Dan E. King: Part 2 of an interview by Bob Morris

Posted on: April 10th, 2015 by bobmorris

King, Dan EDan is the founder and principal of CloseReach Consulting and has developed a proprietary growth acceleration model designed for business leaders and senior teams striving to outpace the competition. The model consists of and numerically scores three growth drivers: Strategy Planning, Execution, and Talent. Dan developed this data-centric concept for assessing critical aspects of an organization’s capabilities in order to provide leaders with the knowledge of where weakness resides. Only then, can investments be targeted to the right elements of the business in order to steepen the growth trajectory. Dan helps leadership teams overachieve – fortifying the business so that financial targets are surpassed – the hallmark of hyper-growth.

Prior to CloseReach, Dan held a senior executive role with a mid-market enterprise that delivered double-digit revenue growth for five out of six years and was named winner of the Atlanta Business Chronicle’s Pacesetter Award in 2010. In December, 2012, the company was recognized by Inc. magazine as one of the fastest growing companies for the fifth time.

He has developed white papers on topics such as The Keys to Flawless Execution, Achieving Talent Density in a High Growth Enterprise, Strategic Planning – Getting it Right, Applying the Organizational Prowess Scorecard to Create an Integrated Organization.

His book, The Scorecard Solution: Measure What Matters to Drive Sustainable Growth was published by AMACOM (2015)

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Morris: When and why did you decide to writeThe Scorecard Solution?

King: The ideas for the book struck me 3 years ago while working in a private, VC backed business that was experiencing impressive growth, but producing wide swings in performance from one year to the next. One year would be stellar, surpassing revenue and profit goals by a wide margin. The next year we would fall short. Over the course of 5 years we saw growth, from $25M to $80M. But there were two “down” years within that 5-year span. Why couldn’t we sustain year over year growth? If so, we would have easily surpassed $100M in that timeframe.

I became curious and conducted my own quiet examination of the organization to better understand what was really happening. During my analysis, I discovered that there were certain growth drivers that had to be optimal in order to sustain growth. I bucketed these as strategy planning, execution framework, and talent. Additionally, these elements of the business required frequent attention in order to keep them at the optimal level. For example, shifting strategies meant different talent requirements. We made the classic mistake of expecting the same people to do new things. We pushed people away from their skills and our results suffered. The neglect of these growth drivers was, in a nutshell, the reason our performance slipped. We would come off of a good year and assume that we could repeat. That led to the cross your fingers approach to leadership. “Let’s not rock the boat and we can have another great year.”

What I learned is that rocking the boat is mandatory and necessary to sustain growth. These revelations 3 years ago led to the book. I wanted to capture the essence of what we experienced and convert the findings into an actionable methodology for the reader. The “secret” ingredient is how the scorecard pulls the curtain back on parts of the business that a leader normally can’t access – seeing how execution truly occurs in the trenches. This is so much more revealing than relying on what others tell you. The message is almost always sanitized.

Morris: Were there any head-snapping revelations while writing it? Please explain.

King: The big “Ah ha!” moment was when one of the CEOs I interviewed as part of my research for the book suggested a numerical scale to measure the growth drivers. She noted that business leaders love numbers – quantitative verification — and if I could portray the health of the enterprise numerically, it would resonate with the reader. Consequently, I developed the scale, made up of the 4 quartiles – laggard, vulnerable, resilient and agile. I’ve also learned that the progressive nature of the numerical scale gives teams something to shoot for. A best practice is to re-apply the scorecard every 6-12 months and as improvements are made, it is motivating to see increasingly stronger scores.

Morris: To what extent (if any) does the book in final form differ significantly from what you originally envisioned?

King: My editor encouraged me to show more of the details of what was addressed within the case study business as a result of the scorecard results. I had conveyed the improvements at too high of a level and the suggestion really made sense. The reader could actually visualize the specific actions taken by the leadership team to build back the strength in strategy planning, execution and talent density. The other meaningful change reflected in the final form was the emphasis on the playbook. This is the tool that actualizes the scorecard results. I was excited about the playbook because it is a tangible way to keep the book alive – not just sitting on a shelf. I wanted to create a book that a leader could easily learn from and apply in his or her business.

Morris: What dos and don’ts should be kept in mind when formulating a scorecard?

King: Do spend the time to customize the sub-elements to your business and current state. For example, under “strategy planning” there are multiple items to be scored. Each leader needs to scrutinize the data and add/modify as needed. Since I developed the measurements based on research, a lot of modification isn’t advised, but some adjustment to make it more relevant to the business is fine. Another “do” is to be very careful when selecting the individuals who will do the assessment. Some companies engage external experts in order to stay objective and unbiased.

