly Rocks?
8. What are your issues?
Please note that it’s recommended that you try to answer all eight questions in a full one-or two-day off-site session.
WHAT ARE YOUR CORE VALUES?
What are core values? They are a small set of vital and timeless guiding principles for your company. A good rule of thumb is to limit them to somewhere between three and seven. As always, less is more. These core values define your culture and who you truly are as people. When they are clear, you’ll find they attract like-minded people to your organization. You will also find that when they are applied in your organization, they will weed out the people that don’t fit. Once they’re defined, you must hire, fire, review, reward, and recognize people based on these core values. This is how to build a thriving culture around them.
Unfortunately, most organizations have not defined their core values, and the resultant lack of clarity hinders their growth. When your people don’t embrace your core values, their actions hurt your cause more than help it. By not defining what your values are, you have no way of knowing who believes in them and who doesn’t.
When Image One started The EOS Process, the leadership team learned early on that we would be spending a few hours determining Image One’s core values. Company co-owner Rob Dube argued that they must solve issues first. “We prepared a list of issues, and there are a ton,” he said. “We should do this core-value thing after we solve those.” In reply, I asked him to take a leap of faith and told him that if he didn’t like the way our core-value search was going after an hour, we could move on to the list of issues. After the process was over, Rob changed his tune. “I didn’t just like the way it was going, I loved it,” he recalls. “I’ve been sold ever since. I tell that story to all new Image One team members and when I speak to groups about EOS. Defining core values changed our company, the way we do business, and the way we select our people.”
Much has already been written on the power of identifying core values and instilling them in an organization. In the course of writing Built to Last, Jim Collins and Jerry I. Porras spent six years researching organizations that have endured through recessions and depressions for decades. One of their key findings was that in every case, these companies defined their core values in the very early stages and built a culture of people around them.
Despite that, the perceived value of core values has diminished as of late. After all the hype in the 1990s, they are now frequently regarded as clichéd and tired. This, ironically, is what makes them more vital than ever. In this book, they are the first step to forming your vision.
One important thing to understand is that core values already exist within your organization—they’ve just been lost in the day-to-day chaos. Your task is merely a matter of rediscovering what they are and instilling them as the rules you play by.
The following is the exact process all EOS clients follow for discovering their core values. First, schedule time with your leadership team. I recommend a minimum of two hours, preferably away from the office, as strategic thinking is always best done off-premises. In that meeting, you proceed as follows:
STEP 1
Have each member list three people who, if you could clone them, would lead you to market domination. These three names should preferably come from inside the organization. Once each person has his or her three, post all of the names on a whiteboard for everyone to see.
STEP 2
Go over the names and list the characteristics that those people embody. What are the qualities they exemplify? What do they do that puts them on the list? Start with a long list so that you can see all the possibilities. To help your thought process, here is a list of real-world core values:
• Unequivocal excellence
• Continually strives for perfection
• Wins
• Does the right thing
• Compassion
• Honesty and integrity
• Hungry for achievement
• Is enthusiastic, energetic, tenacious, and competitive
• Encourages individual ability and creativity
• Maintains accountability
• Services the customer above all else
• Works hard
• Is never satisfied
• Is interested in continuous self-improvement
• Helps first
• Exhibits professionalism
• Encourages individual initiative
• Growth-oriented
• Treats everyone with respect
• Provides opportunity based on merit; no one is entitled to anything
• Has creativity, dreams, and imagination
• Has personal integrity
• Isn’t cynical
• Exhibits modesty and humility alongside confidence
• Practices fanatical attention to consistency and detail
• Is committed
• Understands the value of reputation
• Is fun
• Is fair
• Encourages teamwork
STEP 3
Your organization’s core values are somewhere in that long list you’ve just created. Now, narrow it down. In your first edit, circle which ones are truly important, draw a line through the ones that are not, and combine those that are similar. Remember, the rule of thumb is between three and seven; after the first round, you should have the list down to somewhere between five and 15.
STEP 4
Here is where you’re going to make some tough decisions. Through group discussion and debate, decide which values really belong and are truly core. Remember, your goal is to get your list down to between three and seven.
Here are some examples of EOS clients’ real-world core values:
McKinley
• Can do
• Gumby™
• Service
• Results
• Adroit
Schechter Wealth Strategies
• Clients’ needs first—always
• A complete “WOW” experience
• A special place to be
• Cutting-edge knowledge—we are the experts
Zoup! Fresh Soup Company
• Action-oriented
• “Can Do” attitude
• No jerks
• Open and honest
• Passion for the brand
Gumby Trademark and Copyright Notice™, and © Premavision, Inc. and Prema Toy Co.
Randall Industries
• Collaboration
• Enthusiastic, energetic, tenacious, and hardworking
• Honesty and integrity
• Humility
• Pride in work
• Ability to adapt/adjust
Professional Grounds Services
• We do whatever it takes in every situation
• We have fun
• We are passionate about our work
• We have integrity in all that we do
Don’t run out and tell everyone immediately after you’ve established your core values. Instead, let them simmer for 30 days and then meet one last time as a team to sign off once and for all on the final list.
The next step in the process is to communicate these core values to the rest of the organization. It’s time to create your presentation speech. People won’t necessarily understand what you mean if you merely state each core value. That’s why each one needs to be backed up with stories, analogies, and creative illustrations to drive home its importance.
When writing your core values speech, make sure you word each core value with the same pattern or tense (e.g., “To always …” or “We always …”). Make sure to bullet-point three to five supporting examples under each. This will give you a rough guide of how the speech should be laid out. From there, you can improvise.
Below is an example of an actual outline for a core values speech.
Team-oriented approach
• You can get what you want by helping others get what they want. It’s all about service. How can we serve our customers and fellow employees?
• Strive to always act for the greater good of the organization, not our self-interest.
• We should view ourselves as playmakers—a good assist is often more satisfying than getting the goal in sports and at work.
• In sports, team play overcomes raw talent if that talent is not playing together. This applies equally in the work environment.
• We are a team and presently a very good one. Let’s together aspire and work to become great!
Commitment to excellence
• As the saying goes, “We only get one chance to make a first impression.” Let’s make it a good one.
• The written word. It should be clear, concise, and directly to the point. My dad is fond of saying, “If I had more time, I would have written a shorter letter.” His point is this: Let every word tell.
• Use we vs. I. Using “we” signifies you are a representative of an organization larger than yourself. The use of “I” can connote ego.
• Be professional when the situation calls for it, and, likewise, feel free to be casual in the right circumstances. Use your emotional intelligence here. However, when in doubt, err on the side of professionalism and conservatism.
• Reputation outweighs profit every time.
Problem-solving approach
• What do we do well? Solve problems.
• How do we solve problems well?
• Get the facts
• State the issues correctly and succinctly
• Ask the right questions
• Engage in unrestricted but efficient debate
• Listen carefully to all arguments
• Based on relevant facts and persuasive argument decide next course of action
• Assign responsibility for “next steps”
• Promptly execute on agreed-upon course of action
• Follow up on progress at next meeting
• Sometimes a decision is made by not making a decision.
