In the movie Moneyball, Brad Pitt played the role of Billy Beane, the General Manager of the Oakland A’s. The movie depicted events that took place during the early 2000’s when Beane popularized an approach to baseball that is often referred to as Moneyball.
At the time, Moneyball essentially was a way of valuing professional baseball players based on their ability to get on base. The Moneyball approach applies a very specific statistic that focuses on acquiring players that have the greatest likelihood of getting on base based on percentages at bat for the lowest possible salary.
The approach would often minimize the importance of other qualities often favorable in baseball, in favor of opting for a player with the lowest possible salaries and highest on base averages. Lesser known players were acquired in favor of future hall of famers if the statistics worked.
In 2000, the Athletics became the first team in the 100+ years of American League baseball to win 20 consecutive games. I wish I could report that the A’s won the World Series during this time period, but they didn’t. They did, however, improve the teams winning record coming in first or second in their division for many years following the new strategy and doing so with the 4th lowest league salary.
This got me thinking. Is there a key statistic that a business could focus on that would ultimately impact the overall performance of the company? Remember, Beane wanted to win games. He focused on getting people on base to support that outcome. His statistics gave him the information that would help him acquire the best players for the lowest price.
We all know in business what winning the game is, right? If not, let’s set up a time to talk about it. The question is “what is the core statistic that a business should focus on that will ensure that they win at business?”.
The answer is the Systems Performance Score.
Allow me to explain. As you already know, I operate from the premise that:
The key to success of any business is dependent on the quality of its systems. If you want to improve your business, you improve your systems. Since that is true then we must have a method for improving and scoring the performance of our systems.
I’ve put together a simple system that scores the quality of a businesses systems. Using this methodology enables the business to quantifiably focus the organization, like Beane did with player recruiting and the teams strategic focus, to intentionally and systematically improve the business through continual systems improvement.
When scoring a system, the Level 7 System guides us to score four primary areas.
1) Is the system producing the results it is intended to produce?
2) Is the system cost effective?
3) Is the system congruent with the company culture?
4) Is the system easy to follow and use?
We rate each of these questions on a scale of 1-5. 5 being the best. The higher the overall score for the system, the better the system is doing. Once you’ve scored all your systems, then you have a baseline Systems Performance Score.
The business development and improvement strategy of your organization is to continually innovate and improve your systems to elevate the total Systems Performance Score.
Rather than randomly chasing improvement, innovation and growth, the Level 7 System shows us to be systematic, disciplined and intentional in our strategy to growing a thriving, high performance entity. Want to win the world series of business, then focus on your Systems Performance Score.
I am going to be in hot water after sharing this one, but I just couldn’t resist.
The other day my wife and I were chatting about an event I was preparing to have at our home. As I shared with her some of the things I was doing she began to tell me what I should do differently…um…I mean… she offered her suggestions.
I looked at her and said, “You just always have to be in charge, don’t you?”
Without hesitation, she replied, “No! I don’t want to be in charge. I just want people to listen to me and do what I say.”
Not another word was said. It wasn’t necessary.
Being in charge means people are listening and taking direction. But there are varying degrees and methods of being in charge.
On one hand, we can be “The Boss”.
On the other we can be “The Leader”.
At the end of the day both could potential accomplish the same results.
The Boss gives direction, perhaps demands performance. In exchange for time and work, the boss will compensate an individual in the form of a paycheck or some financial reward. The individual that is performing the work doesn’t have to be enthusiastically engaged or even care about the end result. In some cases, their only motivation is to do just enough to maintain the relationship where there is an ongoing exchange of money for their time and effort.
Being a boss is easy. It doesn’t require much other than convincing someone to do the work for pay.
There is a distinct difference between being a boss and a leader.
Leaders can effectively engage people in ways that don’t require compensation. If you have ever served in a non-profit environment that utilized volunteers, you know what I am talking about. Leading volunteers is a whole new world. Leading volunteers requires we get people engaged and inspired to support a mission or goal.
Essentially the leader and the boss accomplish the same thing, they facilitate getting a result.
So why do we want or need to become better leaders?
1- People Need Purpose.
More and more people are looking or requiring a sense of purpose and meaning in the work they are doing. This is not a generational thing by the way. We hear that the millennials are all about work environments that offer them a sense of purpose. This is no longer limited to this generation. Seeking purpose and meaning in work is crossing over into all the generations now. What that means for us as leaders is we must learn how to show our people how the organization can satisfy these needs for them. They need it to be more than a paycheck. I understand if your business is making widgets it might be hard to connect your work to a higher mission.
