I know many business leaders and CEOs who follow the concept of 13-Weeks Sprints, whether they have adapted them from the Rockefeller Habits, EOS, or elsewhere. While 13-Week Sprints are great, many select their “Rocks” without tying them to the three to five corporate objectives for the next year, leading to the company’s 3HAG (3 Year Highly Achievable Goal) and BHAG (Big Hairy Audacious Goal). Thus, why many have ten to twenty “Rocks” that they are tracking and accomplishing, the team still feels like there is no coordination and everyone is going in different directions without alignment. Without alignment, nothing really gets accomplished. To resolve this, in each 13-Week Sprint, you need a Critical Number!
What is the Critical Number?
When determining the three to five corporate objectives for the next year, develop a theme for each quarter. Within that theme, identify the one critical number or metric that needs to be attained to move the company towards its objectives over the next quarter. Examples among my clients include reducing defects in software that they produce, project completion times, customer support response times, and employee utilization. Once the critical metric is identified, determine your “Rocks” for the 13-Weeks Sprint to move that metric to its desired result and rank them. The “Rocks” should be objectives across the organization that all support the achievement of that critical number.
When identifying the critical number for the period, frame it with a sense of urgency. “If we don’t hit this critical number, customer satisfaction will fall and drag down revenue, causing us to lose money and die, so it is essential to achieve this number.” That may seem a little extreme, but by framing it that way, the entire organization realizes its importance and has a ripple effect.
What About Your Counter Critical Number?
So, having identified your critical number and supporting “Rocks,” the following question to answer is, “What is the counter-critical number?” The necessary counter metric ensures that the focus on the key metric for the quarter doesn’t damage the company elsewhere. For example, suppose the critical number is customer support times, and we want to improve efficiency. In hitting that critical metric, we might provide worse customer support but achieve the support times we desire.
So the appropriate counter-critical number might be customer support satisfaction scores. We need to reduce customer support time but maintain or exceed a customer satisfaction score of X. Thus, the counter number stops the organization from hitting the critical metric at a detriment to other areas of the organization.
Selecting the appropriate counter-critical number needs work, as we often don’t anticipate all the changes that can result from setting the critical metric. Think of metrics for sales teams, as great salespeople are excellent at figuring out how to hit their targets with the least amount of effort and gaming the system. Many sales metrics have resulted in bad outcomes because no one thought through the ramifications of the targets. So get your team together and challenge each other about what you would do to hit the critical number that might damage the company. Do not take pride in the authorship of the critical metric or argue that certain behaviors would never occur within your team. To quote Douglas Adams, “A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools.”
As you work through this, a great rule is the “And” rule. You can only respond to any suggestion by agreeing with at least 10% of it and then improving on it by saying “And.” No “Buts” allowed!
Communicate and Celebrate!
Throughout the quarter, update the organization on its progress towards the critical number and maintaining the counter-critical number. Do this in weekly updates. Suppose you can’t generate the critical and counter-critical metrics weekly. In that case, they are bad proxies because, by the time you report them, it will be too late to correct to implement correcting actions to achieve them.
Also, when establishing the “Rocks,” critical and counter-critical numbers for the quarter, set a celebration budget. If you follow EOS, Verne Harnish, or any other management systems, you are aware of red, amber, green, and super-green targets. Basically, red = miss, amber = close, green = met, super-green = overachieve. The celebration budget should be dependant on the level of achievement, e.g.,
- if Y% of the “Rocks” are green and none are red, the budget is $X;
- if all the “Rocks” are green, then the budget is $1.2X; and
- if all the “Rocks” are green, but Z% are super-green, then the budget is $1.5X
Have the team, not the leadership, plan the celebrations for the different budgets and share them with the organization. Regardless of what it is, ensure that it’s something that will get everyone excited and motivated to work together to achieve it. If the numbers are reported weekly, everyone knows how they are progressing towards that exciting goal, and if they are missing some, they can adjust to try and achieve them by quarter’s end.
So go and set targets that will lead you to your 3HAG and not trip you up on the way. Celebrate each accomplishment. You will be glad you did.
