Set stretch goals
Jackson once heard a story about four young boys, where the
first two challenge the other two as to who could walk farther
down a set of railroad tracks. One on the first team got up and
walked about 15 feet before falling off. His teammate got up and
went slightly farther, falling off after 20 feet. But then, the other
pair got up simultaneously — one on each rail — and held
hands. Together they continued walking and could go on all day
because they used each other and worked as a team to accomplish more than they each could have individually.
“That’s what we’re trying to promote here — not individualism
but an interdependence,” Jackson says.
This type of teamwork is key to successfully and rapidly growing
a company.
“There’s really no limit to what you can accomplish if you don’t
care who gets the credit,” Jackson says. “It’s the team first.”
Because Jackson believes so strongly in teamwork, he sets
aggressive growth goals. He requires most divisions to grow 20 percent a year — some more and some less. To set these goals, look
closely to see what each team collectively, as opposed to its members individually, are capable of accomplishing.
“Look at the facts underlying — the current run-rate, the
opportunity, the businesses out there, how many people you’re
going to be able to grow — and you test that against what your
market potential is,” Jackson says. “Using all those factors, you
come up with something that’s realistic. You don’t want the
goal to be so far out that they can never get there, but you also
don’t want it to be a chip shot either.”
Each division is charged with collaboratively planning how to
achieve that growth goal. To ensure everyone stays focused,
Jackson gives managers a reason to rally the troops.
“Have the senior executives’ total compensation based on
that, and then you incentivize that they really make a lot more
if they go above,” Jackson says.
For every dollar of profit the department generates above its
budget, the manager can receive up to 10 cents on that dollar.
“I’ve seen companies where there is not one person who lost
sleep overnight over whether they made profits or not,” Jackson
says. “Everybody else is based on sales or whatever. The first
thing we do with the companies we bought, we basically make
10 different people’s compensation reliant on being profitable,
and all of a sudden you spread the sleep around. It’s just easier
when you have 10 people focusing on it versus one or none.”
This kind of financial incentive inspires managers to make sure
their department is working like the two boys on the train tracks
to gain maximum productivity. As a result, the company as a whole
has made budget every year, and only about 10 percent of the
teams have fallen short at some point or another.
“We believe in self-management,” Jackson says. “We believe
in self-empowerment. We want to have a no-excuses environment. … The high performance people want that — give me the
resources I need, tell me what the objective is, give me a share
of the wealth, a piece of the pie and get out of my way. That is
very empowering, and if you do that at broad and deep levels,
then you’ve got an organization that’s really not just surviving
but thriving.”