Outro

The best operators in M&A make hundreds of millions because they "model deals elegantly," but billionaires "can barely do the math. They just only do deals where they can't lose."

At least that’s what Jon and Peter believe. It's Warren Buffett's philosophy in action; that price is your due diligence.

Metrics should be entered manually, not automated. The psychological weight of pulling numbers and inputting them weekly creates accountability that automated dashboards never achieve. It's the difference between ownership and passive observation.

They distinguish between dashboards (lagging indicators like revenue) and scorecards (controllable activities like reviews requested). This separation, learned from their EOS coach Chris Kaplan, prevents teams from chasing metrics they can't influence week-to-week.

Next we’re asking, “Should you judge people on outcomes or process?” Saban (echoing Bill Walsh) says focus on the controllables. That is, the score takes care of itself. But Jon admits he's "constantly ripped in half" between mandating process and demanding results. Peter suggests it depends on performance level: high performers get freedom, struggling performers get prescription.

They tackle paired metrics as protection against perverse incentives, using India's snake-bounty program as a cautionary tale. When the government paid for dead snakes, people started breeding them. Similarly, optimizing turn time without pairing it with customer satisfaction leads to cutting corners.

Finally, Jon and Peter riff on Saul Alinsky's "Rules for Radicals", particularly when he says that, when pressure increases, people try to diffuse responsibility.

As a manager, your job is keeping accountability focused: "You are responsible for everything that does and doesn't happen to make this number improve."

Key Topics:
(07:47) Why Automation Kills Accountability
(10:20) Building Your First Scorecard: Start Imperfect and Iterate
(12:41) Dashboard vs. Scorecard: Lagging Indicators vs. Controllable Activities
(19:57) Control the Controllables, Not the Score
(37:27) How Incentives Create Perverse Outcomes
(41:14) Why DLER Must Be Balanced with Customer Satisfaction
(45:38) Change the Metric, the Goal, or the Person
(48:56) High Care, High Standards.

Stay connected for more insights and strategies by following:
Jon: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@MatznerJon⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ on X and at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠lazyleverage.beehiiv.com⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠
Peter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@pslohmann⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ on X and at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠peterlohmann.com