Episode 345: Red to Yellow To Green

Hey everyone, well, I've done an episode previously called VFR to IFR, and the whole idea is that you go from visual flight rules to instrument flight rules in your business, basically having scoreboards, dashboards, and scorecards. This one is called— kind of builds upon that— it's called Red to Yellow, Yellow to Green. In fact, I would even add to that, it's red to yellow, yellow to green, and then green to yellow. Here's what I mean. But before I get there, let me explain to you what I mean by school board, dashboards, and scorecards. Sometimes those get used interchangeably, and I think that's fine, but we'd like to try to use words really intentionally. So with a school board, that is your main school board that is keeping score in the business. Dashboards can be like satellite tracking systems. And then scorecards are for your individual people on your team. So someone has a scorecard that is dedicated to their job, whether it's the number of sales that they need to make, the number of pivots or some sort of service type activity that they may have, or something else depending on what they're responsible for. So you can have dashboards that could be just a financial dashboard. It could be like your sales-specific dashboard, etc. But on your school board, you're looking for somewhere between 5 and 10 KPIs, really key performance metrics in your business, or key performance indicators as what's defined as by KPI. But here's what I mean specifically around the game of business can become down to taking numbers on a scoreboard and taking numbers that are in red, turning them to yellow, turning yellows and then into greens. And then I'll explain what I mean by greens to yellows in just a moment. So this started with this week, I got a message from someone that is a client. He said, you know, my team hit the number that they needed to hit as an office with this particular product. And we have some time left on for this month. And I said, hey, let's push for what the rest of the month needs to be. And they got— he got some pushback from that. He said, should I be feeling pushback? And I said, well, looking at it from one month perspective is just not enough. How have they done the last 3 months? It's March when I'm recording this. And so I said, what did they do in January? What'd they do in February? He said, well, they actually have achieved that target all 3 of the months. I said, so let me be clear. That means that for January, February, March, for that particular product, they have hit that number. So therefore that number is green each of the last 3 months. He said, that's correct. And I said, okay, are there other numbers on your school board that are yellow? And he said, yeah, there is some numbers. Are there numbers that are red, meaning they're not where they need to be? And so what this does is specifically brings like a heat map to your school board. I'm pretty confident many of you have some sort of tracking mechanism in place, some sort of way that you have transparency. So having a school board in your business is probably not anything that's profound. But maybe what maybe might be an addition for you is to color code it, which means that you have identified or said this number and above is green, between this number and this number is yellow, and anything below this number is red. So let's just use the number and say it's the target is 50. So anything 50 or above for a— in this particular case, he was referring to on a month. For that month, anything that 50 or above is green. Well, let's say that anything 45 to, uh, 35 to 49 is yellow, and anything 34 or less is going to be red in our hypothetical example. And that's not far off from, um, what was shared with me. And so when you look at it going back, what he has is then for that particular product they have been green each of the last 3 months. And so what I shared with him is now it's his job to go in and to turn that particular number from green to yellow. And what I mean by that is, is that he raises the bar. But it's oftentimes— and I can look back many times for me— is that I've raised that bar after 1 month. I think 90 days is the perfect amount of time. We're coming into the beginning of Q2. This is the perfect amount of time for you to to look back, and if you don't have a color coding system, just a— I like to call it a heat map, a heat map on your school board— I would urge you to do it. And so it's not just whether or not a number is below, but it's also whether or not you have a plan in place. And so let me give you an example. So in our hypothetical here, let's say that the number is 35. And for the last month, the team hit 30. Okay, so if it is below the red number, then that is signaling that not only did we miss the number, but we kind of need some help. Okay, if it is 37 or 38 or 39, then you could say, hey, that's not where we want to be, that's not our target, but we have a plan in place to be able to make that happen. Okay, and so it's really important that you both have a numerical number to it, but then also people are looking at and saying, hey, we have a plan in place to try to make sure whether or not we're going to get to the target number or not.

