June 16, 2022

1067: Align the Round Canoe to Move Forward, with Erik Host-Steen

39 minutes

Erik Host-Steen is the Founder and CEO of SMP Alignment which stands for Sales, Marketing, and Products. He discusses the Round Canoe Phenomenon where misalignment between SMP causes the boat to go around in circles. One way he addresses this is with an Outcome Hierarchy that is grounded on a purpose, a strategic mission vision, a tactical approach, and metrics. He discusses how structure can give rise to incentives that make people act opposite to the purpose at the top of the hierarchy. Ultimately, misalignment causes missed targets, higher churn, and lower retention of key employees.

HIGHLIGHTS

The round canoe: Misalignment makes you go in circles

Outcome hierarchy and getting clarity on the definition of terms

Fix the structure of incentives to hit quota targets

QUOTES

Erik: "If we take a sales leader, a marketing leader, and a product leader, put them in this round canoe, and then the CEO hands out paddles and says okay, team. Let's start rowing. We get a circumstance where the boat doesn't really go in a straight direction and, oftentimes, people are rowing against one another."

Erik: "The beginning of alignment is the definition of terms. And being clear on what we really mean when we say structural or what we really mean when we say cultural, these are important things to sort of get clear on."

Erik: "A good place to look is the incentive structures behind that are creating that outcome and behaviors that we're seeing, and that's a great example, why do we give all these great customers to a few salespeople. Let's the rest of us should be like whatever, and maybe that's okay, but we got to do it with eyes wide open, recognizing the kind of business that we're trying to build."

Find out more about Erik in the links below:

LinkedIn: https://www.linkedin.com/in/erikhoststeen/

Website: https://www.smpalignment.com/