Over a century ago, Charles Schwab, the CEO of Bethlehem Steel, asked Ivy Lee, a management consultant, to help him get more done. As the now famous story goes, Lee told Charles Schwab to write down and prioritise the 6 most important tasks he wanted to do the next business day. Then he instructed Schwab to start with the first item the next day and not move on to another until the item was completed.
“Don’t be alarmed if you only complete two or three, or even one item, by the day’s end.” He said, “You’ll have been working on the most important ones, and the others can wait.”
Ivy Lee then encouraged Schwab to share this new way of working with his executives, judge the value for himself, and then send him a check for whatever he thought it was worth.
2 weeks later, Lee received a check for $25,000 — a handsome reward in those days. Schwab had also enclosed an accompanying note which said, ‘this is the most profitable lesson I have ever learned.’ From that day henceforth, this priority list was Charles Schwab’s daily “main thing.” Under his leadership, Bethlehem Steel would go on to become the second-largest steel maker in the USA, and one of the most important manufacturers in the world.
As this example demonstrates, setting priorities applies today as much as it did over 100 years ago, and it’s critical in both the short run and the long term. As Confucius said, “He who pursues two rabbits ends up catching neither.”
The key to success in your “main thing” in business or individually, is to sequence a series of priorities that keep everyone focused and heading in the same direction.
Individuals or organizations that have too many priorities end up having no priorities and as such risk expending a lot of effort yet accomplishing nothing of significance. On the other hand, when everyone is laser-focused on a single priority to be worked on— today, this week, this quarter, this year, the next 10 years — it creates clarity and power throughout the organisation.
In this article, the main message for you and your company is to stay focused on the “main thing no matter what. We will show you how to have a memorable theme around your priority. How to achieve it — or make substantial progress toward it — by a specific due date. Finally we’ll implore you to host a celebration with rewards to provide the necessary finish lines and add fun to the process. This will in turn pump up the engagement and enthusiasm of the team members as they achieve something significant together.
To be able to accomplish this, we emphasize the importance of first cultivating a healthy team that can withstand the brutal facts and supports the type of constructive debate that is necessary to set a main priority which everyone can get behind.
Creating a healthy team
To understand how to create a healthy team, it’s critical that you know the symptoms of an unhealthy one, so that you can catch them early and put the necessary remedial measures in place.
Patrick Lencioni, in his book ‘The Five Dysfunctions of a Team: A Leadership Fable’ describes 5 unhealthy situations that can sabotage your leadership team as:
- The absence of trust
- Fear of conflict,
- A lack of commitment,
- Avoidance of accountability, and
- Inattention to results.
If one or more of these exist, we strongly recommend you address it first before you move forward with any other aspect of execution.
You can do this by purchasing Lencioni’s affordable “Team Kit” then taking your leadership team through his training process and assessments. This will help strengthen their levels of trust, commitment, accountability and ability to have healthy debates as well as their attention to getting results.
It also works well as a good tune-up for healthy teams. At a minimum, you can require all your leaders and managers to read Lencioni’s book once a year. You will find it a quick read, and having the team do a refresher will most likely prevent new problems from coming up within the team as you scale up.
Other ways to help the team build trust are:
- Conducting leadership and Personality style assessments, which help the team members to see and appreciate each other’s differences.
- Ensuring you integrate social and meal times together with your off-site planning and strategy sessions as well as the monthly management meetings
- Setting up trainings so that members can have shared learning experiences
Setting the Main Priority and The Critical Number.
We recommend a simple methodology to help you set your main priority. The two main decisions you need to focus on are:
- What is your BHAG- (The Big Hairy Audacious Goal that you want to accomplish in the next 10-25 years)?
- What measurable next step- The Critical Number(one that has a 90-day to one-year focus) are you going to set in place.
From the previous articles, The BHAG, derived from your strategy, is the main long-term priority or focus that anchors the strategic thinking in your vision. The Critical Number, measured quarterly or annually, is the main short-term priority that anchors the execution planning side.
Jack Stack’s book ‘The Great Game of Business: The Only Sensible Way to Run a Company.’ offers invaluable insight about this ‘Critical Number’. According to Stack, although all your metrics are important, reserving the term “Critical Number” only for your measurable number one priority, ensures everyone is focused on that one thing.
To get to the one Critical Number, imagine the many important things that you need to get done lined up like dominoes. The goal is to find the lead domino: the one action that, if and when pursued to its completion, makes it much easier to accomplish everything else.
You can also derive your critical number by identifying the main constraint you face — the bottleneck or choke point — and addressing it first. Eli Goldratt’s book ‘The Goal’ is a great guide on how to scale up, by eliminating constraints —for your customers and the business at large.
The Critical Number, just like the organisation’s strategy, should not be set in isolation from the realities of the marketplace and the company. Employees and more critically customers will think the executive team was high on something if they come down from the proverbial mountaintop with “the tablets” dictating the latest Company Strategic plan without any consultation.
As Jack Stack strongly suggests, it’s best if the Critical Number is benchmarked against an external standard so that the employees don’t think the executive team was just making stuff up (e.g., “If company Z can achieve 6000 sales a month, then why can’t we?”)
Quarterly Themes
Themes are a fun way of internally encouraging your employees towards achieving your critical number. We encourage teams, especially when new to using this, to start with a few initial themes that last no longer than a quarter. As you will soon learn during execution, it takes a few quarters to master choosing and setting critical numbers.
