The Second Secret to Owning a Successful Business: 

CULTURE

The Secret To Owning a Successful Business: Culture

SUSTAINABLE GROWTH.

As I highlighted in “The Secret to Success in Owning a Business,” the special sauce to having a successful restaurant, small business, or non-profit resides in three simple, but profound ideas: Leadership, Culture, and Strategy.

Last time we focused on leadership, the ring leader.  Now, let’s focus on the elephant under the big tent.

CULTURE.

Everyone is talking about it, but few have a complete understanding. There is an expression “culture eats strategy for lunch.” Similarly, as Dr. Chris Kolenda so appropriately said in a recent post, “culture always collects.”  Don’t underestimate the power culture has over your business.

CULTURE IS ALWAYS ON THE MOVE.

In a 2017 blog post entitled the 2020 Workplace: The Future Workplace Trends to Know Right Now“, Nikos Andriotis did a great job doing what we should all do if we are hoping to be proactive, instead of reactive.  The business environment is constantly changing, and with it, the culture within.  Niko’s blog itself is case and point, promoting “the most-affordable and user-friendly learning management system on the market.”  Since when did how we learn our jobs efficiently and effectively make so much of a difference?  It’s a fact.  The world is rapidly getting smaller.  It’s getting progressively hotter.  And if you’re not ahead, you will find yourself behind faster than ever before!

And like a plant that has all the sunshine, water, and soil nutrients it needs, your business’s Sustainable Growth relies upon a healthy culture.  An unhealthy culture steals away the very sunshine, water, and nutrients necessary, and adds a powerful herbicide to quickly choke out your business’s Sustainable Growth.  So, what does a healthy culture look and feel like?

HEALTHY CULTURE.

If it is the restaurant culture we are thinking about, we can probably visualize a healthy culture, right?  It should:

  • Be inviting and keep customers coming back for more
  • Reward values like friendliness, cleanliness, expediency, and precision.
  • Maintain accountability by disciplining behaviors such as dishonesty, disrespectfulness, and laziness
  • Retain talented and engaged employees by incentivizing and motivating programs and processes.
Sustainable Growth will never come if you are not continually striving to be better in aspects of your culture.

Quick-action Steps to Sustainable Growth.

Here are three small things that may serve you well in your endeavor to be the best in your business:

  1. Do a quick mental assessment of your business culture: How happy and motivated are your  1) employees?  2) customers?  3) you?
  2. Ask your team what they think about the culture (even better, have someone else ask and capture feedback).  Any trends?  Any negative surprises?  Anything positively noteworthy?
  3. Lastly, reflecting on what we have envisioned a healthy culture, list 3-5 tangible things that are keeping you from increasing the health of your culture.

So, how is your business’s culture?

  • Do the location and your people say everything you want them to say? Are they saying something you don’t want it to say?  How do you know?
  • Are your employees well-versed in reflecting the culture you would like? If not, where you do start? We have many tools and resources that can help you get where you want to go! Check us out!
  • If you are unsure of the message your culture is sending, it is worth the time and effort to get help from someone outside your organization.

Tackle this critical task today before the unhealthy aspects of your culture eat the positive aspects of your strategy and leadership for lunch.

LET’S GET OUT THERE AND DO IT!

Why Help the Restaurateur?

Why Help the Restaurateur?

Serving those who serve

Why am I passionate about helping the restauranteur?  After serving in the military for 23 years, why would I now choose to work with restaurateurs and quick-service franchisees?  The answer is quite simple: I want to continue to serve by serving those who serve!  Can you think back to some quick-service restaurant that broke the monotony of your day-to-day?  What fast-casual dining restaurant answers the age-old question of “what’s for dinner?”  Food remains integral to building relationships, our country’s economy, our culture, and our way of life. The restaurant industry is one of the most dynamic, cut-throat, and often unappreciated sectors in today’s marketplace. 

GUTS – Radical Courage

It is no easy road to be an entrepreneur entering such a demanding industry.  It takes real GUTSradical courage—to join such a space.  Food expenses are rising.  Operating costs, to include the rising cost of wages, are a challenge. The increasing price of leased real estate is a looming foe.  In addition to these costs, the complex nature of marketing, sales, and communication make running a restaurant no easy task. Never mind trying to infuse a level of sustainable growth.  

