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Communicating, Executing, and Optimizing with Jim Canfield

Allan Hirsh Advisors asked Jim Canfield to be a guest on an episode of the AHA Business Podcast. The podcast series provides information to help you run your business and guide your decision making. The more you know, the better decisions you make. Listen to Jim Canfield speak to Allan Hirsh on an episode of the AHA Business Podcast, or watch the video version.

Allan: My first question is, what motivates you to get up in the morning and go to work?

Jim: I just love to make a difference in the lives and companies that I'm able to touch and interact with. I've been fortunate throughout my career to have the opportunity to work side-by-side with hundreds of CEOs and their teams. I have seen the changes that can take place inside their organizations to make it a more effective organization, delivering against their objectives, and a better place for people to work. People enjoy being a part of an organization where they feel they understand where the organization is heading. They're able to help make a difference there. I just love being a part of that.

Allan: What are CEO tools? I mean, I work with CEOs, so what are some of these tools that you're trying to get them to do, which helps them create a better business for themselves?

Jim: I'll even back up one step from there, Allan, and say you know they're not actually just tools for CEOs, although certainly any entrepreneurial CEO can use these tools to run their businesses more efficiently and effectively. I really like for people to think about CEO as an acronym instead of is a title, and the acronym is to communicate, execute, and optimize. The tools fall into these three categories.

  1. Communicate- think about communication as what do we need to communicate? How do we get that message through the organization so everybody knows where we're headed and how we're going to get there? Also, what are we tracking to know when we're on and off-track?

  2. Execution- how do people know what to do, and more importantly, how do they know that the work they're putting in is delivering the results we're looking for?

  3. Optimize- how do you keep all the stuff going? Do you finish strong? Do you hit that finish line with some gas left in the tank? Optimize is about tools that make that happen.

Allan: Do they do it two years ago on the road, three years down the road, which they really need to optimize some of the tools and things that you teach.

Jim: I look at it this way, Allan if we were here to talk about building a stronger, better body instead of a stronger, better company, what's the likelihood we would talk about diet? How about exercise? Drinking enough water? Getting enough sleep? We know all this stuff. It's about it doesn't help to go to the gym once. It doesn't help to eat one healthy meal, but if done on a regular and disciplined basis, it makes a huge difference. It's the same thing with the tools when used on a regular and disciplined basis over time, the results they create are absolutely amazing.

It's the same thing with the tools when used on a regular and disciplined basis over time, the results they create are absolutely amazing.

Allan: So, let's talk about the 'C', communication skills. What are some of the ones that you teach, and you want your CEO's to follow?

Jim: With communication, I'm typically looking at two things alignment and engagement. We hear those two terms all the time when we hear about people management. How do we get our people more aligned and more engaged? And really, the communication part of CEO tools is about doing those two things.

So let's look at the first one first alignment, it is all about setting direction, and if people in the organization aren't crystal clear, then they can't be fully engaged because they are not sure where we're headed. We use the One Page Business Plan to do that. One piece of paper that lays out strategy, tactics, actions, metrics, and goals all in one place so that people can see, hear, and know where we're headed.

Allan: If they're not sharing that with their senior staff and even all the way down to the shop room floor, there's not a common goal.

I think if you're exactly right and then work loses context. It just becomes a job, and quite frankly, that's not enough. We have people showing up and just do a job that's not enough, and that's really what the second part of communication is about also is engagement. See alignment says, "do I know where you're going?" Engagement says, "I'm willing to help you get there. I will give you the time, energy, and effort." And I know what you're thinking we pay people for that but see, I think we get exactly what we pay for. It's that incremental effort, discretionary effort that people choose to give us or not, and what this all comes down to is trust.

It turns out Allan; there is a one-to-one correlation between engagement and trust. Simply put, if I don't trust you, I won't engage with you. I'll only engage up to the level of our current level of trust.

Allan: If you don't trust me, you're going to jump ship the first chance you get.

