Q&A on the Book Further, Faster

The book Further, Faster by Bill Flynn provides ideas for business leaders to build teams, create a strategy to stay close to customers, and manage a company’s growth with cash as the primary metric. 

InfoQ readers can download an extract from Further, Faster or listen to the introduction of Further, Faster.

InfoQ interviewed Bill Flynn about issues businesses face when they start to grow, key elements that drive healthy and sustainable growth, keeping A-players engaged, creating great teams, hiring people who fit the company or team culture, knowing what your customers’ problems are and what they value, why the CEO should act as a chief explanation officer, how to change meetings from status to progress, and how inefficient cash cycles result in wasting money and what can be done to reduce this waste.

InfoQ: What made you decide to write this book?

Bill Flynn: I think it is a shame that great leaders and businesses struggle or fail due to preventable reasons. After studying business success for over thirty years and being a leader or significant contributor to five successful startups, I believe there are a first few critical things every leader of an organization should focus on to give themselves the best chance of success over the long term.

I had no intention of writing a business book; quite the opposite. There are already so many.  However, over several years, I was told often that my take on these well-trodden topics is different enough that I should write them down.

If one reader finds a useful nugget of knowledge or experience to help them or their teams or their customers, it was worthwhile.

InfoQ: For whom is this book intended?

Flynn: Humble leaders who are life-long learners and are comfortable regularly challenging the status quo. Most businesses fail in less than a decade yet many mistakes are repeated unnecessarily.  If you are already able to figure out with a high degree of accuracy how much revenue, profit, cash, people, and widgets sold you will achieve several years out, my book may not be for you.  All others may find something useful.

InfoQ: What kind of issues do businesses face when they start to grow?

Flynn: Here is what I have found:

1. All of the key decisions made getting from startup to scaleup must be revisited. Why? Many were made for the wrong customer base (innovators), by team members who may now be in the wrong positions for growth. Your next 1000 customers will be very different from your first ones. The business and the people have to grow to accommodate the inevitable changes.
2. They lose touch with the key constituencies that got them there - Customers, Team Members, and the Market in general.  They have slowly become more isolated by the layers that separate them from these key constituencies so the critical information they need to make the few important decisions to prepare them for the future is filtered and/or inaccessible. Instead, they make less important decisions that they should have taught others to make.
3. They fail to realize that the “product” they should be paying the most attention to is the business itself.  This refers to the oft-used phrase “Focus on the business, not in the business”.  Their primary job to scale up is to increase the enterprise value of the business. Most focus on revenue, fewer on profit, and even fewer on cash. The core customer is forgotten along with many of the names of the team members and their families. Each of these missteps make it harder and harder to succeed.
4. They do not realize that cash is the primary growth metric.  Growth sucks cash. Cash is an antecedent.  You need to invest it in front of growth. Plan your growth and then determine how much that will cost.  If you do not have the cash, you cannot afford the key items you will need for growth - people, hardware, software, land, buildings, etc.  Most businesses die from indigestion, not starvation.  Spend wisely.
5. Not having enough cash to sustain you through the inevitable tough times. We have had three significant economic impacts since 2000. It is magical thinking to believe that we will not have another within ten years. I advise all of my clients to have at least six months of operating capital in reserve.

In summary, for the most part, I have found the following:

• We do change wrong
• We do decision-making wrong
• We do vision wrong
• We do people wrong
• We do teams wrong
• We do feedback wrong
• We do innovation wrong
• We do hiring wrong

Most businesses fail within a short amount of time.  Almost daily struggle is what is in store for the majority of those left standing.  Doing well the eight things above can make a huge positive difference in the lives of all stakeholders involved.

InfoQ: What are the key elements that drive healthy and sustainable growth?

Flynn: 

• Focus on teams and training team leaders.  According to ADPRI, over 80% of employees are on at least one team.  About 60% of those are on more than one team with many of these teams not represented in the organization chart. Many of these team leaders are invisible to the leaders.  
• Systematize your business. Once you have a sustainable business model, you must focus on repeatability and scalability, especially for Strategy and Execution. 
• Take the guesswork out of growth. Once you have all or most of the correct systems in place, the leaders should now have more time to do their real job which is to predict the future, at least three years out.  The only way to do this is to fire yourself from the day to day running of the business.  The brain cannot think critically and envision a future while it is also focused on the daily operational decisions.
• Cash - Access to reliable sources of cash to fund your growth. 