Key Trends

In the NRA’s 2019 State of the Industry Report, they highlighted five key trends that continue to be at the forefront of the challenge:

  1. A competitive business environment.
  2. Staffing as a top challenge.
  3. Pent-up [customer] demand remains elevated. 
  4. Technology incorporation continues.
  5. Food preferences continue their rapid evolution.

Past performance does not dictate future success

Unfortunately, these trends do not soften the statistics of the past two decades either.  As you often hear it said, past performance does not dictate future success, but hindsight makes it clear that it is a significant challenge to be a successful restaurateur in today’s environment.   The numbers are staggering, with no relief in sight. Research has estimated some 60% of restaurants don’t survive their first year; Anywhere from 70-85% of restaurants either change the owner’s hands or go out of business in the first five years according to a 2005 study.  And personnel turn-over within the restaurant space is commonly observed to be as high as 70% annually. There is much to be gained as a restaurateur. However, it takes something special to not only survive but grow. 

How can I serve you best?

I have spent the past six months transitioning from my career in the Army and thinking about this VERY blog.  My aspiration: how can I serve YOU best?  I have visited a countless number of quick-serve and fast-casual dining restaurants.   I have watched and spoken to the men and women who are doing it, day-in and day-out, and my hats off to you! 

Three action steps

Here are three small things that may serve you well in your endeavor to be the best in your business:  

  1. Take deliberate time to reflect on this year’s five trends, and rate your restaurant? How are you doing in those challenge areas?
  2. Rank order them. Which presents you with the most formidable challenge? Is it staffing? Are you meeting customer demands? Are you integrating the newest tech? Is it staying food-relevant? Rank-order them, one to five.
  3. Do ONE thing about the top three. You can’t fix everything, but you certainly can do one to three tangible tasks to make your business better today.

You can do IT!

Don’t know where to start? Please feel free to reach out. You can do IT. Whatever IT is.

5 Reasons Why Your Development Strategy is Failing

5 Reasons Why Your Development Strategy is Failing

THE RIGHT FOUNDATION

“Kim” was searching for the right development strategy. As the new executive director, she wanted to boost the nonprofit’s revenues and invest marketing resources for the biggest payoff. Some told her to invest in Direct Mail, others to focus on major donors and foundations. Yet other experts suggested a video-centric social media effort aimed at individual donors.

As I began asking Kim some questions about the nonprofit, the reasons for the fundraising problems came clear: she took over a nonprofit that had not gotten the right foundations in place. Until that occurred, no amount of fundraising tactics would work.

A SOLID FOUNDATION FOR GROWTH

Here are the five elements to a solid foundation for growth:

  1. Board governance. Does your board govern effectively? Does everyone on your board donate? Major donors and foundations, especially, will avoid supporting nonprofits that have ineffective boards or directors not willing to put their own money into the organization.
  2. Transparency and Accountability. Watchdog ratings are a quick check to assess whether the nonprofit is using resources wisely. Would you prefer to donate to an organization that has high marks or low marks? Poor ratings are donation killers.
  3. Strategy. Donors want to know the nonprofit has thought through the challenges and has an approach to the mission that stands a reasonable chance of success. Donors expect you to be able to explain your strategy in clear, simple, and believable terms.
  4. Impact. Are your efforts doing any good? Too many nonprofits measure efforts rather than outcomes. Serious donors want to know that their support will make a difference. A combination of personal examples and quantitative measures is the gold standard.
  5. Personal Connection. Donors with a deep, personal connection to the cause are likely to support your nonprofit sustainably. How are you creating such bonds?

Without a solid foundation in place, fundraising tactics are the noise before failure.

GET THE FUNDAMENTALS RIGHT

Kim is now focused on getting the fundamentals right so the development effort has a chance to succeed. Her efforts look like a list of best practices for new nonprofits. She is:

  • Working with the board chair to establish key governance committees and board director expectations.
  • Providing charity watchdogs, such as Guidestar, Charity Navigator, and Give.org the needed documents so they can begin rating her nonprofit. She has also learned from them their standards so she can make sure the right transparency and accountability measures are in place.
  • Developing a sound strategy and implementation plan that she can explain in clear, simple terms.
  • Establishing a compelling set of outcome measures so they can begin collecting and assessing the right data, while also gathering powerful personal stories from beneficiaries of their work.
  • Developing creative ways to create personal connections to the mission for her ideal donors.