• Sometimes a “wrong decision” produces a better outcome than no decision at all. Velocity of decision-making is often as important as the quality of the decision. Other times protracted contemplation is warranted in order to get the right outcome. This is an art, not a science. Experience counts here.
Candor
• Open and honest communication should be our goal.
• We can all pursue improvement if we are constructively apprised of our strengths and shortcomings.
• Be clear and honest, yet sensitive and supportive.
• Avoid “talking down” to others.
• Seek to communicate with proper balance of confidence and humility.
• When a decision is made that is not in line with your recommendation, simply move on. Don’t take it personally. It does not reflect negatively on the value of your input.
Fairness
• Demand results.
• Have a sense of equity. What is a just result under the facts?
• It’s OK to be tough when circumstances call for it, but do not take unfair advantage of your strength.
• Be compassionate.
• If you’re dealing with a ruthless or unethical opponent, fight hard but always within the rules of engagement. Don’t fall into the trap of stooping to his or her level.
Balance
• Work smart. Do what is necessary to get the job done right.
• Valuable output is the greatest measure, not hours put in. Anyone can keep busy, but that does not equate to productivity.
• The story of the accountant who works until 11 p.m. during tax season but has ample time for golf/family in the off-season months—an example of life in balance?
• Volunteer in the community. Always seek to give back. Involve your family.
For more inspiration, here is a complete core value speech as it was delivered to the 51 employees at Wolff Group by the co-owner, Stuart Wolff:
We at Wolff Group are about to embark on our 10-year anniversary! One decade in business as Wolff Group!
But actually, nothing is more important than the number 51.
Yes, 51. That’s the number of individuals, people—yes, you—that make up the Wolff Group team, the Wolff Group family. Here are a few more numbers: We could not have been in business for 10 years with four offices in three states as one team if it were not for each and every one of you. Each and every one of you adds something to define who we as Wolff Group are. We are one of the leaders in our industry, yes, but we are so much more.
Enough about numbers, let’s use some words. Words such as:
Integrity and honesty
Hard work
Service-oriented
Dedicated
Teamwork
The words above describe us as Wolff Group. These words describe what makes us tick, what drives our passion, what is at our core, the heart of Wolff Group, the heart of us. These words describe a part of each and every one of you.
Why do customers do business with Wolff Group—with a Scott*, with a Tina, with a Bill, with a Lynn, with a Josh, with a Debbie, with a Hank, with a Barb, with a Sean, with a Steve, with a Kelly, just to name a few?
Because these people I just mentioned and all of you understand the importance of treating others with respect, and being honest, sincere, and trustworthy. We know how important …
Integrity and honesty are to a relationship, any relationship, whether it be a business or personal one. Tie that in with a sincere interest in understanding the needs of our customers, listening to their needs, and being ready to assist when needed. To jump in and help out makes us …
Service-oriented. This is why when a customer like [ABC Company] calls and tells Tina that the new product is on their menu next week and the supplier is out of stock, Barb stops what she is doing and adds onto the supplier’s order to take care of the increased demand for this product. And then again when we find out that the supplier’s order is on hold due to a credit issue and Debbie has to stop what she is doing to help get that deduction cleared so the order will ship on time. That shows that we are …
Dedicated and don’t mind Hard Work. Then Sean gets an urgent call from [XYZ Company] on a Thursday afternoon saying, “We need you in a sales meeting first thing tomorrow morning with [PDQ Company].” So Sean calls Debbie in a panic to help him out and put together a custom flyer for the next morning that she completes and e-mails to Sean at 1:00 a.m. that night. That proves we thrive on …
Teamwork. We respond with a yes, we can do it for you, we can make it happen. This is a team of service-oriented individuals that are focused on their customer needs, work hard, and are ready to do whatever it takes! I can go on sharing more and more stories, but luckily for all of you, I will just name a few.
One thing you will notice about these words is that they’re virtues that we can’t teach in a class or train you on; they are part of what makes up each and every one of you. It’s your core, these are your core values, and it’s what makes your heart go pitter-patter every day. Whether it is in your upbringing or in your genes, I am not really sure, but one thing is for sure: People with these virtues are the ones we want to be a part of our team, of our family. Continuing to be committed to finding the right people will be one of the keys to taking Wolff Group to the next level.
Identifying what makes us tick is important, because it lays the groundwork for who we are, where we are going, how we are going to get there, and when. We are on a path that will take us to places we have never been before, and things we have not achieved before. We are on a path that will send us and drive us to wherever we want to go. It is a very exciting time at Wolff Group. I am so glad that each and every one of you is a part of it.
I am driven and dedicated to making the next 10 years at Wolff Group the best ever. I hope you will all join me for this ride—it’s going to be fun! Here’s to our next decade of blazing a new trail!”
This core value speech was a tipping point for Stu Wolff to catapult his company to four times its size. He delivered this speech five years ago, and since then, with clarity of his culture, he and his partner decided to part ways due to a lack of core value fit. He found a new partner with matching core values.
Once he built a strong culture and crystallized his business model, he then acquired three companies that doubled the size of his company and recently completed the acquisition of an equal-sized company.
Wolff Group is now a $16-million company with a strong culture—very well run and well respected in its industry.
Your core values should become a guiding force in your organization and should be incorporated into your hiring process. When you interview employee candidates, they need to hear that speech. They need to know who you are. It’s easy to find people with the right skill set, but you want the one that rows in your direction. You will find that your hiring success ratio will increase if you evaluate applicants’ core values before their skill. Every one of my clients follows this exact same process. The reason? It works.
Once your speech is written, delivered, and incorporated into your hiring process, it will become common language within your organization, and that’s where your core values will start to come to life. There are many creative ways to keep them alive. For example, one particular client with an amazing culture names each of its conference rooms after a core value. McKinley has a core value called “Gumby.” It gave each of its employees a Gumby doll with an attached label explaining that Gumby is flexible, helpful, optimistic, honest and pure, adventurous, fearless, loving, and everybody’s friend.
I’ve worked with many clients that have acquired other companies, merged with other companies, and have been acquired (incidentally, five of my clients have been acquired, and in every case, they sold for unusually high multiples and the acquiring company said they were the best-run small company they’d ever seen). The number one reason those deals were successful and continue their success is due to core value alignment. I advised every client to start each due-diligence process with core value fit; if there’s a fit, everything flows. If not, I advise them not to move forward.
In short, it doesn’t matter what your core values are as much as it does that you’ve clearly defined, communicated, and are living them as an organization. Only then can you truly surround yourself with the people who will prepare your organization for growth.
Work on establishing your core values now. Once you’re finished, plug them into the V/TO.
WHAT IS YOUR CORE FOCUS?
It doesn’t take much for an organization to get off track in the hustle and bustle of the business world. Businesses can easily become distracted by opportunities that are wolves in sheep’s clothing. Others falsely assume that since they are succeeding in one business, they can succeed in any. Others simply get bored.
