070: Shannon Susko - The 3-Year Highly Achievable Goal

Are you thinking about how to grow your business with near and offshore staffing, but you're also wanting to make sure that it's reliable, cost effective and really well done. I think docsa talent is the way to go. Here's why. They don't just fill your jobs. They bring integrity, top talent and a people first approach that's hard to find. I've known the people at Doxa talent for over 20 years now and I say that you can count on them. I have. Talk to docs of talent and you won't be disappointed. Go to docsatant.com Bill G Again, that's doxatallent.com Bill G. One more time. Doxatallent.com bill G. Check it out today. Oh, this week's show is all about three Hag, the three year highly achievable goal. That intermediate. We're not talking BHAG and we're not talking one year goals. How do you get that midterm, that three year piece? And what difference does that make? We think it's critical. And Shannon Susko is here to talk with us today. Foreign. Welcome again to the Scaling of Business podcast. I'm your host and growth coach Bill Gallagher. On the show today, Shannon Susko, one of our senior coaches and a total rock star. Badass human being all around groovy gal, Shannon. Anyway, I'm just excited to have you on the show. Welcome to the show, Shannon.

Thank you so much. I'm happy to be here.

Well, I've got to do 3hag next week with two clients so it's so timely that we're talking and I've done it before and I've heard you talk about it, but I'm interested to sort of hear your take on it. What's different learned from you today, as I'm sure we all are. So I know it's critically important. That near term thing, you know, we talk about the BHAG and that long term like thing that we're reaching for, it's inspiring. But so many people who work in our companies are not even going to be around 10 years. They know it, we know it.

Very true.

And sometimes because it's such a big reach, it feels very pie in the sky. So before we get into what it is, why it's important, how we get to it, tell us about, you know, how do you arrive at it, when do you first start to use it? Share your story.

Yeah, no, thank you. So 3hag actually came from implementing Verne Harnishes Rockefeller habits, scaling Up. We're very familiar with it. As a CEO in my first company, we're venture backed and pretty much at least once a quarter, once a month, if not more, we're standing up in front of our team and our investors, our shareholders. And we actually not only had to state very confidently our BHAG, but we had to make it believable. And the 3HAG is a stepping stone. The 3HAG is what I learned as a CEO is gutting out. You did that to raise money. Where are you going to be gutting out what you need to be in three years time? And we all did that. I did that. Most companies actually don't do that. And the biggest reason why they don't do it and what I've learned, and I learned this later on, is that they're afraid to be wrong.

You mean to fail? They hate to fail. Is that what you mean by being wrong?

We all hate to fail. But there's good lessons to write down where we need to be in three years. And what we did is we actually got it out the three year, you know, three hag. We shared it with everyone. But then for confidence as a CEO and a leader and my leadership team, we wanted to ensure we knew exactly how to get there. So the three Hag not only became the goal, the stepping stone to the bhag, it actually turned into us. For us, the strategic execution system. And we use that a lot. Our annual plans, execution. Our BHAG is the first foundational strategic goal. But the three Hag brings them together. It's like the pivot point. And so when we learned this, we were software as a service, business, subscription based. And every time I stood up to say our three Hag, I actually wanted to be more comfortable than less comfortable each month. And what we did is we just decided to map out 36 months, 12 quarters of what the key milestones were going to be to put our strategy in place, put us in a unique and valuable position while obviously watching what's going on around us and what's going on internally. We fell into this mostly because we wanted to be confident.

How did it go? What difference did it make?

So in my first company, we were your typical late 90s startup. We raised a lot of money on not a lot of confidence, quite honestly in what we put the big numbers out there we thought had a plan, but what we learned is we had a little bit of a plan. So by us actually working week over week, month over month, quarter over quarter in the strategic execution system, that is putting out in front of us up on the walls, strategic pictures. We had what we called our swim lanes which took us from our key initiatives for one year all the way through to our three year, three to five differentiating actions, our key capabilities. And we really just stepped, kept stepping quarter over quarter. It was almost like we looked at it like the never ending rolling system. The difference it made for us. We were about four years in before we started actually putting this framework, the scaling up framework in place. And the difference this three hag made to us was it kept it in front of us in order to ensure it stayed visible, focused and all the decisions, the strategy is about making decisions. All the decisions we were making, we just kept making more decisions towards our three year, highly achievable goal. So in that company we actually executed on that. We had an exit about five years after we started implementing the whole framework. It was a great exit. My second company, probably because we had to learn the framework. We actually, before we started the second company, before we opened the doors, we actually put it in place, laid it out as we did in our first company. We just didn't have the whole bus rolling down and it was three years, three months to the day to sell it up, to sell it off. That was a huge exit. The value came out of being able to predict where we're going to be three years away.

