If you don’t know where you’re going, well, you’re lost.
It’s true. The best laid plans of mice and men often go awry. Lots of startups plan to do one thing and end up doing something else. And that’s ok. However, what often leads to failure, is when a team does not have a well understood, small set of very important goals. Goals that are so important that “failure is not an option.”
Sounds easy and pretty obvious. But it’s actually pretty hard. It’s hard to get a group to generally agree on “Wildly Important Goals” (as named by FranklinCovey); it’s hard to get larger groups to know and understand goals; it’s hard to figure out what to do day to day to achieve the goals; and on and on. President Kennedy did it well in setting a wildly important goal of landing a man on the moon.
It’s hard, but a leader is defined as “someone with followers”. And to have followers you should know where you are going. And more importantly, the team had better know where they are going with you.
Here are some thoughts for what makes good goal setting.
- Focus on what’s “wildly important”
- Build out the strategies, objectives and tactics
- Communicate, communicate, and communicate again
- Review the plan frequently and adjust as needed
Wildly Important
A great plan should only be a few key goals that if you don’t achieve, lead to failure. A wildly important goal should be aspirational and big picture so as to differentiate from the often urgent, yet less important things which bombard us everyday. Ideally, your wildly important goals become a rallying cry for the team.
And they should be simple and short. 3-5 bulleted sentences. That’s it. No long 20 page business plan document. 3-5 bullets that can be written in an email or on the back of a napkin.
Strategies, objectives and tactics
Often during a goal setting effort, there are lots of questions about what’s a goal versus a strategy, objective or a tactic. Someone once gave me this as way to keep them straight.
- Wildly Important Goal -- A simple declarative statement of something you want to do or achieve. It’s aspirational. A goal most of us can understand might be “I want to lose weight.”
- Strategy -- this is the “how” you are going to achieve it, not the tactics, but the big picture “how”. For example to support the goal of Losing Weight, a strategy might be ”Exercise regularly or Go on a Low Carb diet.”
- Objective -- an objective is how to measure your success. It should be quantifiable and time bound. For example, “Lose 5 pounds in 2 weeks. Lose 15 pounds in 2 months.” And for each, make sure people know who is responsible for achievement of the objective. Accountability is a key ingredient as its how you manage the team as well as an individual and their performance.
- Tactic -- this is the day to day actions you take such as “Eat 2 hard boiled eggs for breakfast or Ride my bike today for 2 hours”. Too often tactics get mixed up as strategy and objectives. For example publishing a white paper or doing a press release are tactics and not objectives.
Even with the strategies and objectives, a great plan should fit on one single 8.5x11 inch sheet of paper. You don’t need to include all the tactics as each person should have their own list. If it is more than a page it’s too much because then it’s nearly impossible to communicate, impossible to remember, and too complicated to manage.
Communicate, communicate, communicate
The reason to do a plan is to lead a team to achieve great things. The key is to communicate the wildly important goals and explain the strategy (how) and objectives (scorecard) for everyone. And once you have communicated the plan, communicate it again, and again, and again. And then email it out and post in on a bulletin board or a intranet site. And refer back to it when dealing with the day to day tactics.
Getting a team to understand, buy in, and own the plan is key to success. If great teams know what it’s important, they will figure out how to make it happen.
Review and Adjust
Planning also means reviewing and adjusting as needed. In success you should celebrate, and in failure, you should reflect and adjust to get better. By honestly talking about failure (which starts with the leader) you may even engender a greater loyalty than in celebrating success.
Whatever the outcome, a set of goals should be a living document that is reviewed regularly. I suggest a regular 90 day review and adjustment of a set of rolling 18 month objectives -- especially for a startup. Most organizations create a calendar year based plan if not an even longer multi year plan. I argue that those are obsolete in the world in which we now live. Markets change, competitors adjust, and you learn new things. A series of smaller course corrections over a shorter period are easier to manage, less disruptive and more effective than a massive change once a year or worse.
In summary, keep it simple, build out the objectives, strategies and tactics, communicate and review the plan frequently.
This little clip from Apollo 13 is a great example of wildly important goal setting along with some objectives, strategies and tactics. A wildly important goal should mean “Failure is not an option.”
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Show me your customers, and I will tell you who you are.
There is an old saying that you can tell a lot about a person by knowing their friends and the company they keep. The same is true for startups and why it is critical to target the right markets and customers to define what kind of company you are or will become.
The right customers varies from company to company or even product to product within a larger corporation. It some cases it might be small businesses, or 18-24 year old consumers, or Fortune 1000 financial services firms (although in today’s market you want to be real sure about that as your target…). What matters is figuring out on which is the right market segment to first focus and establishing a wildly successful reference-able set of customers upon which you can then build a foundation to further expand and grow the business.
This decision about what customers or markets is important for a couple of reasons: Focus, Reference-ability and Competitive Advantage.
Focus
Getting a great team aligned behind a singular goal is key. At Vontu, a company of which I was the CEO and a co-founder, we were like any other startup in that we did not have a lot of funding and we needed to maximize and focus our efforts. For us, we were in an information security space helping organizations to prevent the loss of sensitive information from the inside – such as employees sending out data over email, copying information to an external hard drive or simply helping to find all the places sensitive data is stored inside of the organization.
