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Hi there! 👋

This E-Commerce Reboot Gameplan consists of 4 tracks:

1. Culture

2. Finance

3. Operations

4. Revenue

Today, we’re going to dive in part 1 of 2 about Culture.

Managers don’t want to confirm it, but most businesses have a crappy culture.

Many e-commerce brands have survived the past 5 years on “auto-pilot” growth and lazy management.

The result? A 9-5 “just show up” culture where people just take a paycheck by doing the absolute minimum.

So the first thing you need to do when rebooting your business is to establish a new culture.

Every reboot starts with establishing a new culture.

On the first day of the reboot, you need to set the new culture. Gather your team and give the “new head coach” speech.

Things need to change and you need be upfront with your team on 3 tactics.

1. Urgency

People have been doing the same thing for years and years.

However, if you keep doing the same thing you did for years, you won’t get any progress. You need to make clear that - in order to drive the business forward - you need to act fast. Otherwise the business will slowly die.

Days of coasting are a thing of the past.

And people aren’t going to like you for this one. However, you can’t grow if you can’t get people out of their comfort zone a bit.

Give them all the trust and responsibility, but its fine to get in their grill every now and then. As long as you keep it respectful.

2. Performance

The past years we have established a culture where people can just show up, move their mouse a bit and take home a paycheck.

Besides that, the board wants the best people for the lowest wages.

This creates a lazy business.

We need to change that.

And we do that by implementing a performance based rewarding.

More on that later.

3. Profits

We need to make clear that days of auto-pilot revenues are over and that we need to focus on profits.

I’m baffled on how many e-commerce businesses are revenue driven and don’t have any clue on the profitability of their actions.

Optimizing for revenue is probably the easiest thing to do.

Optimizing for profit is probably the hardest.

And your business needs profit to pay the bills.

You need to rethink how you reward your team.

As mentioned earlier, we have created a lazy business where people come in, coast and take home a decent paycheck.

In order to drive growth we need to rethink this one.

Most of the time, people get rewarded based on tenure (years in business).

Long term result? Your B-player with 10 years in the business gets paid more than your A-player resigning after a year of ballin’.

Here’s how I see it.

💵 If people directly impact profits, pay them far above market averages and set up a 20% bonus rate on top of that.

💵 If they don’t, pay market rates.

This will lead to a wide disparity within the company.

And that’s fine.

As long as the disparity is tied to trackable differences in performance and profit contribution.

It’s OK to let people go.

Your business is a team, not a family. 

Families have lifetime employment. Teams don’t.

You are constantly trying to get better at every position. 

Because of this, you will need to fire people when they are underperforming or just aren’t a good fit.

If you never do this, you won’t build the performance mindset necessary to create a thriving culture.

Leave underperformers in place and you will demotivate the once who want to be at the top of their league.  

The toughest calls are the underperformers who seem nearly there. You might think that with a bit of extra coaching, they will get there.

Let me remind you of this: it is much easier to bring in a new A-player rather than coaching up an underperformer.

The hours and hours you would have spent coaching could go towards better uses of your (and your team’s) time.

Recap

Your first weeks in reboot is definitely a tough one. You need to set up a new culture where the cosy, family like business needs to go. You need to open up the business for performance and driving profits.

You will feel uncomfortable, and people will feel uncomfortable.

And that’s fine.

Next week is part 2/2 of this track.

We’re going to talk about traction and baller CMO’s.

Stay tuned. Have a great Sunday.

Erik

Whenever you’re ready, there are three ways I can help you.

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