Your job as a leadership team is to establish your organization’s core focus and not to let anything distract you from that. Many things have the potential to distract us from our core focus. Steve, a member of one leadership team, calls it “shiny stuff.” A competitor, a new idea, a new product, and poor advice that looks like good advice at the time are just a few examples.
The central concept of a core focus has been given many different names over time, including “mission statement,” “vision statement,” “core business,” “sweet spot,” “the zone,” and “the ball” (as in “keep your eye on the”). In his book The 8th Habit, Stephen Covey calls it “voice.” Dan Sullivan calls it Unique Ability®. And in Good to Great, Jim Collins calls it “the hedgehog concept.” I call it core focus because it should come from your company’s core and you must stay laser-focused on it.
Russell H. Conwell’s story “Acres of Diamonds” illustrates this point well. To paraphrase: There was once a man named Ali who owned a large farm with many orchards. Ali was perfectly content with his lot in life until one day, when a local priest told him how the Almighty had created diamonds, and how one stone the size of his thumb was worth enough to purchase an entire county. As the story goes, Ali went to bed a poor man. He sold his farm and set out to seek a fortune in diamonds.
After years of searching all over Palestine and Europe and not finding a single diamond, he ended up penniless. In a fit of despair, he threw himself into the raging tide and drowned. Soon afterward, the purchaser of Ali’s farm was visited by the same priest that told Ali about diamonds. The priest noticed a small diamond on the mantelpiece and asked, “Where did you find this?” To which the man replied, “There’s a brook that runs through our farm, and it’s full of them.”
Most people are sitting on their own diamond mines. The surest ways to lose your diamond mine are to get bored, become overambitious, or start thinking that the grass is greener on the other side. Find your core focus, stick to it, and devote your time and resources to excelling at it.
When business owners get bored, there is always the potential for them to get distracted by the shiny stuff and inadvertently sabotage what they’ve created. Fading passion and losing sight of why you’re in business are other pitfalls that could lead to the same fate. Defining your core focus will return you to your original levels of clarity and excitement.
A great example of a company distracted by shiny things was Broder & Sachse Real Estate Services Inc. Just prior to starting its EOS process, the real estate management company had dodged a bullet.
This particular bullet came in the form of a business proposal from a man who wanted Broder & Sachse to buy an industrial building he owned so he could start an engine powder-coating company. The deal was that he would lease the building from Broder & Sachse and would use the proceeds of the sale to build the line and the facilities. The man had customers already lined up; he just needed to build the company and open its doors. On paper, it was a million-dollar idea. Excited by the prospect, co-owners Rich Broder and Todd Sachse decided to go one further and partner with the man in the powder-coating business.
After investing a million dollars of their own money and a year and a half of their time, Rich and Todd eventually closed the business. In the three months it had been open, it had lost a total of $300,000. Clearly, it was the worst business decision of their careers. There was, however, a silver lining. Six months later, someone stepped in and bought the company for almost as much as they had put into it. They got lucky. On the other hand, they still lost a year and a half of time and focus on their core business, and that loss is incalculable.
Their mistake is now known around the office as a CCT, which stands for the short-lived company’s name: Capital Coating Technologies, Inc. Now, whenever they see something shiny, they jokingly dub it a CCT and direct their energies elsewhere.
Broder & Sachse’s core focus is owning and managing real estate, not powder coating. While a new idea may look like a no-brainer on paper, it’s simply not worth doing if it’s not a part of your core focus.
When your core focus is clear, you’re going to come to several important realizations. You’ll realize that certain practices, people, and, sometimes, entire divisions and/or product lines don’t fit into your core focus. As a direct result of this discovery, past EOS clients have gotten rid of entire departments and excelled as a result.
Once Image One, a $7 million laser printer service and supply company, was clear on its core focus, it eliminated its computer networking business unit and focused entirely on simplifying its clients’ printing environments. The decision was a painful and emotional one, but the company did it. As a result, it’s grown by an average of 30 percent for every year of the past four, resulting in a sale to a publicly traded company in its industry for high multiples.
Image One’s president and co-owner, Rob Dube, says, “The decision to close our computer division after six months was a turning point in our company’s history. Once our core focus was clear, there was no turning back.” Incidentally Rob and Joel have purchased the business back and continue to grow it at 30 percent per year. Image One was recently selected as the Small Business of the Year by Crain’s Detroit Business and also as a finalist for the Ernst & Young Entrepreneur of the Year award.
Decide what business you are in, and be in that business. As the old saying goes, “He who chases two rabbits catches neither.” Or as Al Ries pointed out in Focus, “Imagine a medical practice saying to itself: ‘We are known as terrific brain surgeons, so let’s get into the heart, liver, lung, and limb businesses.’”
I’m always amused when a client looks at another industry and says, “I wish I were in that business. It’s so much simpler.” I’ll think to myself, “Oh, if he only knew.” In other words, I’ve yet to see a single business that is easy to run. They all take work. Success in one kind of industry doesn’t necessarily dictate success in another. You can only succeed in the kind of business that is right for you and your team. As Jim Collins puts it in his bestseller Good to Great, “You have to figure out what you’re genetically encoded to do.” That’s a vital point. The combination of your talents and passions combined with your leadership creates something unique that no other company has, and that something is your core focus. You must uncover what it is. The following exercise was designed to help you do just that.
HOW TO DETERMINE YOUR CORE FOCUS
First, you and your leadership team should define, with absolute clarity, your two truths: your reason for being and your niche.
Core focus is actually very simple. Don’t overthink it. After reading this section of this book, lock your leadership team in a room for a minimum of two uninterrupted hours. Start by asking them to write the answers to the two questions below. Once everyone has finished, go around the table and have them share what they’ve written. Then, open up the discussion for debate and talk as a group for as long as you need to.
Do this with both questions, one at a time, until you’re on the same page and have each answer down to just a few words. Be warned: You may need several sessions to complete the task. Be patient and remember not to overthink and overanalyze. Like core values, your core focus already exists; it’s just a matter of chiseling away the non-core items before you can get it. What follows are the two questions with some real-life examples and tools for guidance:
1. Why does your organization exist?
What is its purpose, cause, or passion?
When your purpose, cause, or passion is clear, you won’t be able to tell what business you’re in. You should be able to take it into any industry. This will also keep you from confusing it with your niche.
When entering your core focus into the electronic version of the V/TO, please choose one of the three words “purpose,” “passion,” or “cause”—the one that resonates best with your team—and delete the others from the document. Less is more.
When your purpose, cause, or passion is clear, it should meet all eight points of the following checklist:
1. It’s stated in three to seven words. |
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2. It’s written in simple language. |
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3. It’s big and bold. |
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4. It has an “aha” effect. |
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5. It comes from the heart. |
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6. It involves everyone. |
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7. It’s not about money. |
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8. It’s bigger than a goal. |
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Examples of purposes, causes, or passions
Cunningham/Limp: Customer delight
McKinley: To enrich the quality of life in our communities
Image One: To build a great company, with great people & great results
Schechter Wealth Strategies: To create lifelong relationships and raving fans
2. What is your organization’s niche?
Your niche should be simple. It will ultimately become a filtering mechanism for your team to make its decisions as you move forward. Orville Redenbacher’s theory says it all: “Do one thing and do it better than anyone.”
