Rhythm: How to Achieve Breakthrough Execution and Accelerate Growth
272
Rhythm: How to Achieve Breakthrough Execution and Accelerate Growth
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Product Details
| ISBN-13: | 9781626340794 |
|---|---|
| Publisher: | Greenleaf Book Group Press |
| Publication date: | 02/25/2014 |
| Pages: | 272 |
| Sales rank: | 473,167 |
| Product dimensions: | 5.50(w) x 8.50(h) x (d) |
| Age Range: | 3 Months to 18 Years |
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RHYTHM
HOW TO ACHIEVE BREAKTHROUGH EXECUTION and ACCELERATE GROWTH
By PATRICK THEAN
Greenleaf Book Group Press
Copyright © 2014 Patrick TheanAll rights reserved.
ISBN: 978-1-62634-079-4
CHAPTER 1
THE SECRET TO GROWTH IS DEVELOPING A HABIT TO THINK
It is not enough to have a good mind; the main thing is to use it well . —René Descartes
In January 2012, a company called AvidXchange celebrated a major event: a single online bill payment. Doesn't sound like much, right? You—or your bank—probably make online bill payments every month. You go to the online bill-paying system for your account, enter payment and payee information, and ta-da, you've paid your bill online!
While it is easy for an individual or consumer to make a payment online, it is harder than you might think for a business to pay their vendors electronically. Unlike individuals, businesses have to make sure that payments are integrated into their accounting systems, that the right people have approved the invoice, that payment is sent to vendors in a form they can receive. It can be a complex process for some companies, so it took years of thinking and planning for AvidXchange to launch an online bill-payment system for businesses. It was a move that put them on a path to double their business in fifteen months. I call these high-growth moves winning moves.
I had been working with AvidXchange since 2001, when the company was just a year old. Today, it is a fast-growing software-as-a-service (SaaS) company with revenues north of $30 million. They built the company on the concept of paperless accounts-payable automation, and their flagship product was called AvidInvoice.
By 2010, AvidXchange had become a leader in accounts-payable automation in the real estate industry. But like any hot technology company, their first-to-market advantage wasn't going to last forever. While they were still at the top of their game, they needed to identify the next winning move to fuel their growth and stay ahead of the competition. They could tell that a growth ceiling was looming. Rather than wait until revenue started to flatten, they began the process to find their next winning moves.
In 2001, the AvidXchange team had committed themselves to a strong and regular rhythm of getting together for two days every year and every quarter and spending time thinking about how to grow the business. And every week, they met for an hour to share and discuss any feedback that they might have received from prospects and customers regarding their products and services. They used this feedback to fine-tune their offerings and improved their ideas and products week after week, quarter after quarter.
This rhythm allowed them to work on new winning moves ahead of time. After many sessions, they realized that they had an internal asset that they could monetize. They had relationships with their business clients and their customers' vendors. These vendor relationships were created as they helped their customers validate vendor invoices. And they had already integrated their solution with customers' accounting systems. This combination made AvidXchange uniquely qualified to provide an online bill-pay system for businesses. This was a winning move that could potentially double the company revenue in two years, and even 10X it in the long term!
I can't emphasize enough the value of this kind of rhythm. We would like to think that success happens overnight, that winning moves appear overnight, but they don't. The lesson we can learn from AvidXchange is that it takes the habit of spending time—on a regular and consistent basis—working on and refining your strategy to create success. I call this a Think Rhythm.
Think Rhythm: Put Thinking Time in Your Flight Path
Most executives I ask would agree that it is important to spend time thinking strategically about the future of their businesses. Yet most leadership teams fail to do so. They fail because they do not have a clear and simple way to get this strategic thinking time into their company routine or regular flight path.