BRAVO, KIM!

So many nonprofits are understaffed and overloaded with work. This can create a situation, as it had for Kim’s nonprofit, in which the executive director is overwhelmed trying to keep up while the volunteer board is not fully aware of the costs. This is often a recipe for slow failure. Dedicating time and effort to the 5 important-but-not-urgent issues at the top of this article can help your nonprofit create a solid foundation (and will probably reduce the volume of daily crises, too!).

Five secrets to doubling your workforce

(without more people or gizmos)

Five Secrets to Double your Workforce

Only about one-third of employees in the United States are engaged at work

Julie, we will call her, was so frustrated. She was in charge of a nonprofit that supported an important cause. She had talented people and enough budget to execute their programs. Despite all this, they just couldn’t seem to get anything done.

According to Gallup, only about one-third of employees in the United States are engaged at work. The other two-thirds are physically present but mentally absent.

Julie’s challenge was a bit different. Her employees were engaged but only about one-third of the time … and, of course, at different times. The other two-thirds seemed to be consumed in backbiting, frustration, and unproductive churn.

These 5 low-cost, high-impact efforts are changing all that.

  1. Take the time to explain WHY. Julie would get frustrated when her employees asked her to explain certain policies and decisions. She believed she was being second-guessed. After reflection, she recognized that most of her answers could be summed up with “because I said so.” She discovered that her reaction to the questions was part of the reason for the backbiting and friction.

According to Forbes, explaining WHY has a tendency to improve employee confidence, productivity, as well as the employee’s ability to problem solve and innovate.

A Change in mindset

Julie began using a different approach. She changed her mindset and began to interpret WHY questions as indicators that her employees cared. She took the opportunity to validate their concerns and explain her rationale. When she found that she could not offer a compelling answer, she worked together with the team to come up with a better policy.

  1. Take Responsibility. Julie prided herself on high standards. She set tough goals and challenged her team to meet them. When questioned by the board of directors about a shortfall, Julie often began the explanation with “the person responsible for X is working very hard, but …” She thought she was backing her team. They believed she was throwing them under the bus and blaming them. They never took risks or tried new approaches. Like others, her employees concluded that following the status quo was the safest way to avoid getting blamed and, perhaps, fired.

When Julie realized that her approach had these inadvertent negative effects, she changed her language to “That’s my responsibility. We’ll get to work on it.” She also made sure to distinguish between accountability and blame. She held her employees accountable for things under their control, like developing sound plans to achieve goals and then executing those efforts to standard. But she also made clear that no one was to blame for outcomes that were beyond their control. This reduced the finger-pointing that was wasting time and damaging morale.

  1. Hire for Culture. Every organization seeks the best possible talent and Julie was no different. She carefully outlined the skills for each position, diligently combed through candidate resumes for the right background and experiences, and conducted interviews to choose among the finalists. Normal practices.

Julie’s nonprofit had an average employee retention of 24 months. Every two years, most of her twenty-person team changed. Of those who left within two years, most were due to a culture mismatch — numbers consistent with national trends. With an average salary of $70,000 and an estimated turnover cost at 75% of annual salary, Julie was burning over $1 million in the revolving door.

Determine the ideal culture for your team

Julie used our tool to determine the ideal culture for her team. She discovered that a Collaborative team best addresses the nonprofit’s mission and challenges — one focused on teamwork and innovation. She had been hiring highly-qualified people who were individually competitive, which was undermining coordination. She was also hiring process-oriented people who wanted the comfort of executing routines rather than explore new ideas. Both were creating workplace friction and frustration.

Hiring for culture only works if you have clearly defined the values and expectations of your desired culture. Now, she can begin hiring the right people. Cutting turnover in half will save her nonprofit $500,000.

  1. Put people in roles that match their leader persona. Part of Julie’s turnover challenge was burnout — a common problem for nonprofits. Good people worked very hard, grew exhausted, and burned out. Their last six months on the job were marginally productive. Julie’s team was physically diverse, but most tended to think the same way.

