Blueprint for Excellence: Building and Scaling High-Performing Teams

From an early age, I’ve had a fierce competitive streak. One of my earliest memories is from grade school when we had a fundraising challenge to sell as many chocolate bars as possible (many of you remember those). Most kids sold to neighbors, a few made a half-hearted pitch to family members, but I saw it as an all-out competition. I didn’t just want to sell a few—I wanted to sell the most.

So, I got creative. I mapped out my strategy, loaded up my backpack, and hit the streets. To sweeten the deal, I offered low-cost incentives: buy five chocolate bars, and I’d throw in a free lemonade. I even supplied my friends with free pizza to help expand my sales team—fortunately, my parents covered the cost of goods sold, or I would’ve gone broke! By the end of the first day, I was completely out of stock and already asking for more.

I didn’t stop there. I sold at local events, convinced my parents to take boxes to their offices, and even persuaded a local shop owner to display some on the counter. When the challenge was over, I had sold more chocolate bars than anyone else in the school—and had a blast doing it.

That drive for high performance has shaped my journey, and now, as a leader, I focus on building and scaling high-performing teams.

My knowledge on the subject is hard won, having led and grown revenue teams at four startups, founding two of my own, and advising many others. Throughout my career, I've worked with a variety of teams—some more effective than others—and I'd like to share the insights I've gathered along the way.

In this post, we'll dive into the key elements of building and scaling high-performing teams by focusing on three critical areas:

1. Talent: The Foundation of High Performance
2. Goal Setting: Driving Impact and Alignment
3. Culture of Excellence: Fostering Continuous Improvement

Each of these areas requires intentional design to ensure high performance is sustainable and woven into the fabric of the organization. Whether you're leading a startup or managing teams in an established company, these principles can help you unlock your team's full potential and drive exceptional results.

Talent: The Foundation of High Performance

“High performers especially thrive in environments where the overall talent density is high. Our employees were learning more from one another, and teams were accomplishing more—faster. This increased motivation and satisfaction, leading the entire company to get more done."? – No Rules Rules: Netflix and the Culture of Reinvention

Raising the Bar: Finding the Right Talent

In a startup's early stages, each hire has an outsized influence on the company's future. Beyond technical skills, candidates must align with your values and align to the stage of the business. In my experience, strong hires possess three distinct qualities:

1. Startup Fit: Thriving in ambiguity and embracing scrappy problem-solving.
2. Business Athleticism: Intellectual versatility to adapt and take on multiple roles.
3. Purposeful Drive: A deep sense of purpose fueling unwavering commitment.

Hiring with a focus on these traits ensures you're building a team that's not just capable, but adaptable and dedicated to the fast-paced, often non-linear startup journey. As your company grows and evolves, the qualities you prioritize in candidates will naturally shift to align with your changing needs and challenges.?

While referrals can be a great way to find talent—since great talent often knows other great talent—it's critical to maintain a strong commitment to diversity. Recent studies show that companies in the top quartile for ethnic diversity outperform those in the bottom quartile by 39%. Diverse teams, with their varied perspectives, solve problems more effectively than homogeneous ones.

While a simple 'yes/no' rating system can foster clarity and decisiveness, it can be misleading. A string of 'yes' votes doesn't necessarily indicate an exceptional candidate. Instead, focus on identifying "spikes" – standout qualities and unique strengths that truly set a candidate apart. These spikes, rather than merely the absence of weaknesses, more effectively predict exceptional performance.

Performance Management: Defining Excellence?

Performance should go beyond hitting goals; it's about creating a broader impact on the company and elevating the broader team. Effective performance management is crucial for translating raw individual talent into high-performing teams. Let's explore two key aspects of performance management: defining performance levels and utilizing an evaluation framework.

Three Levels of Performance: Good to Great

Performance goes beyond hitting goals; it’s about creating a broader impact on the company and elevating the team. I categorize performance into three levels:

?? Level 1: You consistently achieve your goals.

