I’ve always been a strategic soul, plodding and planning my way through life. Along those lines, I’m a big proponent of having a central point of focus in both my personal and professional life. Some people call it a rallying cry. Others may call it a reason for being. The French call it a raison d’être which is just too cool for me to pull off. I call it my North Star.
Writing about my North Star seems especially appropriate, as this is a very important week in my life. You see, it’s the week of my wedding. On Saturday, my fiancé Ned and I are getting married in New York. Without a doubt, the North Star in my personal life is Ned. He’s my anchor, the one who holds the ground while I fly. He keeps me grounded, makes me laugh and makes ordinary days idyllic. He’s my barometer of sorts: if he’s content, it’s likely that I am too.
In my professional life, my North Star operates the same way. It’s the focal point for all strategy and goal setting. It’s what aligns my team and helps everyone focus on what matters. In my 20+ years of professional experience, THIS is the difference maker.
What’s that? You don’t have a North Star at work? No problem! Here’s a step-by-step guide on how to establish one.
Fair warning: for some people who are less math/numbers inclined, this exercise is going to seem like one giant, horrendous word problem from your SAT’s. Fear not! With a little perseverance and some help from your numerically inclined friends, you’ll find your North Star in no time.
Figure Out Your Key Metric. This sounds simple, but it’s stunning to me how many top executives within multibillion-dollar organizations don’t know what their key metric is. Every employee, from the top to the bottom of your organization, should know how your money is made and be oriented towards that thing.
Simply put, the key metric is what drives revenue. At this point in your journey to find a North Star, I recommend enlisting a savvy numbers person in your organization. This might be a financial person or someone in your research department. These people are close to the metrics that move your business, and they’ll likely help you find the right path more quickly than going it alone.
In television, the key metric is ratings or impressions within a given consumer demographic (e.g., Adults age 18-49). For an online retailer, it might be average dollars per order. Keep in mind though, this step is only the tip of the iceberg.
Levers: What Drives the Key Metric? Knowing this is truly crucial. Typically a few things – I call them levers – underlie your key metric. These levers are things that you and your team can directly control, and that’s how progress happens.
Let’s go back to the traditional ad-supported TV example. In television, there are only three ways to affect ratings: get new viewers, get viewers to watch more frequently and get viewers to watch for longer periods of time. Those three things have the potential to be directly affected by things that people do every day, from marketing to scheduling to production.
In the online retailer example, you might affect average dollars per order by finding more high value customers, getting existing customers to buy more and/or getting existing customers to buy products at a higher price point. Again, all of these levers can be directly impacted by things people do including promotion, pricing, research and product development.
Set Goals Based on your Levers, NOT Just Your Key Metric. I know, I know. This seems counterintuitive. If it’s all about moving the key metric, shouldn’t goals only be based on the key metric? Goals should be based largely on things you can directly control. They should also set a timeline for your progress: from x to y in a given timeframe.
I like having one BHAG and a few lever goals. BHAG is a term coined by Jim Collins in his bestselling book Good to Great, and it stands for “Big Hairy Audacious Goal.”
Let’s play this out in our online retailer example:
BHAG: To increase average dollars per order from $100 to $110 in 2015.
Lever Goal #1 – High Value Customers: To increase high value customers (AVG order size >$125) from 20,000 to 25,000 customers.
Lever Goal #2 – Premium Package Orders: To increase sales of premium packages from 1 million orders to 1.2 million orders in 2015.
Over-communicate Your Goals. Once you establish your goals, you’ll need to communicate them to your team. I’m a big fan of kicking it old school and creating a simple infographic that people can hang in their workspaces. I also like to see these hung in common areas like break rooms, conference rooms and even on the door inside bathroom stalls. When I said “over-communicate,” I meant it!
Keep Score. Business is inherently competitive. Yet, so many organizations refuse to keep score in a meaningful way so their employees understand the health of the business and can act accordingly. I love sports, and I love the notion of an ever-present scoreboard. Once you establish your goals, you need to decide what form your scoreboard will take. I like a simple weekly email that states the goals and how you’re pacing. Additionally, an online dashboard is great, provided that that it only tracks your goals and not a bunch of other metrics. Simplicity is the goal here so people can stay focused.
Set Meetings to Stay on Track. Full disclosure: I abhor most meetings. They lack focus, are too long and seem to be a real life compendium for human neuroses. That said, a weekly meeting where you discuss progress on your goals with your direct reports is a beautiful thing. I recommend setting a weekly 30-minute meeting late in the afternoon every Monday. Every people manager, from the top to the bottom of the organization should have his meeting. It creates an unmatched cadence of accountability.
Open the meeting by talking about the latest progress towards the goals. Then, talk about what you personally did the previous week to advance the goals. Next, commit to what you’re going to do this week to move the ball forward. Go around the room and have each team member do the same.
FYI…you don’t have to commit to vast, sweeping activities. For a CMO, this could be as simple as reviewing a contract for a new consumer research vendor that will help you segment your customers more effectively. For a web designer, this could be making progress on a phase of design for your mobile site that will attract more high value consumers. Always remember: small steps to greatness. Just be sure that every team member’s activities can directly impact the goals. And, if they don’t, call them out on it, and redirect activities.
At first, these meetings will be awkward because you’re talking about things that matter as opposed to the typical “round-robin” staff meetings where everyone tells you what he or she did on summer vacation. Give it time. In a few weeks, this will be the best meeting on your schedule. Better yet, the efficiency and importance of this one meeting will forever change how you and your team conduct meetings.
And, BOOM! You’ve completed all of the necessary steps for finding your North Star at work. On the personal front, I can’t help you. I’m just grateful that I found mine!