"Culture Archetypes", Lecture by Andy Freire / Axialent (2007)

Video Lectures

Displaying all 9 video lectures.
Lecture 1
What You Do Defines Your Culture
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What You Do Defines Your Culture

Andy Friere, Co-founder and CEO of Axialent, argues that what leaders do--not what they say--defines the organization's culture. Friere suggests that most leaders are not actually aware of how what they do is perceived and shapes culture. However, shaping a strong culture is one of the most important activities for any entrepreneur because it determines, in part, whether the company goes on to success after the founder leaves or whether it fails.




Transcript



You, as leaders of the organizations, you cast a tremendous shadow in the way you run your business and the message you send to the organization. And many of you are completely unaware of those messages that you send. And what we're going to be talking about in the next hour, it really has to do with becoming more aware of the culture you are building in your organizations. For those of you that don't have an organization, my invitation is that you start asking yourself how are you as a father, as a mother, as a friend, in your interactions with other people. And what I can guarantee that you'll realize is how important it is to know the kind of messages you send to your organization, the way you do things. Not what you say, but what you do. There's a phrase I really like that says, "What you do speaks so loudly that I cannot hear what you say." So we're going to be talking about that, and I'm going to be putting all this in the context of, I'm going to look like a corporate consultant now, but I think it has a very important message behind it. So why 'culture'? Well, I know that you all love your organizations, and you really think about the mission and where you want to go. But I'm sure that very few of you have sat down and said, "Well, what kind of culture do I really want to build? What's going to make this company become successful and unique?" And if someone were to ask me, I was taping a video for Endeavor, and they were asking me, "What's the uniqueness of the Endeavor entrepreneurs?" And I said, "The cultures that they build in their organizations, that's really unique." And I find this is very timely because, at least my experience is, a company really transcends its leader when the culture is so strong that you can leave your CEO and the company can keep on going as good as it was before. It can keep its path very strongly. My experience of Officenet is, when I left the company, it started growing at twice the growth while I was there. But just the fact of leaving an organization that has a strong culture, that allows you to be able to have a new CEO taking over, and the company continues growing. And a weak culture is one where all the culture is dependent on you, and when you leave, then the company goes under. Why? Because you were the company. You weren't able to transcend yourself when you were building the company.

Lecture 2
Three Building Blocks of Organizational Culture
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Three Building Blocks of Organizational Culture

Andy Friere, Co-founder and CEO of Axialent, discusses the three things that he believes build culture: 1) Behavior, 2) Symbols and 3) Processes. To elaborate, Friere suggests that behavior--what firms actually do despite what they say they do--defines what individuals in the organization come to believe. Furthermore, the symbols in an organization, primarily how time and money is spent to reward people, also shapes culture. Finally, the processes an organization has for measuring and compensating performance influences culture.




Transcript



The first thing that basically builds the culture--well, there's three things that build organizational culture. One is behavior, what you do. And that has to do with basically how you as a leader, and the people that work with you do things: the link between the walk and the talk, what you say and what you do. What is role model? You say, "It's really important that people come here on time." And you come late, so you come late to the office, and people say, "Well, that's not true." They say it's important, it might be important to me, but that's not really what he probably values. I'm sorry, I'm going to use you as a guinea pig, okay. So what is really role model? That's really what people see. And then meetings, conferences and emails. How do you communicate things? How do you run meetings? I mean, if you really care about the client, how many topics that are related to the clients' needs do you have in your agendas? You say, "Oh, we're really humble. We really want to focus on learning, and we're really committed to learning." Well, how much time do you spend, when you have a failed project, to really talk about what can we learn from this past mistake? And how much time do you just go and start saying, "Oh, let's keep rolling. And come on, we have a lot of fish to fry." And how much do you really focus on learning, how much do you sit down to talk about learning? Well, that is really what people see, and that is really what you value, believe it or not, because that's really what people see you doing. The second aspect that basically builds a culture is symbols. Symbols are those intangible things that people attribute meaning to. That is basically your calendar and your checkbook. So the calendar basically says, you say you value this, you say you want to spend time with your people, and your employees, and your supervisors, and you want to go to the factory and talk to them. But when I look at your calendar, I don't see you spending a minute doing that. You say you care about clients, but I don't see you talking to any clients. So how budgets are allocated, what gets the priority in terms of money, how time is spent, promotions, who gets promoted and why, who gets fired and why, job titles, offices, office space, open space, or huge, nice, beautiful offices with nice views, rituals and stories. I mean, many of you, as leaders, have a tremendous role as storytellers. When you get together and you have your monthly meetings or your year-end dinners, or whatever, you tell stories. What do you talk about? Well, that says, basically, what you really value. If you talk about a fantastic client that got really excited about something, that's one thing. If you talk about this employee that got this amazing opportunity, then you talk about this, that's another thing. So just becoming aware of the stories you tell, that's also a component that basically comprises what we call symbols. And the last one is more the hard wiring, the systems which has to do with the planning and budgeting process. So if you're focused on the client, how much of clients' satisfaction affects peoples' performance? You say "client satisfaction", but then peoples' performance is based on sales. Well, we could argue that sales have a connection with client satisfaction, but it's not directly connected to it. So how are you basically compensating people, how you're measuring and reporting and learning, how is your structure? How are you building your org chart? So this basically is like a huge cocktail that builds a culture.

