Setting Clear Expectations
Watch/Listen here or on Apple Podcast, Spotify, or wherever you listen to your podcasts“I believe as the leadership team goes, so goes the rest of the company. So if you don't have that consistent and significant sustainable growth, you've got some work to do.” — Mike Goldman
"Performance does not equal productivity. Productivity is one aspect of performance.”
– Mike Goldman
The Need for a Better Framework
Problem Identification
Lack of measurable expectations.
Inconsistent processes to manage and hold people accountable.
Productivity vs. Performance
Distinguishing Between Productivity and Performance
Productivity does not equal performance.
High productivity does not justify poor cultural fit or negative behavior.
Setting Clear Expectations for Productivity
Common Mistakes
No clear expectations are set.
The misconception that working long hours equals productivity.
Key Performance Indicators (KPIs)
Use 2-4 quantifiable KPIs.
Set clear targets for each KPI.
Ensure a high frequency of measurement for accountability.
Balancing Leading and Lagging Indicators
Lagging indicators measure results (e.g., revenue).
Leading indicators measure behaviors that drive results (e.g., sales calls).
Collaborative Goal Setting
Work collaboratively with direct reports to set expectations.
Ensure mutual agreement and commitment to targets.
Defining Role Success for Company Success
Ensure individual goals align with overall company goals.
Cascade company objectives down to individual roles.
Setting Expectations for Culture Fit
Core Values
Define 3-6 non-negotiable behaviors that reflect the company’s best attributes.
Ensure core values are clearly defined and measurable.
Job Scorecards
Use job scorecards to set clear expectations.
Components: Mission of the role, roles and responsibilities, required competencies, measures of success.
Actionable Steps
Start with defining your own expectations.
Cascade clear expectations throughout the organization.
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Unclear expectations lead to unacceptable results. Unclear expectations don't lead to unclear results. They lead to unacceptable results. Worked with a company who is building new technology to sell to their clients. Their original measure of success. was whether that technology was built on budget and on time.
Well, they built it on budget and on time. The problem was they didn't sell anything. There was no revenue. There was no return on that investment, but the measure they were trying to hit was being on time and on budget. Unclear expectations led to unacceptable results. Working with a CEO recently who wanted to know from his team, how he could be of more help to them since he thought his primary role as CEO was just to touch base and help everyone on the leadership team.
Now, while that is part of what a great leader should do. The CEO, the head of the company needs to have measures of success that drive what they do and a, an understanding of whether they're successful in what they're doing. Their job is not to do everybody else's job. Their job is not to spend their days figuring out where other people need help.
And the results of that company showed that the CEO was not spending time where he needed to unclear expectations lead to unacceptable results.
Worked with a firm for a number of years, still work with them who have a marketing function and the marketing function for quarter after quarter after quarter believed that Expectations for them, their measure of success was to launch a number of marketing campaigns.
They were successfully doing that. They looked pretty good. Their website looked pretty good, but the number of qualified leads coming from those marketing campaigns. The number of times the phone actually rang because someone who saw one of those marketing campaigns wanted to work with them was, I don't even want to say it was pitiful.
It wasn't even measured. And they'd wondered why their sales force didn't feel like they were being supported by the marketing team. Unclear expectations lead to unexpected results.
One more example was working with a leadership team and they were having issues with employee retention. When I asked them who was accountable for employee retention and even just ask them, What are your employee retention numbers?
I'm hearing you're not happy with them. You have a sense too many people are leaving. But what are the numbers and who's accountable? At first, they all looked at each other and then the CEO looked at the head of HR and said, well, aren't you accountable for that? The head of HR said, I don't know. We've never talked about that.
I could track it if you want. I'm not sure how I could be accountable for it when I don't manage everybody, but man, it's probably something we need to talk about. Well, no one was accountable for it. Unclear expectations led to unacceptable results.
So we've got a problem setting expectations, measurable expectations.
We've got a problem, even if they're set, there's no consistent process to manage and hold people accountable to those measures. And at times there's too many people accountable, who's accountable for every new, uh, everyone who's accountable for net profit, everyone. We need a better model. We need a better framework.
The other problem I see is the belief that productivity equals performance that the words productivity and performance are synonymous.
And I don't believe they are. Not only do I not believe they are, I think it's dangerous because we, when we ask how someone is performing, if you've got a great salesperson that is bringing in a ton of revenue, we say they're performing at a high level. Although that salesperson who's bringing in a lot of revenue is consistently making the people around him worse, is disrespecting the customer service team, disregarding the operations team, not doing the things he needs to do to help build the culture.
