It really is the simple things.
Have you ever noticed that certain activities in your business seem to have their own natural laws?
Today I’m going to give you one easy-to-follow natural law (rule) that affects six activities in your business. I’ll also show you what the experts say their experience has been with this rule in each area.
Put a stickie by your computer. It should read “5 to 7”. Read it every day and it will simplify your business. Your team is going to thank you because they’re going to be able to get more done in less time.
The six activities this rule covers are:
- Meetings and decision making
- Sales and Marketing
- Leadership
- Personal Values
- Company Values
- Goals, Metrics, and Job Descriptions
Can you just decide?
Let’s start with a question:
How many people are too many people to make a decision? (I know!.. 535!)
There are two suggestions here and they’re almost identical. Bain & Co suggests 4 to 7 people, and Alex Shootman, CEO of Workfront (a project management software company), suggests 4 to 6 people.
What you’ll notice here is that they both have the same lower limit of 4 to help make sure there’s a variety of perspective. Their upper limits are inside the 5 to 7 rule to keep the group from being too large.
When a group passes 7 members it becomes too difficult to arrive at a decision. Think: U.S. Congress!
Groups aren’t good and ranking and choosing options. And the larger the group get’s the worse this problem gets. Here is a 7 step framework to improve the quality of your decision making meetings:
1. Specify the outcome you want
“We need to generate a 5% cost savings. I will not consider staff reductions or cuts to employee benefits.”
2. Explain the options you’d be willing to consider
“I’m willing to hear about any ideas that might include new efficiencies, reductions in materials costs, and/or reductions in overhead costs.”
3. Agree on how the outcome will be measured
“We’ll be measure the outcome at both the pre-tax profit line and the individual cost lines to make sure the results show up.”
4. Question boundaries
Teams often think there are “sacred cows” or “untouchable” areas. If you see or hear ideas that don’t venture into those arenas ask why and offer those as options.
5. Eliminate unfavorable options early
Take early votes and eliminate ideas that get the fewest favorable votes for whatever you’re considering. There is no point in pursuing an idea that only one person is willing to support.
6. List the Pro’s and Con’s
List the pro’s and con’s of each idea. Eliminate any ideas where the con’s outweigh the pro’s.
7. Design a “Best Option”
If no one idea stands out, design a blended idea that keeps the best of the pro’s and minimizes the worst of the cons.
The first time I became a CEO I observed how the Founder had been making decisions. If the company needed a piece of equipment he held a meeting where everyone who worked at the company gave their opinion even if the result didn’t affect them.
The company was struggling, and this was one of the reasons.
I understand the benefits of maintaining an open culture in a business. Yet at the end of the month you need to be able to show real growth. Real growth comes from decisions that can be acted upon.
When it comes to how you use meetings in your business the number of people you invite depends on what you’re trying to accomplish. Here are some guidelines on who to invite and when:
Everyone – You only invite everyone when you’re giving out information – not receiving.
Brainstorming – When you’re trying to come up with ideas it’s good to have a good sized group. Cap the group between 10 and 20 people otherwise things become too conversational and the meeting runs long.
Set an Agenda – Let’s say you have a client conference coming up or a big public event that you’re running. Keep the list of people down to only those who are responsible for certain pieces. Headcount-wise this will depend on the size of your company, and you can plan on this being between 5 and 15 people.
Making a Decision / Solving a Problem – The 4 to 7 people who are truly accountable for the successful outcome.
Are you getting enough touches?
7 is the magic number – in more ways than one.
In fact, here are 5.
Marketing is an ever changing world these days. There are so many platforms to choose from.
One of the podcasts that I love to listen to is the Perpetual Traffic podcast published by the folks over at Digital Marketer and Dominate Web Media.
As I was listening to one of their earlier episodes the guys at Dominate were talking about the best length for a Facebook video ad. And it came up through their observation that 6 minutes works great. I’ve since discovered that Entrepreneur contributor Ben Angel followed this rule in his latest series of retargeting videos for a Facebook ad campaign he’s running.
It continues…
Neil Patel points out that the optimal length for a read on Medium is 7 minutes. After that, the number of readers you attract begins to drop off.