That's something that I hear again and again from early birthing of giants, early rock habits, users and stuff. It's like, okay, well we sort of muddled around with it the first time and then the second time around we did the whole thing and we did it right from the get go and then, wow, it made all the difference in the world. And I hear people adding 800 employees in a couple years and going hundreds of millions of dollars in a couple years. That's something that I hear again and again and I think it's worth reinforcing because especially to clients who are new to the framework, there's this desire to pick and choose pieces and judge and evaluate and say that doesn't really apply to us and whatever. And to do it without reaching, to always be making it better. And I think that's a mistake. Right?

Yeah. Well, I love that you're saying that because one of the things that we did, rightly or wrongly, when we learned this, there weren't all couple hundred Gazelles coaches out there worldwide. I definitely had a coach. You don't go to the business Olympics without a coach. So you know, I had a coach, but they didn't know this framework but understood what it was founded upon. But the one thing I loved in working with a coach and our leadership team just sort of grabbing hold of this is we went through the whole methodology and I always say got out, but we wrote down what we thought, all of us, we agreed upon it. That was like round one, right? And then we did round two, three, four. If I look at all the one page plans we had and I look at all, even the three Hag, you know, that we've written down over the years and all the detailed strategic pictures behind it, we definitely, you know, had like I look back in my files, every one of them says draft because it's just good enough for what we need. Right?

It's today's draft, this quarter's draft, it's never done right. Never done right.

Yeah. So I love that.

The current draft.

Yeah, it's the current draft. It's what we know that's good enough for us to continue to actually drive forward. And it's always, it has to be good enough and we have to be confident that it's good enough and we'll take the next step forward. So when I think of Bhagwan and then I think of three hag and I think of, I actually call like the 12 month plan just to roll the hags is the one hag. But when I think of that, your one year has to be highly achievable. Like you must have it right there in front of you and you must be so clear on how you're going to do it. Your three Hag, you have to roll out the next two years. But one of the things we learned is the more we focused on just writing down good enough, how we're going to get there, the better we got as a leadership team in actually talking about it, coming together, collaborating on the overall strategic plan. Then we started. The more we put it in front of us, the more we could see how we are getting there or not getting there. And what do we need to do? Turn left, turn right. Make those decisions quickly.

Before we share some other examples, let's just talk about what it is. So what are the pieces of it? What does it look like, what isn't it? The three Hag.

Yeah. So I actually define the three hag as a strategic execution system and it should drive your confidence in predicting the future, the future of where you're going to be and then laying out a step by step plan to how you're going to make it happen. And as a CEO and as a leader, as an entrepreneur, there's nothing more clarifying than actually just writing it down. The steps in the three Hag, they're not new steps, honestly, it's just in the way that you actually flow them together. A lot of organizations and I went to business school, I learned, yeah, let's create that five year strategy. And it's static. The 3Hag system, the 3Hag itself, it's combining your execution system and your strategic system, tightly aligned so that it's ever evolving. You're never going to stop talking about it. And so we take your typical foundation. When I think of the step one, two and three, it's as we always know, we need the core purpose, core values. You've got to write down a bhag and you need to know how you're going to make money. Profit per X. That's great. The next thing that we need to write down is even just starting this out and the steps on this, it's just gutting out like what are your fiscal and I call widget based goals that you're going to, where you're going to be. Fiscal year ending three years away. Sitting here right now, most companies are getting ready to plan 2018. So in 2020, what are you going to look like? The 3Hag itself is actually a statement very similar to the Bhagavad and it's a statement of what you're going to be year ending 2020. Right. What are your three to five differentiating actions and then, you know, write down what you're going to be known for at that time. That's round one. And then once we get that down and this is what we learned, most people only do round one in the steps following and probably the things working out of all the strategic thought leaders out there, Vern's guidance on the page behind the page of seven strata, which came out a little later than this, but definitely confirmed, the path we're on is actually doing your internal analysis, your external analysis on the market, your internal analysis on how you make money knowing core customer, really foundational and then working into one of the tools. There's three tools I want to talk about just in regards to the steps is getting a tool that we use called the Attribution Framework. And it was just a way for us to see the white space, see the white space in the market and see what we look like in the market today and where we want to go. What comes out of that is a really key step. This is where we can find Our three to five key capabilities, which roll right into your differentiators. How are you going to put yourself in a unique and valuable position?