Our leader-persona assessment led to some interesting observations. First, her team was imbalanced toward detail-orientation. This partly explained the innovation problems — she did not have Mavericks or Pioneers who were hard-wired to challenge the status quo. Her Operators and Reconcilers worked very hard to come up with new ideas, and some ideas were very good. But the work exhausted them, contributing to the high turnover for these positions.

Second, she had Jim, her only Maverick, working as the chief of staff, which meant he was trying to play the Reconciler role of building and managing consensus among the team. Jim was a super policy advocate, but he was terrible in this new role. Julie, an Operator, found herself constantly refereeing disputes among the team – something Jim was supposed to handle. She was tired of it. Jim was growing frustrated, too, and she did not want to lose him.

Julie put Jim back in the advocacy role. She is seeking more Mavericks or Pioneers to support her need for innovation and is hiring a Reconciler for the Chief of Staff position.

5. Involve your team in creating the annual business plan. Like most nonprofits, Julie had a 5-year strategic plan. She outsourced the work to a team of consultants. They listened carefully to Julie and the board about the challenges the nonprofit was facing and the main capabilities and initiatives to advance their cause. The consulting team produced a very well-organized strategic plan that was supposed to result in $2 million growth.

The problem was that no one other than the consultants really understood the theory of success, so everyone just kept doing what they had been doing. This was not going to yield better results. Her team was like the other 90 percent who failed to execute their strategies successfully.

Create a new strategy

Julie worked with us to create a simple new strategy to address the changes in the environment. She explained the updated approach to her team and how each of their efforts contributed. Using SLA’s implementation plan model, she had her teams develop their annual tasks and requirements. They were, in effect, aligning their own work plans for the year to the strategy. Dedicating three one-half days to this effort was painful.

But the payoff was immediate. There were no more unresourced, pie-in-the-sky ideas, disconnects between activities and desired outcomes, or competing silos. By outlining the needed resources and setting their own deadlines, the teams gained ownership and accountability for the execution.

Julie reckons that change alone boosted employee engagement from about one-third to about two-thirds.

These five new habits are helping Julie double employee engagement, effectively doubling her workforce’s productivity at very little cost.

Julie is an amalgamation of clients who have experienced these challenges and outcomes.

 

What is your organization’s ideal workplace culture?

Ideal Workplace Culture

Organizations thrive when their official values and workplace culture are in sync. Major problems occur when those values are mis-aligned, leading to employee turnover and disengagement. These problems drain your revenues — it’s like having a big hole in the bottom of your bucket. 

89% of employees who leave within 18 months do so for culture reasons. Replacing them may cost between 50% and 200% of that position’s annual salary. Workplace incivility costs an estimated $14,000 per affected employee. Getting the culture right helps your team grow sustainably.

Workplaces develop one of 4 dominant cultures: Innovative, Collaborative, Authoritative, and Cooperative. Find out which workplace culture is best for your company and the values that support it. 

Hiring the right talent that fits your culture will improve employee retention and engagement.

Three Ways to Reduce Employee Turnover

Reduce Employee Turnover

Reduce employee turnover

“Employee turnover is killing us,” Johnny told me. “We had a nearly 100 percent turnover last year. We can’t create any momentum. Projects get stalled. Our leaders get consumed in the hiring process rather than serving our clients. Our clients get upset. We cannot survive like this.”

The Problem

Employee turnover is a silent revenue-killer. Employees tend to leave organizations due to unhappiness rather than seeking better pay and benefits. Hiring and training a new manager could be as high as 50% – 200% of the position’s annual salary.

What Gives?

Employers tend to hire for talent rather than for culture. A myriad of technological tools rarely help. As a result, employers often hire people who are not a good fit for their culture. This practice can create a toxic work environment that drives away your talent. 46% of employees reportedly leave within 18 months, 89% of those due to culture.

Solutions

1) Define your ideal workplace culture (our tool can help – click HERE).

2) Align your values and workplace culture

3) Screen for qualified people that fit your workplace culture. It is much easier to train jobs skills than to change a person’s workplace habits.

