Get a Goal: The One Number That Runs Your Company | EP2

1,000 days. That's enough time to transform a company, but not enough time to waste. Welcome to The 1,000 Day CEO, the podcast about decisive leadership, sustainable growth, and building a business that thrives beyond any one leader. Your host is Bill Canady. Let's make every day count.

Here's something I do in my first week at a company, and it has never gone once The way the CEO expected. I walk into a building. It's not a tour. Nobody escorting me around with a clipboard. Nobody warned that I'm coming. I just walk and I ask people the same question. 8 simple words. What are we trying to accomplish this year? Last time I did it at a manufacturer about 40 minutes outside of Cleveland, I asked 5 people in the space of one morning. And the VP of sales said, Well, we're going to grow that top line. We're going after the big accounts. And the plant manager said, on-time delivery above 95%. A production scheduler, 22 years in that building, knew more about how the place actually ran than anyone else I met, said, well, I think we're trying to get the second line up. A customer rep said, honestly, fewer complaints. And the CFO gave me the numbers straight out of the sponsor's model. to the decimal, because knowing it is his job. 5 people, 5 answers, not one of them wrong exactly, uh, and every one of them working hard on something real. I took that back to the CEO and he was genuinely surprised. He said, Bill, we've communicated this plan extensively. It's in the town hall decks. I sent it out in January. And he had, and he wasn't lying. He wasn't lazy. He had communicated it. He had just never installed it. The gap between communicated and installed is worth about six million bucks a year. Let me show you the arithmetic. All right, here's the proof: a hundred and fifty million dollar manufacturer, not a turnaround, a decent business, profitable, bought at full price by a sponsor who needed to get materially better on schedule. That CEO ran one meeting. Walked out of it one goal, one a number, a unit, and a date. Then he made two moves against it. Two, he simplified the product line and he fixed the price. Nine months later, that business had six million more dollars of EBITDA on the board. Now let me tell you about the other version because I've seen it a great deal more often than I've seen the first one. Same size company, same kind of sponsor. Same caliber of operator, and he came out of his planning process with 25 initiatives. 25. Gorgeous deck. Every function represented, an owner and a date on every line. 9 months later, nothing. Not a disaster, nothing. None of them were at 40% done. 4 of them were finished and didn't matter. And the EBITDA line was inside the noise of where it started. Same market, same year, roughly the same people. The difference was one number versus 25. Here's my promise. By the end of the next half hour, you'll be able to write your company's one goal on a single line, test it in about 90 seconds against 3 questions that tell you whether you got a goal or a wish, and run the meeting that installs it in the building. And here's the plan. First, I'll give you the 4 meetings that make up your first 100 days, just so you know where this sits. Then I'm going to spend most of this episode on meeting 1, because it's the one that decides whether the other 3 are worth having. Then 3 moves, and you can run all 3 before your next leadership meeting. This is The 1,000-Day CEO. I'm Bill Canady, and let's get into it. Let's start with the problem. Let's talk about the laundry list. I want to be fair to it before I take it apart, because nobody arrives at 25 initiatives by being stupid. They arrive for 3 reasons, and all 3 of them are reasonable. Reason 1 is inclusion. You have 8 functional leaders. If the plan has 1 item on it, then 7 of those 8 people feel like they're not on the plan. And you're new and you need them and you can feel the room when you get to the end of the list and quality isn't on it. So, quality gets one. Well, IT gets one because they need one too. And let's not forget about HR. They get 2 because HR always gets 2. And now you have a list of enormous political advantage of being a list that no one has to fight about. Reason 2 is you honestly don't know yet which one matters most. You're on day 20. The data's a mess. Everybody's opinion contradicts everybody else's. 25 is not what dot choosing looks like once it's been typed up and it's put into a template. Reason 3 is no one says out loud, a long list is safer. If you commit the company to one number and you miss it, well, you missed it. If you commit to 25, you deliver 11, at least you build a slice that says meaningful progress across the board of the portfolio. You made some progress. I've watched people survive 2 quarters on that slide. I've never watched anyone survive 4, though. Now, here's the arithmetic that kills it. Your leadership team can carry about 3 genuine changes at one time, on top of running the company. 3. And notice what's already true about their week before you hand them anything. It's full. It was full before you got here. The day job is still 100% of the available hours, and the day job is what produces this year's number. So it wins every conflict, every time, without anybody deciding that it should. So you hand 8 people 25 items. That's 3 apiece on top of a week that's already at capacity. And here's what happens next. And it's the part you need to see clearly because it happens quietly and it happens fast. Your organization sorts your list for you. They decide. You didn't ask them to do it. Nobody held a meeting about it. But within 6 weeks, 25 items have become the 6 that people are actually working on. And the 6 that survive are not the 6 with the most value on them. They're the 6 that are comfortable. They're the ones that don't require telling a customer no. The ones that don't require telling a 20-year salesman that his largest account is about to get repriced. The one that can be done inside of one function by people who already like each other. Without a hard conversation, which means the rank of your company's priorities got made by default by people optimizing for friction, and you are not even in the room. Now let's put a dollar figure on it because I'd rather you felt this in the P&L than in the abstract. Take that $150 million business. Say it earns 12% EBITDA. That's $18 million right there. The model that sponsor underwrote needs EBITDA to grow to 10 to 12% a year, and that's the going rate now. Against about 5% historically. 