Money. Recognition. A pat on the back. Those are common ways to motivate people. But one of the best ways I’ve found to ignite top performance is to challenge my team with an inspiring Huge Outrageous Target (HOT). It’s better than traditional goal setting.
It all started years ago. My company, Platinum Capital, was experiencing a tough stretch and I sat down with my colleague and good friend Jack Daly.
We needed a way to rally our team, to come up with something that would energize them after the tough time we were all going through.
We came up with what we called a Huge Outrageous Target. It was a goal so big and so outrageous that it sparked a fire in our team and gave them a way forward to new growth.
Over the years, we have refined the concept, and now it is an integral part of how our client companies Make Big Happen!
A HOT is the one goal (or at most, two) that matters most. It gives direction to the firm, and failure to achieve it will make every other accomplishment pale by comparison.
As entrepreneurs and CEOs, it’s difficult to set HOTs because we always want to do more. We’re drawn to the next shiny object. We get antsy and have ADD.
The discipline of setting HOTs keeps us in check and focused on the absolute-most-critical goal for our company.
How do you determine a HOT for your company?
The key is to look for leverage. Ask yourself, “What HOT, when achieved, would have the greatest impact on our business?”
You are looking for a HOT that will deliver outsized impact on your business and perhaps even help your company grow exponentially.
Properly set, your HOT should inspire, motivate, reinforce your vision, and drive your culture of performance.
Keys to Achieving Your HOTs
Talk is cheap. Anybody can come up with a HOT but it won’t go anywhere unless four things happen.
1. You and every member of your team must believe that you can achieve it.
If your goal is too outrageous and people mentally assign a 5 percent or lower probability of achieving it, you run the risk of demoralizing your team instead of energizing them.
To avoid this trap, run the HOT by a trusted colleague and get their feedback. Jack Daly was my sounding board and he got as excited about the HOT as I did.
2. Make sure the financial reward for achieving the HOT is spread throughout the organization and is large enough to motivate your team to give their maximum performance.
If your team feels the reward for achieving the HOT goes disproportionately to you, they may be resentful and give less than 100% effort.
3. You must have a plan to achieve the HOT and execute it.
In other words, you have to determine the specific and measurable activities that your company should undertake that will lead to achieving your HOT.
As McChesney, Covey, and Huling wrote in The Four Disciplines of Execution: Achieving Your Wildly Important Goals, these activities should be leading activities. By leading I mean the activities should be predictive, in that if you execute on these activities, you can almost guarantee that you will hit your HOT.
4. After setting the HOT and determining the leading activities, you must follow through with developing a scoreboard.
Similar to a sporting event, your scoreboard should track your progress toward achieving your HOTs and be easily accessible to everybody in your organization.
Are People Accountable?
How do you ensure people follow through on the HOTs? It’s called accountability. Whether you hire a coach or each team member holds each other responsible for following through, you need an accountability system.
One simple accountability system is to hold a weekly meeting with your team. I know, nobody wants another meeting, but if you do it right, it’s a high-value activity.
At this meeting, each member reports on what they committed to do that week, the scoreboard is reviewed, and new commitments are made for the next week. This is the process I follow with my coaching clients to keep them focused on their HOTs.
This system of setting HOTs, developing leading activities, using a scoreboard to track lagging indicators, and practicing accountability is not just theory. It works in the real world.
For example, my client Sheldon Wolitski, CEO of The Select Group in Raleigh, NC, decided to follow this methodology and grew his company from $18 million to over $100 million over the last six years. More importantly, the company grew its gross margin from 24 to 30 percent.
The Big Disconnect
When I speak to entrepreneurial audiences around the world, I often ask them if they can produce a one-page plan for the coming year complete with what is going to guarantee they can get it done. Unfortunately, 90 percent of them cannot.
These are not small mom-and-pop shops; they are businesses in the range of between $5 million and $100 million in revenue, some even meaningfully larger. Yet, they really struggle with the “what is it going to take that is specific and measurable to guarantee we get it done.”
So where do you want to be twelve months from now? What do you desire in terms of growing your company’s revenues and profits? And what’s going to guarantee that you get there?
Once you know where you are going, the key is to identify those HOTS and then determine the specific and measurable activities that your company should undertake that will lead to those outcomes. Goal setting is important, but being driven by HOTs is even better.
This is a proven system that works.
About CEO Coaching International
CEO Coaching International works with CEOs and their leadership teams to achieve extraordinary results quarter after quarter, year after year. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 1,000 CEOs and entrepreneurs in more than 60 countries and 45 industries. The coaches at CEO Coaching International are former CEOs, presidents, or executives who have made BIG happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $10 billion, and many are founders that have led their companies through successful eight, nine, and ten-figure exits. Companies working with CEO Coaching International for two years or more have experienced an average revenue CAGR of 31% (2.6X the U.S. average) and an average EBITDA CAGR of 52.3% (more than 5X the U.S. average).
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