Take a closer look at your regular day. What does it look like? Is it filled with various meetings and customer deliverables? Maybe a fire to put out here and there? No leader is sitting on his or her butt waiting for something strategic to do! Being busy with the day-to-day operations of the business is the most common excuse I hear from executives for not having time to think and work on winning moves. Then a few years down the road, their growth flatlines. They are left scrambling desperately for growth. As a CEO or executive, you are accountable for the growth of your company. Provide a clear path to that growth instead of scrambling to try to birth a winning move overnight. "We don't have time" really means that a strategy for growth was not important enough. It did not make the short list. If you truly believe that it is important, prioritize it above the other things that compete for your time. Put a Think Rhythm into your flight path!
Michael Praeger, the CEO of AvidXchange, said to me, "The best advice you ever gave me was to take two days every quarter and every year, get out of my company, and work on the business. It has turned out to be one of the best habits we have today. We do this every quarter and year, regardless of our current situation. We spend that time working on the future of our business and planning exactly what we are going to achieve as a team for the upcoming quarter. In twelve years, we have never missed a session, and they have been amazing. Over the years, this rhythm forced us to stop and think when we least wanted to or when we thought we couldn't afford the time. We kept to our rhythm and met anyway. Ironically, those were the times when we needed to stop and think the most. This rhythm has allowed us to head off a number of crises and develop a vision and strategy for our future."
Not only did the Think Rhythm help AvidXchange develop a game-changing winning move, it has also helped the team beat their competition to become a leader in electronic invoicing. In 1999, one of their competitors raised $200 million in capital, compared to AvidXchange's $1.5 million. I remember discussing the competitor's war chest in a Think Rhythm meeting. Michael was wondering how they could compete with their tiny $1.5 million. Imagine that—going to war against a competitor with 133 times more capital than you! I helped Michael and his team focus on what they could affect, and they built a strategy based on e-invoicing for a single industry. They worked on that strategy every quarter. Ultimately the competitor with the massive war chest couldn't compete against AvidXchange's focus and discipline. The competitor flamed out during the dot-com bust. AvidXchange rode it out. In fact, they've repeated this victory time and time again, most recently with their winning move of becoming an e-payment company.
Implement this Think Rhythm in your company today if you want to ensure your future:
* Two-day annual and quarterly sessions: The first day is part of your Think Rhythm. Spend time working on the future of your business. Work on systematically developing winning moves and building your foundation to make sure you are able to grow with purpose. The second day is part of your Plan Rhythm, which I will cover in part 2.
* Weekly talk and think time: Spend at least an hour every week pushing your strategies forward. In his book Good to Great, Jim Collins provided a great process he calls The Council.
Yes, the Think Rhythm includes meeting quarterly and weekly. If you want to achieve breakthroughs in your growth, you have to keep moving your strategies forward. If you put strategic thinking on hold between quarterly or annual Rhythm sessions, you won't successfully execute your strategy. I'll explain winning moves in more detail in the rest of part 1, but know that you should be testing your ideas before you pour your full resources into executing them. You should be collecting real-world data, observing customer reactions, and talking about your findings with your executive team. Don't be afraid of obstacles. Confront them and solve them. The obstacles were already there. You did not create them. The faster you uncover them, the faster you can bust through them and succeed! Use your Think Rhythm to uncover them quickly and find solutions.
I recently facilitated a company's annual strategy and execution–planning session. I had also facilitated their last annual session. As we reviewed their strategy, the lack of real-world data and insights made it clear that they had not made progress. They had not spent time thinking and working on their winning moves over the last twelve months. This company's leadership team was too focused on their day jobs and had not invested time to test and validate their strategy. When I shared this insight with them, they realized that they had to get on a regular Think Rhythm to work on their strategies and winning moves before another twelve months flew by. They were still inspired by their plan. That's wonderful. Inspiration is good, but inspiration coupled with perspiration is much better!
What should you spend time on during these Think Rhythm sessions? Two things: Work on and improve the foundation of your company when necessary, and develop winning moves to drive revenues and growth.