InfoQ: You mentioned that A-players, who are typically two to three times more productive than anyone else, are often ignored. What causes this to happen, and what can leaders do to keep them engaged?

Flynn: I often call this the crying baby problem. The A-players do not need to be managed. They meet or often exceed expectations. They are true believers and rarely complain.  They are easy to overlook as they are happy and fulfilled most of the time. On the other hand, the B and especially the C-players get most of your time and attention. They do most of the complaining, thus the crying baby problem.

To keep A-players engaged, I recommend challenging them.  The first place to look is your own plate.  What do you do that they might be able to do even better based on the different strengths and weaknesses of each party?  Also, since you are planning three years in the future, you can involve them in that process to help you plan your market-dominating strategy and systems and processes to support it.  Also, they are human beings. They enjoy sincere praise and recognition as much as anybody.  Just because it may come easy to them, does not diminish the value to the organization.  Celebrate their great work.

InfoQ: How can we create great teams?

Flynn: Great teams are essential to success.  It bears repeating as stated above: according to a multi-country study of almost 20,000 workers, ADPRI found more than 80% of people are on one team and more than 60% of those are on more than one.  Many of those are not represented on the org chart.

Teams get stuff done.  

With that in mind, I believe the bulk of leadership training should be focused on how to spot, train, and cultivate great team leaders within the context of what each team’s main contribution to the organization is.

Let’s start by defining what a team is:  a group of people (usually ranging from 3 to 12 individuals) who all share a common goal or goals as well as the rewards and responsibilities for achievement, who will readily set aside individual and or personal needs for the greater good of the group.  Pat Lencioni, organizational health author and speaker, has spoken about this often.

With that in mind, I believe a team leader needs to do the foundational work first in order to know how to create a good team which leads to them producing better results. My approach is outcome-driven first, then looking for the right people to fill those roles. More on that in a minute.

After that, your job is to lead them so they work well together. That involves combining spiky people into a well-rounded group that works well together. Google’s Aristotle Project, a five-year study of why some teams are more successful than others, shares the following: 

Overall finding: What really mattered was less about who is on the team, and more about how the team worked together. The five characteristics they found in order of importance are:

• Psychological safety: Psychological safety refers to an individual’s perception of the consequences of taking an interpersonal risk or a belief that a team is safe for risk taking in the face of being seen as ignorant, incompetent, negative, or disruptive. In a team with high psychological safety, teammates feel safe to take risks around their team members. They feel confident that no one on the team will embarrass or punish anyone else for admitting a mistake, asking a question, or offering a new idea.
• Dependability: On dependable teams, members reliably complete quality work on time (vs the opposite - shirking responsibilities).
• Structure and clarity: An individual’s understanding of job expectations, the process for fulfilling these expectations, and the consequences of one’s performance are important for team effectiveness. Goals can be set at the individual or group level, and must be specific, challenging, and attainable. Google often uses Objectives and Key Results (OKRs) to help set and communicate short and long term goals.
• Meaning: Finding a sense of purpose in either the work itself or the output is important for team effectiveness. The meaning of work is personal and can vary: financial security, supporting family, helping the team succeed, or self-expression for each individual, for example.
• Impact: The results of one’s work, the subjective judgement that your work is making a difference, is important for teams. Seeing that one’s work is contributing to the organization’s goals can help reveal impact.

This is how you manage great teams, according to Google’s Aristotle Project.  I have found similar recommendations from others who study teams such as Amy Edmondson of Harvard Business School and David Rock of The Neuroleadership Institute. 

As mentioned above, what is also key to optimizing teams is to make sure you do the foundational work by combining different sets of skills, knowledge, and abilities of individuals around a predetermined defined key functional goal (more about this below).  That is, build a key process flow map by key function to understand how the business makes money.  Here are steps I recommend to get started:

1. Figure out the key teams by function that drive your revenue, profit, and cash; focus primarily on profit and cash (e.g., Marketing, Sales, Operations, Manufacturing, Customer Success, Finance). 
2. Then, establish the key function teams that support them (e.g. People/HR, Tech Support, IT, etc.). 
3. Establish the key inputs and outputs of each team. For example, Marketing’s key input is often raw leads/suspects/prospects depending on the language you use.  The key output is a qualified lead that is handed to Sales.  This key output from the Marketing function often becomes the Sales function key input. See Key Process Flow Map picture below for an example.