Heading over a cliff

“Johnny” was a senior leader in an organization that was heading over a cliff. Employee turnover was a symptom of larger issues: a chaotic work environment, shifting priorities, and no strategy. “Winging it” had enabled the organization to seize emerging opportunities and gain some early clients. But that mode of operating had become a habit — the company was chasing cash. They were in peril.

The BIG 3

They needed help getting the 3 BIG things right: Leadership, Culture, and Strategy. This included creating a proper strategy and implementation plan, instituting some procedural discipline, and getting the culture right. The last one would be the most challenging.

The company had tried to address the problem by organizing “culture days.” They spent time doing interactive exercises to get to know one another better. They had so-called “radical candor” sessions. They argued over and selected their values. They felt good for a few days. Things seemed to get better.

Reality

Then reality struck. Within a week the same old problems and practices were back. Employees grew more disillusioned. Several quit.

“We’ve got to stop the bleeding,” Johnny told me. Even the best strategy would not overcome the culture problems the company was facing.

“How well do your values align with your workplace practices, Johnny?”

“Don’t you mean: how well do our workplace practices align with our values?”

“Is there a difference in the two statements?” I asked.

“The answer on alignment is ‘Not well.’ The way I phrased it suggests we should align our workplace practices with our values. That’s what everyone teaches. You phrased it differently — your values should align with your workplace practices. Isn’t that backwards?”

Employee turnover plunged

Their values list was heartwarming — focused on cooperation and happiness. The founder actually ran the company on creativity and agility — even if that meant a chaotic work environment. No amount of culture days would change the founder’s DNA.

Johnny understood that he needed to hire employees who could thrive given the organization’s realities. To add candor and avoid cynicism, he recognized that the company would need their values to reflect what they expected in practice.

Johnny began to hire for culture. The company had what we call an Innovative culture. They valued creativity and results over process and co-working relationships. In the hiring process, Johnny deliberately sought qualified people who could thrive in their workplace. Employee turnover plunged.

Hire for culture – deliberately

Gregg Williams, the interim Head Coach of the Cleveland Browns in the latter half of 2018, hires deliberately for culture. He emphasizes a cooperative culture: teamwork and execution over individual stats and player creativity. He starts players who show they have bought into the culture. The Browns won 5 games in the second half of the season — more than they had in the previous 3 seasons combined.

Aligning values and culture improves employee engagement and reduces turnover. Use our tool below to discover your ideal culture archetype — Cooperative, Collaborative, Authoritative or Innovative. Once you have established your ideal culture, align your values accordingly.

The bottom line

Hire qualified people who fit your company’s culture and you will reduce the costs associated with turnover and disengagement.

Uniformity Versus Diversity

Uniformity versus diversity

Uniformity Versus Diversity

What is stronger: uniformity or diversity? Pundits upset about the lack of ruthlessness in Game of Thrones’ latest episode are missing a better point about leadership.

[Spoiler alert] Episode 2 led watchers to gird themselves for the death of beloved characters. After all, who could forget season 1 in which Robert Baratheon and Ned Stark met their unexpected demise? Who would it be this time — Danaerys, Jon Snow, Tyrion, Varys, Sansa, Arya? All of them survived, winning the epic battle against the Night King.

The end of the Night King sets up a more interesting struggle between Team Targaryen and Queen Cersei. This struggle pits uniformity against diversity.

Good fiction prompts us to question conventional wisdom. The upcoming struggle gives us an opportunity to explore the limits of uniformity and diversity.

There is no “I” in Targaryen

Team Targaryen represents diversity — there is no “I” in Targaryen. Daenerys has encouraged debate among her counselors, permitted them to challenge her thinking, and empowered some questionable leaders who have unexpectedly risen to the occasion.

The coalition fought as one against the Night King, but that epic threat masked an emerging leadership struggle as the North refuses to bow to Daenerys and will only follow Jon Snow. The latter’s revelation as the last surviving male Targaryen complicates questions of power and authority.

The Symbol of Uniformity

Cersei, meanwhile, is the symbol of uniformity. It’s her way or the highway. Even her brother and lover, Jamie, left for Team Targaryen when Cersei’s demands became too much to stomach. She is systematically shedding all naysayers and anyone not fully prepared to obey.
After seeing the seven kingdoms tear each other apart, Cersei sees strength in uniformity. She believes they can act faster and strike more decisively than the Targaryen coalition and hold together in the face of adversity.