In my experience, most companies that adopt the scorecard have objective leaders who can handle it. Just be careful on who is chosen. The one big don’t I would offer is, don’t keep it a secret. The scorecard and the numerical score can be a rallying cry for an organization. Share it widely and get people vested in the work to improve the score. I know one CEO who applies the scorecard every 6 months and publishes the results for everyone to see. As a business, they have moved from the vulnerable quartile to resilient over 3 years and they have the financial results to show for it. The company is healthier, employees are engaged and shareholders are ecstatic. It’s a real success story.

Morris: Who should be involved in that process?

King: The business leader (CEO, owner, Division President, etc.) must own it and sanction the work. The person who has the authority to drive change and make decisions that affect the organization being assessed must lead the charge when it comes to scorecard adoption. Then, the senior team needs to endorse the process. The scorecard results will be converted to an actionable playbook that is the domain of the senior team. Then, as I mentioned, the selection of those who will actually collect the scorecard data is key. This might be a member of the senior team or someone a level or two down.

Morris: In your opinion, what is the best way to introduce the scorecard to the workforce of an enterprise? What dos and don’ts should be kept in mind when doing so?

King: Great question. The best examples I’ve seen involve multiple methods of communication. In one mid-market business, the CEO introduced the concept of the scorecard at a town hall meeting and through a well-crafted email message. He then asked his senior team to hold small team meetings to further share the scorecard and implementation plan. That set the stage. Once results were in, another town hall was held to unveil the results and action plans. While there was room for improvement based on the score, people liked being informed and knowing exactly what had to get worked on and how they could help. In this case, the leaders established a cadence of repetitive application of the scorecard, address the weaknesses, repeat. It changed the culture to one of high energy and high performance.

Morris: As I indicate in my review of the book for various Amazon websites, there are dozens of passages throughout your narrative that caught my eye.

For those who have not as yet read the book, please suggest what you view as [begin italics] the most important point [end italics] or [begin italics] key take-away [end italics] in each of these passages.

First, Leveraging Data (Pages 11-14)

King: As a senior team, do your homework. Collect relevant data regarding the competitive landscape, the marketplace and your internal capabilities. Don’t make big decisions with gut instinct alone. It’s amazing to me how many companies don’t have good information when it comes to the competition and their own ability to execute.

Morris: Plan the Future (21-28)

King: Planning is so much more than the 2 day offsite and a room full of smart people. Again, it starts with the data. Don’t let opinions of the most verbose drive strategic decision-making.

Morris: Understanding Leading Indicators (29-31)

King: This is vital – creating the ability to track progress in real time. The ability to overachieve is fueled by swift course correction. Leading indicators are the lifeblood of a high growth enterprise. Don’t get blindsided by poor results. I tell the story in the book about the CEO and CFO who were tracking lagging indicators of revenue and profit and were perplexed when results dipped. They had not been watching the leading indicators and paid a dear price as a result.

Morris: The Elements of the Scorecard (39-48)

King: The key to an accurate score is the sub-components beneath the “big 3”. That’s why scorecard preparation is so important rather than just leaping into the data gathering. Take the time upfront to get the elements of the scorecard right. In the book, I present 22 elements under Strategy Planning, 18 under Execution Framework and 8 under Talent. You can appreciate the level of detail required to get to the root cause of performance deviations.

Morris: Scorecard Component Details (51-58)

King: I thought it would be helpful to take each sub-component and describe precisely what to look for and how to assess the current condition. This section of the book helps the reader visualize the tactical aspect of diagnosing numerous sub-components and how to apply a score to each. It’s not complicated. I wanted a straightforward, pragmatic approach to building out the scorecard.

Morris: The Data Behind the Numerical Scoring of Strategy Execution (61-66)

King: This section provides the rationale for the numerical score. It gives the reader insight into exactly how the scoring was determined as the 18 sub-components under Strategy Execution were assessed. The example then makes it easier for a leader who is preparing their own scorecard.

Morris: Strategy Planning

King: Similarly, this section provides insight around the 22 sub-components and how those conducting the diagnostic translate current condition into a numerical score. The key takeaway here is the example providing a pathway for a leader to adopt the scorecard for his or her organization.

Morris: The Offsite Work Session (90-103)

King: There are critical success factors associated with the offsite session. First, it is essential that the pre-work be completed. This is the data needed to plan the future. Once in the planning room, the keys to success are a facilitated process, the right people in the room, an agenda that moves the team toward strategic decisions and a plan to communicate the plan. A word of caution – don’t allow your strategic choices to outstrip your ability to execute. Leaders tend to plan the future with great optimism and a disregard of organizational constraints. Guard against this. This is why it is necessary to include those in the planning who are in the trenches. The offsite session shouldn’t be just about rank.

