People who gravitate to Metronomics (and there are many) often ask about the “Systems” in Metronomics. The question normally comes either after they have finished the book or, if they are working with a Metronomics CEO+Leadership Team Coach, during the second or third quarter in the process.

“So how many systems are there?” If only all questions were that easy to answer “There are seven!”.

Metronomics is a repeatable, structured and prescriptive process. That means if you apply it in the same way you will generally get the same results (repeatable). It has seven systems that structure it in a way that make sense to most people (structured). It shows you how to apply it over time, over Year 1, Year 2, Year 3 and beyond. We call this the “Compound Growth System” as if you apply it methodically you will get compound growth in your business year over year.

The house diagram (above) has evolved over many years and represents the seven systems. The foundations and the walls (the structure) of the house are made up of the Cultural System, the Cohesive System and the Human System and we call these the “Soft Edge” Systems (more on that later). Inside the house we have the Strategic System, the Execution System and the Cash System. These are the “Hard Edge” Systems (again more on that later). The Soft Edge Systems are all about making sure we have the right people in the right seats and the Hard Edge Systems are all about doing the right things right.

Ironically, in practice it is the Soft Edge systems that are hard as they are all the people systems. Most CEOs and Leaders gravitate to the Hard Edge systems because they are tangible; you can count and impact them through analysis and by "cranking the handle". The Soft Edge systems need leadership, empathy, people skills

Let's break the systems down one by one.

Soft Edge Systems

The Cultural System

This system ensures that there is a clear and known culture in the business and in the team. It ensures the team is aligned with the company's purpose and the handful of behavioural rules (core values) that guide and inform behaviour within the teams. It also sets out the long term (10 - 30 year) vision for the business in the form of a Big Hairy Audacious Goal (BHAG™).

The CEO is accountable for the culture of the business so they are represented as the foundations of the house. As the owners of the culture, they must communicate and over communicate the culture of the business to all team members so that the culture is clear and known throughout the business.

I've recently written a "deep-dive" on the Cultural System.

The Cohesive System

As Jim Collin's said "First Who, Then What". To be successful in business you have to have a great team around you and that starts with the leadership team. If your leadership team is dysfunctional you are not going to achieve what you want. The Cohesive System, which is powered by Patrick Lencioni's "Five Dysfunctions of a Team", shows you how to create trust, manage conflict, get commitment and accountability and through this process, create results. The Cohesive System works from the beginning to build cohesion within the leadership team and from there, cascade it down to all team members.

I have provided a more in-depth review of The Cohesive System in my recent article.

The Human System

You will need as many A-Players on your team as possible; A-Players who are committed to both the company culture and to the achievement of results. But for A-Players to truly deliver great results there needs to be absolute clarity of role expectations and accountabilities. The Human System is inspired and powered by Brad Smart's Topgrading process.

If you would like to know more, you can read my article The Human System.

Hard Edge Systems

The Hard Edge systems are the Strategic System, the Execution System and the Cash System and these are known has "Hard Edge" because they have to do with strategy, execution planning and monitoring, financial plans and forecasts all of which are hard results. They can be counted!

Most businesses focus mainly on these three systems (well mainly only two, Execution and Cash) as you cannot build a successful business unless you have a clear plan, objectives, metrics. However, to rely on these at the expense of the Soft Edge systems will impact the sustainability of the business in the medium to long term.

The Strategy System

Strategy means different things to different people. Within Metronomics our approach to strategy is driven primarily from Michael Porters work on Competitive Strategy. Michael Porter defined strategy as:

“A unique and valuable position involving a different set of activities”.

His perspective on strategy was that you had to be unique in your market and that you created uniqueness either by doing different things or by doing things differently. So strategy is all about consciously choosing how you are going to be different, a choice of what you are going to focus on as a business (and what you are not going to focus on).

This can be very abstract for many CEOs and Leadership teams and it is rare for us to find a business that can state their strategy simply and confidently. The Strategy System is all about creating a complex strategy that can be explained simply so that the whole team can understand it. Once the team understands the strategy, they can make decisions that are aligned with the strategy.

The strategy system is a structured strategy formulation process that looks at where we want to be in 3 years time, the market the company is operating in, who the core customers are, what you are good at and how this measures up to your competitor’s strengths and weaknesses and from this the establishment of 3 - 5 differentiators. Once these differentiators have been decided on we build out a plan that will ensure these differentiators are in place to support our 3 Year Highly Achievable Goal. Over time we validate and refine the strategy so that it is up to date and alive in the business.

If you are interested in learning more, I have written an in-depth article on The Strategy System.

The Execution System

The execution system is what gets us to where we want to be day by day, week by week, month by month, quarter by quarter and year by year. So we need Annual Plans (our 1HAG including Targets and Priorities) and Quarterly Plans (our QHAGS including Targets and Priorities). The Execution System ensures there are clear accountabilities for what needs to be achieved to bring the company’s strategy to life and achieve the company goals. Meeting and communication rhythms ensures that information is communicated and cascaded down to those who need it at the right times. There are strong touch points from the Execution System and the other Hard Edge Systems (things) to the Soft Edged systems (people).

You can read more about the Execution System in my recent article.

The Cash System

As we know, Growth Sucks Cash so it makes sense to start first with cash. Forecast cash first and forecast it month over month, quarter over quarter for 36 months. But this is not set and forget, it’s a system and you need to be looking at cash and your rolling cash forecast every month with your leadership team. Whereas in most companies cash forecasts are owned by the finance teams, in Metronomics companies cash forecasts are owned by the whole leadership team.

So once you forecast your cash, then you forecast the widgets (the non-fiscal numbers) that flow through the business to generate that profit and cash. Having forecasts that are financial and non-financial gives you the leading indicators and the levers that you need to control your business and respond to changes in your market and within your business.

We want to get to the point where each function in the business knows their own widgets and the part they have to play in achieving the organisation’s goals year on year and how that helps the business achieve their 3HAG.

If you want to know more, I have recently published my article The Cash System.

What brings all this together?

So if the Soft Edge systems are the Cultural, Cohesive and Human systems and the Hard Edge systems are the Strategy, Execution and Cash systems, what brings these all together? We’ll that is simple, what brings all of these systems together is the 3HAG, the 3 Year Highly Achievable Goal (along with clear priorities, owned widgets and the open playing field with a clear and visible scoreboard).

So what's the Seventh System?

The seventh system is called the Coach Cascade system and it sits at the bottom of the "house". This isn’t a great name but it is a critical part of the compound growth system as this is the system that develops the leaders into coaches themselves so that their teams can become high-performing teams connected through the company growth plan. The Coach Cascade system develops the leaders into Level 5 Leaders who lead with humility and will. This doesn’t happen overnight and is very difficult to do unless you work with an external coach who can act as the leadership team’s “blind spot” remover.

Want to read more about how the Coach Cascade System helps build high performing teams? Read more here!.

What’s Next?

Over the next few weeks and months I’ll release articles where I break down each of the seven systems and how to implement them. Let me know which one you want me to focus on first.