Examples of niches
Autumn Associates: Creating the right program with right coverage for the right clients
Orville Redenbacher: Popcorn
Atlas Oil Company: Moving gallons
Image One: Simplifying companies’ printing environments
McKinley: Solving complex real estate problems
With your niche and your organization’s reason for being crystal clear, you now have a core focus. Once your core focus is clear, you’ll need to stay true to it. If a new business opportunity doesn’t fit, don’t do it. If someone on the leadership team tries to throw something incongruent over the wall, throw it back. Let it be your filtering mechanism for all future decisions.
Below are some real-world examples of a company’s core focus:
Asphalt Specialists, Inc. (ASI)
Passion: Winning
Niche: Quality asphalt paving
ZenaComp
Passion: Creating efficient solutions
Niche: Worry-free technology that protects & grows our clients’ business
Ronnisch Construction Group
Purpose: Exceeding peoples’ expectations
Niche: Meeting the schedule in all facets of construction
Image One
Passion: Building a great company, with great people and great results
Niche: Simplifying companies’ printing environments
Alongside two other partners, brothers Tyler and Jonathan B. Smith founded a small technology business designing high-end websites with back-end web applications. Once they realized their current business no longer fit their personal core focus, they left the business to their partners and each went on to build successful businesses in line with their core focus.
Jonathan went on to cofound Wave Dispersion Technologies, Inc., a company that provides coastline security for countries all over the world. His company made Inc. magazine’s list of the 500 fastest-growing private companies.
With his new partner, Brad, Tyler built the web retail company Niche Retail, taking it from start-up to almost $19 million in revenue, in nine years. Tyler and Brad were finalists for the Ernst & Young Entrepreneur of the Year award, and Niche Retail was named #300 on Inc. magazine’s list of the 500 fastest-growing private companies. Illuminate your core focus, and you could generate those kinds of results as well.
One important point: The task of clarifying your core focus assumes that you already have a financial model that works. If that’s the case, it’s just a matter of focusing on and executing your vision so that the profit will follow.
If you’re a golfer, you know that the face of a golf club has a sweet spot. While its actual size varies depending on the club, let’s assume it’s about 50 percent of the face. To the degree you hit the ball on the sweet spot, the ball goes farther and straighter, contact feels better, and you’ll score better. The same applies to your business. Just like a golf club, your business has a sweet spot, and now that you have clarified your core focus, you now know what it is. Assuming you stay in your sweet spot, which might be about 50 percent of your market, your business will go further and score better in terms of profitability.
Once your core focus is clear, your people, processes, and systems can be put in place to drive it with consistency. Until you have exhausted every opportunity in your core focus, don’t allow yourself to get distracted by the shiny stuff.
Now that the work is done, add your core focus to the V/TO.
WHAT IS YOUR 10-YEAR TARGET?
Now that your core values and core focus are clear, the next question is this: What is your 10-year target? Where do you want your organization to be a decade from now?
One common thread unites successful people and successful companies. All of them have a habit of setting and achieving goals. That’s why I am consistently amazed by the number of entrepreneurs who can’t tell me what their number one goal is. To me, they’re like rudderless ships. How do you know if you’re heading in the right direction if you don’t know which direction you’re meant to be going? As Yogi Berra said, “You’ve got to be careful if you don’t know where you are going, ’cause you might not get there.”
In their book Built to Last, Jim Collins and Jerry I. Porras found that organizations that have endured for decades share another common practice: They all set massive 10- to 25-year goals. Collins and Porras refer to these as BHAGs—Big, Hairy, Audacious Goals—and define them as having “a long-term vision so daring in its scope as to seem impossible.”
That’s one of the main differences between a 10-year target and any shorter ones you might set. This is the one larger-than-life goal that everyone is working toward, the thing that gives everyone in the organization a long-range direction. Once your 10-year target is clear, you and your leadership team will start doing things differently in the here and now so as to get you there.
In You2, Price Pritchett explains how to make such quantum leaps: “You must focus on ends, rather than means.” Your long-term target is that end he is describing. He continues, “It is crucial to have a crystal clear picture of what you want to accomplish … Rivet your attention on that spot where you are to land at the end of your quantum leap … Once you do that, it’s almost as if you magnetize yourself to the ways and means involved in the methodology for getting there. Solutions begin to appear. Answers come to you.”
The reason this particular target’s time frame is 10 years is that 90 percent of EOS clients have selected it in the past. Some preferred a five-year time frame, while others went as high as 20 years. The length is entirely up to you.
Examples of 10-year targets
ZenaComp: $10 million in revenue with 15 percent net income
Autumn Associates: A referral from every client and every client from a referral
McKinley: 20,000 multifamily units owned and/or managed
Atlas Oil Company: 5 billion gallons moved
Schechter Wealth Strategies: 15 percent of target market
HOW TO SET A 10-YEAR TARGET
Meet with your leadership team and discuss where you want to take your organization. A word of caution is in order here: While your core values and core focus are already present within your organization, the 10-year target will be different. I’ve never seen a team land on the same page with a 10-year target on the first go-around. Be patient in your first attempt.
I recommend starting off by asking everyone how far out they would like to look. I would then ask everyone what they believe the revenue size of the organization could be at that point. This is a particularly fun question, and you’ll probably get a wide range of responses. These different figures should start to get everyone talking and ultimately in sync with each other. Once those two questions have primed the pump, ask everyone what they believe the target is. It may take a few meetings to settle on a final answer. I’ve had to come back to certain EOS clients with the same question every quarter until they nailed it.
Once that decision is made, confirm that everyone is motivated by it and on the same page. As with all goal-setting activities, your 10-year target must be specific and measurable so that there can’t be any gray areas. You will know the right goal when you have it. It will be the one that creates passion, excitement, and energy for every single person in the organization whenever it’s repeated.
With many clients now closing in on or achieving their 10-year targets, the question regarding what to do when you’re getting close to hitting it comes up often. The answer and rule of thumb is that once you’re three years from achieving your 10-year target, you move it to your three-year picture (which will be covered on page 66) and set a brand-new one.
Add your 10-year target to the third section of the V/TO.
WHAT IS YOUR MARKETING STRATEGY?
A mother, her young son, and their donkey are taking a long journey through the countryside. The mother is riding the donkey with the son walking alongside as they enter a village. All of a sudden, the village people gather and start stoning them. The pair run away and manage to escape. The mother is dumbfounded, and as they approach the next village, she thinks, “Maybe they thought it was inappropriate to have the son walk,” so they switch places and prepare to enter. But once again, they’re stoned by the village people. At a total loss, she thinks, “Maybe it’s the donkey. Maybe they worship donkeys in this country.” So before entering the next village, they decide to pick up the donkey and carry it, but it proves so heavy that as they cross a bridge, the donkey falls over the side, lands in the river, and drowns.
What’s the moral of the story? If you try to please everyone, you’re going to lose your ass.