Lecture 3
Five Archetypes of Culture
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Five Archetypes of Culture

Andy Friere, Co-founder and CEO of Axialent, provides five basic cultural archetypes into which organizations fall: 1) Achievement, 2) Innovation, 3) One-team, 4) People-first or 5) Customer-focused. Friere argues that ultimately organizations need to develop strength in all five archetypes. However, Friere emphasizes that organizations cannot develop all five at once. Instead, organizations can only successfully develop one archetype at a time, a process that requires a few years of focus on each individual archetype sequentially.




Transcript



We basically developed five archetypes. So we said it doesn't matter what culture you have. It will fall into one of these five, and only one of these five. And then you can start saying, "Well, we can change the name." Performing culture is "achievement." People first, one team, innovation, customer focus. It doesn't matter, really, the wording you use, it will always fall into one of these five. And I invite you. If you have like, "Well, what about product? We're really focused on building amazing products." Well, that's innovation. So that's an innovative culture. If you're really focused on people reaching sales and a lot of pressure in a sales organization, well that's very much an achievement culture. And you will want to develop these five. So it's a fact that you want to achieve these five. The best way to do that is to choose one that's going to be your torch that you're going to be carrying to build a differentiated organization. One of those five is going to make the difference. And at some point in time--normally, a culture change process takes two or three years. So after two years, you start saying, "Well, you know, we're doing pretty well around achievement. Now let's go to the next step, which is becoming more client-focused." That's sort of the pace at which you can change things. You're not going to be, "This month, we're going to do client focus, and the next month, we're going to do innovation. And in six months, we'll just cover them all, and we're great. That's not going to happen. It takes a lot of time.

Lecture 4
Culture Archetypes: Customer-focused Culture
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Culture Archetypes: Customer-focused Culture

Andy Friere, Co-founder and CEO of Axialent, describes the customer-focused culture archetype, one of the five basic cultural archetypes into which organizations fall: 1) Achievement, 2) Innovation, 3) One-team, 4) People-first or 5) Customer-focused. Specifically, Friere suggests that customer-focused cultures value flexibility to service customer needs above other potential activities. Friere describes the behaviors, symbols and processes that build this type of culture as well as the actions that destroy it.