It's actually this person's tearing the culture down. So they say, well, he's kind of a high performing jerk. I don't believe there's such thing. I don't think that person is high performing. If they're hurting the people around them, hurting the productivity and the morale of the people around them, how could we say they're high performing?
Performance does not equal productivity. Productivity is one aspect of performance. But the right way to Set expectations for performance to measure performance, to hold people accountable for performance is to measure performance on two different axes or two different components. Productivity, of course, but also culture fit.
Is this person making the people around them better or worse? Is this person building our culture in a positive way or helping to tear it down?
So what I want to talk about on this episode of the show is kind of the right way to set expectations for both productivity and culture fit. And let's start with the most obvious one.
And the one that certainly seems and feels, and it is the most measurable and that's productivity. The mistake I see leaders make when setting expectations for productivity. Well, the biggest mistake I see they make is they don't set expectations. Like the poor marketing lead who believed she was successful because of all the marketing campaigns they were launching.
That's what she thought she was supposed to do as a marketing lead. No one ever set clear expectations and said, Hey, your job is to get. Five new marketing qualified leads per week. If marketing campaigns are going to help that to happen. Great for better website is going to help that to happen. Great. If an email campaign does it beautiful, but if those don't do it, you better find another way because your expectation is marketing qualified leads.
So one mistake I see people make around productivity is they don't set expectations, the second, which is related. Is there's this belief that productivity the way you know whether someone is productive is if they're working really hard or they're working long hours, they're here late every night, they're here early every morning, they are working on the weekend when you email them, they answer you right away, which, by the way, maybe a, maybe a cause of lack of productivity.
But it's not about working long and hard. We have all found that out loud and clear. Now that a lot of us are remote and hybrid, we can't see how long and hard somebody is working anymore. In the old days, back pre COVID we could, it was a mistake then. It's a mistake now.
So how do we measure productivity?
I recommend that you measure productivity using. Two, three, or four key performance indicator measures of success, like marketing qualified leads, like employee retention, like new revenue, like throughput through your distribution center, quantifiable measures of success, not 25 of them. If you've got a direct report, and I want you to think about this for you, everything I'm saying, think about it for you.
And if you're a leader, think about your direct reports and setting these measures of success, these measures of productivity, these key performance indicators, you and each member of your team should have two to four key performance indicators, two to four measures of success. If you have 15, 20, 25, it's a lot of.
Data, but it's not usable information. There's too much there. What are the one, two, three, four that really drive whether this person is productive and those measures are going to differ by role. Now if you are a VP of sales and you've got all sales people working for you, it may be they all have the same metrics.
You may be measuring them all by new revenue, gross margin, closing ratio, or win rate. But if you are in operations and you've got someone working for you that is managing the warehouse and someone else that is managing transportation and someone else that's about quality control, each one of those roles are going to have very different metrics that you hold them accountable for.
So number one characteristic of a great set of expectations for productivity is that they're four or less. Key performance indicators that are measures of success and they're quantifiable. The next characteristic is you need a target. It's not enough to say as my head of marketing, you are now accountable for marketing qualified leads.
I have an expectation that you are generating marketing qualified leads. It may be obvious, but how many marketing qualified leads? Is it five a week? Is it two a week? Is it 10 a week? And it sounds obvious, but I see people all the time who say, I'm accountable for employee retention, or I'm accountable for marketing qualified leads, or I'm accountable for, a win rate.
But when I say how many, you know, what win rate are you accountable for? They're like, well, we've kind of done this in the past. What employee retention number are you accountable for? Well, we're trying to keep it as low as we can. I mean, we're all retention. You want to keep as high as you can turn over.
You want to keep as low as you can, but doing the best we can is not good enough. That's not an acceptable measure. That's not a clear expectation. We want to set clear expectations. So we need two to four measures. And we need targets for each of those measures.third characteristic is the frequency of those measures.
The higher the frequency, the better. If I tell the head of marketing, or if my head of marketing and I agree that she is accountable for 200 marketing qualified leads this year, How the hell am I going to hold her accountable week in and week out to make sure she's hitting that? It's too much time There's no Fire up my butt or hers.
There's no sense of urgency
the higher the frequency the better daily is typically not reasonable but man Weekly marketing qualified leads are a hell of a lot better than monthly. Monthly is better than quarterly. Quarterly is better than annual. So the higher the frequency, the better.
I'd also suggest you think about both leading and lagging measures.
Now here's the difference. Most of us think about lagging measures. A lagging measure is the measure of a result. Revenue is a lagging measure. Net profit is a lagging measure. Employee retention is a lagging measure. It's the result of a whole bunch of other things you do. Lagging measure, measures are critical.