Team Targaryen

I’ll be watching to see how Team Targaryen’s leader team adjusts in the face of diverging interests. Jon Snow’s ability as a Reconciler in keeping the coalition together and gaining consensus on a shared vision and strategy will be essential for success. Can Daenerys set aside fears of being displaced and empower Jon to play that role? Team Targaryen will also need the ideas of Tyrion (Maverick) and the systematic thinking a Varys (Operator) to create blind spots for Cersei and exploit them.

Team Cersei

I’ll also be watching to see how Cersei (Maverick) attempts to create and exploit fissures within Team Targaryen. Her best strategy is to get her opponents to paralyze themselves. Cersei is brilliant, but can she anticipate and neutralize her opponent’s creativity while acting decisively faster than they can? Will she listen to wise counsel that challenges her thinking?

More broadly, well-crafted fiction can help us explore the conditions that can turn diversity into unity and prevent uniformity from blindness and insensitivity.

What to learn

Want to learn more about balanced leader teams and ways to turn diversity into a strength? Take our “Which Team Targaryen Leader Are You” quiz. Find out which Game of Thrones leader leads like you and how to bring out the best in yourself and others.

3 Ways to Tell if Your Culture is Killing Your Organization

  1. Is your annual turnover higher than 20 percent? Hiring a new employee could cost as much as 50% to 200% of their annual salary.
  2. Do you have toxic leaders or employees? Workplace incivility costs an estimated $14,000 per affected employee.
  3. Is your workplace culture out of step with your strategy? If so, your team is underperforming. This is part of the reason most strategies are never executed.
Workplace Culture Economics

Culture eats talent for breakfast

“Culture,” the late management guru Peter Drucker famously said, “eats strategy for breakfast.” I like to see them as two essential courses, along with leadership, of a 3-course meal. Two out of three is not good enough. A poor culture will undermine a good strategy and drive out good leaders. Poor leadership will damage a solid culture and strategy. A bad strategy will impede the growth of a well-led team.

Culture eats talent for breakfast … and spits out anything it does not like. Talent that matches culture becomes part of the organization. Talent that does not fit gets rejected.

Here’s the trick: your workplace culture is not the same as your workplace values. The culture is defined by what actually occurs at work — hour-by-hour, day in and day out.

Organizations that focus their hiring practices on talent tend to have workplace cultures that grow organically — regardless of the official values that hang on the walls. Hire competitive talent and you will get a competitive culture, even if your official values champion cooperation and collaboration. Hire cooperative talent and your push for a competitive workplace will find resistance. Hire talent that is at odds with your values and you will eventually have a toxic culture.

One former client, James Cook Media, was experiencing an annual turnover of around 100 percent. This fast-paced, innovative company, was hiring highly talented people. The problem was that the new hires expected a steady rather than dynamic work environment. The revolving door was a massive drain on revenues that were bankrupting the company.

We help define culture.  We get results.

We helped them define their culture and the types of employees that would best fit. They began making culture fit their top priority. This dramatically reduced turnover and helped save the company from bankruptcy.

The American Association of Suicidology was experiencing declining revenues. Their dedicated employees had low levels of engagement due to poor strategic direction. When Colleen Creighton took over as the Executive Director in 2017, she recognized the need for a proper strategy. We worked together on this with the board of directors. Once approved, we coached the staff to develop a business plan to implement the new strategy. In effect, the staff was creating their own work-plans for the year.

Employee engagement rose from about 40 to 80 percent — with significant impacts on greater revenue, lower costs, and higher levels of initiative.

Here are three quick ways to check if your culture is damaging your organization:

  1. Is your annual turnover higher than 20%?
  2. Do employees report workplace toxicity?
  3. Are your culture and strategy aligned?

According to one study, poor culture fit accounted for 89 percent of hires let go within 18 months.  

Use our workplace culture quiz to help you identify the ideal culture for your organization, so you can specify values that make sense and improve your hiring practices.

 

what's the difference between a strategy and a plan?

