Start Running Your Company Cadence with Peter Engelbrecht’s Formula

The cadence of a company (i.e. how you run your company) is one of the main dimensions that determines whether it is bound for failure or success.

But getting the right cadence can be seen as an art. What works for you may not completely work for me, and what works for you now may not work well for you 3 years down the line. So, the question is: How can you set the cadence that works best for your company?

In a talk with Peter Engelbrecht, co-founder of Firmafon and CEO coach, he shared with us his formula to effectively run a company. In this article, we will delve into his step-by-step guide so that you can revisit your strategy and improve it.

Meet the leader: Peter Engelbrecht

Peter began his career working in Product & Commercial roles for Tech companies in the mid-90s. At that time he worked for large companies like Intel where he spent many years. 

He had the passion for technology and the dream of becoming an entrepreneur.

So he started working for startups to learn how businesses are formed and escalated. In 2010, he was part of Firmafon’s founding team, where he stayed as CEO for 10 years, before selling it to TDC. During that time, he got a full grasp on how to effectively manage a company.

A well-defined cadence makes change predictable for your team

Cadence is what allows people to know what is happening, when it is happening, and how decisions are made. In other words, it gives a sense of predictability - employees know what to expect - and predictability goes hand in hand with productivity.

Nevertheless, it is important to note that you should only use cadence when your company reaches a certain size.

According to Peter, when your company is in its earliest stage and you have fewer than 10 employees, you should keep things simple. Do not overcomplicate by having an extremely structured cadence strategy. If everything is still working through “osmosis”, keep it that way.

On the other hand, if your company has over 10 employees then it is a good time to set a cadence.

Cadence should change as your company changes

As your company size grows, your yearly goals change, your vision of new possibilities becomes sharper, your company cadence should change to accommodate new growth.

Although there is no one-size-fits-all when it comes to setting the right cadence, here are two things Peter Engelbrecht stresses you should avoid:

• Changing directions too often - “I read this blog post yesterday. Let’s go this way.” This leaves employees confused and has negative consequences on their performance.

• Being too static - “We decided to do this two years ago. We’re going to try and stick to the plan.” Remember your cadence should change as your company changes.

So, finding the right cadence is all about building that middle ground.

This is Peter’s formula for good company cadence

Peter Engelbrecht set the cadence for his company at three levels: yearly cadence, quarterly cadence and weekly cadence. Each allows him to focus on a different company dimension: (a) mission, values and strategy, (b) OKRs, (c) employee 1:1, respectively.

Here is how he goes about it:

Yearly cadence: Reevaluate mission, values and strategy

Peter Engelbrecht bases his cadence on the calendar (years, quarters, weeks) as it is a common language between everyone.

He deeply believes that, once a year, you should reevaluate the company’s mission, values and strategy. That does not mean they have to change every year, but simply that there should be a check-in to see if they are still relevant and adjusted.

Here is how you can do your company’s yearly evaluation:

Get employees’ feedback

Send out a company survey to the whole company, for example in mid-November. On every survey Peter sends, he includes:

• A standard employee survey;

• The eNPS (employee net promoter score);

• And three questions: (a) “What do you think we should stop doing?”, (b) “What do you think we should start doing?”, and (c) “What would you do if you were the CEO of the company?” – This last one is similar to Brian Chesky's approach at Airbnb.

Get the management team to have an off-site

For one to two days, get your leadership team together to discuss the company’s strategic view.

1. Start by asking every manager to independently do a SWOT analysis of the company – what are the company’s current strengths? Weaknesses? Opportunities? And what big trends are coming?

2. Take everyone’s input and brainstorm to form a combined SWOT.

3. Based on the brainstorm outcomes and the employees’ feedback, create The Company Constitution for next year.

4. Peter became famous/infamous for this company constitution concept. It is essentially a poster entitled “What is this company?” and it has the company’s high-level vision, meaning its WHY, its values, and its annual goals.

5. Again, mission and values are usually evaluated for a simple check-in. Annual goals are the ones that may change more frequently.

Plan the budget

At a different meeting, the leadership team would come together to plan the budget based on the Company Constitution.

At the end of the process, there are two outcomes (two documents): the Constitution, which is aimed at C-level and downwards, and the company Budget, which is aimed at C-level and upwards.

Quarterly cadence: Set OKRs

Every quarter, Peter advises you to set up the goals for the quarter using objectives and key results (OKRs). This timing is a good compromise between having a clear direction and avoiding changing paths all the time.

It is a real challenge to get OKRs right – a lot of leaders struggle with either setting incredibly specific goals (e.g. “introduce this AI feature”) or extremely vague goals (“grow sales”). You know you have formulated them in the right way when they give a sense of direction but also leave enough room for the team to navigate them in those three months.

How to set OKRs that drive meaningful change

The biggest challenge leaders often face when setting OKRs is when they mistake them for KPIs. Here is how Peter explains these two distinct concepts to his team:

• KPIs are measurements for the continuous operation of your company. So you typically have KPIs for sales, customer satisfaction, etc.

• OKRs is the approach that allows you to develop new capabilities as a team, it is how you grow as a business. So, the objectives are what you strive towards and the key results are the concrete aspects you measure.

• Bad example of an OKR: The objective is “grow sales” and the key result is “increase sales by 5%” – this is NOT an OKR because it has no direction, it does not tell you what to do.