?? Level 2: You consistently achieve your goals and improve your skills.

?? Level 3: You consistently achieve your goals, elevate your skills, and inspire excellence in those around you.

Level one is expected. Level two is good. Level three defines a 'top performer.' A strong indicator of a level three performer is someone you would prioritize recruiting when starting a new company.

The key to sustained high performance is cultivating an obsession with growth. Teams must constantly push themselves to learn, evolve, and adapt to new challenges. Those who stay complacent will be outgrown by the demands of high-performing environments.

Strategic Talent Evaluation: Using the Nine-Box Matrix

Originally developed by McKinsey in the early 1970s to help General Electric (GE) prioritize investments across business units, the nine-box matrix has been adapted to assess employees by rating them on two axes: performance and potential. High performers with high potential land in the top-right boxes, while low performers with lower potential fall into the bottom-left.

When used effectively, the nine-box matrix becomes a powerful tool for strategic talent management, offering several key benefits:

1. Holistic Talent Assessment: The matrix provides a unified framework to evaluate all employees consistently, creating a level playing field for talent assessment across the organization. This holistic view helps leaders make more informed, equitable decisions about development, promotion, and resource allocation.
2. Strategic Talent Development: By clearly categorizing employees based on both performance and potential, the matrix allows for tailored development strategies. High-potential employees can be challenged and fast-tracked, solid performers can receive targeted skill enhancement, and struggling employees can be given appropriate support or transitioned out so they can find a company more aligned to their abilities and interests..
3. Performance Tracking Over Time: The nine-box grid facilitates easier tracking of employee progress over time. Leaders can visualize how individuals move across the grid, identifying trends and making proactive decisions about talent management.
4. Succession Planning: The matrix is an invaluable tool for identifying and preparing future leaders. By spotting high-potential employees early, organizations can develop a robust leadership pipeline.
5. Resource Optimization: Understanding where each employee falls on the grid helps organizations allocate resources more efficiently, focusing investments where they'll have the greatest impact on both individual and organizational performance.

By incorporating this evaluation framework into your performance management process, you form the foundation of?a data-driven approach to talent management that aligns with your organization's strategic goals. Remember, however, that the nine-box matrix is a tool, not a solution. It should be used in conjunction with other performance management practices and regular, meaningful conversations with employees to drive true high performance across your team.

A, B, C Players: Focus on What Matters

Focus your energy on A players. They contribute disproportionately, delivering 200% to results compared to B players' 80% and C players' 20%. A players don't just perform better individually—they elevate everyone around them, creating an upward spiral in performance.

Invest most of your time in A players, as they set the bar internally and consistently seek out other A players. This compounds as you build the leadership team as you scale. Be especially cautious about promoting B players to management, as they tend to hire C players, compounding the problem.

However, high performance isn't everything. High achievers who create a negative environment cannot be tolerated. Their individual contributions—no matter how impressive—will never outweigh the toxicity they introduce to the organization as a whole. No assholes allowed. Full stop.

Managing A, B, and C Players: Maximizing Team Performance

A Players: Unlock Full Potential

To harness the full potential of A players, provide them with meaningful stretch opportunities that offer real impact. These projects should be strategically selected to ensure close collaboration with leadership, enhancing visibility rather than being random assignments. Ideally, A players should tackle complex problems that align with leadership's focus, offering fresh perspectives from the ground-level that are deeply rooted in the customer and product experience. This approach not only helps them grasp the bigger picture but also deepens their commitment to the company's success.

B Players: Enhance Capabilities

For B players, focus your time and energy on enhancing their capabilities. These individuals typically perform consistently but may lack the high-impact results or adaptability needed to take on bigger challenges. To support their growth, encourage B players to take ownership of their development by identifying key areas for improvement. Challenge them to step outside their comfort zones, create an environment where accountability is prioritized, and establish clear, defined metrics for success in their development plans. Without a well-defined path forward, B players risk stagnation. While they may not perform at the level of A players, the right structure and support can help them become reliable, valued contributors.