What’s the difference between a Strategy and a Plan?

Here are three things you need to know.

What’s the difference between a strategy and a plan?

We were executing our plan perfectly. All of our metrics indicated that we were on an upward trajectory. We were working hard, creating efficiencies, and consistently improving. We felt very good about our performance.

And yet, we were not succeeding.

That was exactly how I felt after the first 60 days as a commander in Afghanistan. I learned that while successful organizations perform at a high level, the reverse is not necessarily true.

When we begin talking, many of my clients express the unsettling feeling that something is missing – and that missing “something” is creating a gap between high performance and success.

The normal approach to this problem is to stay on the trajectory but work harder, in the belief that this will lead to incremental progress and greater efficiency.  

The problem, however, is that high performance does not necessarily equal success.

This is a difficult truth to swallow, especially for leaders. To admit that is to recognize that the plan is flawed. What we are directing our employees to do, what we are prioritizing, and what we are measuring may all be off-target.

Leaders excessively concerned with execution can begin to drink their own Kool-Aid, believing that blips in performance are leading toward success. This can reinforce the blinders and refuel the desire to do the same things over and over again, but expecting different results. The technical term for this is confirmation bias.

This is where strategy comes in.

Strategy helps you expose disconnects between success and performance, ask the right questions, and adjust as the marketplace shifts under your feet.

Here are three critical differences between a strategy and a plan:

  1. A strategy faces outward, first. A plan faces inward
  2. A strategy orients on factors you don’t control; a plan focuses on what you do control
  3. A strategy measures success; a plan measures performance

Let’s break these down.

A strategy faces outward, first. A plan faces inward

A sound strategy begins with a diagnosis of the current marketplace and your place within it. This establishes the context in which you will advance your vision and mission.

This context is always dynamic. The marketplace is in a constant state of flux, influenced by factors like technology, social and political changes, government policy, competitor choices, and so forth. Your strategy should identify those factors most likely to affect your outcomes. How you believe they will unfold and shape the future become your assumptions.

Once you have outlined the context, you can develop your theory of success. This expresses what you intend to do to succeed. A good strategy process will develop and evaluate more than one theory of success, so you can choose the one you think is best.

Your plan faces inward. It focuses on how to execute the course of action delineated in your strategy. A good plan ensures these tasks are integrated and properly resourced.  

*PRO-TIP: THIS 5-D PROCESS HELPS YOU DEVELOP A STRATEGY

What's the difference between a Strategy and a Plan?

A strategy orients on factors you don’t control; a plan directs what you do control

As outlined above, a wide range of factors will impact the environment within which your business exists and may potentially impact how successful you can be within a given context. You cannot simply wish them away. But what you can do is develop a tool that monitors and addresses these external drivers of change. That tool is your strategy.

A strategy is not a crystal ball that foretells how your organization can move toward a desired end-state. Nor is it a blueprint of the bridge from the present to the future. These analogies are too deterministic and too self-centered for a dynamic and uncertain marketplace.

A strategy is a hypothesis based on your diagnosis and chosen theory of success. It is a best guess that relies on assumptions about the future and factors you so not control. A proper strategy is explicit about these assumptions, allowing you to monitor them as the future unfolds.

Revising your assumptions later on is not a sign that you were wrong, but a reflection that you have been sensitive to the salient changes in the environment. When you revise your assumptions, you may need to modify your strategy.

*PRO-TIP: DISCUSS THE STRENGTH OF YOUR ASSUMPTIONS DURING YOUR QUARTERLY BOARD MEETINGS

Now that your strategy outlines how everything fits, you can make an implementation plan to direct the activities under your control. These activities should be properly resourced and integrated, and then broken down into team and individual workplans.

*PRO-TIP: HAVE THE PEOPLE RESPONSIBLE FOR EXECUTING THE PLANS DRAW THEM UP.  MORE OWNERSHIP LEADS TO BETTER EXECUTION

Strategy measures success; a plan measures performance

Your strategy should outline your mission, vision, values, and goals. Your goals should focus on the impact and outcomes you seek to achieve. These become your strategic measures.

Your plan outlines the critical tasks you selected as important to implementing your strategy. Measuring performance enables you to assess the strength of the execution.

