How to Get Your Leadership Team Executing: Todd Smart's Six-Part Business Wheel

Dec 18, 2013

5 min read

Updated: Oct 29

Many owner-led companies grow on good timing. The right market, the right people, at the right time. Todd Smart, president of Smart Partners and a serial entrepreneur who coaches leadership teams, says that can work for a while, but it is not the same as a healthy team. His napkin is a wheel with your business at the core and six parts around it: vision, people, data, issues, process and traction. It comes from a system he implements for entrepreneurial companies of roughly $2 to $50 million, the stage where a real leadership team of four or five people has to run the business together. The aim is simple. Get everyone aligned, measure the right things, solve real issues every week, and spend far less energy figuring out how to run the company.

Inspired by Paper Napkin Wisdom Episode 31 with Todd Smart.

Why some leadership teams win in any industry

The system Todd uses started with an observation. Its creator, an entrepreneur in Detroit, consulted with leadership teams and found that 29 out of 30 were succeeding because of their circumstances. Right time, right market, right people, seemingly by chance. Move that team to another industry and it would not excel.

The one out of 30 was different. That team worked so well together that the industry hardly mattered. Its success came from how the leadership team worked.

He studied those companies, drew on authors like Jim Collins, Patrick Lencioni, Dan Sullivan and Michael Gerber, and boiled it down to six components. Todd describes it as strategic execution more than strategic planning. It is how to get stuff done as a team.

Why $2 to $50 million? Under $2 million there is often one strong entrepreneur and no full leadership team. Above $50 million, most companies have already discovered these lessons the hard way. Todd says five people is probably the sweet spot for a leadership team.

How to set a vision your team will actually follow

Vision has eight pieces. It starts with core values. Todd warns against aspirational values. They should describe who you really are, day in and day out, even on your bad days. Then you use them to hire, fire, review, reward and recognize people.

I learned this by failing at it. I once had a list of eight or nine core values that nobody could remember. It was really a marketing piece, and my staff saw through it. We whittled it down to four: drive, impact, approach and leadership. Once we got around those, we did really well.

The rest of the vision follows. A core focus, meaning your purpose and your niche. Todd finds that the narrower the niche, the faster these companies go. Then a 10-year target on the horizon, a marketing strategy and a three-year picture. Next, a one-year plan with three to seven priorities. Quarterly rocks, the most important things for the next 90 days. And an issues list.

Then comes the part most leaders skip. Repeat it. Todd says people will not hear it until they have heard it seven times. That is hard for visionary leaders, who are already off to the next idea.

How to know if you have the right people in the right seats

Right people means they match your real core values, which you find mostly through behavioral interview questions.

Right seat comes from an accountability chart. It looks like an org chart, but one person can sit in more than one seat. A person fits the seat if they get it, want it and have the capacity to do it. Todd calls it GWC.

Wanting it is the piece many teams miss. When people are open and honest, Todd often finds someone who does not want the job they are in. They are doing it because it is the job available. You can patch that for 90 days. Long-term, they need a seat where they fit on all three.

If the company is growing, you can move people around because you keep adding seats. If it is not growing and there is no right seat, you have to exit them from the firm.

How to measure, solve issues and document process

Data. People respond well to being measured. Todd uses a scorecard of 5 to 15 weekly activities that drive the month-end and quarter-end results you want. One person is accountable for each. You look at a 13-week trailing view to see trends. After about six months, leadership teams start to read the code of their business and predict their future more accurately.

Issues. Once the vision is set and people are measured, issues come out of the woodwork. The list often has 100 things. Each week the team picks the top three, finds the root cause, discusses it openly and decides right there. Dysfunctional teams keep talking about symptoms. Todd compares it to running on a treadmill and expecting to be a block further down the street.

That raised a question for me. If I say the wall looks brown, everybody agrees it's brown. Todd's answer is trust. The team has to put the team first and know it is safe to disagree.

Process. Every company has six to ten core processes. Document the 20% of each that drives 80% of the results, on one page. Then expect 100% of people to follow it 100% of the time. When I think about where I've gotten stuck, it was in the weeds, which are really the outliers.

How to build a weekly meeting rhythm that creates traction

Vision with no traction, Todd says, is hallucination. Traction is where the work gets done.

Hold a weekly 90-minute leadership meeting, usually Monday morning. Spend about 25 minutes checking the scorecard, rocks, customer and employee headlines and last week's to-dos. Spend the hour solving the top issues.
Take one full day off-site every quarter to review the last quarter and set new rocks. Leave the office so the team works on the business.
Once a year, make it two days and reset the three-year picture and the one-year plan.
Run everyone on 90-day rocks. Each week, ask where people need help and what obstacles you can clear.

Todd compares this to a computer's operating system. It is the foundation, not the value. He finds teams spending 20, 30, even 50 percent of their energy working out how to run the business. His aim is to get that down to two to five percent, with fewer internal meetings and more time with customers, employees and vendors.