Jim: Certainly or worse, I just hang around and don't give you enough to really make anything happen right. To your point, trust and communication rise and fall together. If I need to increase the trust in the organization, I must increase the quantity or the quality of my communication to build that trust.

Allan: What is the name of this one-page form that you use to help businesses set out? It sets the goals and parameters of where you want to go in your business.

Jim: The idea is that one sheet of paper can deliver the answer to 3 vital questions that every one of the organizations must know:

  1. Where we're headed?

  2. How we're going to get there?

  3. What we're tracking to know when we're on and off-track?

That's what the document does. It has a section that talks about our mission, vision, values, and who we are. It has an element of strategy; those are directional objectives that tell us where we're headed over the next few years. Then we have a section of tactics, that's what we're going to do this year to advance that strategy. Then a section of metrics, what are we tracking on an ongoing and regular basis to see when we're on and off track and where. And then goals, how do we know if we win. Every one of those goals has an owner, so someone is tracking and is responsible for keeping us up-to-date about whether we're on track with every one of those items.

All that in one single piece of paper, and frankly every year, Allan, I used to take it, and I would complete it. When I was a CEO, I would have it blown up in poster size. It went on the wall directly across from my desk to remind me exactly where we headed, how we are going to get there, and what we are tracking to know we were on and off track.

Allan: Some of it makes sense. I mean, I use the smart acronym, be specific. You have to build this. In the end, you know by doing it's smart because you're doing the tracking and the analytics. When you do all that, sometimes it becomes permanent, and you track it. You continue to track it.

Jim: For us, that is what execution is about, that second step. Execution sounds like it's what you want people to do, but what I noticed if we went to any of the businesses that you've talked to over the last few years people are busy. The question is, are they doing what we need them to do, to get the results that we say we need, to deliver the goals that we've laid out? The only way we know that answer is by tracking metrics.

One of the phrases I give in the book Allan is, "if we don't measure it, how will we manage it?"

Allan: Well, I have no idea, and neither do they. They need to measure it, and they need to track it, so they're on board. If tracking it and if it varies, they need to adjust the tracking. They need to adjust to correct what they've done wrong because it might not work. They have to have that open thought. They have to think outside the box sometimes to create a better working environment, a better strategic plan.

Jim: You use the term correction. I believe that one of the fundamental responsibilities of a leader is course correction. See, you've probably picked it up, every time I've said where we headed, how we're going to get there, that third phrase I've said is how do we know what are we tracking. We need to know when we're on and off track. I've always said when not if, because the reality is we're always off track.

To your point, we're a little ahead, we're a little behind, or we are a lot ahead or a lot behind. In other words, the only situation I rarely see is we're delivering exactly what we thought we would, at the exact time we thought we would deliver it, and getting the exact result we thought we would get. A leader's job is to make course corrections to get us back on track if we are off track or stay ahead when we're ahead.

Allan: It makes sense, I mean I've read your book, and I appreciate it. I also actually remember Kraig Kramers came to a Vistage group that I was in and did some KPIs that you work on.

Jim: That's typically what we're tracking performance are the key performance indicators.

Allan: So, what does the 'E' stand for?

Jim: Execution. That's the tracking of metrics and making sure we are correcting. We use KPIs, key performance indicators, as our tracking documents; those are the metrics that we're tracking. Then we use charting to be able to see trends over time.

A lot of people just track the metric itself. So they know that that revenue is X or the correlation between two numbers is this, but if you don't start that over time, it's very difficult to assess and identify trends. We have both monthly charting and then a very famous tool inside of CEO tools, the Trailing-Twelve-Month Chart, where we actually look at a new way of looking at Trends over time. This oftentimes revolutionizes how people see their business trends.

Allan: When you look at the sales, and you do it month by month, they're up and down up. You know, February's got fewer days than in March and in January. If you compare February to February, that's well and good, but where are you going where? Where is it going to take you?