We made a decision to focus on companies in the Fortune 1000 that have lots of customer information, e.g. credit card and social security numbers – which meant financial services (banks, et al), insurance, and retail. We focused on this problem because the regulatory legislation to protect customer data combined with the negative impact as a result of losing that information, meant it would be a top priority (See recent press about a data breach in the Wall Street Journal). We felt that this was a big enough space to start and could serve as a strong foundation for future growth into other areas such as companies with lots of intellectual property. Everything in the company aligned behind this goal from our products to marketing to sales to support. With limited resources, we put all our wood behind that arrow and as a result, our first customer was one of the 3 largest banks in the United States – and one of the largest in the world for that matter.
Reference-ability
When we closed that first customer, we then knew if we made them wildly successful and reference-able, they would help us get the next 20, 30, 40, or even hundreds of customers who would all have similar characteristics of being Fortune 1000, lots of customer data, and lots of employees which meant unique challenges of scale. The same holds true in any space and is the idea behind how your customers define you. By winning and making this customer successful, we now had credibility to win other customers of similar size and stature in the Fortune 1000. We not only had a reference, but we had a model of repeatability and domain expertise that we could apply to other similar customers. Ultimately, we ended up with 50% market share in the Fortune 1000.
Competitive Advantage
By winning this first customer, and then the next set of Fortune 1000 customers in financial services, insurance and retail, our customers became a self confirming competitive advantage. Customers like to know, especially when buying from startups, that they are in good company. By winning the first large bank, we were able to get most (if not all) of the top 10 banks. By winning the banks, retailers felt more comfortable buying from us. And so on. And this success made it increasingly challenging for our competitors to compete in the Fortune 1000 since they had so few, if any, Fortune 1000 references. Of course, we still had to have a better product and continue to out execute our competitors, but as they copied our features, it was nearly impossible to replicate our customer base.
While this sounds like an obvious thing to do, maintaining that focus is not easy. Why? Early one, while we had been talking with some Fortune 1000 companies to get them as our first customer, one day, out of the blue, I got a call from a small, several hundred person company, based in Hawaii, that was interested in evaluating our product. It took all my courage to tell them while we would like to work with them, we had to to say no. The reason being that it would take just as much time and energy to work to get them as a customer, and the price would have been lower and it would not have helped get customers in the Fortune 1000. Sometimes saying no to a customer is the right answer.
And while this example is from the enterprise software space, the same is true for any market. Toyota seeded the Prius with many high profile celebrities who represented the “green” movement. Facebook was initially for college age students and once they dominated that space they moved to become a mainstream web application even for geezers like me. By winning the right first customers, you can then influence the rest of the market to your ultimate advantage. So pick your customers wisely as they will define who you are.
Let me know what you think and feel free to subscribe to get updates on future posts. I promise, no spam.
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Following the puck can give you a black eye
Wayne Gretzky is one of the greatest hockey players of all time. I remember reading somewhere that while watching hockey games on TV, his dad made him draw on paper where the puck was going in order to teach him to “Skate to where the puck is going, not to where it is”. That quote is often good advice on how to compete. But it does beg the question, “What if someone’s stick is winding up to take a shot right at your face?” Well, at times like that maybe the right competitive strategy is to play a different game. And that is exactly what Nintendo did with the Wii.
I’ll admit it. I got a Wii for Christmas and it’s fun. I will also admit that when I first heard about the Wii I thought Nintendo had totally lost the video game market to Microsoft and Sony. As background, through the 1980′s and early 1990′s, Nintendo was the market leader with the Nintendo Entertainment System and the Super Entertainment System. But once Sony stepped in with the Playstation in 1994 and then Microsoft stepped in with the Xbox in 2001, Nintendo was relegated to a distant third place.
The market dynamics in 2001 were basically as follows (think of this as where the traditional video game market “puck” was going):
- video game players were primarily males ages 12-40
- first person “shoot em ups”, such as Halo, were all the rage.
- all the industry talk was about the need for faster and more realistic graphics.
So what to do?
The common and most often used strategy is to do what everyone else is doing but doing it better and faster. This is exactly what Microsoft has done with Xbox -- and actually for almost every market they enter -- operating systems (Mac), Applications (WordPerfect and Lotus 123), Databases (Oracle and sybase), etc. Let’s call this “Keep up or get ahead of the joneses”. And Microsoft has shown that it can be a good strategy. However, it would dictate that Nintendo make a box that has faster graphics with more shoot em up games, and do it better and faster than Microsoft and Sony.
Instead Nintendo charted a whole new course. They said let’s do something completely different. Let’s zig while everyone else zags. They questioned the status quo and instead of trying to get a piece of an existing market, they challenged the basic market dynamics and literally and figuratively changed the game.