Perhaps your organization can adopt and support a cause that will help you people see how your business is contributing to the greater good.
I worked with a client in the real estate industry that understood that his business was more than just selling and help people buy homes. He committed his business to helping his people get better and improve every day. He adopted the philosophy that they are in the people development business and they just happen to sell real estate. This cause was very compelling for the people on his team.
I’ve also worked with businesses that determined that a percentage of their revenues would go to help kids in disadvantaged areas by exposing them to computers and teaching them programming and coding skills.
2- People Will Fight Harder to Win.
Leaders effectively engage people in a way that draws out their best. When done well, people in your employ that are enthusiastic about the mission will apply more effort and energy by their choice. They will fight to win.
During the Gulf War in the early 90’s, Saddam Hussein invaded Kuwait and the United States and their Allies came to Kuwait’s aid. Now I believe the US Military Forces are the best trained and equipped military force in the world. In addition to having the resources they need, they have established a great culture. Every soldier I have met has incredible national pride and is willing to give their lives for their country and our freedom. They will resist any force that threatens our freedom. The culture comes out of a history of great leadership through US history.
When the US attacked the Iraqi Forces and Hussein’s coveted Republican Guard they did so with ferocity and precision. The battle began with an aerial assault from the Air Force and Navy that seemed to decimate Hussein’s Army. When the ground forces finally entered Iraq, the Iraqi soldiers, who seemingly had lost heart and motivation to fight, quickly gave up their weapons and positions.
Hussein was a boss. His military was enlisted to do a job but lacked the heart and enthusiasm for Hussein’s mission and vision.
Interestingly, as the United States and Allies war against ISIS and terrorism we seem to be struggling a bit to overcome a seemingly inferior force. Why? Terrorists fight for a cause; an ideology. They are willing to die for it. It is more than a paycheck for them. Regardless of ideology, their system fosters enthusiastic, focused and engaged support from their followers.
The point is that a great leader and organization can accomplish so much more with a fully engaged and passionate band of followers.
3- Great Leadership Inspires Innovation
Great leadership incites greater participation and potential for more innovation and ideas. Great leaders are wildly effective at communication the goals, vision and values of an organization. Bosses often don’t. As such, people working under a boss lack clarity as to the purpose and results they are there to accomplish. Leaders make it very clear and invite people to look for ways to help achieve the goals, vision or values.
Leaders ask for ideas. And when people genuinely care about the organization, they are very willing to offer their insights, ideas and innovation to help get there. In fact, asking them to participate in the vision and goals of the organization inspires their engagement.
Without asking people to support in the ongoing innovation of the organization, the Boss is often the only one capable of providing relevant innovation to improve the business. That can be a daunting task considering the potential exponential improvement that comes by improving all the areas of the organization versus focusing on just a few that the Boss can handle on their own.
Are you the boss or are you the leader? Be honest with yourself. No judgement here. Just an opportunity to improve.
Are you clear on your vision, goals and values? Do your people really know them and do they REALLY care? If not, you might be the boss.
Being the leader requires intentional engagement and inspired communication that raises enthusiasm, fosters buy-in and invokes loyalty to the organization.
Whether you are the Boss striving to be a better leader or a competent leader looking to improve here are a couple starting points.
- Begin by defining your vision, your goals and values. Get them in writing.
- Ask yourself the question, will these matter to our people. If not, revise. If so, continue.
- Communicate, communicate, communicate until they get it. And you will know when it happens and it will be an amazing thing.
“Why can’t you just be happy?” my wife asked me recently.
I paused and thought about it for a moment. “But I am happy. I am very blessed.” Then I preceded to give her a run down of all things I am grateful for including my marriage, kids, my business, health, friends etc.
I continued. “Baby (that’s my pet name for her), I think you are confusing happiness with contentment.”
“I am happy but I am never content. I don’t think I will ever be content. It is simply not my nature.” At that point I gave her a brief lesson on the nature of entrepreneurs.
Understand that true entrepreneurs are never content.
Stop fighting your nature. I have found over they years that virtually every entrepreneur struggles with being content or satisfied. They struggle because they believe that someday they will arrive and finally be content.
Sorry! It ain’t going to happen. Entrepreneurs are problem solvers. Their radar is constantly up and observing things that aren’t working or could be improved. We seek out opportunities to make things better and then hopefully take action to make things better.
We are always looking at things to improve. To the outside world this appears to be someone who is not happy with the way things are.
This nature extends beyond business. It shows up in our marriages, our health, our expectations of our children and so on.