Transcript



Customer-centric. What does a customer-centric organization do? Well, at the level of behaviors, what you see basically is, senior management spends a lot of time with customers. So, really literally. I remember when we started with something, we had this angel investor who was sort of a nightmare. I mean literally, we had this assumption that he. He made a lot of money based on a lot of luck. I'm not going to give his name. He was lucky. He was really lucky. And he kept on coming to us and saying, "Are you going in the van to ship products?" We're like, "Yeah, yeah." "Are you just going in the van wearing the Officenet uniform and going to ship boxes to people who're ordering office supplies?" And delivery boys and vans were going to deliver. "Are you actually going there?" "Well, yeah, sometimes." "How many days a week are you going?" And we were just lying to him. We never did it. We were not very client-focused. Seriously, we weren't really going and doing it, but that's really what a client-focused organization does. Effective listening is widespread. I'm really happy with Michael, when he said, "What's the unique thing? I know how to listen. I've learned how to listen to people." Well, learning is the key skill or the key behavior that great client-focused leaders express in the way they do things. Customers' issues are part of every meeting agenda. You go to see the agendas, and it's client issues, client topics. They talk about clients all the time. They sit and say, "Well, this is a client situation. How do we address it? How can we do it better? How can we address their needs more effectively?" Which is different from saying, "How can we sell more to them? How are we going to renew the contract?" That's not client-focused. Client-focused is saying, "Let's talk about their needs," not, "How are we going to sell more?" Symbols: top investments go to client-related projects. Untrained staff are never put in front of a client. So never put untrained people, because basically, you're really focused on the client experience. People probably share success stories of exceeding customer expectations. When you do the story telling, you go and you say, "We have here Mike, who did this amazing job to go the extra mile to serve a client." And that's what people see, and they say, "Oh, that's really what they value. That's what the leaders value. So if I want to grow in this organization, that's what I really need to do." And systems, well, really customer feedback is integrated into everyone's compensation. And you're really focused on serving the client. You build flexible structures so you can address clients' needs. Now, this is what you see at the surface level. What needs to happen at the mental level, what you need to think or really believe in in order for this to happen? What you need to believe in is those closest to the customers know more about their needs than senior leaders. Now, clients are always right: beautiful phrase. Do you really believe it? Do you really have that sort of mindset in everything you do, or not? And the values that you need to have is: are you really a humble organization? Are you really a learning organization? Do you respect other perspectives? Is relationship based on trust and mutual respect and reliability, what you really believe in? Believe it or not, I'm not talking about.. Well, some organizations, most of the Fortune 50 companies, when they see these things, they say, "You know what, we're not really humble. We're about building this pharmaceutical company." They are like, fantastic R&D, amazing, $80 billion market, and they say, "We're not humble enough to really focus on what the client really needs." And the deal breakers: what's a deal breaker? Deal breaker is, if you have this, don't even try becoming client-focused, because it's not going to happen. Arrogance, the I know what is good for you attitude, and reject feedback. You don't listen to each other, you don't have open dialogues, people talk to each other without listening to what the other person is saying. Have you seen those typical meetings where someone starts talking, and you see the other people thinking what they're going to say next rather than listening to what someone is saying? Well, that is the pattern that would let you know that this is not for you. Don't try it at home. If you see that happening, and you're in the next meeting, and you say, "Oh my god, no one is listening to no one. This is just people talking." Well, don't even try it.

Lecture 5
Culture Archetypes: One-team Culture
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Culture Archetypes: One-team Culture

Andy Friere, Co-founder and CEO of Axialent, describes the one-team culture archetype, one of the five basic cultural archetypes into which organizations fall: 1) Achievement, 2) Innovation, 3) One-team, 4) People-first or 5) Customer-focused. Specifically, Friere suggests that one-team cultures trade off the optimization of individual systems or people for the benefit of the entire organization. Friere describes the behaviors, symbols and processes that build this type of culture as well as the actions that destroy it.