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Now you can, and people have automated some of these numbers. You can pull from your dashboard, you can use Zapier, etc. You can do other things to try to automate it. I would encourage you not to do that. I think on a simple Excel spreadsheet or a Google Sheet, is absolutely fantastic. Yes, there are some other ones. One of our sponsors today, AppPro, has some incredible tracking mechanisms. I think that is fantastic. Use that. But what I'm saying is, is to pull together into one manual spreadsheet, again, a Google Sheet or an Excel spreadsheet, as your business's scoreboard. And the reason why we don't want to automate that And we really don't even want to automate the colors is because whoever is responsible for that number, for that metric, for that KPI, is then going to have to self-select whether that is red, whether they're— whether it is yellow, or whether it is green. And by doing that, they will get so much— I mean, an incredible amount of insight because they are having to say, You know what, this number is red. We are off base and we really need some help. Or this number is yellow. It's yellow because it's, it's within this range. But also, I think that we have a plan in place to be able to get there. At the— I wanted to record this at the beginning of the quarter because this is the perfect amount of time that if you're making adjustments to certain numbers, to not do it on a month-to-month basis, but look at it on a quarterly basis. So, uh, at the time of this recording, I too am putting some finishing touches on our quarterly targets and specifically what we're going to try to do for Q2. And I was looking back at some of the metrics and we had a lot of red numbers in some areas, in some areas green, in some areas you could literally see it went from red to yellow and now it's green. And I'm looking at beginning to try to increase some of those targets or increase those standards to turn some of those greens to yellow. But then there's some other numbers that have been red all quarter. And my thought process is, you know what, I actually might need to reevaluate this number. And so I'm trying to go back. Where did I get that number from? Where did I say these— this was our targets? You know, one of them is the number of leads. And so when I look at that, I think, was that a little aggressive? Was that a little— not delusional, but was I a little mistaken as to, you know, kind of where those numbers were going to come from? Are those really the numbers that we need to— I mean, they're off, yes, but how much of it is the fact that maybe I was just a little too aggressive earlier in the year versus where I think we'll be by Q4? So those are some metrics that I'm looking at, and I may indeed lower some of those metrics. Now, this is important. I'm not moving the goalpost on what it is I said I wanted us to do, okay? Those are our objectives for the year. But on a school board, some of the different metrics that help us what to be able to hit our objectives may need to adjust on a quarter-to-quarter basis. I hope that makes sense. Again, don't move the goalpost of what it is that you said you wanted to do in 2024. But when I look at our scoreboard, there's probably right at 10 different metrics that we are measuring that are going to help us achieve our objectives for the year. Well, some of those are some marketing metrics, some of them are some sales metrics, some of them are some delivery and fulfillment metrics, some of them are some service metrics, some of them are some attendance metrics of different things. And those metrics may need to change, not to, again, lower the expectations from the team, but to look back and say, you know what, I think that actually I was a little too aggressive in that number. I think this is the number that we can absolutely hit. It's still, you know, leading us towards where we need to be. But my thought process around setting the targets may have been a little off. And that is similar to this idea of flying the plane from New York to LA. And that is that if you set the coordinates to Los Angeles and put it on autopilot, the plane does not fly in a perfectly straight line. There is weather, there is wind, there is other planes, there are other things that are going in place. There's the obviously the topography of the ground. You're not flying in a perfectly straight line directionally. Yes, it's, you know, fairly straight, but it's definitely not exactly straight. And I think that's a lot of the same way to look at at it in our businesses is that we are directionally moving towards it, but we're going to have to make these adjustments along the way. And what do those adjustments look like? They look like adjustments in the targets on a quarter-to-quarter basis. We're not changing at all what it is that we said that we wanted to do in 2024, but we are making some adjustments to the targets that we have going from Q1 into Q2? What are some of the numbers that I need to raise expectations? And so in other words, turn those from green to yellow. What are some of the numbers that I might need to look at and say, you know, we've been red all quarter, are those numbers off? Or maybe is it poor execution? In one particular case, we've had a number all year that I'm not changing that. It's actually a percentage. And I'm not changing my target on that at all. The percentage is— happens to be specifically 20%. And we ended Q1 at 9.5%. Well, does that mean I'm going to lower it to 15? Not at all. We are going to get to 20 on this number. And the question then becomes, do we have a specific tangible plan to be able to make that happen? And I feel confident going into Q2 with the addition of some new strategies, addition of a couple new, um, actions or activities we're going to do, that we're going to move that number from 9.5 to 20. So hopefully you can see in the examples that I've given some numbers we're going to need to lower that, lower the bar, so to speak, or lower the targets of those numbers. Not because I don't think the team can do it. It's just because I actually think that those numbers were off. Secondly, there's some numbers I'm going to hold steady. I like that number. I like where it is. We've just got to execute better. And then there are some numbers that we're going to have to raise the bar. We're, we're, we're going to have to raise the bar because we're hitting them and they've been green now for a while. And so now that number, let's just say that number is 50, now no longer is 50 green, it is now yellow. And now the new target number may be 55. So hopefully that helps. I would tell you, putting the heat, uh, tracking mechanism on it is incredibly helpful. I've done this with a number of people. They have loved it. They love the visual aspect of it. And so then part of the gamification of business really simply comes down to this. It's turning reds to yellows, yellows to green, and greens back to yellows. I hope that served you. I hope that makes sense. Love to hear your feedback. Thank you all for— many of you reach out to me, whether it's on Voxer or email or text message. Thank you for doing that. Really helps me to know what resonating with you, what's timely for you. So thank you for doing that. This has been helpful. Share it with, uh, someone else. And if you'd be willing to give us a review on Apple or Spotify, we would greatly appreciate that. All right everyone, till next episode, leave one.