It is crucial to avoid complacency in managing B players. When leaders overlook opportunities for growth, the risks are significant: they may either regress or become comfortable with mediocrity. The goal should be continuous improvement, encouraging B players to strive toward becoming A players. If they lack the skills or the will to develop, they won't advance within the organization and create drag on your A players and management.

C Players: Make Timely Decisions

As for C players, they should be let go sooner rather than later if there's no significant improvement in a short period. A common mistake managers make is keeping C players around longer than necessary, fearing the loss of minimal productivity until a replacement is found. What they fail to realize is that retaining C players poses a much greater risk: to retaining A players, whose impact is exponentially higher.

This makes holding on to C players a negative expected value, even when there is no immediate replacement available. Retaining C players not only drags down team performance and morale, but it’s unfair to the individual as well. With no path forward, they’re wasting time in an organization where their talent is poorly aligned instead of actively pursuing? in an environment more suited to their strengths. Retention of a C player is a net negative for everyone involved that extends beyond their low productivity—it can significantly impact the motivation and retention of your top performers.

Effective team management requires a nuanced approach to different performance levels:

• Cultivate and challenge your A players with impactful projects.?
• Develop your B players by pushing them to grow and take ownership of their improvement.?
• Make timely decisions about C players, recognizing the hidden costs of retaining underperformers.?

By actively managing all levels of performers, you can maintain and elevate your team's overall performance, creating an environment where excellence thrives and mediocrity has no place to hide.

Goal Setting: Driving Impact and Alignment

"You don't rise to the level of your goals, you fall to the level of your systems." – James Clear

Purpose-Driven Goals: Fueling High Performance

Building a high-performing team transcends the initial acts of hiring and managing great talent. At its core, it's about instilling a profound sense of purpose in every team member. When individuals understand how their work directly contributes to the company's mission, they become more than just employees—they transform into resilient, motivated, and highly productive owners of the organization.

As a leader, your role in this process is pivotal. You serve as the bridge between the company's overarching mission and the day-to-day efforts of your team. By clearly articulating the organization's vision and consistently reinforcing how each team member's contributions drive towards this greater purpose, you create a powerful alignment of individual efforts and collective goals. This alignment doesn't just boost productivity; it inspires a deep-seated commitment and passion that can propel your team to extraordinary achievements.

Strong leadership in this realm involves a delicate balance of communication, goal-setting, and constant reinforcement. It's about painting a vivid picture of success that resonates with each team member, then working collaboratively to define goals that not only align with the company's mission but also tap into the unique strengths and aspirations of your team. Through this process, you cultivate an environment where every individual sees their role as integral to the company's success, driving them to perform at their highest level.

Cascading Goals: From Company to Team Execution

To illustrate how departmental goals can ladder up to company-level objectives, consider this example for a SaaS company that outlines the topline department goal, then connects this goal to the success of the broader organization. This approach creates clarity around the connected nature of departments with different performance standards and helps teams understand how their work supports the topline goal, but the goals of cross-functional partners.

Company Goal: Increase ARR by 30% while achieving a 25% EBITDA margin

Departmental Goals:

• Sales: Achieve $30M in net new ARR

> Directly contributes to ARR growth, supporting the 30% increase target

> Drives immediate growth through new customer acquisition and expansion

• Customer Success: Increase product usage by 50%

> Boosts customer retention and upsells, supporting long-term ARR growth

> Improves profitability by increasing customer lifetime value

• Solution Architects: Decrease time to go live by 25%

> Accelerates revenue recognition, directly impacting the ARR target

> Improves operational efficiency, positively affecting both ARR and EBITDA goals

• Marketing: Generate $120M in sales-qualified opportunities (SQOs)

> Fuels the sales pipeline, directly supporting ARR growth

> Optimizes spend efficiency, contributing to the overall profitability

• Revenue Operations: Improve deal velocity by 15%

> Increases the rate of closed deals, directly supporting the ARR growth target

> Enhances overall operational efficiency, indirectly supporting the EBITDA margin

• Support: Decrease resolution time by 35% and achieve NPS > 75

> Enhances customer satisfaction and retention, supporting sustained ARR growth

> Reduces costs, contributing to improved EBITDA margin.