12 is the new 5. So the business owner roughly owes $2 million of new EBITDA every year, every year for the length of the hold. The one-goal CEO put $6 million on the board in 9 months. That's about 3 years of required slope delivered in 3 quarters. Well, we like that. The 25-initiative CEO put nothing. He didn't owe $2 million anymore. Now he owes $2 million plus the $2 million he just missed. And he owes it against a board that has started to wonder and a team that has now learned that the plan is a document rather than a fact. And then there's the cost in days, which is worse because you can't refinance days. Your first 100 days are the only clean pass you get at establishing command. On day 101, you're not the new CEO anymore. You're just the CEO. And every single thing you didn't change is now something you've endorsed. You own it. That's right. It's yours. So the question isn't whether you have a plan. Everybody has a plan. The question is, what are you gonna do that first 100 days? What are they actually made of? Here's the framework. First 4 meetings, 100 days. That's the whole structure of phase 1. And I want you to hold it in that shape because the sequence matters as much as the content. Here are the 4 meetings. Meeting number 1, get a goal. Week 1 and 2, the output is one measurable goal for the enterprise. One sentence. That is the whole subject of today. Meeting 2, well, that's where you set the strategy. Weeks 3 through 6, now that's the goal, and you decide where the company will and will not compete to hit it. Which segments, which customers, which products. You cannot do this first. Strategy without a number attached is just a preface. Meeting 3, reorganize the company. Weeks 6 through 9, structure follows strategy. You put the right people against the segments and you just choose, and you take people off the segments you just walked away from? Well, that's episode 8. Meeting 4, take action. Weeks 9 through 12, and then forever. This is where the cadence starts. The store scoreboard, the reviews, the countermeasures. That's episode 9. 4 meetings, 100 days. And here's the rule that makes them expensive. The CEO only gets one clean pass through these 4 meetings.

One.

You can hold the meetings again later and people will attend. But it will not have the same effect because the second time you're not announcing a new era, you're correcting a failed one. And that's a different room with a different air in it. These meetings are the CEO's power tools. Most people treat them like they're calendar entries. They're not. They're the 4 occasions on which you get to reset what a company believes about itself. And each one only works if the one before it actually landed. On the first meeting, let's get that goal. It's a half day long. Your direct reports, no observers, no consultants presenting, no one from the sponsor sitting at the back. They'll get the output and they'll get it better if the room was honest. And the output of that half day is one sentence. And here's what the sentence looks like. Improve EBITDA margin by 300 basis points in 12 months. That's it. That's the entire artifact of meeting one. Read it again in your head and notice it, what's in it, because every word is load-bearing. There's the number, 300. There's a unit, basis points of EBITDA margin. There's the date, 12 months. There's the denominator, which I'll come back to because that's the one part people leave out and it's the part that stops the goal from being gained. It has to be measurable. That means somebody in finance can calculate it from the actual books the same way every month without a debate about definitions. If 2 smart people can compute your goal and get different answers, you don't have a goal. You have a topic. It has to be time-bound, not over the next couple years, a date, because a goal without a date can't be behind schedule. And a goal that can't be behind schedule cannot be managed. And it has to be recitable by anyone in the building. Not understood, recited. There is a woman running a machine on second shift who has never met you and probably never will. And the test of your goal is whether she can say it back. If she can't, you don't have a company goal. You have a leadership team goal, and a leadership team is not where the work happens. Okay, how to write this? It's one sentence, a number, a unit, a date. That's the whole specification. And it takes most executive teams about 4 hours to produce, which tells you something about how rarely anyone makes them choose. Now, let me give you the trap because this is where almost everybody lands the first time. Most goals are wishes because become the supplier of choice in our category. That's a wish. Drive operational excellence. A WISH. Deliver a world-class customer experience. Well, that's a wish wearing a suit. None of them have a number, not a unit or a date, and none of them can be missed, which is precisely why they're popular. A WISH is a goal with the accountability taken out of it. Well, here's a subtler one, and this is the version that fools sophisticated teams. Grow revenue 