But the problem with lagging measures is They're not always easy to take direct action on if as a salesperson, I say one of the lagging measures you're accountable for one of the expectations I'm going to set is that you've got to be bringing in, you know, 50,000 dollars in new revenue each week.
Well. If I want to up that, if I believe my head of sales needs to increase that by 20%, I need you to bring in 20 percent more than that, or you're only at 30,000 and ma'an, we need to make it 50,000. What did they do? There's no dial. They can go turn to make 30 go to 50. That's where the leading indicators come in.
The leading indicators are. Specific measures of behaviors that drive results. So if you're bringing in 30,000 in new revenue per week as a salesperson instead of 50,000, what might a leading indicator be? Well, it might be how many sales calls you're making to Decision makers. It might be how many meetings you're having with decision makers.
It might be how often you're calling on current clients and working to upsell them. Now, those are things. If I said, I want you to increase the number of times you are, calling on current clients to upsell or cross sell them. Or if I said, you know, you need to be, you know, increasing by 25 percent the number of meetings you're having per week with decision makers, that is something you could turn the dial up on.
So we need both leading indicators and lagging indicators. Next, We need a balanced set of indicators and let me give you one example from the operations world, what I mean by balanced. Sometimes you get what you ask for. So let's say for argument's sake, we really need to do a better job of managing our inventory.
We've got too much inventory. So I tell my head of operations who is also accountable for our inventory levels, I say, you need to improve your inventory turns by 50%, which means they need less inventory on the same amount of sales. Well, if my head of operations is solely focused on decreasing inventory on improving inventory turns.
That's not hard to do stop ordering so much product. Well, if they do that to an extreme, they will improve inventory turns. They will reduce their inventory costs, but they won't be able to fulfill orders with clients because they won't be in stock anymore. So there needs to be a balance. If you're setting an inventory turn goal, you should set an order fulfillment goal back to marketing qualified leads.
If all my marketing team is focused on is bringing leads in the house. Let's forget about whether they're marketing qualified. I need you to increase the number of leads. They can increase the number of leads, but half those leads may be crap. That you're unable as your sales team is going to be unable to close.
So if you are telling them, bring in more leads, you have to balance that with how many of those are qualified and closeable. So we need balanced measures. We also need measures that are collaborative.
Collaborative means If you are, and I'm going to continue to use marketing as my example here. If you are the CEO and the head of marketing reports to you, the best way to go about setting expectations for marketing qualified leads or any other measure you're setting.
Is not to dictate, is not to sit down with the head of marketing and say, okay, I have now determined you are accountable. My expectation of you is to bring in 10 new marketing qualified leads per week. Go do it. It's not the best way to do it because that measure is now something you own. It doesn't mean the head of marketing believes that's reasonable.
or the right metric or the right target. So if you're dictating it to them, they're not going to own it. They're not really going to be committed to it. You're going to have a difficult time holding them accountable. They don't make it. They're going to say, I never thought that was realistic anyway.
So what you want to do is sit down with your direct reports and work collaboratively with them. To define what those two to four measures are and what the targets are and what the frequency is and which ones are leading and which ones are lagging and how do we balance them? Make it collaborative. And lastly, make sure that you are defining role success in all these roles that will drive company success.
Now, what does that mean? Well, I'll give you an example of where a company didn't do that.
I'll talk about this example. This company kind of in a vacuum said, everybody go out and set goals. You know, the CEO said, everybody go out and set expectations, set measures of success, productivity expectations for your team. go set them. Well, they all set those goals.
those measures. But if everybody met all of those expectations, it didn't all add up to an organization that was meeting its goals. Simple example, sales team was a sales team where everybody was meeting or beating their expectations, and yet the company was missing its revenue goals. Something was wrong.
Now that's obvious math. But something was wrong there. So you do have to have a process where you are cascading up and cascading down a meeting in the middle and saying, Hey, if we want to hit revenue of X and grow and gross margin of Y and net income, or EBITDA of Z. How does that cascade down to the rest of the organization?
How much revenue does the sales team need to bring in? And how are we going to break it down? What kind of,client retention does the service team need to achieve in order to meet those numbers? So we need role success that drives company success. So those are some thoughts, some tips, on the productivity component of setting expectations.
But just as important, and I would argue maybe more important, is expectations around culture fit. If you have a set of core values, this is what we're talking about, living those core values. So how do you take something kind of seemingly amorphous, like culture fit and set expectations beyond telling people, don't be a jerk beyond saying, you know, you need to work on being a better culture fit.
You know, what does that mean? Well, the major type of expectation we need to set around culture is as I said a minute or two ago, is core values. And the way I define core values is they are three to six non negotiable behaviors. Three to six.