• Product: Launch 3 new products, driving $2.5M+ additional ARR

> Directly contributes to ARR growth through new revenue streams

> Improves margins, supporting the overall EBITDA target.

These departmental goals are strategically aligned to drive the company’s growth and profitability. Each goal impacts ARR, profitability, or both, ensuring a cohesive approach to hitting the company’s targets. The interconnected nature of these goals highlights the need for departments to work together.

For example, the pressure to generate $120 million in SQOs can be eased by higher win rates from improved sales execution, product launches, or increased customer usage. This alignment ensures the company moves forward efficiently and effectively.

Shaping Behavior: Pygmalion Effect

The goals you set as a leader are among the most powerful tools at your disposal for shaping team behavior and driving performance. They serve as more than just targets; they're a declaration of what you believe your team is capable of achieving.?

Clear, challenging goals engage and motivate teams, tying directly into the Pygmalion effect: individuals tend to rise to the level of expectations set for them. When leaders set ambitious yet achievable goals, they implicitly communicate their belief in the team's capabilities. This confidence often translates into increased effort and performance from team members, sparking innovation and providing clear focus for the team's efforts.

Conversely, setting low expectations or vague goals can lead to underperformance. Teams may interpret such goals as a lack of faith in their abilities or an indication that high performance isn't necessary, resulting in decreased motivation and effort.?

To harness the power of effective goal-setting, ensure your goals are SMART+ (Specific, Measurable, Achievable, Relevant, Time-bound, and slightly out of comfortable reach), communicate the 'why' behind each goal, provide regular feedback, and be prepared to adjust dynamically as circumstances change. By setting thoughtful, challenging goals and supporting your team in achieving them, you create an environment where high performance becomes the norm.

As your company grows and evolves, so too should your goal-setting philosophy. While the fundamental principles of setting clear, challenging goals remain constant, the specific targets and metrics may shift. Teams that expect goals to change over time are more adaptable and resilient.?

Regardless of your company's stage, always strive for goals that are aggressive yet achievable, with a continual focus on efficiency improvements. This evolving approach ensures that your goal-setting strategy matures alongside your organization, keeping your team engaged, motivated, and aligned with the company's changing needs and ambitious growth trajectory.

Systems: The Bridge Between Goals and Achievement

While setting ambitious, cascading goals that ladder up to top-level objectives is crucial, it's important to recognize that goals alone don't guarantee success. The true key to achieving and sustaining high performance lies in the systems and processes that bring these goals to life. These systems are the operational frameworks that translate lofty ambitions into day-to-day actions, ensuring that every team member knows not just what to achieve, but how to achieve it.

Effective systems in this context encompass the repeatable processes, habits, and routines that your team engages in regularly. For a sales team aiming to increase ARR, this might involve structured approaches to qualification, multi-threading, and negotiations. In customer success, it could mean systematic onboarding processes and proactive engagement strategies. These systems provide the roadmap for consistent execution, reducing ambiguity and increasing productivity across the organization.

As a leader, your role extends beyond setting challenging goals to architecting and implementing the systems that enable your team to consistently work towards these objectives. This involves identifying key processes that drive goal achievement, standardizing best practices, and implementing supporting tools and technologies. By architecting robust systems, you provide your team with a clear operational blueprint for turning ambitious goals into tangible results. These systems act as a force multiplier, amplifying individual efforts and ensuring that daily activities consistently align with overarching objectives, even as the organization scales or faces new challenges.