They said let’s build games for a (much larger!) segment of the population not currently even a target for an Xbox or Playstation -- which will make both somewhat irrelvant as competitors. By coming up with a whole new way to play games based on a new controller or, more to the point, a “wand” you hold in your hand and move, they were able to go after a new market such as younger children and their parents and even grandparents. As an example, people play Wii Sports for hours. Many of the games are very simple electronic versions of tennis, bowling, golf, and boxing. The graphics are not at all realistic, but it is tons of fun. Hand someone the controller and they are playing tennis in no time at all -- no matter what the age, from 7 years old to to 70, or the gender. And they actually make money on each unit as opposed to Sony and Microsoft that lose $100-200 per game box and make their money on the royalties from the games.
In hindsight, it seems obvious. Why do you need a controller with a gazillion different buttons so when you press X and O followed by a double tap move to the left does a Karate Kid “crane kick”? How about simpler games such as tennis, and you use a controller you simply swing just like a racket? If you’ve never played a Wii, then watch the video.
And now Nintendo is the video game console market leader. Worldwide sales from Wikipedia shows the results for this generation of games as follows:
- Wii 45.8 million
- Xbox 360 28 million
- PlayStation 3 15.6 million
There are other examples of companies that have done the same thing taken the road less traveled such as Southwest Airlines -- air travel like a bus, FedEx -- overnight mail delivery, or even Cirque du Soleil, a modern day circus for adults (and $100 tickets!).
So next time you are coming up with a startup or competing against a more established player, ask yourself if you can go after a whole new market to capture new demand which makes the competition irrelevant (for the time being at least), and do it with lower costs. That combination of new markets and better economics will make the competition wonder where the puck went for a long time. Let me know what you think…
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Nice resume, but can you juggle?
Hiring and engaging a great team is key to success for any organization. And hiring great people is simply difficult. It’s hard to get great people to show up for an interview, it’s hard to decide position requirements (both functional and relational competencies – see previous post), it’s hard to assess candidates, it’s hard to convince great people to join new teams, and on and on. Of course, the engaging part is tough too but more on that later.
Of the many hiring challenges, one that strikes me as easy to improve is answering the question, “can a candidate juggle?”
You are probably thinking that this post is about if someone can handle lots of things at once, and while that is often important, that’s not the big idea. Juggling is, according to wikipedia, “a physical human skill involving the movement of one or more objects, usually through the air, for entertainment.”
So what does juggling have to do with hiring? Well, if you’re running a circus and looking for a juggler, it’s everything. And more often than not, when interviewing too much time is spent talking versus seeing if someone can actually juggle.
Mike Wolfe, a co-founder at Vontu, suggested I read a book when we first started the company called Peopleware: Productive Projects and Teams
Look left and right
How many times have you been interviewed or performed an interview during which one of the following occurs:
a) A chronological review of a resume
b) A “get to know one another” conversation with little content about the job
c) A rant about how bad a company is – including by the one doing the recruiting!
d) or Worse?
An interview should be about competencies. Competency interviews should focus both on the “left and right brain” of a candidate – as well as the candidates fit with your company’s culture.
Left brain interviews focus on technical competence. Can someone program? Can they prepare a balance sheet? Can they get customer meetings? Can someone juggle?
It is as important to interview for right brain skills. Right brain skills are about how well someone can think. Can they come up with new go to market strategies? Can they intuit an answer based on experience? Can they lead a group to get a job done?
The Audition
Left brain skills are a little more straightforward for which to develop a set of auditions. If you want to test someone’s programming abilities, give them a whiteboard and have them write some code. If you want to see if they can juggle, hand them three balls and let them juggle.
While right brain skills might be less quantitative, you can certainly test someone’s abilities here too. For example, to test for competitiveness, have someone answer, “What is a company you admire that is a leader in their market and what are all the things that make them successful.”
Usually candidates go on and on about what makes a company such as Apple successful with the iPod or Nike with basketball shoes. Each time the candidate finishes, ask again what else makes that company great. Ask this until they have nothing to add. And after they have thought up everything that makes them great, ask “Who is that company’s biggest competitor?”
And once they name a competitor ask “If you were CEO of the named competitor, what would you do to win and beat the market leader in the next three years?” That will test their competitive competency and how well they can think creatively.
Another example is in the importance of communications skills. If you believe in the importance of a person’s ability to communicate (and you should since in everyone’s job there is some level of interaction with others be it customers, other developers, future candidates, internal teams, etc), have them audition and present. At Vontu, one of the last steps in the hiring process was for the candidate to present to a group of their future co-workers. This was something suggested in Peopleware. Not only did we end up with a great group of communicators, but it was surprising how many candidates did not present well.
Coffee for Closers
Lastly, the key to a successful interview is that every candidate should leave each and every meeting wanting the job. Great people need to be sold and interviews can not be one way tests of a candidate. The company is a candidate itself – a candidate company for the person looking for a job. Make sure each interview gives time for the candidate to ask questions. Invest in making sure the candidate knows a lot about the company and why it’s a great company and a great place to work. Don’t forget that once you have decided that someone has the right competencies, you need them to accept your offer. Great people always have multiple options and ultimately once you give them an offer, they get the final decision to join or not.
While there is a lot more to think about in recruiting, getting these three things completed in any interview, will certainly help to get the best candidates and help to get them to join your team. As I’ve said before, It’s about the people, stupid. Let me know what you think.
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