4. Break down each of these key function teams into key sub-teams. For example, Sales key function sub-teams could be Inside Sales, Field Sales, Channel Sales, and Sales Operations.  The team leader of each function usually takes the first crack at this.
5. Repeat step 3 above for each of these sub-teams.  See Key Process Flow Map Phase II picture below for an example of the sub-teams under the Marketing function.

6. Determine if there are sub-function teams beyond those in step 4. Rinse and repeat until you have broken down each individual teams’ functions that drive or support the business model.  This could take days to weeks to complete fully. See Key Process Flow Map Phase III picture below for an example of the sub-teams under Demand Generation.

7. Figure out the type of person who is the best fit for each role. You can leverage the knowledge you have of people already in those roles and/or use psychometrics like DiSC or Predictive Index. There are also tools like Standout and StrengthsFinder to help. This is a little art and science so you may not get it right the first time. The key is to put people in a role that takes the best advantage of their strengths and minimizes their weaknesses. Please note: this is far more difficult in smaller companies due to fewer people on staff.

InfoQ: How can we hire people who fit the company or team culture?

Flynn: This is an interesting topic. Resulting from my study of neuroscience and cognitive psychology over the past fifteen years or so, I have come to believe that the worst way to hire someone is through the interview process.  The data supports this as there are studies that show the hiring success rate is about 50% - no better than a flip of a coin. That is distressing.

The only way to know who someone is is to observe their behavior. The more often you can put them in a meaningful situation, the more likely you are to see who they truly are, and how they would react. Too often this does not line up with what they told you in the interview.  

For example, Pat Lencioni calls the ideal team player humble, hungry, and (people) smart. He often tells a story of taking a senior leader shopping as part of the interview process to see how he would react to being put in that position.  He tests to see how humble they are while being asked to grab some shampoo or some aspirin. Tony Hsieh of Zappos involves the limo driver from the airport in the interview process.  

If you can afford it, I recommend you interview people to find the top 1-3 candidates for the role and the culture and offer them the job for a probationary period for 90-180 days. Whole Foods does this with all new team members. At the end of ninety days, each team member weighs in on whether to hire them or not. 

This may not always be possible. If not, create a systematic interview process where everyone has a specific role to fill and knows exactly what they are looking for.  At the end of the interviews, get everyone together to give their individual assessment.  The hiring manager can pull all of this together and decide to hire (or not) or continue the process to address unanswered questions. 

I do have some sample interview questions for the top twenty or so common core values to help with this process.

InfoQ: What does it take to know what your customers’ problems are and what they value?

Flynn:  Ask them.  Easier said than done. The problem I have found is that we ask the wrong people the wrong questions almost every time, leading to unnecessary “upgrades” to the product or new products customers do not truly value (i.e., will generate additional profit and do the job the customer hires the product for).

We often ask the customer to tell us what we should build, as opposed to what their struggles are or an explanation of how our product or service makes their lives easier (or better).  It is our job to figure out the solution, not theirs. Stop doing that.

Interview them like you are a disinterested reporter trying to find the story, not a self-interested salesperson trying to take their money.

Lastly, we should focus our attention on the ten or twenty percent of our customers who make up eighty to ninety percent of our profit.  We want more of these types of customers and fewer of the ones on the opposite side of this list.  

I wrote this prescriptive post a couple of years ago to help accelerate this discovery process by asking core customers one question. It is one of my most popular posts to this day.

InfoQ: In the book, you mentioned that the CEO should act as a chief explanation officer. Can you elaborate on why, and how this can be done?

Flynn: There is a joke that says your job as a CEO eventually turns into repeating yourself over and over again. Repeating who we are (core values), why we do this (core purpose), what dent we are trying to make in the universe (just cause/vision) are essential. Please note that when people start rolling their eyes and finishing your sentences, they are starting to get it.

I am reminded of an apt quote by Samuel Johnson: “People need to be reminded more often than they need to be instructed.”  

InfoQ: How can we change meetings from status to progress?

