Hugh’s 5 Pillars of Success
Here are the 5 essential elements for building a sustainable, profitable enterprise, either a business or a charity. Leaving out only one of the 5 pillars, will compromise the ultimate success of the enterprise.
This session today is key. I am going to give you my Five Pillars of Success. Each of these pillars is essential. Leave out one of them, and you are limiting your success by at least 50%. Over my 50 years of working with social entrepreneurs, I have found that there are many gaps. The series “Orchestrating Success” is about identifying those gaps, finding the missing elements that are limiting success for each one of us, and filling those gaps with knowledge, systems, and competent team members. Today, Five Pillars of Success. I am going to give the five in a quick overview, talk about each of the five, and then summarize at the end what to do about it.
Here are the five pillars. Number one is strategy, the absolute essential foundation of any organization, any business, any charity, any church. There must be a road map. I call it a solution map. Where do you want to be, and how are you going to get there? Pillar number one is strategy. We will talk more about it later. There was a session on it earlier, and we will go into detail on different elements.
Number two is leadership. That is us. That is you; that is me. It won’t happen unless we equip ourselves to make it happen. Transform the idea. Transform the organization. It begins with transforming the self.
Three is team. Surrounding yourself with highly competent people and getting out of their way.
Four, financial. We must have somebody who understands finances, who is external to the organization or to our brain, somebody whom we pay to watch the dollars. I have seen lots of people raise lots of money and go bankrupt because they didn’t have somebody on the team with this expertise in planning, evaluating, and monitoring the financial aspects of what we are doing.
The last one is a support system. Every successful businessperson, performer, athlete, every successful person has a coach, a mentor, a support system around them, a combination of those.
Let’s get started. Strategy. If you didn’t listen to it earlier, go back and listen to the session on strategy. Strategy is what we are going to do, when we are going to do it. It unlocks the key for team performance. People know when to be engaged when they have a strategy. They know what they are supposed to do, when they are supposed to do it, and what the result looks like. The strategy is your road map from here to where you want to be. Strategy is a plan that you develop. It’s not a business plan; it’s an operational plan. In my world, a business plan is a financial document that you share with a bank or an investor. That is just a footprint, an overview, a snapshot of what your business looks like. A strategic plan includes strategy; it is an operational plan. There is a quantifiable difference. Understand the difference. Build your strategy. Plan your work, work your plan. That is the only way.
Strategy talks about your long-term strategic objectives. That is 3-5 years out. What is your target? Where will you be? Define the future in the present tense. One year, short-term goal. Define the future in present tense. One-month milestones. Those are 12 accomplishments during the year. Weekly to-dos. Everything so far has been defining the future in present tense. The weekly to-dos are tactical. Many leaders start here. Here is the tactical part. We have not got the long-term vision, the mid-term vision, or the short-term vision in place. All we are doing is tactics. We have so many tactics that they ultimately have the risk of cancelling each other out. We duplicate efforts and have to repeat actions because we didn’t do them in order. Sequence is key. These tactics are in sequence. You have a linear plan. The secret sauce for me is DVDs, Daily Valuable Deliverables. I suggest three goals as the limit for most organizations. Most leaders can manage three. I think there are three areas: financial, operational, and what you are delivering. What are your products and services? You write one plan and it will migrate over time.
In your plan, you write a budget. Every item in your budget ties to a milestone or an action item. There is a relevance, and when you spend money, it makes things happen. There are specific, measurable outcomes. Your strategy also includes your competencies. What do you need to learn? What are the competencies you need on your team? Some of this is overlapping with what we talked about for strategy. It is so important. It reinforces the major themes. What is the compelling reason for people to choose your entity? Why should they join your church? Why should they buy your products? Why should they come to your events? Unique value proposition. What do you offer that is so compelling that people must come, subscribe, do business, participate with your products and services?
There is no distinction in my mind in how we do this for businesses, charities, or churches. We must define our target market. Who are we marketing to? We must define what is so good about what we have. We must have a compelling brand promise. What will they get if they participate with us? We are not very good at defining why. We are not very good at telling people why they should play with us or why they need our products, services, membership, or events. We are not good at that. but it is essential to say why.
As you develop your unique value proposition, look at your vision and your mission. Your vision is your concept. This is what we do. SynerVision provides products and services to leaders and charities at a price that is affordable. High-level, specific, measurable outcomes and products and services. The mission is we do this by providing online content, podcasts, direct work on site, coaching, delivery, mastermind groups, master classes, and leadership cohorts.
Your concept is what you are. If somebody steps on an elevator and asks you what your organization is, you can say it very concisely, very cleanly, and with a compelling presence, compelling words, compelling enthusiasm. What you do is not boring, and you are not boring, so why make your statement boring? Try it out on a child. They will say at first, “How long will this take?” That will test your patience, and it will also see if you can capture their attention. Middle school is a good one. You have to get on ‘em, and they will give you some real honest feedback. Then go to the easier audiences, the adults.
Your vision and mission are key. What is the concept, and how do you accomplish the concept? The application of the concept. Your brand promised this is what you get if you participate with us. How are you going to pay for it, long-term and short term? How are you going to develop this organization over phases? Phase one might be you are coming out of the ground. It is your development into reality. Then there is the start-up. We are going to develop it and build a foundation, then we will move into start-up, then we will move from start-up into revenue, then we will move from revenue into profit, and then we will move from profit into sustainability. Then we will do a sustainability legacy plan. How is this going to transition over time? If it is a movement, if it is a concept that deserves to last over time, how will it do that? Building and sustainability is part of your strategy.
Define the phase. Define the cost of the phases. Define what you are going to do for each phase. Define the sources of income for each phase.