Culture of Excellence: Fostering Continuous Improvement

“We are what we repeatedly do. Excellence, then, is not an act, but a habit.” – Aristotle

Accountability and Visibility: Keys to High Performance

People respect what you inspect, and visibility inherently breeds accountability. If a leader doesn't prioritize certain metrics, they won't hold the same weight for the people who have the most influence on improving them. Here's how to implement this effectively:

1. Identify Key Metrics:

• Determine the metrics that matter most to your team and organization.
• Ensure these metrics align with your overall business objectives.
• If everything matters, nothing matters, so don’t choose too many things to focus on at one time.

2. Establish Baselines:

• Set clear baselines for each metric to measure progress over time.
• It’s ok if pulling the data is manual as you start, you can improve process and tooling over time.
• Apply this approach at both team and individual levels.

3. Regular Performance Assessment:

• Evaluate how each employee performs against the established baseline.
• Look for patterns: Is someone excelling in one area but struggling in another?
• Use these insights to identify best practices and areas for improvement.

4. Maintain Visibility:

• Keep performance metrics public and easily accessible
• Regularly discuss performance in team meetings and one-on-ones
• Aim to create self-serve dashboards or visual aids to make data easy to understand at a glance

5. Recognition and Improvement:

• Publicly recognize and praise top performers, focusing on how their specific efforts drove performance
• Address areas needing improvement systematically and constructively
• Celebrate progress and milestones to make winning palpable

When leaders prioritize the right metrics and maintain consistent visibility, it drives accountability and sets the tone for sustainable performance improvement across the organization.

Dismantling Silos: Facilitating Cross-Functional Success

Leaders who dismantle silos create environments where high-performing teams thrive. By ensuring teams understand each other's roles and breaking down barriers between departments, leaders enable faster, more informed decision-making. This connected approach maximizes leverage, allowing collaboration to amplify impact—where 1+1 equals 3—and unlocks greater potential across the organization.

Case Study: Branch's Pipeline Attribution Challenge

During my six-year tenure at Branch, where we grew revenue from under $1 million to $100 million, we faced significant challenges in tracking contributions as we scaled. Here's how we addressed it:

Key Takeaway: Breaking down silos requires a structured approach and a willingness to challenge existing processes for the greater good of the organization.

The Innovation Poker: Betting on Success Through Calculated Risks

More than two decades ago, I started playing online poker. Those countless hours spent analyzing hands, calculating odds, and making decisions based on incomplete information shaped my approach to business in profound ways. In poker, every hand is a calculated bet - you're constantly weighing probabilities and making decisions that will be profitable in the long run.

This poker mindset seamlessly applied to the business world. Every business decision is essentially a bet - whether it's launching a new product, entering a new market, or trying a new marketing strategy. The concept of expected value (EV) became my north star: it wasn't about winning every hand, but about making decisions that would pay off over time.

I realized that to truly drive innovation and improvement in our company, we needed to scale this mindset across the entire organization. But more importantly, I recognized that the team members closest to our day-to-day operations were best positioned to identify opportunities and make smart bets.

So, I gathered my leadership team for a strategy session. "From now on we're going to view our initiatives as bets. I want each of your teams to make calculated bets on experiments they believe will drive significant improvements in their areas. They have the most information and expertise to increase the expected value of these bets."

What made this approach powerful was its bottom-up nature. These weren't assignments handed down from above; they were passion projects born from the front lines. Each team intimately understood their challenges and was now empowered to address them directly.

To support this wave of experimentation, we implemented three crucial elements:

1. Stimulate Curiosity: We created an environment where questioning the status quo became the norm. No idea was too outlandish to consider, fostering a sense of psychological safety that allowed true creativity to flourish. This is akin to a poker player exploring unconventional strategies to gain an edge.
2. Embrace Data-Driven Decisions: While we encouraged bold bets, we balanced them with rigorous measurement. Each experiment needed clear, quantifiable outcomes to guide our next steps. This aligned perfectly with the poker mindset of calculating expected value and making decisions based on probabilities rather than hunches.
3. Champion Transparent Sharing: We launched a dedicated Slack channel where teams shared their ongoing experiments and outcomes - both triumphs and setbacks. This open exchange sparked cross-pollination of ideas, much like poker players sharing insights to improve their collective game.