Your attribution framework is a concept and it's key to your process, and you just threw it out there quickly. But you talk about mapping out all the primary attributes of your offering relative to others and then weighting what your core customer wants and like that.

Yeah. The great thing I love about this as a CEO, when we're using this, but also as a coach using this, is that it gets your team together to come up with what they feel like, the seven to nine key attributes, characteristics of the marketplace you're playing in. And then the next step is really key. You're going to rate your own company. A lot of people go, that's pretty subjective, but that's okay. We're going to have a really good discussion as leaders about how do we do, how have we decided to serve those characteristics? And then we're actually going to put some other players, some of our biggest competitors that are in the marketplace, other players are in the marketplace and rate them as well. And a couple things happen at that time. One is that companies might get stuck at that point because they don't know enough about their marketplace and their competitors. And I think that's okay. Yep. We take that away as an action item. That, you know, what we need to know more and that everybody at this table, the leadership table, needs to be market experts. It's really not acceptable. No matter what role you're in. You need to know about the field you're playing on. So we'll take that away. And we might not be perfect the first time around, but it will be enough that we'll be able to gut out those ratings. And then the thing that, like the aha moment in that tool that I find just turns the light bulbs on and everyone goes wow. Is when you actually graph it out, graphing out what you feel you're best at out of those attributes to the ones that you're decided or just, frankly, not good at. Which is fine. Absolutely fine. You're going to map that out, and then you're going to map out the others that you rated. What that gives you is a picture of you're already in the white space. You're already in a unique and valuable position. Right. And we want to probably protect that position. Or you look like everyone else. What decisions are we going to make strategically to move our organization into the white space that's available now?

Are you going and adding client input.

On any of this we do after the fact. After the fact we'll do it. I don't want to slow that down at the point where we are, especially when we're going through it the first time. I love as a situation CEO and as a leader in an organization, if I put that hat on, it was just like one of the best discussions we could have using some really visual tools. And then as a coach it actually, you know, putting this in and working with teams, I mean you're the furthest away and you can see so much more. You're actually not in the day to day so you're a lot more objective. And you know, I usually go in and have pre done this to see what I see compared to what they see now.

This. Is this any different from the process described like an uncommon service?

It is very, very similar. And the funny thing is when uncommon service, when uncommon service came out that that book, I was like, yeah, thumbs up. Love it. Because they do such a great job on it. Right. And one of the things that we like when I learned I went looking when I wrote Metronome, in fact, I went looking for the academic name of this tool we've been using since 2000. Yeah, I also found it, I think it's called I'm going to get this wrong actually, but it's in Blue Ocean.

Oh yeah.

You know, it's very, very similar. But I think the difference is one of the things we took it is we took it and we put it up on the wall. Number one, we definitely mapped where we were today and then we mapped where we wanted to go. And the key discussion that comes out of that tool is really driving towards your three to five very dependent differentiating activities that's going to put you in that unique and valuable position, put you in that white space. And I find white space gets overused. But unique and valuable position, it means that you can do the same thing as three of your competitors in the marketplace, but you might be offering it in a different way to a different core customer. Totally not competing to be the best, you're competing to be unique. That process is so important to keep coming back around. That's that system part why I always call it the three eggs strategic execution system. Because we have to keep coming back around and the pictures that we create in this make it easy and actually time efficient for the leaders. And I can say as a coach, makes it so easy to come back around and make sure we're hitting this at minimum every quarter. We should be looking at it every month and it should be in our war room for every week.