Transcript



One team: one team is basically saying, "We are willing to sub optimize our subsystem in order to optimize the overall system. What optimizes a subsystem not always optimizes the overall system. An example would be an organization. Global companies: many of you either have many stores in many places in the same country, or you have several countries where you operate in. Well, you're a one firm culture if you're really focusing on building standard processes, even knowing that what would be optimal for that specific neighborhood is different from what would be optimal for the overall system. The metaphor I always use is in a soccer team. If you were to go to the defense team and you say, "What's your goal as the defense team? How am I going to assess your performance?" They're going to say, "I need to let the opponents score the minimum number of goals." That's the way you assess defense. If you're attack, then you say, "Well, I measure success based on the number of goals we score." That's what an attack team would say. Basically, the super, $20 million players would say, "How many goals have I scored, and are we really scoring a lot of goals?" A one team culture is one where, in the scenario of losing 4 to 5, winning 2 to 1, or tying 0 to 0, in a not sophisticated one firm culture, the defense would say, "I'd rather tie 0 to 0." Why? Because no one scored me any goal. And the attack would say, "I'd rather lose 4 to 5, because I've scored four goals." And the best for the team is to win 2 to 1. So really, a real team is one where people are really willing to say, "You know what, I feel a conflict here. What's best for me is not best for the firm. So I put it on the table and let's discuss what would be best for the firm. And once we agree on that, I'm willing to align myself behind that." So I'm not going to start questioning and say, "I never agreed with that. That was your opinion, but I was never part of it. I never bought into that idea." No. A one firm culture is one where we say, we discuss, we have friction, we have meaningful discussions. But once we make a decision, we are all aligned behind it. So when a decision is made, individuals speak and act in support of it. Work is done by one group on behalf of the whole, people have this sense of, "I'm not only committed to delivering my goals, but I'm also committed to helping you deliver yours." So the remuneration system encourages people to facilitate the success of others. Structures and reporting line recognizes dual citizenship. People get moved, so if you have several stores, you keep on moving people around, because that's what's going to allow them to have more perspectives. And the belief is that what goes around comes around, that most people are well-intended and their actions have a worthy motive, even if you haven't quite figured it out yet, that people can be accountable for things they don't control, so they help each other. And generosity and sharing, cooperation, trustworthiness, openness and diversity is what really is ingrained at a values level in a one firm culture. The deal breakers are those typical organizations with barons. I mean, owners of pieces of land that say, "Don't cross the line. This is my world. I do it well, don't get into my thing. I know how to run it, don't bother me." That is they typical deal breaker for a one firm culture. So if you really want to do that, you need to say, "No barons, no dukes, no owners of property right. We're here to build what's best for the team." Silo mentality: how many meetings do you get together, and people start fighting for their own agenda, rather than saying, "I put my agenda on the table to try to see what's best for the whole." Well, how much of that happens? It's a question of degrees. It's not that it's either 0 or 100, it's a question of degree.

Lecture 6
Culture Archetypes: Innovation Culture
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Culture Archetypes: Innovation Culture

Andy Friere, Co-founder and CEO of Axialent, describes the innovation culture archetype, one of the five basic cultural archetypes into which organizations fall: 1) Achievement, 2) Innovation, 3) One-team, 4) People-first or 5) Customer-focused. Specifically, Friere suggests that innovation cultures focus on experimenting and learning from mistakes to create new products and businesses. Friere describes the behaviors, symbols and processes that build this type of culture as well as the actions that destroy it.




Transcript



Going to an innovative culture, I'm moving really fast. Experimenting. Very large Fortune 50 company wants to become innovative, and the typical phrase from the CEO is, "That's the stupidest idea I've ever seen. I couldn't think of a worse idea than that one." Killed the innovation. People say, "I'm not even going to say what I think. If I just say it, and they don't like it, they're going to kill me. So I'd rather stay under the radar. I'm not going to think out of the box. I'm not going to take risks." If you want to be an innovative culture, you need to think that out of ten ideas, nine will fail, one will go well, and you need to encourage that. And when things go wrong, you need to sit down and say, "This is fantastic. What can we learn from these nine failed projects that will allow us to increase from 1 to 1.5 in the next series of test attempts?" So that is really a culture of innovation. So experience is valued, resources are assigned to think tanks, development, rituals associated with learning are common, post-implementation learning sessions. And there's a lot of rigorous measurement and focus on how to improve. So a lot of continuous improvement process. What needs to happen? Well, basically, the value is curiosity. I'm so amazed, because I wrote this down before Michael Dell started to talk. And he started talking about innovation and client-centric, which is, I think, are two of his main assets. He said, "Curiosity is one of the things that drives me." And then learning. So courage, openness, pursuit of excellence and curiosity are the values that basically an innovative culture expresses in the way people work. The typical mental model, mindset of an innovative culture is, "If it isn't broken, break it anyway." While an achievement culture is, "If it's not broken, don't break it, don't fix it. Just let it be as it is." And the deal breaker is risk aversion. If you're not willing to take risks, and you have an environment where you're going to punish people that make mistakes, don't even try being innovative. Just focus on being great performers, and that's it. And then shoot for the stars. I mean Wence is a fantastic example of.. He's going to talk tonight and bring all his wisdom to all of us. He's been an amazing innovator. That's really what he does best. He does a lot of other things not that good, but that is really what you're really good at. You don't have a mike, so you cannot reply. Don't worry. But really, innovative, thinking big. Saying, "We're not here to count the pennies. We're here to change the world." Well, that's Wence's mentality, and that has been his mentality in every single project he pursued. I mean, he's now trying to change the world of payments. When you ask him, "What are you up to?" "Well, I'm trying to change the world of payments." That's really.. those are the kinds of things he would say. You're like, "What? So you want to issue a new credit card?" "No, I'm going to.. I want to create a.." Can I say something about that? Or is it..? "I want to create a new device that is going to change the way payments are made in the world." I'm like, "Okay, well that's interesting." That's an example of the opposite to penny-pinching mentality.