Jim: When people show me the numbers, and we charted for the first time on a monthly basis, they typically tell me the story of the numbers. "Here's why it goes up. Here's why it goes down. Here's why it is choppy in the middle."

As you were mentioning, I've heard it all, seasonality, cyclical, 5-week months, weather-related. I never know if the stories are true, but they're always so convicted to them. Look at the trailing-twelve-month chart. The beauty of that chat is number one there's no story. It will never lie to you. Up is good, and down is bad. What we are getting is an annual look, an entire look at a year every single month, and that shows true trends over time.

I've had in so many companies who have looked at their numbers that way, who thought if they were going up or going down, but when they saw them on the trailing twelve, they found out something completely different because it was hidden in the volatility of their numbers.

Allan: It smooths it out. It shows what the future looks like, and as the trailing-twelve-month average, you know where you're going. Then the CEO or the sales manager can adjust and look at the challenges that he's facing because his trailing numbers are not going up.

Jim: Right. All around course correction. The other part of execution is so what happens next?

Allan: So then you have the trailing averages; where does it take you?

Jim: The beauty is now, we look into the future. What I say about execution is to make sure that we're delivering on today's objectives the very best we can. Nothing is worse than working hard at something that we shouldn't have been doing at all. Right? Think about examples like Blockbuster and Kodak, who were running great companies, and they ran right into the ground because they were working really hard at either technologies or models that were no longer being served by the market.

What I say about execution is to make sure that we're delivering on today's objectives the very best we can.

Allan: Just for people's information, Kodak invented digital photography and didn't do anything with it.

Jim: Yes, they suppressed it because they thought it would cannibalize film sales. They were right, just for all the wrong reasons. To avoid that, we use a tool called the What's Next? Tool. We take every client company through each year, and sometimes more than once a year. I can tell you we started taking a lot of clients through it at the beginning of June and July as they started to look at the second half of 2020 because the first half of 2020 wasn't anything that they had expected.

The What's Next? Tool is a way to look into the future and prepare yourself for what you think the current trends will be in the future. Although none of us has a crystal ball, this does start to crystalize some of the thinking about where we might be heading. We can then take advantage of that if it's working in our favor or address it if it's moving against us.

Allan: I mean, you're right, and in February, who would have thought that we'd have a pandemic that literally transformed businesses. It put a lot of people out of work, makes mail order so much stronger, and some businesses just bury their heads in the sand and hope it's going to continue. While others transform what they're doing.

Jim: We told everyone to take a look at the second half of the year (by the way, it's a best practice for all of our company's any way that we work with at Ceo Tools); we call it the Mid-Year Reset.

The way I can describe it, Allan, is I want you to think I'm a big college football fan, and I want you to think about a college football game. That coach is on the sidelines as the last seconds of the half are ticking down. 10...9..8…. He looks up at the scoreboard. There are only one or two circumstances. He's ahead or behind. Now I guess you could say they were tied, but I would consider if you're tied, you're behind.

Think about it as those seconds tick down 3..2..1... How many of those coaches think to themselves, "I don't need to say anything at halftime, these guys know what to do in the second half?"

Allan: None. Not a single coach, even if they are ahead.

Jim: Especially if they are ahead! Think about how few CEOs do the same thing. I like to look at this halftime as a way to think about what message does my team need to hear today. Do they need to talk about how do we stay ahead? How do we make that work from this point forward? Or if we're behind, how do we get back on track? What are we going to do differently or stop doing in the second half to make it work? So that's a big part of this Mid-Year Reset and the What's Next? Tool can really help be valuable in that way.

Allan: So what does the What's Next? look like that you're working with your CEOs?

Jim: It's a four-step process. First, we talked about what is? and we challenge the team to think about what we believe to be true right now? What we believe to be true about our customers? What about our product or service? What do we believe to be true about our competitors? What about our employees? What about the Marketplace. Our industry?

