Let’s talk about a concept that gets batted around a lot in leadership circles, and for good reason.
It’s when every person within an organization, leaders and all, is focused, coordinated, and pointed in the same direction, under a common purpose, and with a high level common set of goals and objectives. There are also subsets of separate goals and objectives for each functional area and/or division of the organization, but they all funnel nicely up to (and serve the purpose of) the high level ones.
The short version of this definition is commonly known as “everybody on the same page”.
I’ve heard that line again and again during my career, but more often in the form of a lament.
“Why isn’t everyone on the same page?????”
Early on in my leadership journey, I was one of those lamenters. I spent years trying to unlock the “top-down” secret to a perfect alignment, but never could quite crack the code.
That is, until I discovered something deceptively simple that finally got it done.
The Theory of 3 Numbers.
It’s a theory that revolves around the simplest of business ideas, one said so eloquently by the late Peter Drucker:
The purpose of a business is to create a customer.
Here’s how the theory flows from that premise.
There are 3 numbers that relate to customers that, if properly tracked, monitored and fostered, can create great alignment.
The first, is a Total (Valued) Customer Number
For some businesses, that’s an easy one to figure out. In the cable television business, where I spent the bulk of my executive career, it was anyone who was paying for that wire going into their home, and then into their TV, modem and/or telephone.
For other businesses, you may have to dig around a little bit, but the important thing is to find a count that is a real profit driver (the “valued” part). Like in a retail business, I’d look for a repeat customer count of some kind.
The second, is a Customer Pain Number.
This is a count of the things that go wrong, and cause pain for a customer. For the cable TV business we came up with what we called a “customer fault rate”, which tallied every time a customer called in (or came to our retail locations) with a problem – of any kind (I graded on a pretty high curve).
Again, this will differ from business to business. To use the retail example again, product returns & exchanges would be a prime candidate here, although it probably would be good to tack on customer service complaints too (to go to a similar high curve as I did).
The third, is the Happy Customer Number.
I wanted to know how many cable TV customers loved us. Not just liked us, but loved us. Take us home to mother love. Customers who would spread fantastic word-of-mouth. How would I find this out? We picked up the phone, called them, and asked, basically, “how do you feel about us”, in the form of this question: “On a scale of 0-10, what is your willingness to recommend us to a friend or relative”.
You may have recognized that as what’s known as the “Ultimate Question” – the one used to come up with the commonly used Net Promoter Score (more about that here). I loved that score, because it has a direct correlation to profit, and it was a much more relatable score to talk to teammates about.
Plus, it identified those happy people.
Armed with these three numbers (and a way to generate them, which I’d add will take some work if your data gathering and database capabilities are not robust), I believed I had the critical “high-level” bases covered – who didn’t ultimately have a hand in generating these numbers? And, better still, I knew that if those metrics were optimized, profit would follow.
The last step in making the theory of 3 numbers work is to keep them on the minds of every single person in the organization. How did I do this? We measured them every week, and then we plastered them on our intranet home page, on the bulletin boards, and on the walls.
I further required every person to be able to recite the latest trio of numbers to me (or another manager), upon request.
Finally, I backed up the requirement with context – I went on the road and explained the connection of the 3 numbers to the work that they did, and why it all mattered. Over and over again.
Over time, with the huge help of the 3 numbers, we achieved the alignment we desired, and the flywheel started spinning faster and faster.
We were all on the same page. Aligned. Focused, correctly, on our purpose.
Creating (and keeping) customers.
Try this theory yourself, and see how it works for you.
And if you’re wondering about how to go about it, drop me a line or comment below, I’d love to hear from you.