So let me see if I got this for our listeners. We're talking about looking at all the various attributes that you and your competitors have and then how you think you do on them and how you think they do on them. But what we're looking for is how to differentiate, not how to even it out. And too often this thing is like we figure out how to suck less at certain things. In this case, we're actually looking to double down on some of the things that really we're good at already and, and then exit stuff. And as a well known example, if you're in ever anywhere around the western U.S. or you are, or you've read about Southwest, you know that they don't even try to have shitty food. So they're like, peanuts, baby, we got peanuts and sometimes a bag of pretzels. And that's what they got. And so they're not going there. But, but low fares, low hassle, easy fun and just crazy number of flights. It's hard to switch off Southwest if you're in that region because they just make it so easy. It's really hard. So that's what we're talking about. It's not like how to sort of get in the same thing with the fares and then, you know, come up with a novel way to serve food and make money. Like, no, it's like, this is who we are.

Yeah. And I think that I love what you said there because the biggest thing is, and it's, you know, as a leadership team developing this leadership team with a coach developing this. It's like deciding a strategy is all about, we've decided to do this because we can't do everything right. And that, you know, the map that comes out of the attribution framework gives you a really great discussion with your leadership team around what you should decide to do because your core customer really cares about it, it really matters and they're going to buy from you at a profit. Well, what's better than that?

Underscoring again. And we both run SaaS companies in the past. The thing that we see in tech companies and SaaS companies, but we probably see it in every industry, is they throw up all their things and then they figure out how to shore up weaknesses. We're going against that grain. We're saying try to eve at all your attributes instead abandon some and then figure out what to be extraordinary at.

Yeah, and then you know what? The last is not the last step because you never Stop stepping through this. But what I learned as a coach since I've implemented this as a CEO and we've done it four times. But as a coach, when I started working the framework with other organizations, right. Organizations that, you know, maybe in my Ace Tech roundtable or from a million to 10 million and most of my clients are 50 to 200 million dollars in size. And I've dealt with everything in between on this. But one thing that really stood out as a step that I found people would do this part and then stop and where this quarter over quarter, 12 quarters away. We want to keep mapping out in what I call, you know, I stole it from the, you know, best project management. You know, I guess techniques out there is swim lanes is we want to map out the 12 quarters from here to three years away on how are we going to actually put those differentiating activities in place. Some of them we might have already in place, but it might take up to 12 quarters to get ourselves once we decide on this, to the place where we need to be, not where we are today. And we would actually map that out visually on the wall. And, and that is, you know, I just got to say that coupled with a 36 month over month detailed widget based P and L forecast, those two things is what I call like that's the golden step in this. If we miss that step, that three hag will not be highly achievable.

So you're taking your three head and you're breaking it down into a lot of detailed financial plan as well with metrics of widgets on all the pieces. Yeah, it's not conceptual. Right. So to contrast that for our listeners as well, who may have heard either on this podcast or in other environments of things like a vivid vision or a painted picture, it's very conceptual, it's evocative, it's. That's more touching into the visioning piece of it. This is breaking it down. Okay, well how do we get there? Right?

Yeah. And what I loved about learning this, Vern's foundational scaling up framework for this and my leadership team, we were on a crazy growth path when we were learning this and we wanted the confidence to stand up to know where we were going. This allowed our leadership team to not only collaborate obviously on the strategy, but to tie it directly to how we're executing like today and then constantly evolving it as we're rolling towards the three hack and that discussion. So that 36 month over month forecast is not a finance function. Finance team usually creates the model and excel for it. And it usually starts at a higher level and as we get better it gets more detailed. But this is a leadership team discussion really driving how are we going to grow our widgets, whatever our widgets are, month over month, whatever we're selling, how does that affect our forecasted cash for the next 36 months? And then the assumptions that get made in between that actually really come out of the plans you've made to the milestone based quarter over quarter march towards three years away. And that's the thing that when I started talking about this that I realized some of the bigger companies I'm working with, they had a three year, five year, sometimes a ten year forecast. But it wasn't what I call widget based. It wasn't down to lining up this year's execution plan, to pulling it across widget by widget, transaction by transaction, all the way out. Three years they'd go, oh no, we just added 20% for next year and another 20% and I'd go based on what? And so peeling back that actual forecast is so key, but you can't do it unless you marry it with the 12 quarters. And it's funny, I was with one of my younger companies yesterday, they've been on quite a path, a scale up path. They actually took to this more easily because, well, number one, they didn't have the history of how they got this far, but they really wanted the visibility on quarter over quarter married up with the marketplace and internally to actually see where they're going to be from both forecasting cash before casting top line. It's really interesting to see the different approaches, but the biggest thing is I don't like that's the pivot point in ensuring that we're going to roll towards where we want to end up three years from now.