Crucially, leadership actively participated in this process, not just overseeing but also making bets of their own. This top-down involvement helped to cascade the experimental mindset throughout the organization. We also maintained high visibility on all bets in play, ensuring no duplicative efforts across teams and encouraged potential collaborations.

The results were transformative but more importantly we saw a cultural shift. Teams became more proactive, constantly looking for ways to improve. The line between "my job" and "innovation" blurred, creating a workforce of problem-solvers and innovators. People became more comfortable with uncertainty, more analytical in their decision-making, and more resilient in the face of setbacks. They understood that not every bet would pay off, but each was an opportunity to learn and improve our overall strategy.

This approach also proved effective in managing risk. By encouraging multiple smaller bets rather than a few large ones, we diversified our innovation portfolio. This strategy allowed us to explore various opportunities while limiting potential downsides. Where we saw a lot of success, we could scale up the bet. It created a dynamic environment where small experiments could quickly evolve into significant initiatives, driving substantial improvements across the organization.

Fostering innovation isn't about grand, top-down initiatives. It's about creating an environment where every team member feels empowered to experiment, learn, and drive change. By trusting our people to place smart bets, we unlocked a level of creativity and drive that propelled our entire organization forward.

In the world of high-performing teams, experimentation isn't a sporadic event – it's a habit. It's the engine of innovation, propelling continuous improvement and keeping the organization agile and responsive. So, empower your teams to take bets, learn from the outcomes, and make even better bets.

By embracing this mindset and empowering your teams to make smart bets, you can create a culture of continuous experimentation and learning that keeps you ahead of the competition. The more experiments your organization runs, the greater its capacity for innovation. Remember, it's not about winning every hand - it's about coming out ahead in the long run.

The Underdog Mentality: Fueling Relentless Improvement

An underdog mentality can be a powerful catalyst for high-performing teams, promoting resilience, creativity, and a relentless pursuit of excellence. Teams with this mindset view challenges as opportunities to innovate and grow, constantly pushing their boundaries. Even when performing well, they act as if they're still behind, propelling themselves to seek continuous improvement and avoid complacency.

To implement this mindset, leaders should regularly remind teams of past challenges overcome and set stretch goals that push beyond comfort zones. It's crucial to celebrate wins while immediately focusing on the next challenge, and to encourage healthy competition both within the team and against industry benchmarks. This approach fosters a culture of continuous learning and development, keeping teams agile and adaptable in the face of change.

The underdog mentality thrives on a balance of humility and ambition. While acknowledging achievements is important, the focus should always be on the next goal, the next innovation, or the next improvement. This forward-thinking approach keeps teams hungry for success and prevents complacency from setting in.

Remember, the underdog mentality isn't about feeling inferior or doubting one's abilities. Instead, it's about harnessing the drive and determination that comes from wanting to prove oneself. It's about maintaining the hunger for success that often characterizes underdogs, even when a team has achieved significant accomplishments. Strive for greatness.

Building and scaling high-performing teams requires intentional focus on talent, goal setting, and driving a culture of excellence. By setting a high bar for people, incentivizing the right behaviors, and focusing on relentless growth, leaders can create an environment where excellence thrives. This is not a one-time effort but an ongoing journey that requires continuous adaptation and learning from both wins and setbacks.

The path to building a high-performing team is challenging, but just like my childhood chocolate-selling competition, it’s about creativity, resilience, and strategy. By embracing an underdog mentality, encouraging calculated risks, and replacing "I can't" with "How can we?" you'll find that the journey—and its rewards—are even sweeter than chocolate.