Podcast Summary
Three essential areas for business success: Focus on customer acquisition, customer delivery, and internal operations to increase enterprise value, gain more customers, improve customer value, and decrease business risks.
Building a successful business requires a balanced approach with focus on three essential areas: customer acquisition, customer delivery, and internal operations. These three areas form the three legs of a stool, each played by a functional leader. Customer acquisition is responsible for bringing in new business, customer delivery ensures clients receive promised products or services, and internal operations handles the day-to-day tasks and risks to keep the business running smoothly. These three functions are crucial for increasing enterprise value by gaining more customers, improving customer value, and decreasing business risks. The operations leader, who manages internal functions, should support the decision-making of the customer acquisition and delivery leaders. By focusing on these three areas, businesses can ensure long-term success.
Core Competencies & Hiring: Identify core competencies, focus on them, and hire experts for other functions as your business grows to ensure effective teamwork and business growth.
As an entrepreneur, it's essential to identify your core competencies and focus on them while delegating other functions to experts. In the initial stages, you might wear multiple hats, but as your business grows, you need to hire people who are better than you in those areas. This principle applies to every business, regardless of size, leading to a hierarchical structure with a head of acquisition, head of operations, and head of customer delivery or product, each overseeing specialized teams. Ultimately, your role in a large business becomes overseeing these departments and ensuring they work together effectively. Therefore, it's crucial to invest time in hiring the right people and continuously learning from them.
Building a team: Focus on building a team of like-minded individuals who share your values and mission, rather than getting too attached to specific aspects of your business. Trust them to handle their respective areas of expertise and maintain a long-term focus.
Entrepreneurs should focus on building a team of like-minded individuals who share their values and mission, rather than getting too attached to specific aspects of their business. According to the speaker, it's natural for entrepreneurs to have different preferences and passions within their business, but ultimately, the end goal is to have a team reporting to them. This means that if an entrepreneur dislikes a certain aspect of their business, they should consider bringing in someone else who is passionate about it, allowing them to focus on other areas. The speaker emphasizes that the end result of various businesses, whether it's selling dry cleaning or software, is similar. The key is to surround yourself with a team that aligns with your vision and values, and to trust them to handle their respective areas of expertise. This perspective can help entrepreneurs maintain a long-term focus and decrease the excitement for potential distractions. Additionally, the person with the highest standard should be in charge, and this principle can be applied to every level of the business, from media buyers to content creators to salespeople to recruiters.
Leadership Standards: Hire or promote individuals based on their standards, not tenure, likability, or other superficial factors to raise the average bar within a team or organization.
When it comes to leadership roles, the person with the highest standards and lowest tolerance for anything less than excellence should be the one in charge. This principle applies at every level of a company, from customer support reps to executives. It's important to promote or hire individuals based on their standards, rather than tenure, likability, or other superficial factors. By doing so, you ensure that the average bar is raised within your team or organization. This principle was shared by Jeff Bezos and can be a valuable decision-making framework when faced with hiring or promotion decisions. Remember, the person who can set and maintain the highest standards for your team or organization is the one who should be leading it.
Assessing candidate's understanding: Speak with a sufficient number of candidates to determine if they understand their role and its impact on business objectives, ideally 10-20 candidates. Choose the one who raises the bar for the team.
During the hiring process, it's essential to assess whether you're learning more from the candidate than they're learning from you. This can be determined by speaking with a sufficient number of candidates, ideally 10-20. By doing so, you'll quickly identify those who truly understand their role and how their actions contribute to the desired outcome. It's crucial that they can explain their impact on success and connect it to the larger business objectives. When deciding between strong candidates, consider which one will raise the bar of the team they're joining. Remember, not all roles require the same level of impact.
Hiring Top Talent: Hiring individuals who don't exceed expectations can negatively impact the team and the company, so it's essential to hire top talent and continuously push the team to exceed expectations.
When building a team, it's essential to hire individuals who raise the bar and bring value above and beyond their job requirements. During an interview process for a media buyer role in one of our portfolio companies, I was presented with a seemingly qualified candidate. However, upon further consideration, I realized that he didn't stand out from the other team members. I encouraged the recruiter to reconsider if this candidate was truly the best fit for the team. By settling for mediocrity, we risk making the company worse instead of better. As a leader, it's crucial to recognize the importance of hiring top talent and continuously pushing the team to exceed expectations. This approach not only benefits the individual team members but also contributes to the overall growth and success of the enterprise.
New hires and team performance: Effective communication and addressing potential causes like misaligned expectations, lack of resources, skills gap, low motivation, and poor cultural fit can help new hires succeed and maintain high team performance
Every new hire has the potential to raise the bar of a team and contribute to the overall growth of a company. It's crucial for teams to maintain a high standard and continuously bring in talented individuals. When dealing with underperforming team members, consider the possibility of miscommunication as a potential cause. There are five reasons why someone might not be meeting expectations: they didn't know what was expected of them, they didn't have the necessary resources, they lacked the skills or knowledge, they weren't motivated, or they didn't fit the team culture. By addressing these reasons and ensuring clear communication, teams can help members succeed and maintain a high level of performance. Ultimately, the best employees and teammates are yet to come, and it's essential to keep hiring and developing talent to drive growth and improvement.
Motivation and communication: Effective communication and motivation are crucial for task completion. Rewards like praise, autonomy, and growth opportunities can boost motivation and engagement.
Effective communication and motivation are key to getting things done in a team. If team members didn't complete a task despite knowing what it was, when it was due, and how to do it, it might be due to a lack of motivation. Motivation can be improved by providing rewards, such as praise, autonomy, and investment in their growth. By incentivizing team members beyond monetary means, they will be more engaged and willing to put in discretionary effort. So, clear communication and motivation are essential to ensure tasks are completed efficiently and effectively.
Employee Development: Investing in employee development increases their value to the business and motivates them, but external factors can hinder their performance. Addressing these roadblocks can lead to a more effective and motivated workforce.
Investing time and resources into your employees' professional and personal development can significantly increase their value to your business. This not only benefits the company, but also motivates employees to be more productive and engaged in their roles. However, even with the right resources and motivation, there may be external factors hindering their performance. In the kitchen analogy, having the best chef and resources doesn't guarantee an omelette if essential ingredients like eggs are missing. In a real-world example, my media team had the resources to be efficient at work, but slower upload speeds at home made them more productive there instead. Addressing these roadblocks can lead to a more effective and motivated workforce.
Hard conversations: Understanding reasons behind someone's actions can lead to productive and effective conversations, tackling problems at their source instead of focusing on the person
Identifying the root cause of a problem can lead to significant improvements. In the given scenario, the issue was slow internet speeds that were hindering the media team's productivity. The solution was to invest in upgrading the internet connection, which involved drilling Google Fiber through the floor at a cost of $120,000. This resulted in upload speeds of 1.2 gigs a second, making the office faster than home connections. However, the initial perceived obstacle was not the cost or the effort required, but rather the media team's unwillingness to make the change. To address such situations, a framework for having hard conversations can be helpful. Instead of attacking the person, it's essential to understand the reasons behind their actions. Five possible reasons for someone not doing something include: lack of resources, lack of knowledge, lack of motivation, lack of permission, or lack of ability. By discussing these reasons together, it becomes possible to tackle the problem at its source, rather than focusing on the person. This approach can lead to more productive and effective conversations, ultimately benefiting both parties involved.