Possibly the best book I have read in the past year (not just in 2015) is The Success Matrix by Gerry Langeler. Langeler is a highly successful venture capitalist and entrepreneur who credits this concept to his success. The Success Matrix puts forth a very straightforward concept: Success needs a combination of vision, process and output. Langeler primarily uses this idea to suggest how to build and lead a successful team. Rather than trying to find people who excel at all three variables, since very few exist, great companies combine people so that the company can excel at all three elements.
The three elements of success
- Vision. Vision represents a broadly understood sense of direction that encompasses competitive leadership in your industry over time.
You should ask whether you or your employee has the vision of where you need to go and what you need to do over time. This vision should be sensible, focused and well grounded with a sense of direction. As Langeler writes, “this is different than any specific task, product plans or targets. It means precisely what it says. If you are headed in a direction, you know roughly where you are going, even if you don’t know exactly where you’ll end up.”
- Process. Process is the structures, methods and procedures to produce repeatedly timely, high-quality products or services, independent of changes in people. You can determine if you have strong process whether profitable products and services are
being produced with predictable regularity.
- Output. Langeler defines as output as profitable products and services are being produced with predictable regularity. “Profitable products and services” is the key driver for output. It identifies if costs are in line value is recognized in the marketplace. Any Output short of profitable is wasted effort. “Predictable” regularity speaks to whether the Output is both sustained and sustainable. Short bursts of excellence are not enough.
Evaluate your team
Very few people are strong at all three components (vision, process and output) of the success matrix. If you look at vision, process and output as binaries (people are either good at them or not), there are nine possible combinations to classify everyone (e.g., good at vision and output, not process; good at process and output, not vision). Langeler actually puts labels on each of the nine possible combinations but that is the one element of his work I do not like; I feel that the labels are loaded and create unnecessary value judgments.
The first step is to look closely at your team, and yourself, and understand who has vision, who creates and uses processes, and who delivers output (again, people can have one, two or all three of these attributes). Not only look at the people, but look at how the groups or businesses are operating. If they are not getting strong output, you then know they lack people strong at output. If they are getting a lot done and have good processes in place but don’t seem to be building for the future, then you know they lack vision. Once you understand what the team’s strength and weaknesses are, it is easy to identify the strength and weaknesses of the team.
How to use the Success Matrix
Once you understand the current state of the team members and company, you can use the success matrix almost like Legos to build a high-functioning business. Put people with complementary skills together. For the group getting great output that has strong processes, add somebody with vision to the team. If you have a group that has good vision and is delivering a lot of output but does not have strong processes so scalability is limited, add somebody who is bureaucratic.
Coaching and mentorship represents another opportunity. For an employees who lacks process, help them understand the value of process and then teach them the skill to build processes. For somebody focused on process, conversely, assign them a mentor who is great at delivering valuable output.
Related, if your company acquires another firm or is acquired, you need to ensure everything is in place for success. Large companies are often focused on process, while a start-up they acquire is likely to be more output oriented. The key to a successful integration is getting the new entity to encompass all three variables. As Langeler writes, “large corporations need to learn how to create and/ or acquire [Output focused companies and employees], and then assimilate them carefully into the enterprise so the sustainable Processes get layered in slowly enough not to disrupt the advantages of [the Output focus], but not so slowly as to risk customer backlash.
When you are hiring, look for people who will complement the existing team, fill holes or work well with existing personnel who already excel at the areas where the candidate is weak.
Successes and Losers
Finally it is important to identify and understand what to do with those who have all three elements (Successes) and those who have none. For those with all three, the success they are having appears almost effortless. Often successes (think great athletes) perform with such apparent ease that it belies all the hard work that went into making it look so simple. A Success can make you think that whatever they are doing must not really be that hard, but it is. Langeler suggests, “ride them hard. Add responsibility, but carefully. Riding them hard helps avoid complacency, but also risks adding too much complexity. Set them up as role models. Keep checking upstream. No matter how hard you try, it is natural for Successes to start to focus more on Output, where they see immediate rewards, than on the longer term issues of Vision and Process.”
Also, obviously, if somebody has no vision, is not good with process and does not deliver output (what Langeler calls a “Loser”), you avoid hiring them. If already in the organization, you need to decide if you can turn them into valuable employees or transition them out of your organization. Do not give up on them too quickly. If they are smart, they are likely to be receptive to new ideas and new direction. Langeler points out that “they are desperate for any semblance of leadership that can give them hope.“
On a company level, if you have an organization that is, or is about to be, a Loser, one of the key things you will notice is talent walking out the door. As Langeler points out, “great people have options. And no one likes to go down with the ship, especially if they’ve been trying to tell the captain for some time to steer clear of that iceberg ahead.”
Implementing the Success Matrix
Once you realize that vision, process and output creates success, it should drive your leadership. Build an organization that focuses on all three of these areas, with people who excel at each. If your team delivers vision, process and output, your company will and that is how you sustain competitive advantage.
- Success for organizations is a combination of vision, process and output; you need all three.
- Most individuals only deliver one or two of the three factors for success, so you must build a team that combines people so you are effective in all three areas.
- The goal to success is delivering vision, process and output so make sure your organization is good at all three factors.