Literally, I have wallpapered conference room walls with the things that people believed to be true. We don't argue about whether they're true or not. We're not looking for the truth, we're looking for things that we believe to be true. Sometimes, they'll be the opposite. One person on one side of the room will say one thing, and someone on the other side will say another. They're completely opposite. That's okay! That's why people see things from different points in the organization and then get a different view. Once we've laid out all the what is? then we say okay, if any or all of this is true, what's likely to happen next? Where are we headed? Once they got it all out, trends begin to emerge.

As I said, things are either moving with us or against us. That allows us to ask the question that we really want to ask in any innovation conversation, the what-if? question. What if we went in this direction? What if we took this approach? What if we try this and these what ifs? That's what we really want to ask, but I found if we start there, people are hardwired to tell us all the reasons it won't work.

Allan: Well, their emotional brain fears false expectations appearing real.

Jim: When they go through those first two steps, that actually creates a little bit of the fear. They become very solution-oriented in the third step of what if? When one of those ideas emerges, and they almost always do, that looks like a great idea to apply; then, of course, we say what now?. What steps should we take to make this happen?

There's an example in the book of a company that literally transformed their business when it was under attack from disruption and turned it into something completely different. They were a cab company. They were one of the largest cab companies in America. Along came Uber, and not good news for them. Out of frustration, during the What's Next? exercise one of their employees said, "You know it's frustrating. They have cars. We have cars. They have drivers. We have drivers. The only difference is that they got that software program that connects the passenger directly to the drive." One of their other team members said, "well, is there anywhere else we can do that?"

The answer turned out to be something I've never even heard of, non-emergency medical transportation. See, there are millions of people every day that have to get from their home to a doctor's follow-up or hospital visit, and they've been told you cannot drive, either because of the procedure they had or because of the medication that they're on. At the time, before Uber, and other than their friends or family, the number one way they made that journey was by cab.

So they built a platform that was very Uber-like, and that was the what if?. What if we build a platform that was similar to an uber-like platform that got a cab there quickly? Then they had to say, "how would we do that?" What now? We're a cab company, that's a lot of drivers and dispatchers, not a lot of programmers. They ended up putting that company in San Diego. Where they could actually recruit people from Silicon Valley to come down to sunny Southern California to live. So today, instead of being a $40 million dollar cab company at risk, they're a $250 million dollar software company with a big audacious goal to be a billion-dollar company. Who knows, they might make it.

Allan: That's all part of this rethinking during the end is Coronavirus. I mean, I have one company that was in an airport shop, which is closed. What are they supposed to do? Well, they collected emails that they never knew what to do with. They started remarketing to the email list, and they created a whole new market for themselves. They're making more money now than they did for the shop.

Jim: We've seen this over and over and over, but we've seen people redesign their businesses, rethink their businesses, rethink their marketplaces because they had to. Sometimes there's nothing better than a 'have to', to have you make changes that you've thought about for years, or maybe worried about losing a set of customers. That's the What's Next? Tool can help do that.

Sometimes there's nothing better than a 'have to', to have you make changes that you've thought about for years.

Allan: Ultimately, the 'O' in CEO is what, and how do you react to it, and how do you deal with it.

Jim: The 'O' is about optimize and in our vernacular, optimize simply means how do we keep it going? How do we have it hit the Finish Line?

I do little 5K races to stay in shape, nothing big. I'm not that good at it, but I enjoy doing them. I always say nobody quits in the first mile. In fact, of those races, a lot of people go off the starting line, like they're going to hit a personal best or personal record every single time. What makes a difference is the last mile. How do you finish? How do you finish strong? How do you get to that finish line with some energy left? Hit it in a full stride? That's what makes a difference, and that's the analogy I would use with teams many times. The plans look great, so how do we finish.