15% this year. That does have a number. It has a date, and it's still functionally a wish because it has a numerator with no denominator. And a goal with only a numerator can only be won by spending. You can't buy 15% revenue growth. You can buy it with discounts, with terms, with small orders from small accounts, with a product line extension nobody asked for. You will hit the goal. You will just be poorer once you do. That's why the goal is expressed as a ratio or as a dollar figure paired with a ratio. Margin has a denominator. It cannot be gained by adding volume because volume shows up on both sides of the line. And one clarification, because people hear one goal and panic. One goal does not mean one number on a scoreboard. You still run 5 to 10 operating metrics weekly. It means there is one goal that all of them serve. And when 2 of them conflict, and they will roughly every Thursday, because everybody in the meeting knows which way it will break, then here's an example. Back at the manufacturer, $150 million in revenue, about 12% EBITDA, call it $18 million. The goal out of meeting 1 was to improve EBITDA margin by 300 basis points in 12 months, 12 to 15. On $150 million of revenue, 300 basis points is $4.5 million. Sounds good. We like that. 2 moves. He picked one and he said no to everything else, which was the actual hard part of the meeting. Move one was simplification. The product line had grown for 11 years by addition. Every custom configuration a customer had ever asked for, was still quotable, still stocked, and still in the system. He cut the tail. The plant stopped changing over as often. Purchasing stopped carrying components for products that shipped 4 times a year. Roughly $3 million of that came from simplification, and almost none of it came from firing anyone. Move 2 was price. 2 points. And here's why price is the fastest lever you will ever touch. 1 point of price on $150 million of revenue Is a million and a half dollars of EBITDA. That's real money at essentially 100% flows through because there's no cost attached to a price increase. Two points is three million. They landed 400 basis points, not three, in nine months, not twelve. Six million dollars. You can bet they were happy about that. Now the 23 things he said no to did not disappear. Several of them were good ideas. 2 of them got done anyway by people who wanted them done and had room because the tail was gone. That's what capacity looks like when you free it instead of asking for it. Here's how to present it. The 4 Bs. I love talking about these things. You got the sentence. Now you got to put it into a room. The leadership team, the town hall, and eventually the board. How do you present it determines how it gets adopted or filed. I teach 4 rules for that, and they are: be brief, be brilliant, be critical, and then be gone. First, be brief. One story, one message, one key takeaway, one minute per slide maximum. And if that sounds severe, look at your last board deck and count the minutes you spent on slide 4. If you can't explain it in 60 seconds, you don't understand it. That's not communicating a problem you're having. It's thinking problem. It's a thinking problem. And the extra slides are where you're hiding it. Next, be brilliant. That means deliver insight, not just data. Anybody can put a chart up. Your job is to translate the numbers into meaning. The so what? Not here's our SKU distribution by margin contribution. Instead, of our 1,000 SKUs, only 290 drive 95% of our margin. We should cut the risk and free up $50 million of working capital. Same data. One version is a slide. The other version is a decision. We prefer the decision. Be critical. This means no happy talk. Happy talk kills credibility faster than bad news ever will. And it kills it permanently. Leaders don't trust perfect stories. They trust prepared ones. So, every risk you name, you name with a countermeasure attached. Never a risk alone. Never a countermeasure without the risk it answers. That's the Stockdale Paradox operationalized. Unflinching honesty about the difficulty in front of you, paired with a clear plan and absolute confidence you'll prevail. Both halves. One without the other is either denial or despair, and boards can smell each of them a long ways off. Next, be gone. Once you've made your point, stop talking. Don't restate it. Don't fill the silence. Don't answer the question they haven't asked yet because you're prepared for it to answer. Executives respect people who respect their time, and the last 90 seconds of most presentations are where the credibility is earned and the first 10 minutes get spent. Be brief, brilliant, critical, and gone. That's how you present the goal. It's also from that day forward, the standard you hold your own team to when they present to you. Next, let's look at the plan. It's 3 moves. You can run all 3 before your next leadership meeting. And the first one takes about 20 minutes if you're honest, and about 4 days if you're not. Your first move, write the one goal on one line, not a page, not a pyramid with 3 pillars under it. We all love creating those houses. One line written down in your own handwriting and then said out loud. 2 constraints, no conjunctions to add a second goal. The moment you write while also, you now have 2 goals. And 2 goals is the beginning of 25. Secondly, say it out loud before you accept it. If you stumble reading your own goal, so will everyone else, and they'll stop trying by the second week. Format to start from: improve, insert your measure here, by, insert a number, insert unit, by date. That's the shape. Fill it in with your business. Move 2, pressure test it against 3 questions. Take the line you just wrote and run it through these. 90 seconds. 