Imagine you were put in charge to manage a group of people and you had no prior management experience. To make matters more challenging, it’s a remote team that’s distributed around the world.
Where do you start?
I hired my first employee when I was 23 and I had no clue what I was doing. Books like Scale by Jeff Hoffman, Kiss Theory Goodbye by Bob Prosen, and many books by Peter Drucker helped, but when it came down to it, most of the learning was through trial and error. There were a lot of mistakes and growing pains.
The reality is that most people managers don’t have any formal education in management. In a study by Gallup, one in 10 people has the talent to manage well. The good news is management is a skill that can be taught and learned.
The most important lesson I’ve learned about management is that it’s not about managing people. It’s about building a culture and process that set a team up for success.How we manage a remote team that lets us grow revenue 10% each month Click To Tweet
In this post, I’m going to share with you the management system we use to unify a fully remote company around one goal and keep Hubstaff growing 10% month over month.
The Key to Give Employees A Sense of Purpose Behind Their Work
The key to effectively manage a remote team is radical transparency.
Employees are less motivated to do the work if they’re just given tasks to complete without the understanding of why they’re doing it because it isn’t clear how their work will impact the company.
By withholding bigger picture information, you also risk making employees feel inferior which would create an unhealthy company culture.
Transparency means explaining why projects are prioritized the way they are and why a specific person was chosen to be in charge of a project. It means being open to talking about the entire business, not just what that person is in charge of doing.
When everyone understands how the company works, executing on goals becomes easier because each employee can check themselves on a daily basis and ask, “Does this task I’m doing match up with the company goal?”
If you have the company goals stated explicitly and agreed upon by the entire team, employees will have a commitment to accomplishing them.
Once you have a goal, you can decide which projects will get you to that goal. This poses another problem.
The Moment I Realized I Needed a System
I’ve been managing businesses since 2003, and it wasn’t until two years into Hubstaff that I realized I was too busy trying to keep up with the business instead of running it.
At that point, I was the bottleneck in the process.
I was doing things how I always did: I simply gave each team member a bunch of tasks to fill up their work week, a lot of which was busy work.
I didn’t spend any time thinking about the overall company goals or where I wanted to take the company. So all those tasks that were being completed weren’t even aligned with a bigger mission.
I needed a systemized process that would allow me to manage my team more effectively and grow the company.
The benefit of the process I’m about to share with you is that it frees me up to do my own work and makes the process of “knowing what to do” simple for everyone. It makes it easy for me to set the team up for success and easy for team members to manage themselves.
The Most Difficult Piece of Managing a Remote Team
One of the biggest management challenges we faced was learning how to effectively prioritize projects and communicate those priorities to employees. This caused a lot of miscommunication and drastically decreased company productivity because what employees prioritized often didn’t align with management’s priorities.
For example, if we wanted Alex to publish three blog posts in February, but she didn’t get it done, the issue wasn’t that Alex didn’t know how to write a blog post. The issue was that Alex worked on something else.
The root of this problem was one of two things:
- Alex doesn’t like writing blog posts and made excuses to push it back
- Management put too many priorities on Alex’s plate
In the second scenario, it’s management’s fault for not explaining what the expectations were – they didn’t clearly explain that Alex should focus on writing. If the manager asked Alex why she didn’t get the blog posts published, she might learn that Alex thought responding to customer inquiries was more important than writing blog posts.
While Alex thought she was working hard to keep customers happy, her manager thought she was slacking off because she didn’t complete the blog posts. Alex wasn’t struggling to finish her work. She just had a different perspective on her priorities.
Once you figure out the goals and priorities and communicate them to your team, everyone will be on the same page about what they’re focused on and you’ll be much more productive.
A 3-Step Framework to Effectively Set and Achieve Company Goals
Instead of defining company goals on my own, we start each year by defining our annual goal as an entire team. By having the entire team provide input, they believe in the goal and are more willing to get behind it. Keep the team focused by having only one goal for the year.
For example, Hubstaff started 2016 at $70,000 in monthly recurring revenue and our goal is to do $140,000 by the end of the year.