Number two is work on yourself. In John Maxwell’s writing, he writes about the Law of the Lid. Our organization cannot develop any further than our ability to lead it. Our organization is not going to be better than us or our ability to lead. Dun & Bradstreet did a study in 1995 that said that 90% of entrepreneurs who failed did so because they did not have the ability to manage their business. That is leadership. Management and leadership, we will talk about the process. Managing leadership, managing systems, leading people, understanding how all of that works. Work on yourself first.
Here is a gift for you. Go to thedefinitiveleader.com and get my report about building a profitable, sustainable business that works for charities, churches, and businesses. It is about leadership. We have these five pillars as part of it, but it is a multi-page report with details on what you need to know, what you need to grow with, and what you don’t know about your own ability and how to equip yourself. You will be in an auto-responder series where you will receive some videos that will help you think about how to equip yourself for this journey. By the way, this is a marathon, not a sprint. Work on yourself.
Transformational leadership is a style of leadership that is infinitely scalable. It is about creating a high-functioning culture. As a music conductor, I know how to create high-functioning cultures: choirs, orchestras. I have served mega-churches. I had lots of people working on lots of projects who did it because of their passion, not because of their paycheck. I know how to create cultures that are accountable and function at a high level, and I know how to get out of the way. Get that report at thedefinitiveleader.com, and start your journey of awareness. Then you know where to equip yourself.
This is a step you cannot skip. Failure is imminent if you have not equipped yourself to lead this organization. Part of the discernment at this stage is, what is your leadership role? Are you the visionary? Or are you the admin? Are you the connector? Are you the spokesperson? Are you the day-to-day operational person? Lessons of discernment: Where are your skills, and where do you need to learn to delegate? Bring on people who fill the gaps.
This leads us to pillar number three, the team. This is your high-functioning culture. This is about building this high-performing team that orchestrates excellence. It is high-functioning. We call it synergy in business. I call it ensemble in music. How do we get really good people who have very specific talents and roles or responsibilities, and know what they are going to be doing? You have created a system that you know because you have touch points. You don’t micro-manage them; you mentor. You provide information they need. You provide support. You model what you want to see.
I went over this in another podcast, but I will recap: competency. You make sure that they have the competency, and you have checked it out. Make sure that they fit that role or responsibility. Make sure they fit the culture.
Part of your strategy is core values and guiding principles. Guiding principles define how we as a group make decisions. These are the principles we use for applying the values and making decisions. Lastly, make sure they have performance expectations. What will they accomplish related to their strategy in their role or responsibility in a specific, measurable period of time? Your team represents your entity, your enterprise, your business, your charity, your church. Make sure that they are anchored in principles and values. Make sure that they know what the outcomes look like. Make sure that they have a process with metrics for accountability. Accountability is empowering. It is a very different concept of accountability. This is how we collaborate. We share the outcomes, we work together, and we support each other in the good times and the bad.
The next pillar is financial. I talked about this earlier, but do some forecasts. You have raised x number of dollars. How long will that money last before it runs out? Early stage, we are burning money. We are spending it; we are not bringing in revenue. When we start generating income, that cuts down the burn rate. When we start bringing in more money than it costs, that’s profit in any kind of entity. Nonprofit is not a good word; it is a tax-exempt charity. We must have the bottom line in the black. We must have positive cash flow, positive income, because that will fuel our salary, the salaries of those who are doing work for us, and the work that we need to do.
Managing that cash flow is important. Managing that profit is important. Defining the streams of income is important. Where will that money come from for events, products and services? In charities, you have donations. In businesses and charities, you can get grants, sponsorships. There are a number of ways to generate revenue.
It is important to have a financial plan. It is important to have somebody who sets up the books, approves the expenditures, makes sure that every expenditure is assigned to a specific line item that is related to your tactical part, your milestones, your strategy. No exceptions. If it is not in a strategy, either you shouldn’t be spending it or your strategy needs to be revised.
By the way, you do one strategy. You don’t do it every year. You don’t want to do it every five years. You do one and migrate it over time by reviewing it, evaluating it, revising it, and recommitting to the new and updated plan. Quarterly, semi-annually, at least annually, you always have a long-term plan if you have always evaluated and revised your plan. No exceptions. Make sure that your plan is current.
The fifth pillar is about balance. How do we manage things? We must have a mentor, a business coach, a mastermind group, a support system. I serve as an accountability partner, business coach, leadership strategist, and a planner. I am an external resource that helps leaders discover their blind spots, what it is inside them that is binding them. What have we done to create obstacles? How have we gotten in the way and made it impossible for our entity to attract the exact thing we need to attract? We need someone external to us. We need someone who is going to speak the truth, identify those things, and help us develop the systems and skills to overcome what we don’t know how to do, what we don’t know is wrong, and help us learn how to be a better businessperson, charity leader, organizational leader.
Having mentors has been very helpful to me. We call them blind spots because we can’t see them. Effective leaders have a support system, someone you pay who is your mentor, coach, strategist, who is with you long-term. There is a continuity to the program. There is a commitment. Once you make the payment, there is a difference in you and in your results. Be sure that you go through the vetting process for your team and their competencies, the roles and responsibilities of the person you are hiring. Have you checked them out? Have you talked to people they have worked with? Have you defined your expectations? Do they fit your culture and your values?
This is Hugh Ballou. I invite you to go to thedefinitiveleader.com. You will also find a link to my short course on the Five Pillars for Success.
Here is a tip for the weary and the frantic. If you are burned out, tired, and not making much, if your team is under-performing, look at these five pillars. Look at yourself. Equip yourself to understand that yes, we as a leader have created the results we are getting. If you want to change your results, change yourself.
Thanks to Wordsprint for sponsoring this podcast.
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