Building a Strong Foundation to Scale
Ratmir Timashev, CEO of Veeam, was facing a unique situation when I first started working with him and his team. Veeam is a global software company that builds solutions for managing virtual backup and replication. Veeam had no problems growing revenue. In fact, they were experiencing hypergrowth. "We grew from ten million to over a hundred million very fast. It took us five years. And our goal in the next five years is to hit one billion." How many companies hit $1 billion in their first ten years? Very, very few. And it can be incredibly stressful if you stumble or hit a few roadblocks. Those roadblocks can cause a bunch of fires that need to be put out. How do you navigate hypergrowth while preventing fires instead of firefighting? Let me show you how Veeam used a Think Rhythm to thrive during their hypergrowth.
Ratmir was very clear about why he needed my help. He wanted to make sure that his company was ready to maintain good execution and profitability as their revenues zoomed past $100 million. Hypergrowth is a mixed blessing. Maintaining profitability and strong execution becomes a big challenge. He was being proactive to ensure that they could avoid stumbling blocks that could spoil their positive momentum.
"Most of us don't have experience leading a company that's over a hundred million," Ratmir told me. Not many leaders do, I thought. "We are in unknown territory. To grow is one thing, but to stay profitable and continue with our fast growth is another." Veeam had a very focused growth strategy with a few winning moves. They were being proactive, ensuring that the strategy could be executed well and that it would lead to the growth they predicted. This would help them avoid the ceilings of complexity that slow most companies down.
I helped the Veeam management team establish a Think Rhythm to review key strategy elements that are important to all growth companies. These included their core purpose, core values, BHAG®1 (Big Hairy Audacious Goal, as defined in Jim Collins's book Built to Last), core customer, brand promise, and winning moves. We did not work on all of these items at once. Instead, we got on a path of progress and worked on them one at a time. Over the next year, with the discipline of a quarterly Think Rhythm, monthly coaching discussions, and weekly meetings, Veeam reviewed and fine-tuned their strategy elements and maintained their growth momentum.
For instance, reviewing their core customer definition helped them to examine how their resources were being deployed to service customers. They were devoting resources to multiple market segments, from large enterprise organizations to small to mid-sized businesses (SMBs). This was beginning to be stressful as these two types of companies had very different business requirements for their software.
A common mistake is for companies to think about the market segments that they are in instead of understanding the person who really uses their products and services. We live in a P2P world—a people-to-people world. And it is the people who work for companies—not the companies themselves—that buy your products and services. Companies don't buy anything. Only humans do! So what does that person look like? What does he or she need? This core customer may exist in more than one market segment. Veeam discovered that their core customer did in fact exist more and more in the enterprise segment, even though originally most of them lived in the SMB segment. This insight helped them focus their growth strategies on servicing their core customer. And it improved their focus on those few winning moves that were most likely to get them to the $1 billion goal.
"We assumed that we were all thinking or behaving the same way, even on the executive management team," Ratmir said.
Over the next year, the executive team used their Think Rhythm to systematically examine and refine their core values and clarify their BHAG. I would facilitate and work with them during their two-day quarterly sessions to refine key strategy elements on their path of progress. Then over the next three months, the senior team would continue making progress with Tiffany Chepul, their Rhythm coach. We would then confirm their decisions at the next quarterly session, and begin work on the next thing. When they were ready, they rolled out these foundational elements to the whole company. Sharing their strategy in this way allowed them to align more than a thousand employees as they continued to navigate hypergrowth. This is how they are scaling the business past $100 million in a controlled way.
Clarifying and communicating the elements of your strategy gives you a strong foundation to scale your company. These foundational elements permeate all operational priorities. They are long-term decisions that serve as guideposts so that when you're trailblazing, you don't lose your way. They are domino decisions—when you make one of these decisions, it translates into one hundred other decisions. They allow employees to make the right decisions. They allow you to recruit well. They help you execute winning moves efficiently. Great winning moves should be aligned with all aspects of your strategy. They must serve the needs of your core customers, allow you to grow with purpose, and take you closer to your BHAG. You have to be intentional about these decisions because they define your path forward.