Being an entrepreneur is a gift. We see things that most people don’t. We drive progress. We innovate. We improve.
The moment we stop being content, we cease to operate within our gifting. We stop being an entrepreneur.
Being an entrepreneur REQUIRES that we are discontent. The struggle for many of us to to equate contentment with happiness.
You can be discontent and still be happy. In fact, when you accept that fact that your nature is to be discontent, that in itself should leave your feeling happy.
Why? Because you are operating from a place where you living your true self. Stop fighting it.
Now, there are instances where our nature can become an extreme. We can simply take it to far, especially in the eyes of the others. Like nothing is every good enough. Nothing. This is an unhealthy and unproductive place to be.
Here are some tips that will help you remain more grounded, feel more satisfied and connect with being happy as an entrepreneur.
1- Take time to celebrate your successes. Specifically, schedule time each month to reflect on the improvements and advances that you have made in your business and life. Celebrate privately and with others.
2- Be grateful. Remember to appreciate the things that you do have. Again, make it part of your daily practice. Whether it be a morning or evening prayer or periodic moments of reflection where you stop and observe the good things in your life and business.
3- Smile and have fun. Don’t be so stinking serious and focused ALL the time. Have some fun. Take a break. Enjoy your life and YOUR work. You are most likely doing something that really is special and that you really like doing.
Now go be happy, be discontent and go make something better too!
Today’s message is going to be controversial.
In fact, you might become inflamed by my comments. But hey, sometimes we need to be bold and take some chances in order to get our points or messages across.
By the way, if you’ve got some feedback from today’s post, I’d love to hear it. Fire away.
A little over a year ago, as the Republican candidates for President began to reveal themselves, I was excited and hopeful for the upcoming 2016 election. (In the interest of full disclaimer, I am a registered Republican. However, it is always my intention to be open-minded and vote for the candidates who I believe will act in the best interest of their constituents, community, state or nation. Although, nowadays, finding those candidates is getting harder and harder).
In my assessment and research of the perspective candidates, I thought a handful possessed the values, vision and integrity that would lend themselves to being an effective Commander in Chief.
Overtime the candidates dropped out. One after one, despite their positive qualities, they just couldn’t hang with the likes of Donald Trump.
What the heck! Donald Trump was the last man standing.
Let’s face it folks, even if you adore Donald Trump, you have to ask the question; is he genuinely the best candidate for the highest position in the land? I think not. (For you adoring Trump fans, relax, please don’t take my comments personal.)
For some people he has some very appealing and admirable qualities. Personally, I like some of The Donald’s qualities as well. Some. Not all. In fact, some of the things he says and does just makes me shake my head in disbelief.
Donald is authentic. What you see is what you get. The public is starving for authenticity. It doesn’t matter the generation either. We want someone who is real. Donald, in all his imperfections, is real. (He’s like the Honey Badger…he just doesn’t give a ****.)
Some people, including myself, like the idea that he isn’t a part of the Washington establishment. I believe the general consensus is that people feel like Washington and politicians are completely out of touch with their constituents. People don’t see Washington politicians getting anything done other than serving their own interests.
Some would argue that as a successful business man that he would be effective running our country. Maybe we need some good business sense in Washington.
Maybe Donald getting to where he is right now, the presumptive Republican nominee, was just good timing and dumb luck. Maybe his message was significantly different from the rest of the field that he stood out and garnered sufficient support to get enough delegates from the state primaries and caucuses.
That may be true, but I have another theory.
Donald demonstrated effective leadership and we could all learn something from him.
1- Donald understands the pulse and frustrations that a high percentage of people in our nation are concerned about. He realized that people are frustrated with immigration issues, terrorism, trade disparity, how the middle class is getting crushed and how people are sick and tired of politicians and the Washington Cartel.
2- Understanding those concerns, Donald crafted a message that would address those issues. I didn’t say he created a plan. He created his vision. Build a wall. Bomb ISIS. Deal with China. Fix health care. Create jobs. Build a wall. Make America Great Again. Oh and did I say Build a wall.
3- He effectively communicated his vision in a way that garnered enough support from followers to win the nomination. He managed to engage a passionate, committed group of followers to the cause.
Now here is the interesting thing, other than a couple candidates who clearly stood out as Washington insiders, most of the other candidates possessed a similar vision as Trump. The big difference was Donald’s ability to connect with his followers and communicate in a way that inspired and engaged them.