Behaviors that are what's make, what makes us as a company,best, right, most noble as a company, what are those most important behaviors that anchor our culture and unlike setting expectations, for productivity expectations for culture fit are the same for every member of your organization, from the CEO, all the way down to a accounts payable clerk.
So it starts with not 25 rules of behavior and not five Pie in the sky inspirational words that look great on a website and your clients will love to see it. It's three to six non negotiable behaviors and these behaviors are not aspirational. There again right now what makes you best and right most noble as an organization.
These behaviors need to be specifically and clearly defined. I've sat with leadership teams who have a behavior, you know, on their, you know, a behavior is what are their core values and it is accountable. And there's six leaders around the table and they all define that word in different ways or a word like integrity, you know, nothing wrong with that.
Although I kind of think you don't need to say, integrity is a core value. It's kind of a ticket to the game. You should assume that one, but we need these behaviors clearly defined. If you've got a behavior of innovation, what does that mean? Does that just mean this is someone who comes up with great new ideas all the time?
Well, if that's the case, you might, you may have a. customer service rep or an accounts receivable clerk who's doing a great job doing their job, but she doesn't exactly come up with a bunch of great new ideas. Well, if innovation is a core value, a non negotiable behavior, are we going to fire this person because they don't come up with great new ideas?
Or when we say innovation, does that combine coming up with new ideas and also being willing to entertain new ideas, being willing to do things a different way, be willing to try things?
Well, if that's what innovation means, and I've got a marketing rep or I've got an accounts receivable clerk. Who is not willing to do with the new way. Who says, no, I've always done it this way. I'm not changing. Well, if innovation is a core value, that might be a fireable offense. So three to six non negotiable behaviors, which by the way means someone blatantly and repeatedly violating that core value.
That is a fireable offense. I don't care how productive they are. That's what non negotiable means. Their specific behavior is clearly defined and a way to think about it if you, even if you don't have a clear set of core values, but you kind of know culture fit when you see it. And by the way, I suggest you define core values.
You could think about it as very simply, is this person making people around them better or worse. That's the way to think about it. Are they adding to or subtracting from your culture? Now, the way to make these expectations super clear and measurable is if you do have a set of call it five core values is being able to assess each of those core values for each member of your organization.
By saying, are they modeling that core value? Are they living it at such a high level? They're a model for the rest of the organization. That's top score. If you're assessing it. One level down is they're living the core value. They're not modeling it there, but they're living it consistently every day. One level down from that is they are occasionally having problems with that core value.
One level down from that is they are frequently having problems.
With that core value and if they're frequently having problems with that core value That is a big problem because remember if you've done it, right your core values are non negotiable behaviors So even that salesperson who's bringing in gobs of revenue If they are not living if they are blatantly violating one of your non negotiable behaviors They're a poor culture fit and they are hurting your organization Now, one way to bring all of this together, as I start to wrap up, one way to bring all of this together is in the form of what the top grading methodology would call a job scorecard.
A job scorecard to me is like a job description on steroids. Most job descriptions I don't think are written, they're not worth the paper they're printed on. But there are a couple of things that a job scorecard does better. And it makes it incredibly important for folks who are members of your team now and also using a job scorecard as a way to evaluate potential folks coming into your organization.
And a job scorecard has four major pieces. Number one, what's the mission of the job? What is the one or two sentence mission of the job back to marketing? The mission is probably not to create marketing campaigns. The mission might be to. Make sure that sales has enough qualified leads to close in order to hit revenue targets, that would be a better mission.
So what's the mission of the role. Number two, what are the roles and responsibilities? That's the part that may look a little like a job description. Number three, what are the competencies required of the role? Written communication skills, project management skills, analytical skills. What are those competencies?
So you can set expectations for those as well. And then lastly and most importantly, And by the way, some of those competencies are your core values. That's the place you would put your core values. And then lastly is what are the measures of success and in the measures of success, that's where your KPIs go.
And that's the thing that's typically missing from a job description. So if you have all of those things in the job scorecard, that job scorecard becomes a wonderful tool to help. Make sure you are crystal clear on what your expectations are for you. You should have a job scorecard and all of your direct reports should have a job scorecard.
Started this at the beginning saying unclear expectations lead to unacceptable results. Now that starts with you. Are you clear on your expectations? Get clear there. And again, if you're the CEO, your expectations are not, you're helping everybody else out. What are the measures of success?
And there's a couple of great episodes I have on the podcast. One, with, Brad Giles, who's great, who wrote a book called made to thrive called the Five Roles of a CEO. And there's one more recent where I talk about the roles of a CEO. So start with you. Get clear on your expectations and now cascade it down throughout the rest of the organization.
Go to it. I'll talk to you soon.