I can’t tell you how many of my clients start out trying to be all things to all people. They say, “Oh, you need that? Yes, we do that,” and, “You want those? No problem.” Over time, though, they, their customers, and their employees become frustrated, and the business becomes less profitable. This helter-skelter method may have gotten you to where you are today and helped you survive the early drought, but to break through the ceiling, you have to create some focus.
The intent of this section is to create a laser-sharp focus for your sales and marketing efforts. Many companies waste thousands of dollars on consultancy fees, inconsistent marketing messages, printing, and time, all because they failed to establish a clear strategy from the outset. A focused effort will enable you to sell and close more of the right business. It will become the foundation upon which you create all future materials, plans, messages, and advertising.
This enables you to be different and stand out to your ideal customer. All of your people will have clear direction on who your ideal customer is, what you’re supposed to be doing for them, and how you will do it. Ultimately, you will know which customers you should and should not be doing business with. That means you can stop trying to be all things to all people.
In his book Get Back in the Box: Innovation from the Inside Out, Douglas Rushkoff makes the point that companies have to stop looking everywhere else for the answers. Rather than hiring marketers and consultants, he urges companies to draw on their own experience, core values, and core competencies (core focus). He urges readers to “stop solving your problems from the outside in.” He goes on to say, “Get back in the box and do the thing you actually do best. This disciplined commitment to your own core passion—and not a consultant, ad campaign, or business plan—is the source of true innovation.”
Marketing strategy is made up of four elements, which are contained in the fourth section of the V/TO:
1. Your Target Market/“The List”
2. Your Three Uniques
3. Your Proven Process
4. Your Guarantee
YOUR TARGET MARKET
The first element of marketing strategy is your target market, or “The List.”
Identifying your target market involves defining your ideal customers. Who are they? Where are they? What are they? You need to know their demographic, geographic, and psychographic characteristics. By identifying your target market, you create a filter. Out of that comes The List of perfect prospects for your organization and sales team to target.
If you’re a normal small business, you’ve probably gotten to where you are with a less-than-perfect approach to finding customers. When you were getting the business off the ground, any customer that paid was considered a good one. As a result, you probably have some customers that are not in your target market. Maybe they’re not profitable or they make ridiculous demands. Maybe you don’t even like them.
A problem for most companies is that they take a buckshot approach to sales and marketing. By defining your target market and creating The List, you’re abandoning the shotgun approach for the rifle approach. As a result, your sales and marketing efforts will be much more efficient.
A crucial step to getting sales back on track during the turnaround of our real estate sales training company involved determining who our ideal target market was. Eventually, we realized that it was the presidents and CEOs of real estate organizations with 200 or more agents (demographic) in North America (geographic) that saw the value and need for outside sales training (psychographic).
With this clarity, we ran the filter (which meant that we researched every industry publication, database, and resource) to find out who and how many there were. We came up with a total of 525. At our next quarterly meeting with all of our trainers, we did a skit with a biblical theme that included music and dress. We created a large binder with The List on the cover. It contained contact information and relevant details on 525 presidents and CEOs.
We distributed those names to our 30 trainers, who were our sales force, and they went to work. By focusing on The List, we were able to turn sales around. Ultimately, we were able to penetrate and maintain over 50 percent of The List as our clients. This was not an anomaly. Every client that defines its target market creates this laser focus as a result.
Examples
Image One: IT directors in companies with 25 or more laser printers in Michigan and Ohio
McKinley: Opportunistic, value-added, or underperforming apartments, shopping centers, and office buildings in Michigan, Indiana, Ohio, Illinois, Virginia, Georgia, and Florida
Identity Marketing and Public Relations: Small to mid-sized privately held business-to-business companies in the U.S. that meet our profile
Defining your target market is rewarding. The difference in my clients’ attitude and awareness after doing so is like night and day. Where they used to try to lasso every customer in sight, they now know in the first 15 minutes of talking to a prospect whether they are right or not. As a result, they are bringing on better clients with less hassles and more profit. They no longer waste valuable time with prospects that are not right for them. In addition, they’ve dropped existing customers that are not in their target market and creating stress via unreasonable demands and low profitability.
How to Make The List
Have everyone on the leadership team brainstorm what they believe to be the following:
• The geographic characteristics of your ideal customers. Where are they?
• The demographic characteristics of your ideal customers. What are they? (If you’re marketing business-to-business, consider characteristics such as job title, industry, size, and type of business. If business-to-consumer, then age, sex, income or profession.)
• The psychographic characteristics of your ideal customers. How do they think? What do they need? What do they appreciate?
With the answers to these questions, go to work on creating The List, which consists of the key contact information for each prospect. I won’t kid you—creating The List will take some work. It involves a combination of examining your current prospect lists, generating referrals from existing clients, reading trade publications, purchasing lists, asking around, and telling your salespeople to keep their ears to the ground. You have to harvest and then stockpile these names in a database. Once they’re compiled, your sales/marketing manager has a list of all of your prospects in one place or at least knows where they are and manages them accordingly, confirming that the sales and marketing efforts are laser-focused on them.
Determine the best way to reach these people by using your newly clarified marketing strategy, which you will complete at the end of this section. Most companies realize that the best way to reach their newly clarified target market is through referrals, using their clients to connect with their prospects. You have a variety of options to reach your target market; it all depends on the best approach for your company. McKinley uses banking relationships; Image One uses a combination of cold calls, referrals, and direct mail; and ZenaComp uses networking. Once you’re clear on your core values, core focus, 10-year target, and marketing strategy, the answer should present itself. With this clarity, you can move forward with a targeted approach to your sales and marketing efforts. That will create a growing snowball until you reach a point at which the sales effort becomes self-perpetuating. The task of generating new business will then require considerably less effort than it did in the beginning.
Add your Target Market to the V/TO.
YOUR THREE UNIQUES
Other common marketing terms for this are “differentiators” and “value proposition.” Plainly put, these are what make you different, what make you stand out, and what you’re competing with. If you line yourself up against 10 of your competitors, you might all share one of these uniques. Some of you may even share two, but no one else should have the three you do. You need to settle on three qualities that will truly make your company unique to the ideal customer.
Again, what you’re creating here is focus. The most common mistake that most organizations make involves competing in too many sectors, markets, services, or product lines, and trying to be all things to all people. It’s a game you will not win.
Rather than your salespeople saying, “Yes, we do that, and oh yes, we’ll do that,” to everything, they should be saying, “If you’re looking for that, we probably aren’t the company for you. What we excel at are these three things.” The reality is that if those people don’t want what you have to offer, they’re not the right clients for you in the first place. In the end, you’re both going to end up unhappy anyway.
Southwest Airlines is a great example of this. It focuses on low fares, on-time flights, and having fun. That’s what drives everything in that organization’s business model. If you’ve flown on Southwest, you know it doesn’t offer any frills. As a result, it doesn’t appeal to everyone, but that’s okay. Southwest matters to its ideal customer and that’s all that counts.