Morris: Guiding Principles of Execution (107-122)

King: The two critical aspects when it comes to execution are performance tracking and goal alignment. To flawlessly execute and to overachieve financial targets requires a continual monitoring of progress so that a performance deviation can be addressed quickly. This type of “real time” course correction is the hallmark of a hyper-growth business. Similarly, goal alignment leads to an integrated organization – all on the same page. Individual goals tie to overall strategic direction. When this happens, overachievement becomes a real possibility.

Morris: What Is an “A” Player Anyway? (128-137)

King: The two big takeaways from the discussion of “A” players are that it is measurable and it is situational. I created a scorecard at the individual level because the term “A” player means very little. The term is overused and means different things to different people. I wanted a way to quantify the term. Hence, the scorecard. Secondly, “A” players are victims of the environment. An “A” player in one organization might become a “B” player elsewhere. I have seen “A” players become less capable as their role shifts. This is something leaders in high growth companies need to guard against. As strategies shift, roles change. When roles change, a mismatch between role and skills can occur. This can create an insidious drain on productivity and results. As leaders, we have to have the courage to help the person move on to a setting where regaining “A” player status is possible.

Morris: Make Talent Management a Business Priority (137-145)

King: All too often, the human capital portion of a business in only examined when company performance suffers. This is a classic mistake. Smart leaders who are on a quest for sustainable growth make talent review a priority and do it regularly. Don’t wait for the crisis. Assessing talent at every level and making systematic upgrades where needed will insure consistent execution of top priorities.

Morris: Attracting the Best (151-155)

King: I work with quite a few companies that don’t possess a marquee name. One of the challenges small, fast growth companies face is how to attract top talent. This portion of the book outlines how to “sell” the opportunity and how to appeal to the interests of a game changer. The selection process must be heavily weighted toward selling, not asking a bunch of questions about the person’s accomplishments and background. It sounds counterintuitive, but it is key to building the needed talent density in a small or mid-market enterprise.

Morris: Seek Out Internal Threats (164-167)

King: The takeaway here is, don’t wait for the crisis. One of the most powerful themes of the book is the importance of addressing the root causes of performance deviation before they blossom into big, visible problems. We all get the oil changed in our cars before we experience engine failure. Preventive maintenance works in a business setting too. As leaders, we just need to know where and how to look for the leading indicators that give us insight into the inner workings of the business. This is the value of the scorecard. It opens the door to the internal threats so that they can be dealt with before they grow into major disruptions.

Morris: Leveraging the Scorecard (175-190)

King: The company I profile in the book applied the scorecard after a particularly difficult year. The scorecard results helped the leadership build a roadmap back to organizational good health. At that point, the CEO was convinced of the power of the scorecard data and decided to re-apply the diagnostic every 6 months in order to build a culture of continuous improvement. This is a best practice and the ideal way to leverage the scorecard. Let the tool help you accelerate growth by warding off barriers to company performance. Financial targets can be exceeded.

Morris: Fortifying the Senior Team (195-199)

King: This is the domain of the CEO and Board of Directors. I have had quite a few candid conversations with CEO’s about their senior leaders. Invariably, there is one individual on the team who causes the CEO some sleepless nights. My advice is always the same – act. Do the person a favor and allow them to move on to an environment in which they can thrive. Remember my point about “A” players being situational? I’ve worked with incoming CEO’s who must closely evaluate the senior team. In these cases, it is easier to address individual competency shortfalls because the incoming leader is new and is looking at the people through a discriminating lens. For CEO’s who have been in place for a while, my advice is to look at the team as though it were your first day on the job. Don’t let friendships and familiarity get in the way of constructing the strongest leadership team possible.

Morris: Execution Framework (207-212)

King: It is shocking to me how many management teams ignore this. All teams plan. Very few construct the framework to insure successful execution of the plan. The takeaway from this portion of the book is to develop an execution framework on the heels of your planning session. When I work with a team on strategic planning, I insist we spend time on the execution component before we leave the meeting room. This addresses strategy ownership, dashboards to track leading indicators, execution team make-up, etc. Don’t let execution just be an overused business term. Weave it into the cultural fabric of your company.

Morris: Culture Affects Performance (214-216)

King: Ah, the key ingredient to hyper-growth. I felt compelled to include a section on culture, as it can be either a catalyst or anchor within a business that has adopted the scorecard principles. When a leader consciously decides to build a culture built on teamwork and trust, it serves to turbo charge the organizational prowess principles. I use a graphic that shows 2 overlapping circles – one being the organizational prowess priniples, the other culture. The overlapping portion is labeled “hyper-growth.” My advice to leaders who have a desire to adopt the scorecard is to pay attention to the culture and how people really feel about toiling in your business.