The City Bin Co., based in Ireland, is one company that effectively uses quarterly themes to sign everyone towards one priority.
An example is when they used a lighthearted, betting-oriented theme, ‘180 to One,’ which involved having each of their 60 employees spend 1 day per month job-sharing during the first quarter of 2012 so as to improve customer service throughout The City Bin Co. (60 employees each with 3 job-sharing days results in 180).
According to the CEO, Gene Browne, “Our aim was to stir an appreciation in our employees of the other departments by getting them to think outside their own department.”
This meant having the truck drivers answer the phones at the customer centre, enlisting the people in accounts to work in the call centres and asking those in the customer centre to ride along in the company’s garbage trucks.
As a result, staff cohesiveness and Customer service improved tangibly. A truck driver now understood the types of complaints that would come into the call centre if a bin was not picked up as expected.
“Our culture changed significantly after this ,” adds Browne. “If you ask anyone the one thing they like about The City Bin Co., most will quickly say, ‘Great Customer service.’”
You too can incorporate such themes in your company and then monitor their implementation to see if they move your people towards a common goal.
Celebration
Once you figure out the most important and measurable bottleneck you need to control/fix in your business this coming year and have assigned a theme to it, it’s also important to give your team a chance to win a reward for their efforts.
ProService Hawaii, a Honolulu-based firm which offers outsourced HR services, incorporates this method in trying to achieve its critical number. In 2014, the CEO, Ben Godsey, determined that the Critical Number in that fiscal year, would be shooting for 600 referrals. Compared to their previous numbers, this was a major stretch goal. The company had previously only averaged less than 200 referrals a year, despite being focused on developing innovative products and a great service culture and — as shown by a Net Promoter Score (NPS) that was consistently above 70% (at the same level with Apple).
According to Godsey, “We set one really high bar; as the Critical Number of getting 600 referrals. For us, it was like a journey to the moon and back: We were either going to do it, by all working together towards this one goal or as they say, die trying.”
Sure enough, ProService Hawaii accomplished this goal with a few weeks to spare— and as a reward, the entire team celebrated with a trip to Waikoloa Beach.
ProService Hawaii’s team was by then experienced in using quarterly themes and was therefore ready for this all-or-nothing challenge. For those who are new to this routine, we recommend giving your team a bit of wiggle room as you start, by setting a 3-tiered target.
We’ve found that classifying the rewards in at least 3 tiers i.e. gold, silver, or bronze rewards, so that the team has more to gain with more effort, often has the highest motivation to the team.
Using ProService Hawaii’s example, you could set the minimum target (Bronze) for 200 leads, with the reward being a party at a nearby restaurant; 400 leads for silver, with the reward being a local beach party; and the stretch goal (Gold) of 600 leads, with a company trip to Waikoloa Beach or another fancy destination.
Powerful Celebration Question
At the celebration, we recommend skipping the usual boring speeches by the executive team about how you couldn’t have accomplished this, that, or some other thing without Jane and Tom’s help, etc.”
Instead, we implore you to ask one of the most powerful questions a leader can ask when their team has successfully completed anything: “How did you do it?” Just stand up and say “Congratulations. We said we would aim to accomplish X, and we’ve done it!! How did you do it?”
Then simply pick someone who you are certain contributed to reaching that Critical Number, and have them share their story.
Credit for this hint goes to Aubrey C. Daniels, the author of ‘Bringing Out the Best in People: How to Apply the Astonishing Power of Positive Reinforcement’. (This is one of those fundamental business books that all leaders should read at least twice in their lives).
Side Note: If you’re a parent, try this when your children come home with a success story. Rather than showering them with praise, simply say: “Congratulations. So how did you do it?” and let them share their story. You’ll be amazed at how much it means to them and how encouraging it will be.
To reward or not to reward, that is the question.
What if in the middle of an annual or quarterly theme, you observe and note that the team might miss the Critical Number, maybe by a substantial amount? Do you lower the target? Do you adjust midstream? What do you do?
If the organisation misses the mark, as you sometimes will, you have 3 options:
- Repeat the Critical Number in the following quarter. If it’s still crucial for the organisation to achieve the target, refocusing on it the next quarter becomes your best option. We’ve often seen this when a customer service or a quality score needs to be reached
- Move on to another Critical Number if you sense that enough momentum was created with the previous target to keep the organisation trending in the right direction.
- Do a root-cause analysis to understand the reasons you weren’t able to achieve your Critical Number. Once you identify the reasons, Choose one of them to fix in the next quarter. For example, The City Bin Co.’s “180 to One” theme we talked about earlier, was a fix that addressed an issue with the organisation’s health. The CEO, Godsey Browne felt that the reason the team did not perform as one was because members did not understand the challenges faced by other team members. By walking in their shoes for a day, or 3 in this case, he felt they would be more empathetic of each other’s situations and be more willing to work as one unified body to achieve the next goal.
Like a river flowing down from Everest to the ocean, your organisation will have to constantly need to navigate around obstacles and every once in a while pause or even take a step back. The main reason we encourage organizations which are new to this process to begin with Quarterly rather than Annual Themes, is that it’s very common for teams to fail to achieve their goals in the beginning. Don’t change the goals. You might inspire yourself by sticking with a target to see if your team can come up with a surprise victory in the last few days.
Nothing builds energy and momentum like hitting specific targets. If your company has gone through some rough patches lately and your culture has taken a few blows, pick some really short-term goals, focus everyone on the same thing, “play to win,” and get back your mojo!!
