Developing Your Strategic Axis Line

Happy Sunday Operators!

This one covers a lot of ground in a short amount of time. If you have questions on certain aspects of this, what it looks like in granularity, or want help in executing, please just respond with your questions!

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Where do I start when it comes to building systems for my business?

MAIN ISSUE
Developing Your Strategic Axis Line

In the bustling world of small business advice, the allure of piecing together various systems, incentives, and strategies to solve immediate problems is strong. While this "a la carte" approach may offer temporary relief, it often leads businesses to become patchworks.

On top of these systems and ideas that are sewn together, you have addressed issues of motivation and accountability through incentives and pay raises.

You may have asked your shipping guy to increase shipping volume, your procurement department to reduce spend by 3%. Meanwhile, the bank wants a higher debt/coverage ratio and your customers are asking for bulk discounts… right when you are starting to get enough volume to make the whole thing work.

The System in a Box

Some of tried what I can all “system’s in a box”, like EOS, and applied it. Yeah, it works better than nothing, and at least your weekly meetings are structured now. Your company even feels “professional” now.

However, most still feel a sense of too many directions, mis direction, duct tape operations, and disjointedness… its just organized now.

The Need for Alignment

The solution to this fragmented approach is alignment. But alignment is more than a buzzword; it's a strategic necessity. It's about getting every team member:

• Focused on the same objectives.

• Excited for shared goals.

• Speaking a unified language.

• Collaboratively solving common problems.

Overcoming Departmental Optimization

In many businesses, there's a tendency to optimize departments in isolation. The shipping department, for example, might not see how its processes affect accounts receivable, despite both

• being part of the cash cycle

• being customer facing

• being involved in the 4 crucial flows of a company

Effective optimization, therefore, isn't just about making each department efficient in a vacuum. It's about considering the broader business ecosystem – decisions that may seem inefficient at a departmental level can be highly beneficial for the company as a whole.

Building A Unified Business

Does Your Company Have A Backbone?

A successful business hinges on having a clear, compelling goal – "the point" towards which all efforts are directed. This goal is what fuels excitement and drive. It's about more than just making money; it's about pursuing a path with purpose.

How To Build Your Line

Building the Future

1. Think Strategically

Strategic thinking lays the foundation. It involves:

• Assessing your existing resources and networks.

• Identifying new resources you can acquire and leverage.

• Spotting gaps in the market.

• Recognizing underutilized resources.

• Combining your assets with market opportunities.

This process culminates in a “Thesis”.

2. Location Identification

From your strategic thesis, it's essential to pinpoint a clear, concrete destination for your company's journey. This involves

• defining the specific markets you aim to target

• the scale at which you plan to operate

• the organizational structure that will best support your goals in line with your thesis.

This is a destination, not a journey.

Transforming your strategic thinking into a tangible outcome is akin to setting a SMART goal - one that's Specific, Measurable, Achievable, Relevant, and Time-bound.

This goal, which I call a “Strategic Point,” should be quantifiable, providing clear markers to not only indicate when you've reached it but also to measure how close you are to achieving it.

3. Exciting Vision

Transforming your strategic thesis into a tangible, inspiring vision is critical.

I refer to this as your "Exciting Vision." It should be an ambitious yet attainable goal.

This will be your central message, something you consistently discuss in meetings, conversations, and it will instill a sense of purpose throughout the organization.

For this captivating vision to be effective, it needs to have specific components in place.

1. Strategic: aligning with long-term goals.

2. Ambitious: to spark imagination and aspiration.

3. Realistic: to ensure it's within the realm of achievability.

Creating A Path

4. Winning Actions That Compound

Consider the everyday actions that will propel you towards your goal – it's crucial to identify and articulate these actions clearly. They will evolve into the shared language that permeates your business culture.

Take quality, for instance – it's a vital aspect of our operations. When we have to redo a part, it doubles the labor and material costs for a single item sold. Hence, our mantra is: “Do it right the first time.” This phrase is more than just words; it's ingrained in our company ethos, influencing everything from manufacturing processes to employee mindset.

Adopting this approach minimizes operational inefficiencies and sets a clear course for smoother, obstacle-free growth. It's about bringing diligent effort to the forefront to pave the way for achieving our ambitious vision, not just as a company, but as a cohesive team and as individual contributors.

5. Behaviors That Act

In addition to the tactical aspects, it's crucial to consider the behaviors or the "personality" of your company. A common pitfall in achieving alignment is hiring individuals whose demeanor doesn't match the company's culture. For example, placing a passive individual in a high-energy environment can lead to frustration, irrespective of their skills or expertise.

It's essential to identify and embrace your company's personality traits. Whether your organization thrives on intensity, humor, or thoughtful deliberation, recognize these traits and recruit accordingly. This is especially vital for smaller businesses where each team member's impact is magnified.

Ensure that your company's personality aligns with and bolsters your ambitious vision, facilitating the journey towards achieving it.

👉️ Actionable Tip: Your company's personality should ideally reflect your own. Trying to cultivate a culture that's at odds with your natural disposition is often an uphill battle. Authenticity in leadership means leading with a style that resonates with who you are, as you can't impart what you don't possess.

6. Making Winning Matter

In preparing for a major event like an Ironman, athletes often intersperse their training with shorter races. These serve dual purposes they

• assess the athlete's current pace and endurance

• keep motivation high for the ultimate goal.

This principle is equally applicable in business, especially when striving towards a significant vision. As time passes, maintaining momentum and focus can become challenging.