In the company’s book Nuts! Southwest Airlines’ Crazy Recipe for Business and Personal Success is a story about a woman who sent Southwest a complaint letter after every flight she took. She would complain about problems such as the lack of assigned seating, the lack of a first-class section, the lack of meals, the flight attendants’ uniforms, and the casual atmosphere. According to the book, one of the letters made it up to the desk of then-CEO Herb Kelleher. It took him 60 seconds to write back the following note: “Dear Mrs. Crabapple, we will miss you. Love, Herb.”
If you believe in your Three Uniques, and you believe they matter to your ideal customer, you should never apologize for them.
How to Choose Your Three Uniques
For this step, you might consider including your sales team in the marketing strategy sessions. List everything that you believe makes your people, company, product, or service. What do your ideal customers think is unique about you? Ask them—it’s a 10-minute phone call.
Through the process of elimination, make some tough decisions. Debate and decide which are the three that truly make you unique, and which matter to you and your customer. The individual uniques don’t have to be different from those of your competition. It’s the combination of all Three Uniques that makes you different. No one else should do all three the way you do.
Examples
Identity Marketing and Public Relations (a PR and marketing firm)
1. We get what you do
2. We generate results
3. Full-house, in-house
McKinley (property management)
1. High touch customer service and sales
2. We invest in our people
3. We take an owner’s perspective
Autumn Associates (property and casualty insurance)
1. Our people/core values
2. By referral only
3. Client-selection process
Add your Three Uniques to the V/TO.
YOUR PROVEN PROCESS
My dad always teaches, “Never tell someone something you can show them.” In most companies, when salespeople are meeting with a prospective new customer, they normally try to win new business by using countless words and visuals in the form of pages and charts. When it’s all said and done, they end up looking just like everyone else.
There is a proven way you provide your service or product to your customers. You do it every time, and it produces the same result. It’s what got you where you are. What you need to do is capture that process in a visual format to guide your sales team. It should be encompassed on one single piece of paper, it must illustrate your proven process, and it must have a name. It should show each step, from the first client interaction to the ongoing follow-up once your product or service has been delivered.
There are typically three to seven major steps in any company’s proven process. The EOS Process is shown on the next page as an example. Creating a standard proven process to use in selling situations will give you two very powerful advantages. It will increase your potential customers’ confidence and peace of mind in doing business with you. Second, as most other companies don’t illustrate how they work, it will makes you stand out among the competition.
Rather than giving them a sales presentation and inundating them with information, you’re saying, “Let me show you exactly how we are able to accomplish great results for our customers. We have a proven process that we follow called The (your company name) Difference.”
An ancillary benefit of creating your proven process is that it will help your organization internally. Each person in the organization will know how his or her actions affect the customer and why his or her step in the process is important.
How to Create Your Proven Process
Step 1
With your team, illustrate on a whiteboard what you believe are the major steps in your proven process and then give each step a name. These major steps are the touch points with your customers when you interface with them. The rule of thumb is three to seven steps.
Example
It took financial services company Schechter Wealth Strategies about three hours to create its proven process. After much discussion and debate, the team agreed they had six steps in their proven process:
1. Discovery
2. Solution Presentation I
3. Competitive Bidding
4. Solution Presentation II
5. Solution Implementation
6. Review and Service
Step 2
Once your steps have been determined, add two to five bullets under each item for your salespeople to use as talking points when selling to a prospective customer. For example, in Schechter’s case, under Step 1, there are three bullets: (1) about us, (2) about you, and (3) defining your objectives.
Step 3
Give your proven process a name. If you cannot come up with a name, simply call it “Our Proven Process” or “The (your company name) Difference,” as many EOS clients do.
Step 4
Once you’ve hammered out your proven process, turn your work over to a graphic designer to give it a visual based on your company’s colors, logo, and look and feel. As a result of all the work you’ve done, this should be relatively inexpensive. The graphic designer simply needs to design your proven process in a way that is appealing to you, your people, and your customers.
Step 5
Have it professionally printed, in color, on a heavy stock, and/or laminated. This will increase the perceived value considerably in the eyes of your prospective customers.
Add the name of your Proven Process to the V/TO.
YOUR GUARANTEE
The fourth and final element of your marketing strategy is your guarantee. Think of what Federal Express did with overnight delivery: “When it absolutely, positively has to be there overnight.” Domino’s did the same with pizza delivery: “Thirty minutes or it’s free.” Now hospital ERs are adopting the idea with waiting room times, guaranteeing a wait of 30 minutes or less. Some even guarantee no wait at all.
A guarantee is your opportunity to pinpoint an industry-wide problem and solve it. This is typically a service or quality problem. You must determine what your customers can count on from you. If you guarantee it, that will put their minds at ease and enable you to close more business.
Some businesses are not suitable for guarantees. Fifty percent of EOS clients do not have guarantees because they haven’t been able to come up with a great one that will drive more business. You will not go out of business without a guarantee, but you will attain your vision faster with one. You’re actually closing less business now because you’re not entirely putting your prospective customers’ minds at ease. If you can do that, you will gain more customers.
Image One came up with a guarantee that it has been capitalizing on for over eight years. The biggest single problem its customers faced in the laser printer service business was losing days of productivity as a result of their printers being down. Co-owner Joel Pearlman solved it by guaranteeing, “Four hours or it’s free.”
Your guarantee has a secondary benefit. It forces all the people in your organization to deliver on it. That in turn forces you to look inward and make sure you’ve got all the right people, processes, and systems in place to do so. If not, you’ll be forced to improve upon it. Your client will never need to make good on that guarantee if you’re at your absolute best.
How to Select Your Guarantee
Brainstorm with your leadership team and list what you believe to be the biggest frustrations, fears, and worries for your potential customer when doing business with you. The ideal guarantee is backed up by a tangible penalty if you don’t deliver on it. Your guarantee must drive more business or enable you to close more of what you’re not winning. If it doesn’t, you shouldn’t waste your time using it.
It’s a good idea to ask a few ideal current customers or prospects for their feedback. Sometimes my clients have a hard time with the word “guarantee.” In these cases, call it a pledge, commitment, or promise. This seems to move the creative thinking process forward.
List all the possible guarantees you’d be willing to offer that will put your potential customers’ minds at ease and close more business. From there, choose the best one. If it meets all of the above criteria and you believe it is the right one, then roll it out.
You may not get this one on the first try. Be patient and the right guarantee will come. The awareness alone will start to give you and your team ideas. For example, I was driving by a collision shop the other day and saw that it had a banner that read, “Free Loaners.” It’s addressing its customers’ biggest frustration: being without a car. On the radio, I heard a mortgager guarantee any loan in 14 days or you get $500. Once you’re aware of them, you’ll see and hear guarantees everywhere. Yours will come.
Add your guarantee to the V/TO.
Now that the four elements of your marketing strategy are clearly defined, it’s time to pull the entire marketing strategy section together. You can now clearly communicate a consistent marketing strategy for the entire organization to support, which clarifies for everyone what they must deliver. This becomes the foundation for all of your sales and marketing materials, messages, and presentations moving forward.
Go after all of the prospects on The List, communicating with them why you’re unique, showing them your proven process for doing business, and offering them your guarantee. This incredible precision in your sales and marketing efforts will increase your sales dramatically.