Lecture 7
Culture Archetypes: Achievement Culture
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Culture Archetypes: Achievement Culture

Andy Friere, Co-founder and CEO of Axialent, describes the achievement culture archetype, one of the five basic cultural archetypes into which organizations fall: 1) Achievement, 2) Innovation, 3) One-team, 4) People-first or 5) Customer-focused. Specifically, Friere suggests that achievement cultures focus on measuring and awarding performance outcomes. Friere describes the behaviors, symbols and processes that build this type of culture as well as the actions that destroy it.




Transcript



A culture of accountability is one where people really talk in "I" statements all the time. And I tell you, executive boards of very large organizations, people just keep on blaming each other. And they just gain innocence by blaming the external world. And they just bitch and moan all the time for the sake of gaining innocence. So it's not my fault. Oh yeah, it's the macro context. Oh yeah, well, with this macro, who can forecast effectively? Oh, of course not. So let's keep going. This empowers the culture of achievement in an organization. The three values that are relevant in a culture of achievement is meritocracy, my word is my bond, and truthfulness. And the deal breaker is a CEO that is not willing to hold people to account. I was thinking, when I was thinking this example of green, yellow and red, I'm not sure we were firing those that were really in red. Were we? I think we weren't. So it was like everything was set for a fantastic achievement culture, meritocracy, we were measuring everything. But then the underperformers, we were going to them and saying, "Come on. Keep it up, come on." And then some of them, after two months were yellow. And then we're saying, "Yes, I don't need to fire you. So you keep going." So the reality is, although we were measuring a lot of things, we were not--I was a CEO at that time, so I take responsibility. But we were not getting rid of those underperformers. And a culture of achievement is one where you just say the bottom 10 % needs to go. I need to open the door for other people that are willing to do things more effectively. I'm not saying you need to like that, and you need to make that your culture. I'm just saying a culture of accountability does that. And when you ask, why were people fired? "Oh, because they are underperformers." "Okay, so what do you need to do to stay here?" "I need to perform." Great, well that's an achievement culture. Lack of clarity in communication and goal setting. If you're not willing to share information, make it transparent, you cannot create a culture of accountability. And then lack of healthy confrontation when excuses for non-performance are presented. If you're not willing to confront the facts, the brutal facts and put things on the table and really set standards and respond to those, you're not going to create that culture.

Lecture 8
Culture Archetypes: People-first Culture
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Culture Archetypes: People-first Culture

Andy Friere, Co-founder and CEO of Axialent, describes the people-first culture archetype, one of the five basic cultural archetypes into which organizations fall: 1) Achievement, 2) Innovation, 3) One team, 4) People-first or 5) Customer-focused. Specifically, Friere suggests that people-first cultures are focused on building and developing organizational members above other potential activities. Friere describes the behaviors, symbols and processes that build this type of culture as well as the actions that destroy it.