To combat this, incorporating smaller, incremental goals is essential. These 'shorter races' in the business context are vital for sustaining energy, measuring progress, and keeping the team engaged.

How can this be effectively implemented in a company? The key is to establish a singular, company-wide focus. Everyone's efforts should converge on one primary objective. Two methods I've found particularly effective in achieving this are:

1. The Great Game of Business: This strategy involves the entire company in a unified goal, creating a sense of collective achievement and progress.

2. Four Disciplines of Execution: This approach focuses on aligning the entire company's efforts towards a single, shared objective, ensuring that every team member feels a part of the journey towards success.

Constructing A Strategic Framework

6. Annual Box Planning

Create a 12-month plan towards your vision, considering necessary resources and benchmarks.

This plan should clearly define what's on track and what's not, allowing for regular adjustments based on ongoing reviews and developments.

I have gone into depth on how to do this here

7. Execution Lens

Once your Box Plan is in place, it's imperative to adopt a specific Lens or Perspective that guides the execution of this plan.

A common oversight in many businesses is the lack of such a guiding framework. This oversight typically leads to two major issues:

1. Managers and business owners often generate an abundance of ideas that theoretically contribute to the business goals but fail to prioritize them effectively. This results in a plethora of ideas with minimal execution, leading to a year that concludes much the same as it began - full of unfulfilled starts and initiatives. This scenario can quickly lead to team exhaustion and diminished morale.

2. Without a clear execution framework, the company's direction may shift subtly but importantly. This lack of a unified direction can cause the business to veer off course.

To counter these challenges, it's crucial to develop a unified execution framework.

This framework should clearly define how your company will achieve cash flow that aligns with and supports your vision.

Identifying and utilizing specific levers within this framework is key. These levers, once defined, become the primary activities your team focuses on daily.

Clear definition and communication of these levers simplify daily alignment, make prioritization straightforward, and ensure that everyone is collaboratively working towards the same objectives outlined in the Box Plan.

8. Quarterly Accountability

Each quarter, review your progress against the box plan.

This involves

• identifying areas that need adjustment

• holding teams accountable to their objectives

• using these assessments to drive the next quarter's focus.

It's crucial to assess if you need to adjust and what the biggest areas of focus should be in the coming quarter. Weaker areas of the vision and plan should be areas of focus and development.

We have success to the the plan quantified as much as possible, broken down and assigned to individuals to increase the likelihood of achieving it.

9. Monthly Check-in

Hold monthly meetings to ensure strategic alignment.

These sessions are more about the team sharing updates, seeking support, and preparing for the quarterly reviews. It's an opportunity for team members to share, ask for help, and redirect efforts as needed.

10. Weekly Meeting

Conduct weekly meetings focused on execution, cutting across departmental lines.

These meetings should include leaders from all areas of the company, focusing on the most important things decided by the Box Plan at the Quarterly accountability meeting.

Such meetings encourage multiple perspectives, building a more aligned company.

11. Daily Focus

Daily operations should stem from the focus established in the quarterly and weekly meetings.

If you can’t focus on building and cash flow in your daily execution, it won’t magically appear on the statements at the end of the month.

Your daily business activities are intricately tied to the Execution Lens established at the outset. This lens should suggest or clearly delineate daily actions – or 'levers' – that can be employed to achieve the goals set out in your box plan and overall strategic vision, thereby facilitating cash flow generation along the journey.

Daily Planner

To maintain focus and alignment with this lens, we implement a custom daily planner for our team that serves three key functions:

1. It ensures consistent focus on quarterly and weekly objectives.

2. It helps identify areas where focus may deviate, allowing for timely corrective actions.

3. It provides regular updates on key metrics, keeping the team attuned to the company's progress and rhythm.

I've found this approach to be invaluable across all the companies I work with as an operating partner. It bridges the gap between day-to-day operations and the broader, long-term vision, helping management teams stay connected and aligned with their ultimate objectives.

12. Continuous Repetition

Ultimately, the journey towards your vision is ongoing; it's not merely a rhythm to follow but rather becomes part of your identity.

You will craft and adopt mantras and phrases that reflect your actions, your methods of success, and your overarching vision. It's your ongoing responsibility to ensure these principles permeate every aspect of your communication, planning, and decision-making. They should be a fundamental part of every experience within your company.

For instance, at CaneKast, we live by the ethos “Work hard, Play hard”. This philosophy is so ingrained in our culture that every team event includes a dedicated segment for what we term “Playing Hard” – it's an integral part of our schedule.

The key is to actively use these mantras and sayings, not just in motivational speeches but also in everyday conversations, performance discussions, and team-building activities. They play a crucial role in reinforcing the company culture, drawing in individuals who align with your vision, and dissuading those who don't fit the company's personality.

In summary, your vision, mottos, sayings, behaviors, and reinforcing activities should all be integral components of your meetings and gatherings, helping to shape the very fabric of your company's identity.

Ensuring Alignment with Tactical Tips

• Make sure departments like warehouse, procurement, and finance are focused on unified goals.

• Encourage transparency where everyone knows everyone's metrics.

• Conduct de-siloed meetings to foster broad discussion without hampering productivity.

• Don’t just tack on meetings and add committees… always measure and filter based on the “the line”.

By following this roadmap, your business can evolve from a fragmented patchwork to a streamlined, strategically aligned operation. It's about turning your vision into actionable daily activities, ensuring every department and team member is not just working in the business but working towards the business's future success.