1, can a person picked at random from your building recite it? Not this week, not have you installed it yet, but could they once you said it 15 times? If it takes 2 sentences to say, the answer is no. Length here is the enemy. The company can hold 1 sentence and cannot hold a paragraph. 2, does it have a denominator? Is it a ratio or a dollar figure tied to a ratio? If it's a pure numerator— revenue, units, headcounts, booking— someone can hit it by spending your money. Eventually, somebody will, and you will not like how that goes. 3, does it name a date? An actual month, not this year, not over the planning horizon, a date you could be behind. And here's the informal 4th I'll apply before I sign my name Does achieving this goal require you to say no to something? If the goal can be reached without stopping anything, without walking away from any revenue, without disappointing anybody, then it's not a goal. It's a forecast. Real goals cost something on the day you set them. Move 3, put the meeting on the calendar with a written agenda that end in named owners. Put someone's name next to each one of these. Half a day, your direct reports. Send the agenda out in advance in writing so that nobody arrives planning to present. 4 blocks. Block 1, the situation in numbers only. 20 minutes delivered by the CFO. Where EBITDA is, where it has to be, and the gap in dollars. Block 2, the goal proposed by you, argued for real. Let them fight it. A goal that survives an argument gets carried. A goal that was received gets forwarded. Block number 3, the 2 or 3 moves that close the gap, and you cap it at 3 before anyone speaks out loud at the top of the block. So the meeting is a selection process rather than accumulation process. Block 4 is the one that makes the other 3 matter. Named owners and dates, not functions, not committees, a human being's name against each move. And that single human being is in the room when their name goes on it. You don't leave that room without block 4 being finished. If you run out of time, you cut block 1. The situation can go in an email. Ownership cannot. So, what does it look like when it's working in the room? When, when it's theater? Here's the adoption test, and it's the only one I trust. You know a new standard is taken when people who don't report to you start citing it back to each other in rooms you're not in, To settle arguments you never heard about. When a plant manager tells a salesperson that order doesn't help the 300 basis points, and when you weren't there and nobody told you it happened and you find about it 6 weeks later by accident, now that's adoption. People are doing it. You don't have to say anything. Until then, it's just a thing the CEO says, and it takes time. Realistically, 2 or 3 months of consistent enforcement Consistent is the operative word. It means you open every meeting with it. You ask about it when you're being briefed on something else, and you decline at least one attractive opportunity out loud on the record because it doesn't serve the goal. That last one is what converts to it. People don't believe your priorities because you announce them. They believe them the first time you watch them pay for one. Theater looks like the opposite. It's easy to recognize because it's way more fun. The goal goes on the wall. It goes on a mouse pad. There's a banner in the lobby and a hashtag on the internal site. You've seen them. You know what they look like. And nobody ever uses it in an argument because no one's ever killed a project with it. It's never cost anyone anything, which is how you know it's not real. The wall is not installation. The wall is decoration. Installation is when the goal starts making decisions. That you didn't make. Okay. 3 things to keep from this one. First, one goal. 25 initiatives is nothing more than having none because your organization will sort the list for you and it will sort it for comfort. One number and everything else is in the service of it. Second, a goal has a number, a unit, and a date, and it has a denominator so it can't be bought. Improve EBITDA margin by 300 basis points in 12 months. If your goal doesn't have all 4 of those parts, What you have is a wish, and I've never seen a wish move an income statement. Third, you're not done when you say it. You're done when they say it to each other. That's the adoption test. It takes 2 or 3 months of constant reinforcement. And the thing that converts it is watching you turn something down attractive because it doesn't serve the goal. And when you get to the end of your 100 days, when the goal is set, the strategy is chosen, and the structure is aligned, And the cadence has started, there's one line to close on. I've used it in every 100-day meeting I've ever run, and I don't dress it up. This is our plan. Now we execute with discipline. No one else will do it for us. That last sentence is the one that matters. No one is coming. The sponsor isn't going to operate the business. The board isn't going to fix your product line. The market is not going to hand you 300 basis points as a favor. You've got one goal and about 900 days left to hit it. Next week, we'll go on to day 30 through 90, and we'll find out where your profit actually lives, because I'll tell you right now, it isn't spread evenly, and your P&L is an average that's hiding 2 completely different businesses inside one set of books. I'll give you the 4 quads, the single best question I know to ask a leadership team, and the answers I got when I asked 300 in a $10 million industrial business? The lowest answer in that room was 18%. The highest was 41%. If you want the one-page worksheet from today and the other tools that I talk about, check them out at the8020institute.com. It's the same place you can go to find out how your business is doing. There's lots of classes you can take there. I'm Bill Canady. Now go do the work.

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