Keep your impact and outcome measures separate from your performance measures. This is because impact and outcomes are influenced by factors you cannot control.

High performance on your implementation tasks coupled with low achievement on your strategic goals is an indication that factors outside your control are undermining your ability to advance your mission and vision.

You need to understand these factors and adjust your strategy and plan accordingly.

*PRO-TIP: MINDING THE GAP BETWEEN SUCCESS AND PERFORMANCE WILL HELP YOU ADJUST FASTER THAN YOUR COMPETITORS 

Getting the strategy right enabled our team of paratroopers to succeed in Afghanistan. A sound strategy helps our clients to create sustainable growth and impact.

To learn more about the difference between a strategy and a plan (and why a “strategic plan” tends to be a reverse Goldilocks), see our short video “Strategy versus Strategic Plan.”

Creating a winning culture: the Cleveland Browns

CREATING A WINNING CULTURe

3 Things You Can Learn From The Cleveland Browns

What I learned talking with the team before their big win on Sunday.

Changing the culture

The Cleveland Browns won big on Sunday – their first road win since 2015 and first back-to-back win since 2014.

What’s changed recently? The coaching staff, now led by interim Head Coach Gregg Williams, is creating a winning culture based on Discipline, Accountability, and Focus. The team is starting to believe.

His assessment of what had been undermining the Browns’ performance: it’s not the talent, it’s the culture that needed to be fixed.

I see many small businesses and nonprofits grapple with culture challenges, too. Gregg’s approach is very practical and effective.

Discipline, Accountability, and Focus have been his watchwords.

Gregg asked me to talk to the team about creating a winning culture on November 24th, the day before meeting their in-state rival in Cincinnati.

Discipline, Accountability, and Focus

I told the story of how Bulldog Troop went from being our most troubled team in 2005 to our best by 2007. This was thanks to the extraordinary leadership of Captains Nathan Springer and Tom Bostick.

Both of them believed in Discipline, Accountability, and Focus.

  1. Discipline: doing the right thing, even when no one is watching.
  2. Accountability: holding one another to the highest standard.
  3. Focus: every repetition, drill, decision matters. Make each one count.
Creating a winning culture

Do this 1-60-24. Make each 1 count, every minute, every hour. Turn these winning hours into winning days. Turn winning days into winning weeks. Turn winning weeks into winning months. That’s how an organization builds a winning culture.

And that’s exactly what Nathan Springer and Tom Bostick did.

This culture of winning was tested in Afghanistan, under dire circumstances. On July 27, 2007, Tom Bostick was killed in action leading his paratroopers during a massive firefight.

So many times, the loss of the leader in combat leads to a unit disintegrating. But not for B Troop. The lieutenants and sergeants took charge and continued taking the fight to the enemy. Their willingness to step up, believe in themselves and their training, and finish the fight saved many lives that day.

Joey Hutto continued this culture of winning when he took command of the Bulldogs. Based on what we learned, we adapted our strategy and began to win over the people. The result: a large insurgent group stopped fighting and eventually joined the Afghan government.

The insurgent leader and his men are now fighting on the side of the government against the Taliban. This outcome may be the biggest win since the overthrow of the Taliban in 2001.

The Cleveland Browns could see themselves in this story. Their response was overwhelming. It gave them one more reason to believe their instincts: Discipline, Accountability, and Focus – 1-60-24 – is how teams create a winning culture.

The Browns are doing just that. It’s a long and bumpy road requiring persistence and hiring people who fit the culture.

Small businesses and nonprofits

How does this affect small businesses and nonprofits?

The words may be a little different, but the concept is the same.

  • Set clear expectations about performance and values (discipline)
  • Hold employees accountable to meet them
  • Be held accountable to your team for setting expectations, strategy, and development
  • Make every task and decision purposeful and make them count (focus)

Do that 1-60-24 and you will get a winning culture.

“The discipline has been great,” veteran center JC Tretter told the media Monday. “It’s something we desperately needed…[Williams] has reined everybody in and gotten everybody focused on one single goal.”

The level of clarity Gregg Williams achieves with his message of Discipline, Accountability, and Focus has given his team confidence and on-field competence. They are beginning to believe in themselves.

Your team can do the same.