In my opinion, Donald is not the most effective communicator or orator. He certainly wasn’t the most prepared during the debates. In many cases he acted childlike and immature. Certainly not Presidential. This makes what Donald did even more impressive.
Can you imagine if Donald wasn’t so insulting or divisive? If his personality wasn’t so offensive to some people, the election would be over today. And yet, despite that, he beat 16 other pretty solid candidates.
So what can we learn from Donald that we can apply to our organizations and businesses?
1- You better understand what matters to the people you are going to ask to join your cause, purpose or vision. What’s in it for them is the operative question.
2- You better craft a vision that addresses those things. If your people want to be a part of a business that will provide opportunities for continual advancement and growth, you better include that in your vision. If they want to be coached, you better communicate that. If they want to engage in work that is meaningful to them, say it.
3- Finally, you need to be able to communicate your message in a way that will connect with your people. Donald seems to be speaking people’s language. Like I said, he is proposing many of the same ideas of the other candidates. Donald knows that when he says we are going to build a wall, that communicates a more powerful message than we are going to protect our boarders and stop illegal immigration. Same message communicated in very different ways.
Regardless of whether or not we build a wall and Mexico pays for it, Donald has inspired and engaged enough followers to get him to where he is today.
How are you inspiring your people to enthusiastically engage in your vision?
Rick was very frustrated with his business. Despite the fact he was working harder than ever, the business growth has stalled or plateaued. The business is wildly dependent on him and he couldn’t seem to get free.
Jennifer had a good business. Money was decent. She could take a little time off from time to time. But she knew deep down that the business wasn’t great. The business was far from its full potential. Her dream of building something extraordinary seemed more and more elusive to her. The business hasn’t clearly defined or differentiated itself.
The one thing Rick and Jennifer have in common is they are both stuck. They are intelligent and hard-working. Both were on a journey to build a great business. Although in different places in their businesses they are both on the continuum.
We all are on a continuum to move our business from perhaps barely surviving to modestly performing to performing well but yet highly people dependent to a growing and profitable, professionally managed, scalable, differentiated, system driven business that really matters with a powerful and compelling culture that genuinely serves the lives of the owners, customers and contributors to the business.
We have our own definition of greatness and I believe we all want to get there. If not, why bother?
The Level 7 System started with the premise – How to help entrepreneurs build great businesses that serve their lives.
We developed a set of Level 7 Core Principles; productive ways of thinking about business if you will. The idea is that if we embrace the RIGHT thoughts it will lead to the RIGHT actions.
Then came the Level 7 Implementation Program. We need to help business owners and entrepreneurs to apply the right thoughts in the most productive and effective manner. I am happy to say, my team and I have done a pretty good job of helping our clients accomplish that goal.
Everything changes. Innovation Happens (oh…that could be a t-shirt)
Not too long ago, at one of our Annual Level 7 Roundtables, a client asked me about the key activities of a Level 7 Business. I gave it some thought, did some research and concluded that there are 10 Absolutely Essential Activities Business Must Do to Become Great.
Here they are:
1- Get Your People Fired Up and Enthusiastically Engaged. Great businesses engage in consistent, intentional and varied leadership directed communication with the purpose of creating an enthusiastic collective focus with the people in the organization. Through these communication forums, leadership communicates goals, vision and values in a way to will inspire and get people bought in an on-board with the direction of the business.
2- Pay Attention and Listen. Great businesses expecting people to take an interest in the vision, goals and values of the organization, must demonstrate an interest in the concerns, ideas, frustrations and issues of their employees. These forums, or one on one meetings, with individuals are not intended for mentoring, performance reviews or providing team members direction, they are simply to listen to their people and appropriately respond. Most Level 7 Business conduct 15-20 minute One on One Meetings once per month. Calvin Cummings of Valbridge Property Advisors in Los Angeles, California suggested that implementing One on One Meetings in his business was one of the most important and valuable things he has done for the health, employee satisfaction, engagement and growth of his business.
3- Review Your Systemization Report once a week. Great businesses are systems driven. There seems to be a lot of confusion about what it means to be a systems driven business however. Some people believe that once they have a set of written and documented systems in a three-ringed binder on a bookshelf means they have systemized their business. Or they think that just because they have identified some process or workflow in an area of their business, even though it’s in their people’s heads, they have a systemized business. Well not to burst anyone’s bubble, but this is not systemized or systems driven. Read more about becoming systemize driven here.
Essentially being systems driven means your business has effectively orchestrated the process of documentation, testing, training and implementing your systems. In other words, creating great, high performing, results focused processes that your people are actually USING. Once you’ve done that, your business will be then be engaged in the process of evaluating and innovating your systems to continually make your systems better. The cycle repeats and your business continues to improve.