There are three parts to that in the book. The first part of that is people. Do we have the right people on our team and our organization? And in the right position? Jim Collins has helped us understand that for years. We can almost in unison repeat back his famous line about people "Get the right people on the bus and get them in the right seat." The companies he was looking at were Fortune 500 companies. They had thousands, tens of thousands of employees. What a great talent pool to draw from to put people in their seats.

Most of the companies that I work with, the team they went on the field with, in 2020, looks a whole lot like the team they were on the field with, in 2019. The question is, will they get a higher level of performance out of those people in 2020 and again in 2019? The only way to ensure that is Peak Performance Coaching. We have a coaching tool inside of CEO tools that, if used on a regular monthly basis with team members that will improve their performance.

This is about getting the most out of the people that we have, not finding new people. If we do bring new people in, how do we successfully integrate them? I think that's another big opportunity that is often missed is the onboarding process.

The second part is how do we create processes and systems that deliver reliable results over time. Instead of just depending on a few good people who know what to do. I watch smaller companies all the time who can't because they got a personal position for a long time; they never identify, document, and then improve the process that they're using. The other part of the identifying process and building processes and systems is creating a continuous improvement loop that has them get more effective and more efficient at delivering those outcomes.

One of the companies I studied for the book is a company called Danaher. I want to see how large a company I could find who uses the seven principles we talked about. Danaher uses all seven, and they really focus on this whole idea of continuous improvement. They are a 20 billion dollar company with different operating units, and they believe that their process of ongoing continuous improvement is what's driven all of their results. How good of those results? They've been in the S&P 500 20 out of 20 years in a row.

Allan: What are the seven principles? The list of seven things that help companies optimize what they're doing.


  1. Set direction

  2. Communicate to build trust

  3. Track metrics and provide ongoing feedback about those metrics

  4. Look into the future an create an outcome that works for you

  5. Attract and coach winners inside your organization

  6. Create an autonomous organization built around processes and systems

  7. Celebrate successes.

Make sure that there's an ongoing program, a reward system of rewards, recognition, and appreciation of the people inside the organization. They need to know that what they do is meaningful and that the organization appreciates it. It turns out if there's a secret sauce in the whole process, the Silver Bullet, that's the one that turns out to be it.

Allan: Absolutely. In challenging leadership, they list five categories after doing research of 80,000 leaders around the world and the fifth, when the most important is acknowledging successes. You thank people for doing something good. You can do it personally, or you can do it publicly, but it's about thanking people. People feel good when they're thanked.

Jim: We say acknowledge effort, reward results. Even if we don't hit the targets, if people are working hard at it we have to let him know that we appreciate that. When we do hit the targets, let's be sure we're really letting people know.

Listen to this, at the end of last year, one of the world's largest and most well-respected HR Consulting companies, OC Tanner, did a survey to get a study of people who left their jobs voluntarily in the last 12 months and they wanted to know why. The number one reason is you probably expect at 85%; I didn't get the recognition or appreciation I thought I deserved for the contribution I made. Pay was third, and everyone thinks it is about pay.

In that same survey, the ones who said the 85% and said they left because they didn't get enough appreciation, more than half of them said I didn't get one word, not one word of acknowledgment in the last 12 months about the performance that I did.

Allan: That's why people leave. People forget that it's acknowledging them. That it's giving people the idea that they're trusted, and they work. They do their job successfully. When leadership doesn't appreciate it, and they move one to wear their appreciated, and it's not about salary.

Jim: I agree 200%. So many times, I heard top performers who are going to leave, and we all do the same thing to try to keep them.

Allan: Give them more money.

Jim: Right. Here's what I heard over and over before I finally figured out. They would say no no no, Jim; it's not about the money. It's a better opportunity or a bigger challenge. That's what I'm going for a better opportunity, a bigger challenge. You know what I've decided that's code for I didn't get the recognition appreciation I thought I deserve from you, so I'm going to look for it somewhere else.

Alla: That's exactly right. Anyway, this has been great, and I really want to thank you for joining me today for this podcast. Thank you again.

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