Flynn: I believe most meetings should be adjustment meetings where you move the company, your priorities, and your people forward (There is one important exception - the daily huddle.  This is a short, high-paced, high-energy daily status update meeting). However, we, too often, use them to justify our salaries and time spent by explaining all the great work we have been doing all week.  I believe that is what the pre-meeting status report is for.  Everyone should read everyone else’s on the team.  Your job is to highlight 1-2 things in your report that others should know and how it affects them. The job of the other meeting participants is to read the status reports and formulate questions/comments to ask your teammate for clarification or elaboration.  

Further, I recommend this step-by-step process to use for almost any meeting.

1. Decide the ideal outcome for the meeting.  Be sure to consider all stakeholders such as your team, your business, the VIP and her team, suppliers, and other relevant parties. 
2. Talk to your team beforehand to see what experience they have had in these situations before.  For instance, you could speak with all the people who have had direct contact with the key members of a VIP customer’s team to get the broadest context. 
3. Invite only the appropriate people to the meeting. 
4. When you have achieved the ideal outcome above, end the meeting.  Pro tip: before you adjourn, each member rates the meeting on a scale of 1-5 to look for one or two ways to improve for next time; 3-5 minute discussion at most.
5. Lastly, inform the appropriate teams and individuals inside and outside of your company of the meeting outcome. 

Diligently practicing a process like this will help to avoid the usual eventuality that Jim Collins sums up well with this quote:

“I’m sorry to imprison you in this long meeting, as I did not have time to prepare a short one.” – Jim Collins (from lessons he learned from Peter Drucker)

InfoQ: How do inefficient cash cycles result in wasting money and what can be done to reduce this waste?

Flynn: Most businesses waste money unwittingly. This is, most often, through one or more of the following cash leaks:

• Repeated mistakes
• Longer than necessary cycles such as collection or sales
• Outdated business models

In my workshops, I run teams through an exercise where they often find tens of thousands and sometimes hundreds of thousands of dollars in twenty minutes. Please note that this Cash Acceleration Strategies exercise is from ScalingUp from Verne Harnish.

I recommend the CFO or CEO conduct this or a similar exercise at many levels in the organization, three to four times/year.

InfoQ: What's your advice for leaders running a successful business?

Flynn: Run your business like Alan Mulally ran Ford and Boeing Commercial Airplanes. I believe that Mulally is the finest CEO we have had in 100 years as he helped turn Boeing around in the middle of 9/11—then did the same with Ford during the Great Recession. I am unaware of any business leader (e.g., Jobs, Walton, Kelleher, Gates) who not only survived two existential, economic crises but also whose failing businesses came out of these crises even stronger.

Companies that endure to last decades, generations and centuries typically make a handful of decisions right. Mulally accomplished twice in a nearly identical way the seemingly impossible for two separate industries and cultures. He simplified the business into a few key areas of focus.  For instance, at Ford, in the middle of the worst financial crisis of our lifetime at the time, the turnaround plan focused almost exclusively on the following: (excerpt from American Icon):

1 Aggressively restructure to operate profitably at the current demand and changing model mix. (EXECUTION)

2 Accelerate development of new products our customers want and value. (STRATEGY)

3 Finance our plan and improve our balance sheet. (CASH)

4 Work together effectively as one team. (PEOPLE)

Just after Mullaly left in 2014, Ford surpassed Toyota, re-establishing itself as the leading provider of cars in the world, a position Toyota had held since 2009 and GM for seven decades before that, replacing Ford in the 1930s.

What Mullaly did is not magic. He learned that relentlessly focusing on a few key things executed nearly flawlessly by a cohesive team is the best way to run any business. Now, it’s your turn.

About the Book Author

Bill Flynn has more than thirty years of experience working for and advising hundreds of companies, including startups, where he has a long track record of success. He’s had five successful outcomes, two IPOs, and seven acquisitions, including a turnaround during the 2008 financial crisis. Flynn is also a multi-certified growth coach, has a Certificate with Distinction - Foundations of NeuroLeadership, and is a Certified Predictive Index Partner. Flynn has also authored a best-selling book - Further, Faster - The Vital Few Steps that Take the Guesswork out of Growth.  Away from work, he is an avid reader and athlete, and enjoys volunteering locally. When he is not off cheering on his collegiate-champion daughter, Flynn lives in Massachusetts, with his wife, dog, cat, and four chickens.