Morris: Defining a High-Performance Culture (218-222)

King: In a nutshell, a high-performance culture is defined by discretionary effort. Think about it. If you have a culture that fosters teamwork and trust, people want to be a part of it. When people want to be a part of something, they will gladly give more. Discretionary effort is a powerful attribute for a business. When individuals choose to overachieve, the organization can overachieve. Examine your motivation systems. How do you drive individual performance? Is it through traditional annual reviews and outdated compensation plans? If so, I suggest you re-think how to motivate and inspire the troops. Unleash them from the bonds of old-fashioned organizational systems.

Morris: Sustaining a High-Performance Cultural Prowess Scorecard (235-238)

King: This is about making the scorecard your own. I encourage the reader to think through where the business resides from a capability standpoint and to develop scorecard content relevant to the current state. This customization step creates ownership and is the first step toward making the scorecard a cultural mainstay.

Morris: Apply the Scorecard to Business (238-240)

King: Once you have the scorecard content developed to your satisfaction, the other vital element of producing an accurate diagnostic is to select the scorers. Some leaders engage an external expert to collect the data. Others select someone within the business. The key is objectivity. You’ll want to use someone who is unbiased and who understands the business model. Remember, glossing over the warts within the business is counterproductive. The goal is to unveil the truth so that it can be dealt with.

Morris: Of all the great leaders throughout history, with which one would you most want to share an evening of conversation if it were possible? Why?

King: There are so many great leaders back through history that I am compelled to point out two who are with us today. Warren Buffet continues to impress me with his calm, focused wisdom. He leads over 300,000 employees through a hands off, empowering approach to growth. He compensates managers as though they are owners and has shunned the outdated compensation systems that encourage managers to play it safe. He has become one of the most influential leaders of our time. In my view, the ability to influence those who don’t work for you is the sign of a great leader.

The other, surprisingly, is Bono. Perhaps this is an unconventional choice, but once you examine what the man has done, there is no question he exudes superb leadership traits. He once told Fortune magazine “real leadership is when everyone else feels in charge.” Create that in your business, and you really have something. Just look at how he has persuaded world leaders to help wipe out debt in third world countries and to dramatically increase investments to combat AIDS, poverty and preventable diseases. I’m impressed when an individual can yield positive power through logic and persuasion, not through rank.

Morris: Let’s say that a CEO has read and then (hopefully) re-read The Scorecard Solution and is now determined to establish or strengthen a workplace culture within which personal growth and professional development are most likely to thrive. Where to begin?

King: Begin with the scorecard and use it as the rallying cry to bring everyone together. An integrated organization is the foundation of a high growth culture in which people can thrive. The scorecard becomes the common language across departments and teams. It’s hard to imagine, but the numerical score delivered by the diagnostic works like gravity to bring everyone together. It can be a powerful way to create a dynamic, team-based culture.

Morris: For more than 25 years, it has been my great pleasure as well as privilege to work closely with the owner/CEOs of hundreds of small companies, those with $20-million or less in annual sales. In your opinion, of all the material you provide in The Scorecard Solution, which do you think will be of greatest value to leaders in small companies? Please explain.

King: I interviewed a number of small business owners during my research and one of the common themes was the lack of bench strength. This reality makes it imperative that every contributor in the business is precisely matched to the work to be done. There is no room for error in the small business environment when it comes to people selection and expectation setting. Small businesses need a fool proof-hiring model that includes skill evaluation and fit. The individual contributor scorecard in the book can aid in this process. I also believe the small business dictates an almost ruthless approach to goal setting and accountability. Execution is key and time is not on the side of the small business leader. Those who aren’t putting points on the board need to move on. This is why I so admire small business leaders. It takes a degree of courage not always found in the bigger environments.

Morris: Which question had you hoped to be asked during this interview – but weren’t – and what is your response to it?

King: I suppose one question might be: “For the leader who chooses to ignore the value of the scorecard approach, what is he risking?”

My answer: Certainly not immediate failure. In fact, we have examples around us of high growth companies that have never touched a scorecard. But, when you closely examine what is going on in these businesses, we find that the leader has figured out how to observe and assess the inner workings of the business. This is a rare trait indeed. The scorecard approach is a way for all leaders to uncover the hidden realities. For most of us, without the scorecard as a catalyst, we will suffer from a lack of information and an inability to strengthen growth drivers. That will inevitably lead to performance erosion and mediocre results.

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To read Part 1 of my interview of Dan, please click here.

Dan cordially invites you to check out the resources at these websites:

His consulting firm link

His blog link

The Scorecard Solution link at Amazo

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