Why is it that 6 to 7 minutes is the limit in marketing?
Inc.com Contributing Editor John Brandon has given hundreds of presentations and talks. He has the perspective that 7 minutes is long enough for a presentation. It allows you to get your point across and it’s not so long that you bore your audience.
The average professional will give you 7 minutes without feeling like you’re wasting their time – as long they benefit within 7 minutes.
And after that first 7 minute touch; what then?
You’ve got to keep getting in front of them with your remarketing campaigns. See my previous statement about Ben Angel.
How does this play into the 5 to 7 Rule? Here’s the common wisdom in world of sales.
- 80% of sales are made on the 5th through 12th touch.
- Less than 5% of your competition will try for a 6th touch.
- That means you become exceptional in your sales efforts at the 7th touch.
Google Adwords allows you to set the number of times that you can show an ad to a person in a given period of time. As an example you may decide to show your remarketing ad to a person 7 times per month so that you know you’re hitting the optimum frequency.
7 Rules of Leadership
Nobody ever said leadership was easy. And yet, it’s really not that hard.
Back in 2003 Betsy Bernard published the 7 Golden Rules of Leadership. They’re timeless and I’ll paraphrase them here.
#1 – Everyone’s time is valuable – Wasting your team’s time is the same as wasting your money. If you want to be respected by your team, then don’t waste their time. If you want them to value their time in your business then you need to lead by example – and they’ll return the favor.
#2 – No temper tantrums – Leaders never get to show their anger toward their team. You can be upset because of something going on with the competition, yet you aren’t allowed to get visibly angry with your team. As soon as you do, it devalues the point you’re trying to make.
Think about it like this: If you’re point has merit then you shouldn’t have to raise your voice. If you feel you need to yell then you haven’t clearly thought through what you want to say.
#3 – Get to the point – In other words, when you’re about to send out a message or give a talk, run your statements past someone and see if they hear what you’re saying. Too often leaders don’t speak in terms their teams understand (see point #2). Speak in simple phrases that clearly state what’s happening or where you’re going.
#4 – Be straightforward – One situation where leaders struggle with this is with poor performing employees. It’s hard to have the hard conversations. I get it. Yet you still need to be clear with your team on how they’re doing. Tell them what you’re seeing in their work and what’s on your mind.
Sugar-coating doesn’t help because employees tend to remember the “sugar” and not the hard stuff. Call it like it is. They may not like it, but they won’t be able to say you didn’t tell them.
#5 – Say thank you – Leaders say “thank you”. They also ask for permission first (see point #1). What’s better is that this behavior will show up in how your team treats each other and your clients. Richard Branson is well known for modeling this behavior.
#6 – Integrity is everything – Good people won’t work for someone they can’t trust. And the reality is that you’re likely not a good liar anyway, so even don’t bother. (See rule #4.)
#7 – If you don’t know, who does? – Early in my career I decided to leave a company because when I asked my manager what his expectations were on an extremely important project he replied with, “I don’t know. I’ll know it when I see it.” He never clarified the requirements. To me, this meant there was little chance I could satisfy him. It also told me he had no vision and didn’t know where he was going.
Vision is a necessary component of leadership. People want to be part of something and they prefer working for someone who knows where they’re going. If you don’t have a clear vision of the future, don’t expect your team to get behind you.
As they say, “the fish rots from the head.” Over the next week as you walk around your business look to see if these behaviors are being modeled in your business. If they aren’t, ask yourself if you’re following them 100%.
Everyone Has a Personal Compass
“If I go there will be trouble.
If I stay there will be double.”
The Clash
Your values affect your emotions.
By the time you’re about 5 or 6 years old your core values are pretty well set and serve as your personal compass.
How do you benefit from other’s core values?
In a discussion with someone if you hit negatively on half (or more) of their core values, you’ll lose. They’ll shut down on you.
On the other side; when you hit positively on half (or more) of a person’s core values your message is far more likely to be heard and appreciated.
So it’s not enough to know your core values, you should be aware of what others hold dear too.
Your core values are the lens through which you view the world. They help you make decisions because they’re the behaviors that you hold most important in yourself, in others, and they’re how you want to be seen.