Well, I think you underscore a good thing there. And we all work with a range of clients, right? And this is definitely something I've seen in the bigger, more mature clients, the ones that are already over $100 million and they've been around for a while and they've grown up and they've, and they have certain routines and habits and so on and when you push on them, they're much more resistant than say the brand new early stage. Even if the folks have been somewhere else before, that team is new, that enterprise is new, but these others are like, yeah, now we're going to do this this way or we want to modify that, it doesn't work for us or you don't understand or that And I see this again with these clients that are over 100 million. And so to our bigger folks out there contemplating doing this kind of work, it takes something to try on a new approach and to break yourself up again. Even the ones that are, let's say, over 50 million and full of swagger. But I see this a lot at 150, and I even saw it with a $400 million company and they're far more resistant. They're wanting to do their version of everything.

Yeah.

And that's, it's that, well, we've already achieved some success and so we kind of know something, right?

Yeah. Little coach man, I love that you just said that because two of my companies are both over 100 million. And you know, for the last couple quarters, you know, I've pushed pretty hard on this as we worked through this whole framework. You know, we, we've been in a few years working through this and one of the things they resisted the most, and I say it, but I'm not sure if everyone understands it, is I say widget based forecasting. So that's going right down to like, what are you driving through your business to make money every day? So how many widgets do you sell every day or how many things need to leave the plant or how many subscriptions do you need to sign up? Whatever it is, like what is that thing that you're counting?

Right.

You know, it took me a lot to actually, and I thought about this as a coach, but I thought about this as, you know, putting my, my CEO hat on as if I was them and figuring out how I need to communicate to them at that level. And what I did is I actually separated and I think for any larger company trying to try this out, or even a smaller company that's start out on this, this can be quite overwhelming, this step. Right. It's a big step and it can be quite overwhelming. So I just say, look, let's just sort of map out those key widgets, you know, whatever, whatever we're going to count, but let's start counting them. Let's forecast and count them just to get a handle on the habits in place. Right. We'll actually roll in. This will become a very daily, weekly, monthly number. But once we can start forecasting that out, then we know that will flow back into the overall forecast at a very detailed level. And the questions and what I've observed in the success of doing it this way with my larger companies is that they now see the tie that they were missing between the forecast going out into month 13 to 36. Right. So after that they're usually really good for 12 months, but then just let it fall off. And we want to roll a 36 month forecast at a widget based level. Then we start adding in the dollars and the discussion gets around what we're assuming and what's going to happen and the things we think about in the marketplace like so and so bought so and so what's that going to do to that widget that we think we're selling?

So it's really quite connected the progression of widget metrics and financial metrics on a current state into the future and can be a sort of a typical linear progression. But I think you're talking about adding in the strategic elements of things that we're going to put in place over three years that aren't necessarily here today. And then we're saying, okay, when we deploy this new thing or when we finish building this or when we develop that content piece, then we've got an accelerator here and it looks like this. And so you're counting not just the users and the dollars, but you might be counting the eyeballs or the trials or a number of other things like that.

Yeah. And I always think no matter if you're like, if you're listening to this and it's like you're a smaller company, you're like, I want to try that or you're a larger company, I want to try that. It's just a matter. One of the biggest things is figuring out what are the key widgets and your key process flow and how you make money and start just forecasting those widgets. Right. It's so simple. And, and you know, a lot of people might go, I'm already doing that. I'm like, great, this is great. The next step is so much easier. But a lot of people are tracking and not forecasting and the reason why they're not forecasting. And some people are going to call it a budget. Right. But the forecast is where you want to go and then tracking how are you doing against that? And why are you above where you are? Great. Thumbs up or why are you below where you are? Those are the discussions we need to talk about to keep our strategic direction on where we want to go for our three hag aligned. And those discussions need to happen regularly. The tracking has to happen but against where you thought the win was going to be. Right. That is just a key, that key piece. And I was actually quite surprised in my big companies and the smaller companies, I Work with that. We fell into this I think mostly because I'm pretty detailed oriented that way as I wanted to make sure that what we were putting out the door was actually what we were putting out the door. And it comes from a little bit from my athletic background. But honestly it seems like when I see companies, my own company's success is the ones who really take on the 12 quarter swim lanes and the 36 month over month rolling forecast.