After defining the annual goal, we figure out the quarterly goals by using the theory of constraints which helps identify and fix bottlenecks in your process.
To apply the theory:
Step 1: Identify your weakest link – the constraint. Are you working as efficiently as possible or are there bottlenecks?
Step 2: Manage the constraint. What can do you to increase efficiency in this area?
Step 3: Evaluate performance. How does the constraint perform after implementing the fixes? Is it working better? Is it still a bottleneck? If it’s still a constraint, move back to step two and repeat the process. If it’s no longer a bottleneck, move back to step one and identify another constraint.
The theory works because it forces you to focus on one thing at a time: the weakest link in your process.
Below, I’ve stated our annual goal: $140k MRR by December 31, 2016 across all products and the constraints blocking us from reaching that goal.
Goal = 140k MRR by Dec 31, 2016 across all products:
- No one is using Projects
- Price per client is low
- We are only selling 22% of people on the premium features
- Pricing is only $5
- Don’t have a scalable system for generating leads
- Not truly doubling down on what’s working
- Don’t have A+ blog
- Only 18% of trials are converting to paid users
- Not converting enough trials because there are too many steps, it’s a confusing UI, no simple web-based timer, bad funnel emails, getting employees to agree to use it, etc.
- The product is too “niched”
- Lacking features like per-project budgets, invoices, attendance, daily email summary, faster integration sync, etc.
- Top of the funnel isn’t large enough. Need to improve SEO, content marketing, advertising, sales outreach tactics, loyal audiences, etc.
Then we take those constraints and create a larger system that looks like this:
In that mind map, you can see that we have the annual goal in the center and various constraints coming out of it. Each constraint is then “flipped” and turned into a positive statement, which becomes a goal.
For example, one constraint we have is that “revenue per client is too low.” That statement was flipped into a positive statement, “we average $40 per client.” Now that becomes a goal.
Then we brainstorm various tactics that would help us achieve that goal. In this example, we have “increase pricing of basic plans,” “increase floor to $14,” and “cross-sell projects and time tracking.”
You can see that goals are created by looking at company constraints. From there, we come up with tactics to fix each constraint. That’s how we effectively came up with the smaller goals that would help us achieve the larger single goal for the year.
In the past, we used to start with the channel, such as “Social Media”, and create projects for each channel. We would have projects for SEO, social, email and so on, but we realized that we ended up creating projects simply because we had the people to do them, not because they would grow the company. In other words, we created a lot of busy work.
Now, we don’t think about the people or channels up front. Instead, we examine what projects would have the highest impact on the company, then we assign people to the projects. I’ll explain more on this in the next section.
How Hubstaff Creates Accountability and Encourages Specialization
At Hubstaff, each person owns a specific channel:
Instead of having Rachel own the general marketing channel where she would do a little bit of social media, a little bit of content, some SEO, and a bunch of other things, we have Rachel own only social media. This keeps Rachel focused. It’s specific enough that Rachel won’t get off track but broad enough that she has a lot to do.
By dividing our work into channels and having each person own a channel, we avoid confusion about who owns each metric and create a sense of accountability. Through this process, we encourage each team member to become a specialist in their channel.
At Hubstaff, we hire people who are already specialists and also develop people into specialists on the job. The important thing is that we want the person to be focused on something they enjoy doing so they’ll be more motivated to get better at it.
As mentioned above, each team member understands and believes in the company and the goals. Once you give them a channel, they become accountable for a specific part of the company and understands how their channel will help the company achieve the annual goal. You can trust that each team member will do what they can to achieve the company goal.
A Process to Accomplish Projects and Achieve Quarterly Goals
The tactics that we come up with through the theory of constraints process are divided into weekly sprints inspired by the concept of sprints in software development.
As you can see from the image below, we have one list of all the tasks Neeraj had to complete in Q2 and a separate list for what is currently being worked on and what is already done.
One thing to note about the image above is that those are all the goals and tactics for the quarter. A team member is not expected to complete all of the tasks in one sprint.
We review each team member’s list of tasks on a weekly basis and analyze what has been completed. Management prioritizes the items that haven’t been accomplished and adds them to the following week’s sprint.