The Systemization Report is your reference to the current status of every system in your business as it relates to the systems development cycle. The Systemization Report serves as the catalyst that keeps the process of developing, implementing and innovating your systems.
4- A Commitment Standard is in place. If you have a systems driven business, you can trust and have confidence that your business will perform. Why? Because great systems produce great results. However, most systems are operated by people and, as such, you much trust your people to operate the systems according to the way they have been written and developed. If they don’t, then you will not get the results you are expecting or counting on.
A Commitment Standard simply clarifies the company’s expectations when it comes to commitments and follow-through. It establishes an environment of trust between management and staff and employee to employee. Although we assume people will consistently keep all their promises, things frequently slip through the cracks, people don’t always do what they say they are going to do.
This impacting results and business performance. The details matter. And one small slip can cost a company dearly. But the fact is people don’t always complete tasks on time or do things the way they are supposed to be done but it rarely addressed.
The Commitment Standard provides clarity of expectations when it comes to accountability and follow-though.
5- Stop Firefighting and Solve and Eliminate Your Problems Well. Most business owners are effective at solving problems. We are great firefighters. But to build a great business, we need to permanently eliminate reoccurring problems and frustrations. We need a systematic and effective approach to identifying the core source of the problem and in a step by step manner eliminate it. The Level 7 Problem Resolution System is a tool that our clients and their employees regularly use to deal with frustrations and challenges. Not only does it give the business owner and effective approach to solving problems and frustrations but it helps employees to effectively resolve problems too.
6- Monitor and Report Your Employee Performance. Great businesses have clearly defined, objective and measurable goals and expectations for each employee in their organization. These goals are communicated and reported to each team member on a monthly basis. Great businesses are on the same page with their people. When people are meeting or exceeding expectations they get high fives and acknowledgement. For those that are falling short; time and energy is invested to help them improve performance so they can start succeeding. If your people are succeeding across the board, your business is succeeding.
7- Be the Conductor and Orchestrate Correct Behavior. Great businesses understand that we must get things done. If it doesn’t need to be done, then eliminate it. We create Work Prioritizers. Work Prioritizers are essentially check or task list of reoccurring activities your employees are responsible for doing. This is not micromanagement just in case that thought went through your mind. It’s actually empowerment. You are setting your people up to succeed by providing them a resource that keeps them on track. Sales people are reminded to make 5 outbound calls per day. Bookkeepers are reminded to generate month-end reports by the 5th of the month. Front desk people are reminded to purge old files every month. Managers are reminded to review their Systemization Report weekly and take appropriate business improvement action as required.
8- Don’t Take Any Chances and Thread Your Culture. Great businesses are intentional about their culture. Threading or embedding a set of values in an organization requires a lot more than posting a list of values on a wall someplace on your premises. A well-crafted and threaded culture differentiates an organization among its employees and consumers. Level 7 Businesses employ a wide variety of strategies to establish and maintain a powerful and compelling culture. The most notable and effective is to create a Culture Development Team.
Having a Culture Development Team that meets regularly to develop strategies to communicate and engage people in the culture transfers the ownership of threading the culture to employees.
9- Know Your Numbers. I’m not talking about the occasional monthly P&L you might be getting. I am suggesting a set of key indicators that monitor performance for each department and area throughout the business. You could be looking at client acquisition numbers, lead conversion performance, closing ratios, employee productivity, brand development, quality control, client retention etc. The numbers for each business is unique to each business. Getting the numbers however is not enough. It also requires a clear and specific approach to responding when an area of the business is falling short.
10- Get Your Best Minds Together. Innovation is vital to any growing enterprise. Great businesses engage their key people in the business to participate in specific forums designed to initiate and encourage improvement in areas of concern in the business. The Level 7 Brainbank Process brings people together, they look at areas or systems that require improvement and then discuss and implement changes to their current systems to improve the business performance. Innovation and improvement goes from random and haphazard and business owner dependent to systematic, intentional, purposeful and engaging that includes people within the organization.
Once a business effectively and consistent engages in these key activities, they will see and experience massive improvement in all the areas of performance, revenue, profitability, capacity to scale and replicate, employee morale and customer satisfaction while improving your quality of life and connection to your organization.
Want to discuss or evaluate where you might be or how we can help you implement these 10 Critical Activities? Let chat. Click here to check out times and availability for a 30 Minute Evaluation, Assessment and Recommendation Call.