The leadership system is the set of principles, tools, and practices that guide the activities of the leadership team. When a leadership system is fully implemented, the leadership team will have actions that they perform daily, weekly, monthly, quarterly, and annually to lead the company. It eliminates the ad-hoc, chaotic feel that many small-to-mid-size businesses experience.
I created the model above based on my experiences with other leadership systems, such as EOS® and Hoshin Kanri/Strategy Deployment (a Lean management technique). While I am biased towards the system I created, other leadership systems also work. They each have their pros and cons. I can help you pick the right system for your business.
Regardless of which leadership system you choose, you will likely want some help along the way. With my years of experience, I can help you navigate the implementation of your leadership system to avoid some of the common pitfalls and issues.
There are 3 layers and 6 elements to this leadership model. At the top is the strategy layer. In the middle is the people layer, and at the bottom is the execution layer. Being proficient in each of these elements will result in a well-managed, healthy business that will give you peace of mind. I'll explain each of these sections in more detail below:
The strategy element defines the direction of the company. A clear strategy keeps all efforts pointed towards achieving the strategic vision. The strategy document should be short, simple, and understandable by everyone in the company. It should answer questions like:
Who is the target customer?
What problem do they have that we solve?
What products and services will we offer?
What will be our competitive advantage?
How will we market our products?
How will we price our products?
What are our financial projections?
What are the big risks that we need to manage?
The culture element describes the personality of the company. A strong leadership system will clarify the culture by defining the core values of the company and then integrating those values throughout the organization.
If core values are merely a plaque on conference room walls, they are worthless. However, when core values are woven into the systems for hiring, firing, promotions, recognition, and communications, core values become a powerful force for building an engaged workforce.
The talent element ensures that the company has the talent it needs, both today and in the future. This element includes the tools to easily assess current talent, as well as the tools to plan for future talent needs. Great talent systems keep things simple and easy so that they are used consistently as part of everyday management.
Getting the right talent in the right roles has become increasingly difficult, and it is rising to a strategic level. The fight for talent is proving to be on equal footing with the fight to win customers.
The 90-day element creates a drumbeat, or cadence, in which the leadership team resets and focuses on the next 90 days. 90 days seems to have some magic. It is a long enough time frame to accomplish significant changes. However, it is short enough that it creates some urgency and a call to action.
Every 90 days the leadership team steps back from being "in" the business and works "on" the business. They do a reset. They learn from the past and make adjustments for moving forward This usually includes the resetting of key metrics, financial goals, and top priorities.
From personal experience, I know that after 90 days leadership teams start to fragment and go in separate directions. The 90-day reset is a critical element of a leadership system because it gets everyone back on the same page and stroking in the same direction.
The metrics element helps organizations to use data and facts rather than relying on "I think" and "I feel". It starts with a scorecard for the senior leadership team having some key measures - 10 to 20 is common.
Once the senior leadership team has measurements, scorecards are created for each level of the organization.
Choosing the right measures is a bit of an art, and it takes several iterations to get it right. Once the measures are dialed in, you'll have a clear lens into the business so that you can take quick action when something starts to slide.
The habits element defines the behaviors that we want to repeat on a routine schedule. This implies that it also defines the behaviors that we want to eliminate.
Many habits are meetings. Meetings serve an important function in business because they can enable communication, discussion, dialogue, and debate. Unfortunately, many meetings are poorly run, and thus they've earned a bad rap. As part of this element, we'll learn how to run effective meetings that people look forward to attending. We'll also get clear about other habits that are important, such as recognition habits, auditing habits (e.g. 5S audits), and so on.