This weekly process allows us to quickly re-evaluate what is important at that point in time. For example, if a product launch gets delayed, we can iterate on the next weekly sprint and adapt the tasks to the delay.
This is what our weekly sprint dashboard looks like when we look at the entire team.
Again, at this point, everyone has bought into the annual company goal, and they agree that the quarterly goals help accomplish the annual goal. They have provided input on the tactics to reach the quarterly goals, and I’ve gotten input from them on what needs to get accomplished to achieve their quarterly goals.
The One Tool That Keeps Management From Losing Focus
As you and your team work on projects and get closer to your goal, you’re going to have more ideas on how to achieve the goal. It’s easy to lose focus on the task at hand and start thinking about those ideas.
The one tool that keeps me focused is a brainstorming board.
When I randomly get an idea in the middle of the night or while on a walk or while working on a project, I throw it on the brainstorming board.
We don’t manage any projects or ideas or communicate using the board. It’s strictly used for cataloging ideas.
How We Keep Track of Analytics to Stay on Track
We make sure that we’re on track to hit our goals by keeping an eye on our SaaS metrics. Our key performance indicators (KPIs) vary depending on the channel. You can take a look at all our business metrics on the Hubstaff Baremetrics page.
It’s really easy to track a bunch of metrics that don’t mean anything. Make an effort to track only a few important KPIs per channel. By tracking fewer things, you can focus on the methods that provide concrete conclusions.
If you track too many KPIs, you’ll spend a lot of time building reports and all the numbers will lead to confusion.
For example, we can track many metrics for the blog such as traffic, bounce rate, page load time, time on page, and so on. But we limit KPIs for the blog to traffic, referrals to the home page, and email opt-ins. Instead of tracking dozens of metrics, we focus on the main metrics we care about.
Because we’re a transparent company, we’re comfortable sharing some of our stats.
Each week, every channel owner will update the spreadsheet with their numbers. This further supports the sense of ownership and accountability for their work.
As we start to see trends develop, we bring that data forward and include it in the next quarter’s goals. As you learn what works for your company you can double down on those channels.
7 Elements to Implement An Effective Process to Your Team
1. Create a culture of transparency.
Explain why you’ve decided to manage the business that way. That’s how you educate your employees on the “why” of your business.
2. Have an open discussion around company goals.
Explain what your goals are and what metrics you’ll monitor for each channel so that each team member knows what to track. Make this an open discussion that employees can contribute to. Since they are specialists, they may know more about their channel. The explicit statement of KPIs will guide each team member’s activities on a quarterly, monthly, and weekly basis.
3. Set clear expectations.
Make expectations clear and easy to understand so the entire team is on the same page and knows how they will be evaluated.
4. Allocate a definite amount of time on each tactic and project.
State how much time you will spend on a project and a task. For example, if you have Jim running social media, you might say that if there aren’t concrete results at the end of Q2, then you’ll focus on another channel for Q3 and revisit social in Q4. If you decided to use the sprint method, be sure to explain the concept of a sprint.
If you decided to use the sprint method, be sure to explain the concept of a sprint.
5. Make all the information explicit.
Put all this information in a strategy document that everyone has access to. You can create an internal wiki using a tool like Hackpad or Google Docs.
6. Work toward your goals.
Once you have the system clearly communicated to your employees, start working toward your goals! It will take some time to get everyone used to the new process, but the only way to get it baked in your culture is to apply it.
7. Iterate on the process.
Just as we used the theory of constraints to come up with goals and projects, use the same theory to improve your management process. Are there certain organizational tools that work better for your team? Maybe I shared a process that your team doesn’t need. Reflect and develop your process each quarter.
Management is a Process of Building Processes
Management is the process of building out a system like the one above. It’s a never-ending process of finding the best way to make your team productive and set them up for success. As your team grows, you might need a different system or different tools.
The overall challenge is defining the right goals and priorities for your company and building a system that will help your team achieve the company’s goals.
The common perception of management is that it’s about reprimanding or scolding and making sure employees don’t fool around. But if the manager completes all of the above, they won’t need to worry about employee performance.
Set your team up to succeed and they will.