Be proactive and review your foundation at every annual session. Get all of your strategic elements on a single page. Not only does it make discussions easier, but it also allows you to effectively communicate these elements throughout the company and execute with alignment throughout the year. I use the One Page Strategic Plan developed by Verne Harnish and described in his book Mastering the Rockefeller Habits. It is a beautiful, simple, and powerful tool—one page to capture all of your strategic elements and your execution plans. It is easily shared, posted, referenced, and used. At your annual meeting, pull out your One Page Strategic Plan and talk about anything that may have changed about your company or the market that requires an adjustment. Here are some questions that might help you review elements of your foundation during your annual meeting:
* Does our behavior show that we are living our core values? Have we hired or fired anyone based on our core values?
* Are we clear on our long-term goal? Do we have a vision for what we would like to achieve in the next three years? Five years? Ten years? Are we making decisions with our BHAG in mind? Are our actions taking us closer to or further away from it?
* Are we building products and services that our core customers need?
* Are we taking on projects that help fulfill our purpose?
* Are our people able to make key decisions without asking permission because they know how to use our purpose and core values?
* On the operational side, have we envisioned what our company will actually look like if we achieve our vision for the next three, five, and ten years? How many employees will we need? What will our annual growth rates look like? How might our leadership structure need to be adjusted?
(Continues...)
Excerpted from RHYTHM by PATRICK THEAN. Copyright © 2014 Patrick Thean. Excerpted by permission of Greenleaf Book Group Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
Table of Contents
Acknowledgments xiii
Breakthrough Execution 1
Part 1 Think Rhythm 19
Chapter 1 The Secret to Growth is Developing a Habit to Think 21
Think Rhythm: Put Thinking Time in Your Flight Path 23
Building a Strong Foundation to Scale 28
Chapter 2 Winning Moves to 2x Your Business 39
The Secret to Developing Winning Moves 43
How to Prioritize Your Winning Moves 47
Use an Idea Bench 51
Chapter 3 5 Steps to Developing Your Winning Moves 55
Step 1 Name Your Winning Move 59
Step 2 Find the "Who" 59
Step 3 Develop Revenue Projections 60
Step 4 Identify and Test Assumptions 61
Step 5 Adjust 64
Chapter 4 Your "Stop Doing" List 69
Stop Losing Moves 73
Stop Overeating from the Buffet of Opportunities 78
Think Rhythm: 9 Actions to Get You Started 84
Part 2 Plan Rhythm 87
Chapter 5 Get Your Team Focused and Aligned with a Great Plan 89
Plan Rhythm: Execution Planning Is Different from Strategic Thinking 95
Close the Communication Gap 100
9 Tips to Running a Great Planning Session 103
Chapter 6 Develop an Inspiring Plan 109
Are You Building a Cathedral, or Just Laying Bricks? 111
How to Execute Your Strategy 117
Discuss, Debate, Agree 121
Avoid Common Pitfalls 127
Chapter 7 Every Quarter is a 13-Week Race 133
5 Steps to Developing a Strong Plan 135
The Power of Having a Main Thing 138
Commit to the Most Important Priorities 140
Get Fully Aligned With Your Departments 144
Chapter 8 The Power of Leading Indicators and Dashboards 153
4 Steps to Developing Leading Indicators 159
Red-Yellow-Green: The Power of Having Clear Success Criteria 164
How to Use Dashboards to Drive Results 168
Plan Rhythm: 14 Actions to Get You Going 172
Part 3 Do Rhythm 175
Chapter 9 Nothing Happens Until You Do the work 177
Do Rhythm: Make Decisions Faster as a Team 180
Everyone Is Accountable to Keep the Plan on Track 182
When to Make Critical Adjustments 189
Chapter 10 Prepare to Have a Great Week 197
Meeting with Myself 198
Everyone Is Accountable to Share Their Insights 203
Chapter 11 Make Adjustments to Keep Your Plan on Track 209
How to Run a Weekly Adjustment Meeting 211
Pay Special Attention During Weeks 4, 5, and 6 217
Use KPIs and Dashboards to Make Critical Adjustments 218
You Need a Plan B for the Big Stuff 221
Do Rhythm: 10 Actions to Get You Doing 226
From Good Execution to Great Execution with Rhythm 229
Rhythm Resources 237
About Gazelles Systems, Inc 239
Index 241
About the Author 251