Copyright (c) 2021 Marc A. Borrelli
Recent Posts
Do You Understand Your Costs to Ensure Profitability?
You can only determine profitability when you know your costs. I’ve discussed before that you should price according to value, not hours. However, you still need to know your costs to understand the minimum pricing and how it is performing. Do you consider each jobs’ profitability when you price new jobs? Do you know what you should be charging to ensure you hit your profit targets? These discussions about a company’s profitability, and what measure drives profit, are critical for your organization.
Sunk Costs Are Just That, Sunk!
If you were starting your business today, what would you do differently? This thought-provoking question is a valuable exercise, especially when it brings up the idea of “sunk costs” and how they limit us. A sunk cost is a payment or investment that has already been made. Since it is unrecoverable no matter what, a sunk cost shouldn’t be factored into any future decisions. However, we’re all familiar with the sunk cost fallacy: behavior driven by a past expenditure that isn’t recoupable, regardless of future actions.
Do You REALLY Know Your Business Model?
Bringing clarity to your organization is a common theme on The Disruption! blog. Defining your business model is a worthwhile exercise for any leadership team. But how do you even begin to bring clarity into your operations? If you’re looking for a place to start, Josh Kaufman’s “Five Parts of Every Business” offers an excellent framework. Kaufman defines five parts of every business model that all flow into the next, breaking it down into Value Creation, Marketing, Sales, Value Delivery, and Finance.
Ideation! Harder Than It Sounds
Bringing in new ideas, thoughts, understanding, and logic is key as your organization faces the challenges of a changing environment. But when you do an ideation session in your organization… how does it go? For so many organizations, many times, after a few ideas have been thrown out and rejected, the thought process slows down very quickly, and a form of hopelessness takes over. How does your organization have better ideation? I’ve come across a new approach with a few teams lately.
Recruit, Recruit, Recruit!
An uptick in business has begun this quarter, and companies are rushing to hire to meet this surge in demand. What amazes me is how many are so unprepared to hire. Continual recruiting is key to the survival of a company. It isn’t the same thing as hiring—continuous recruiting is building a pipeline of people that you would hire if you needed to fill a position, or “A players” you would hire if they were available.
We All Need Clarity
If your organization is focused on obscurity over clarity, whether intentionally or not, your “A” player employees are vulnerable. There is a looming talent crunch. As we start to emerge from COVID, demand is increasing, and many are scrambling to fill positions to meet that demand. Headhunters and recruiters are soon going to be calling your key “A” employees. Have you been giving them a reason to stay?
Not Another **** Meeting
As Leonard Bernstein put it so well, “To achieve great things, two things are needed: a plan and not quite enough time.” Your meetings can be shorter, more fruitful, and engaging, with better outcomes for the organization, employees, and managers. It’s time to examine your meeting rhythms and how you set meeting agendas. This week, I break down daily, weekly, monthly, quarterly, annual, and individual meeting rhythms, with sample agendas for each.
Is Your Company Scalable?
Let’s start here: Why should your company be scalable at all? If your business is scalable, you have business freedom–freedom with time, money, and options. Many business leaders get stuck in the “owner’s trap”, where you need to do everything yourself. Sound familiar? If you want a scalable business that gives you freedom, you need to be intentional about what you sell, and how.
Are you ready for the Talent Crunch?
Companies are gearing up to hire. Unfortunately, many are competing within the same talent pool. Some experts are currently predicting a strong economic recovery starting in May or June. But as the economy booms, there is going to be fierce competition for talent. How will you fare in the looming talent crisis? Your organization should be creating a plan, now, so you can attract the talent you need in the year ahead.
The “Flaw of Averages” Causes Havoc for Businesses
Discover how understanding the limitations of averages and embracing probabilistic thinking can improve decision-making and risk management in business.
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האתר רשמי הוצע את כל הקישורים הידיעתיים והמסמכים העדכני לקבוצות העוקבות וערוצים הנבחרים מומלצות לקריאה לרכישת קנאביסין בהטלגרמה בארץ ישראל.
כמו כן, האתר מציעה מדריכים מפורטים לכיצד ניתן להתקשר בהקנאביס ולהשיג קנאביס בקלות הזמנה ובמהירות.
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