WHAT IS YOUR THREE-YEAR PICTURE?
With the first four sections of the V/TO complete, you now know who you are, what you are, where you’re going, and what marketing strategy you’re going to use to get there. It’s now time to illustrate what your business will look like three short years from now.
With life and business moving as fast as it does in the 21st century, there is little value in detailed strategic planning beyond a three-year window. A lot can change during that time span. For the investment of time and money into that kind of planning, there is typically very little return. It’s still valuable, however, to create a picture of the future organization three years out. This will accomplish two vital objectives. First, your people will be able to “see” what you’re saying and determine if they want to be part of that scenario. Assuming they do, if they can see the vision, it’s more likely to happen. Second, it greatly improves the one-year planning process. With the three-year picture clearly in mind, you can more easily determine what you have to do in the next 12 months to stay on track. As Napoleon Hill said, “Whatever the mind of man can conceive and believe, it can surely achieve.”
As you can see on the V/TO, the three-year picture is composed of measurables at the top and bullet points to create the picture. It’s simple but powerful. Do not underestimate the importance of this section, but also don’t overthink it. You’re painting a picture of the destination, not discussing every obstacle along the way.
PAINT THE THREE-YEAR PICTURE
Schedule an hour with your leadership team. Once you’re assembled, have a copy of the V/TO placed in front of each member. Begin by selecting a future date. I recommend keeping it within the end of the calendar year, thus making it easier for people to envision.
Next, determine the revenue picture. Start by asking your team this question: What is the annual revenue going to be three years from now? This is always fun, because you find out if your leadership is in sync with how fast you want to grow. You will typically get a range, but you’ll have to settle at one number. One new client’s range was between $20 million and $100 million. Can you imagine how different those individual future views must have been? They can’t coexist in the same company without creating complexity, confusion, and frustration. That client eventually got everyone on the same page with a figure of $30 million.
Wolff Group originally had a range of $10 to 25 million, with two co-owners at either end of the spectrum. At the time, it was a $4 million company with 51 employees. Through much discussion, debate, and study, it settled on $15 million, and both owners, along with the entire leadership team, ended up on the same page and equally excited for their future. The need to create a three-year picture becomes more and more evident every time I work with a client.
The next step is to agree on the profit number. This will be a similar conversation, but should be settled much more quickly. After that, you’ll want to determine your specific measurables. Measurables give everyone scope and size. Every organization has one or two very specific figures that are a telltale sign of the size of the organization. It might be a number of clients, large clients, units, or widgets produced.
Atlas Oil Company supplies fuel to gas stations, and its measurable is gallons. Last year, it moved 725 million gallons. In its three-year picture, its measurable is over a billion. This number shows scope and size, and it forces the team to think about what it will take to almost double the size of the organization in three years. Equally as important, it confirms that the leadership is in agreement and ready for that type of growth. Another example is Zoup!, a company that franchises a casual soup-and-sandwich concept. Its measurable is its number of stores. Last year, Zoup! had 38 stores; its three-year picture measurable is 94.
Once you’ve determined your numbers, have everyone on the leadership team take a few minutes and write down bullet points of what the organization will look like on that date three years from now. Factors to consider include things such as number and quality of people, added resources, office environment and size, operational efficiencies, systemization, technology needs, product mix, and client mix.
Combine these results, and after some discussion and debate, your three-year picture will typically contain 10 to 20 bullet points that describe what your organization will look like. In addition, each person on the leadership team should verbalize his or her vision for his or her individual role in the organization in that time frame. You’ll gain some interesting insights into people’s motivations and help get everyone’s expectations in line.
You cannot move on and finalize your three-year picture until everyone on the leadership team sees it clearly. At this point, everyone in the room should close his or her eyes as one person reads the three-year picture out loud. The picture must be visible in each person’s mind. Each must believe in it and ultimately want it. After all, they are the team that needs to make it happen. In this session, encourage people to speak up, debate and go back and forth, but ultimately they must agree on all of the major points. You now have a three-year picture that you can take to your organization at large.
Add your three-year picture to the V/TO.
WHAT IS YOUR ONE-YEAR PLAN?
We’re now going to the traction side of the V/TO, which is about bringing your long-range vision down to the ground and making it real. That means deciding on what must get done this year.
Remember, less is always more. Most companies make the mistake of trying to accomplish too many objectives per year. By trying to get everything done all at once, they end up accomplishing very little and feeling frustrated. One client of mine was very stubborn about this point for the first two years. I would tell him to limit the company goals between three and seven, and each year we set goals, he would keep piling on more. When we were done, the company would have 12 to 15 goals for the year. Like clockwork, at the end of the year, they would accomplish very little and end up frustrated. Going into the third year, he finally had a revelation: They were taking on too much. With this awareness, we agreed that the team could choose only three goals for the coming year. They did, and by the end of the year, they accomplished all three, increased sales by 19 percent, and had their most profitable year in five years. When everything is important, nothing is important. The EOS approach is going to force you to focus on a few goals rather than too many. By doing that, you will actually accomplish more. That is the power of focus.
HOW TO CREATE YOUR ONE-YEAR PLAN
Schedule two hours with your leadership team. When everyone is sitting at the table, decide on the future date. It’s highly recommended you keep within either a calendar year or your fiscal year, regardless of where you are in the year. So, if it’s July, set your future date as December 31. After that time, you’ll be able to set a brand-new full one-year plan. Having a partial-year plan allows you to gain experience with the process between now and then.
As with the three-year picture, again, decide on the numbers. What is your annual revenue goal? What is your profit goal? What is the measurable? This number should be consistent with the three-year picture measurable.
With the three-year picture in mind, discuss, debate, and decide on the three to seven most important priorities that must be completed this year in order for you to be on track for your three-year picture. These become your goals. They need to be specific, measurable, and attainable. This is an important point. I cannot tell you how many times when reviewing one-year goals at the end of the year, I observe clients debating what the goal actually meant. To avoid this, the goal must be specific, leaving no wiggle room. An outsider should be able to read it and know what it means. Remember, measurable means you can measure it. “Sales” is not a specific goal, but “$1 million in new sales” is. “Improve customer satisfaction” is not a specific goal, but “increase average customer rating to a 9” is.
“Attainable” means that it’s doable. Setting unrealistic goals is the biggest trap entrepreneurs fall into. The team has to believe it’s possible to hit the goal, or else you can’t hold someone accountable to it. If every goal is a “stretch goal,” how do you know what success is? Goals are set to be achieved.
Make sure you have a projected budget in place that supports your one-year plan. Many companies set goals for the year with no financial projection to confirm that the plan is even feasible. A budget will force you to confirm that you have all of the resources you need to achieve the plan and that when you achieve the revenue goal, the profit number is realistic. Almost every time a profit goal is first projected, the discussion lowers the number as reality is brought to bear.
Add your one-year plan to the V/TO.
WHAT ARE YOUR QUARTERLY ROCKS?
Once your one-year plan is clear, you need to narrow your vision all the way down to what really matters: the next 90 days. You should determine what the most important priorities are in the coming quarter. Those priorities are called Rocks.