Yeah. So creating a picture describing how it ought to look, a detailed plan for it, lots of detail on where you're going to go from a progress standpoint and then tracking how you're going. The sports analogy is relevant because we so often look at these things. Not necessarily a team sport thing, but you could think of like if you're going to train to do endurance events, an Ironman or a marathon or things like that you're going to look at. Okay, well I need to do a certain number of drills and I've got to do these pieces and it builds to this point and you start from where you're at now and then over time you break it down and implied in that too are different phases of work that you're going to do, right?

Yeah, yeah, absolutely. And I really, you know, when I it's funny, be with this CEO roundtable next week and we've been working a couple years through this and I see them once a month and they all drive this framework and One of the CEOs are just at this point, they're really at a detailed level on their 12 quarter swim lanes and their 36 month over month forecast. And the feedback, we were talking the other day and the feedback came back and for anyone listening, you know, he goes, the three hag is hard. That's what he said to me. The three hag is hard. And when I think about sports, if I take, you know, a marathon, if I take a Ironman, you know, if someone decides to make that a goal, that's not an easy goal. Right. It's going to be. They're going to map out who's ever doing is going to map it out. Usually month over month, quarter over quarter to that goal. This is no different. And I think the difference between the individual and this is what we got talking about a little bit with some of the CEOs I was with is that as an individual, no problem, they lay it out, they're motivated, they're disciplined, they're doing it. A CEO in this case is moving from being that example, that expert over to being that coach of the process. Right. And they're bringing everybody. It's a whole team that's going to move this way. And so he was talking to me how hard it is to bring everybody along. And I go, I agree. One of the toughest things I had as a CEO is to actually be able not only to cascade this framework. Right. But also what was in the framework and then how do we keep the discipline, the habits? That's why Vern's book was called the Rockefeller Habits. It's about a team habit on staying focused on strategic execution. And this focal point going back to here's what we said was a win, here's what we said, how we're going to get there, how are we doing? That's just this constant discussion as a team that we're going to move forward. And I just thought it was really, really interesting that that came back as hard. I didn't think about it that way. But it is a disciplined process within this no different than scaling up framework. It's a disciplined habitual process that the CEO really drives the cadence.

Yeah. To recap for the listeners, the BHAG Jim Collins Big Hairy Audacious Goal is a 10 year inspiring vision that is not a simple linear progression of where we are today, but requires some transformation, transformation of the company and the team in the process in order really to be emotionally compelling for people. It's usually a multiple of purpose against a profit per X for something that we're really extraordinary at and could get better at. The three Hag is a three year highly achievable goal. And we're talking about creating a very detailed, rich picture and then a rolling plan that helps us get there with, with metrics, with a forecasted set of metrics that we can look at. How are we actually doing against this over time? And the habit of updating this, of checking this, of rolling our progress on this is what makes the difference. And those habits, right? Today, this week, this month, this quarter, quarter over quarter, day after day, week after week is where the shift happens. It's not like, okay, one day, suddenly it all comes together. It's the culmination of lots of little habits that makes that. And of course that's probably why the title of your book is the Metronome Effect and the original book was the Rockefeller Habits and that is the process of scaling up. These things are all incestuously tied together, right? Yeah, they certainly are focusing on different aspects of. So for our listeners, if you want to know more more about Shannon Sisko, and her work and that kind of thing. Go to Shannon Sisco.com we'll put the link and the spelling and all that right in the show notes for the podcast. So go there and find it and you can go and get more of her stuff and you'll find her on YouTube and that kind of thing as well, sharing some of these things. So that and of course you'll find us scalingupbusiness.com and we've got a growth guide there where you can get the overview of scaling up and get started, learn how to run your meeting. We've got some forms and things like that, an agenda in there to start doing your own work in this realm that again ties to it. We're here every week, so thanks for joining us. Thanks Shannon for coming on the show.

Yeah, thank you.

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