Transcript



People first is about encouraging people to grow and evolve. It's about people. I was talking to Eduardo Elsztain, who spoke the first day. And I was talking about this, and he said, "We're a people first organization." He was just realizing that. He was saying, "I basically have people that are loyal to me and to my brother, and those that are loyal, I respect and I trust and I take care of them. And if they are underperformers, we give them a second chance. And it's based on trust. And it's based on history and loyalty, and giving people an extra chance and investing in developing them. So the typical mindset of a people first culture is: they are underperforming, I'm going to give them another chance. What do they need to become good performers? An achievement culture is: they're underperforming, good-bye. Get rid of them, find someone else. So that is the tension. And that's why it's so important that you choose how you want to play your game. So there's a lot of equally spread benefits across the organization. You don't see huge offices. The symbols are: we're all equal, we all work together. A lot of the Internet boom was very much like a people first thing. We're all in this together, we share the wealth, we either win together, or we lose together. That was very much the energy. Maybe many of them were lacking achievement culture, but they were really focused on people wanting to work together and do things together. A lot of training, a lot of issues at work and we really need to understand. We really care, we really want people to be happy. That is a people first organization. What you need to do is believe in diversity and giving equal opportunity to people and trust. And the deal breaker is distrust, I mean distrust, and believing that people cannot evolve, cannot learn, cannot grow. Some people say if they're bad, they're bad. Nothing's going to happen, nothing's going to change. Don't come with that crappy thing of investing in coaching and those things. It's not going to happen. Just get rid of that. Well, that's an achievement culture. A people first will say, ?Well, but you know, let's find them a place where they can shine and bring their strengths and bring all their strengths to the table so we can make this. Let's find them the right place for them in this organization. That is a people first culture.

Lecture 9
Building Five Cultures in One Organization
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Building Five Cultures in One Organization

After discussing his five archetypal organizational cultures, Andy Friere, Co-founder and CEO of Axialent, clarifies that while ultimately an organization wants to have each of the five cultural archetypes, the way to achieve this balance is to develop one archetype at a time over a period of years. The five cultural archetypes that Friere describes include: 1) Achievement, 2) Innovation, 3) One team, 4) People-first or 5) Customer-focused.




Transcript



I was looking at sort of your paradigm here of five different cultures that a company can adopt. In reality, and I can only speak from my experience; I worked for a number of global companies. You don't really find, again, in my experience, the customer-centric culture versus achievement. Most companies, I think, especially when they grow and they transcend their founders, they find themselves in a kind of mish-mash and confusion of: for some areas of the company, achievement is important. For others, if you ask the senior management, they'll say that they are a people-centered culture. And people in the boiler room, they're worried about losing their jobs. They don't even see that there is a culture. They just see that they're going to be fired two weeks from now if they don't perform. So you know, when consulting with, especially with medium sized and larger companies, how do you even approach the notion that there should be one prevailing culture in the entire organization versus what I think really happens in everyday life? I'd like to make a distinction: companies, successful, high performance companies tend to have these five at the same time in different places. But they can only strengthen one at a time. So the distinction is: you can go to an organization that is highly innovative and highly focused on the client, and it's really good in most of these things. In fact, the companies that have very strong culture are normally good in many of these at the same time in different areas. R & D, they're really about innovation. But then the sales force is really about achievement. And so you see that happening. But when they want to improve, they can do it one at a time. So they cannot say, "Well now, let's strengthen the five of them at the same time." There's a concept of--I don't know whether you read the book "The Goal" by Goldratt. He says, "There's only one weakest link in a chain. It doesn't matter if you strengthen any part of the chain that is not the weakest link. It's not going to make the chain stronger. The only thing that is going to make this chain stronger is strengthening the weakest link." And normally, when you see an organization, you see one thing that is the bottom link for strengthening the culture, and you just really need to go to that. I remember once, when we were just starting Axialent, we hired this expert guru in London, who leads our London office, of culture. She came and said, "Do you have a culture of accountability?" "Yes, of course," I said. "Andy, how much are you expected to sell next quarter?" I said, "Well, we have a budget for this year of $15 million and.." "No, you. How much are you expected to sell next quarter?" I said, "Well, I don't know." "Well, that's a problem. You don't have a culture of accountability." And we realized that that was the thing that we needed to work on. And we worked on it for two years. And then we sat down and we said, "We're now pretty good at measuring thing. Now, what's our next thing?" "Well, we're not listening to our clients enough. Let's become really client focused." So I agree with you, but the distinction is, one thing is the end game of strengthening all of them, and the other thing is the way to get there, which is really working on them one at a time. If you start trying to do two or three things at the same time, that's going to be a difficult message for people to understand.