Quarterly Rocks create a 90-Day World for your organization, a powerful concept that enables you to gain tremendous traction. How do they work? Every 90 days, your leadership team comes together to establish its priorities for the next 90 days based on your one-year plan. You discuss and ultimately conclude what has to be executed in the next quarter to put you on track for the one-year plan, which in turn puts you on track for the three-year picture, and so on.
In a growing organization, it’s normal to battle for resources, time, and attention. There will be tension. But when you have finished setting your Rocks and all the dust has settled, you should all be united on what objectives take precedence in the coming quarter. The focus of the Rocks is what makes this process so productive. Most organizations enter the next quarter battling on all fronts. They make everything a priority and accomplish very little. By setting Rocks every quarter as a team, you gain considerably more traction and finally reach your goals.
The complete process of setting Rocks is addressed in Chapter 8. Once they are set, add them to your V/TO.
WHAT ARE YOUR ISSUES?
The eighth and final section in the V/TO is the Issues List. While it may seem strange to include a list of problems as part of your vision, that list is actually as important as the previous seven questions. Now that you clearly know where you’re going, you have to identify all of the obstacles that could prevent you from reaching your targets.
The sooner you accept that you have issues, the better off you’re going to be. You will always have them; your success is in direct proportion to your ability to solve them. Your leadership team should state them openly and honestly so that you can get them out of your heads and into writing. In doing so, you’re taking the first step to solving them.
HOW TO IDENTIFY YOUR ISSUES
This exercise can be done very quickly, in 15 minutes at most. Ask the team to think of the obstacles, concerns, and opportunities you face in achieving your vision. From there, let the opinions fly. Don’t sugarcoat them. Encourage an open atmosphere where they can all come out.
Through answering the eight questions laid out in this chapter as a team, most of the issues will emerge. They’ll come up when your team says something like, “But what about …” and, “We can’t do that because …” or, “Bill won’t buy into it because …” These are all issues. By the end of this book, you’ll have developed a sixth sense for capturing issues. From there, you will develop a discipline for adding them to the Issues List. You’ll know when the Issues List truly has become a habit, because the next time you get hit with an obstacle, you’ll simply say, “There’s another one,” and add it to the list.
After all of the issues are out in the open, add them to the V/TO Issues List. Don’t worry about solving them yet. That will be addressed in Chapter 6.
You have answered all eight questions, your vision is clear, and your V/TO is complete. An example of what yours might look like follows.
Now that you have completed your V/TO—the first part of the Vision Component—the foundation for the rest of The EOS Process is set. The second part is to share your vision with your employees. The number one reason employees don’t share a company vision is that they don’t know what it is. The only way you can determine if your vision is shared by all is simply to tell them.
A Harris Interactive/FranklinCovey poll of over 23,000 employees in key industries and employed in key functional areas sheds a sharp light on this issue. The poll revealed that 37 percent of employees didn’t understand their companies’ priorities. Only one in five was enthusiastic about their organization’s goals, and only one in five saw a clear connection between their tasks and their organization’s goals.
Now that your vision is on paper, you must communicate it to everyone in the organization, and every person must understand it and share it. When everyone’s energy is going in the same direction, their accumulated drive will kick in and create an exponential force.
Don’t be afraid to let your people challenge the vision and ask questions. These inquisitions, along with the preceding dialogue, will help you both become more invested in the vision. While you may worry that they may point out a flaw in the plan, that’s not a bad thing at all. If they notice and highlight a potential problem, they’ll be even more committed as a result of their involvement in the resulting exchange and resolution. Be willing to be vulnerable.
Here’s the brutal truth: Not everyone in your organization will share your vision. The responsibility that you have as the leadership team is to share your V/TO and inspire your people with a compelling vision. As long as they understand it, they want to be a part of it, and their actions perpetuate the vision, they share it. The ones that don’t will stand out by contrast. Most of the time, they’ll leave before you have to let them go. But as a good manager, you’ll be doing them and others in the company a disservice by keeping them around. You may have to help free up the futures of the ones that don’t willingly leave.
You can effectively communicate the company vision in three events:
1. Have a company kickoff meeting and unveil your clearly defined vision (the V/TO). This is an opportunity to share your newly created core value speech for the first time. Make sure to include question-and-answer time.
2. Every 90 days, have a short (no more than 45-minute) state-of-the-company meeting with all employees. The objective of this event is to share successes and progress, review the V/TO, and communicate newly set company Rocks for the quarter.
The quarterly state-of-the-company has proven to be the most effective discipline for helping people share, understand, and buy into the company vision. In its purest form, the meeting has a three-part agenda.
1. Where you’ve been
2. Where you are
3. Where you are going
Each quarter, you and your leadership team fill each of those agenda items with three of the most relevant data points, and you’ll deliver a clear, concise, and powerful message that keeps your people in the know. Its effectiveness stems from delivering it every quarter and being consistent.
3. Each quarter, as you set Rocks in each department, conduct a complete review of the V/TO as a team.
Each of these three events will prompt questions and answers that continuously clarify the vision for everyone. You’ll need to give people the opportunity to ask questions and understand the vision. As a result, they’ll be able to decide if this is the company they want to be a part of. Through that process, they’ll be able to direct themselves. The core values, core focus, and marketing strategy will always give them clear direction on their actions and enable them to make better decisions on their own, further enabling you to delegate and elevate.
People need to hear the vision seven times before they really hear it for the first time. Human beings have short attention spans and are a little jaded when it comes to new messages. As a good leader, you must remain consistent in your message. The first time they hear it, they’ll roll their eyes and say, “Here we go again.” (Remember, you created this culture through past inconsistencies.) The second time, they’ll still roll their eyes a little. But by the fourth and fifth time of hearing it, they’ll realize this is for real. By the seventh time, they’ll be on board. You’ll have to adjust your outlook from “I’ve told them three times—this is so frustrating!” to “I’ve told them three times—only four more to go!” Be patient, and remember that this is a journey.
Here are some additional real-life examples of how companies share their vision with employees:
RE/MAX First: Each member of the seven-person leadership team took 12 people apiece (84 total), taught them one-on-one, and quizzed them on their Three Uniques.
McKinley: Took their 12 mid-managers, divided them among the leadership team members, and mentored them.
The Professional Group: Conducted on-the-spot core value checks. If someone could name them all, they’d receive a $20 bill on the spot.
Other EOS clients have enlarged the V/TO and posted it somewhere in the office for everyone to see.
I also learned of a company that offered a weekly $20 gift card, albeit with a unique twist. The employee that received it the previous week would give it to the next employee who exhibited one of the company’s core values. They had to e-mail the entire organization and tell everyone who they gave it to and what core value that person exhibited. The gift card could never go to the same employee until everyone received it, and it had to cross departments each time. In 52 weeks, that company spread 52 core value stories.
You achieve your full potential when your leadership team is on the same page with answers to the eight questions. Everyone in the organization shares the company vision, wants to be a part of it, and perpetuates it with his or her actions and words.
Now you must start to make the vision a practical reality.