You’ll most easily recognize your core values because you have a physiological response when someone violates one of them. As an example, if you question the integrity of someone who holds integrity as a core value the expression on their face will very likely change right before your eyes.
How many core values does a person have?
There are many responses to this question. The standard minimum is 5 with the high-end typically being 7 or 8.
How can you make good use of your team’s core values?
Download the core values exercise from this post. Have everyone do the exercise and post their core values at their workstation. You should do this as well.
Then, take some time next Monday morning and talk to your entire company about how to put these to use.
There’s a good chance that if you have communication problems in your company that some folks simply don’t understand how they have accidentally offended a co-worker.
There’s an equally good chance that the offended person didn’t stop to realize that the offending person had no idea that how they were phrasing things would be received poorly.
Doing this will improve communications and interactions on your team by leaps and bounds.
So does your business…
According to Entrepreneur a survey conducted by Havas showed that nearly 75% of people wouldn’t care if over 70% of the brands they used disappeared.
Put another way, people are very willing to change brands if they find another that they connect with or enjoy more.
This means that companies that stand for something more than just making a profit enjoy a significant competitive advantage.
Having written core values in your business is a physical demonstration of your intent to stand the test of time.
Your company’s core values define its culture and brand.
Money Question: Do you measure your employees against your company’s core values?
Your company’s core values are how you know when a team member is or isn’t fitting in. They explain in a very quick way what it means to do things “the ACME way”.
They’re that thing your team fights for in addition to profit.
An issue that I see in too many businesses is that you leave your employees to figure out what the company values are when it comes to culture. Especially in the early years, companies tend to leave their cultural values up to tribal knowledge.
They just sort of develop based on who you hire.
In his book Good to Great Jim Collins suggests that a company have no more than three core values. I agree with the idea that the list should be limited, however I’ve seen that expectations are more clearly defined when companies have 5 to 7 core values. It matches better with the number of core values that individuals have.
As a leader you have a responsibility to decide what these behaviors are and to make sure they are lived in your business. When you don’t, you run the risk of your team not only deciding what they are, but delivering behind-the-scenes discipline to employees who don’t comply with their unwritten social rules.
Too much, or not enough?
Have you ever had an employee tell you they had too much to do; that they couldn’t figure out where to start first?
Ever thought that someone in your business didn’t have enough to do?
Turns out the 5 to 7 rule works great for goals, metrics, and job descriptions too.
In 1956, Psychologist George Miller published an article called “Magical number 7 plus or minus 2” in Psychological Review. In short, Miller’s article states that a person’s performance is basically perfect up to the point where you give them 5 or 6 things to work on. After that, things don’t get done as well as they should.
Think about a situation where a person told you they had too much to do. Did they have more than 5 or 6 priorities to work on?
Gazelles suggests that you limit an executive’s major priorities to no more than 5 each year so that your managers focus on the things that actually move the needle. And you set these activities at the beginning of the year.
On the other end of the spectrum, whenever I’ve felt like somebody on my team didn’t have enough to do, if I sat down and looked at their job description there was less than 5 priorities that were really important.
Because of this you should make a rule that each person on your team will have a range of 5 to 7 goals, metrics, and responsibilities to work on. Before you assign the goals or finalize the metrics make sure that they don’t overlap or compete too much with each other. This helps make sure that the person has a solid set of responsibilities.
Whenever you find that you want to create a new role, sit down and double-check to make sure that you have at least 5 important activities for that role to be working on within their daily responsibilities.
If you don’t have 5 activities that will fill 80% of their weeks and months then don’t create the new role yet. You’re not quite bursting at the seams. This will keep you from creating a role and adding costs that aren’t fully justified.
The Quick List
- Limit your decision making meeting to 5 – 7 people.
- For Sales & Marketing make sure that your team is touching base with prospects at least 5 – 7 times. For you marketing materials like videos and blog posts make sure they can be consumed in 5 to 7 minutes.
- Know and live the 7 golden rules of leadership.
- Distribute your Core Values to your direct reports and have them give you theirs.
- Put the Core Values of your Company on display and measure your team with them.
- Make sure you’re not giving your team too much or too little to do.
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