• Good example of an OKR: The objective is “establish a new sales channel” and the key result is “sell 19 widgets this quarter through partnerships in Germany”.

• Key results should not be your KPIs. They may be somewhat linked to a part of your existing KPIs that need to grow. And sometimes, OKRs are not even tied to a KPI.

Another imperative aspect leaders should have in mind when setting OKRs is how many they should set. Leaders find this to be quite difficult sometimes, as it is common for them to overdo them or underdo them. Here is Peter’s take on this:

• OKRs have a hierarchical nature. You have OKRs at the company level, then at the team level, then the sub-team level, and maybe the individuals.

• You don’t need to measure every single person!

• Keep OKRs as simple as you can. 

• If your company is under 20 employees, have just one set of OKRs.

• If your company has 100 employees, you can have two levels of OKRs – the company level and the level of each department/project team.

How to effectively monitor OKRs

There are two main models to monitor OKRs: Either you have OKR meetings, which typically happen monthly, OR you integrate it in your weekly management meeting. For Peter Engelbrecht, the latter is the best solution.

Here is how you can easily integrate the monitoring of OKRs into your weekly meetings:

1. At the beginning of the meeting do a quick update on the status of the OKRs.

   • Each OKR owner gives the status by rating their progress on a three-colour scale: Red flag, yellow flag, and green flag.

   • Any red or yellow flag OKRs are then added to the issue list of the meeting, i.e. the theme they have to cover and discuss at that meeting.

   • Do not spend time on green flag ORKs – As Peter puts it: “Don’t spend 15 minutes of your management meeting saying how sales were wonderful.”

2. Before you leave the meeting, you should have collected input from everyone who has value to add to how you (as your team) should address each issue.

   • Keep in mind that the meeting is used for input and not problem-solving! It’s important to call out when the meeting is turning into a problem-solving discussion.

   • Similar to the idea Claire Hughes Johnson shared of knowing what type of meeting you are leading, Peter also states that is crucial to distinguish between a process meeting – where you do not solve anything, you just share information – and a mission meeting – where you discuss how you can get a project back on track or how you can workshop an issue.

   • Also, a good mindset to have and promote is that a certain issue, even though it has a clear owner, is everyone’s problem.

3. With the input, each OKR owner has to come up with a plan for the following meeting.

   • It is ok if the owner is not able, along with his team, to solve the problem in a week, BUT they should at least come up with a different way to do it.

   Don’t do the same thing and expect a different result. That’s what some people call the definition of insanity. Peter Engelbrecht

Weekly (or bi-weekly) cadence: Schedule 1:1

For Peter Engelbrecht, 1:1s are the atom of the relationship between the employee and the manager. These meetings set the tone for the development of great relationships (between employees and leaders), so it’s crucial to know how to do them.

Here are Peter’s best practices:

• Reserve 1 hour for each 1:1. It is ok if they take less time, but that is up to the employee.

• Employees can cancel those meetings, but leaders cannot – You should ALWAYS prioritise this time! 

• It is really easy to get caught up in all the other tasks you need to do and just think like “I need the next hours today to fix this. It's just a one-on-one. He'll come back next week.” The problem is if it is you who cancels, you end up sending a message you do not want to send: “You’re not important to me.”

• Keep in mind that 1:1s are the employee’s meeting, you are their resource.

• Employees are the ones who should come up with the agenda (especially the agenda they want!). Inspire them to prepare so you can better help and support them.

• As a manager you should avoid doing an evaluation on 1:1s. You should create an environment where the employee comes in with their biggest challenge in a very non-guarded way.

• Your focus should be on praising and coaching.

• There is a great difference between

  • Evaluating – “Hey, we're a bit behind on sales. Why are you behind on sales again? We talked about how you got to be more proactive.”

  • And coaching “here's what I saw you do – I loved it. Let's think about how we hit this difficult target at the end of March right? Do you have everything you need for that? Have you thought it through? Do you need any help from me now?”

• For an employee to take each 1:1 session as coaching, they need to receive frequent feedback on other times. Otherwise, even if you phrase everything with the best of intentions, they will read it as an evaluation or personal attack.

Key takeaways

Every company with more than 10 employees needs a good, structured cadence to achieve success. For Peter Engelbrecht, the cadence is composed of three dimensions – yearly cadence, quarterly cadence, and weekly cadence – each focusing on different topics.

Here is Peter’s formula for building each dimension:

• Yearly cadence: Reevaluate your company’s mission, values and strategy

• 1 – Get employees’ feedback

• 2 – On an off-site with the leadership team create the Company Constitution

• 3 – At a different meeting plan the budget for the following year

• Quarterly cadence: Set OKRs

• Know the difference between KPIs and OKRs

• Know when you are overdoing them or underdoing them

• Monitor OKRs in your weekly management meetings

• Weekly cadence: schedule 1:1

• You are the coach, the resource to the employee, and it is THEIR meeting

• Reserve 1 hour of your time – leave the actual duration up to the employee

• They can cancel the session, but you cannot – prioritise this time!

• Do not turn 1:1 sessions into evaluation moments – give these at other times

Remember there is not one right cadence. It is up to you to find out what works best for your company. Hopefully, you feel inspired to do so! 😊