My Team Was Hitting Every KPI. So Why Were Profits Falling?

Josh Hadley

Josh Hadley’s Amazon team was busy, every leading indicator was green and the business still missed its back-to-school forecast. He realized his own steady stream of ideas, from new AI tools to dashboards and ad placements, had helped distract the team from profit and sales velocity. In this episode, Hadley shares a five-question framework for getting clear on who owns which outcome, what’s blocking it, how to measure progress, and what work to stop. He also draws on Alan Mulally’s turnaround at Ford, where leaders learned to surface red flags instead of presenting a wall of green. The takeaway: sometimes growth comes from subtraction.

Bullet Points:

  • Focusing teams on outcomes that drive sales, profitability, and distributable cash
  • How too many priorities and new initiatives can distract teams from important work
  • The CEO’s role in setting priorities and avoiding unnecessary distractions
  • Using lagging business results to assess whether leading indicators are meaningful
  • Identifying the main constraint limiting business performance
  • Creating a transparent review process where teams can surface problems and ask for help
  • Applying the 80/20 principle to identify high-impact activities
  • A five-question framework for clarifying ownership, obstacles, priorities, measurements, and trade-offs
  • Balancing accountability and guidance with team autonomy
  • Growing through subtraction by simplifying, stopping, or deprioritizing work that competes for attention

Timestamps:

00:00:00 Why Busy Teams Still Miss Results
Josh introduces a five-question framework for focusing teams on work that grows the business.

00:01:00 The CEO’s Responsibility: Focus
Busy teams can complete tasks without increasing sales, profitability, or distributable cash; leaders must clarify outcomes.

00:03:42 When Leaders Create Distractions
New ideas can crowd out existing priorities, leaving teams busy but unable to deliver important results.

00:04:54 A Back-to-School Season Miss
Green leading indicators masked underperformance, prompting a review of the team’s priorities and business outcomes.

00:07:18 Refocus on Sales Velocity and Profit
Josh owns how his new tools and projects distracted the Amazon team from improving sales and profitability.

00:09:24 AI Makes Prioritization More Important
With endless options, disciplined execution and choosing the most impactful work matter more than generating ideas.

00:10:33 Ford’s Weekly Business Plan Review
Alan Mulally’s review process encouraged leaders to surface problems, even when reports initially showed everything as green.

00:13:09 Diagnose the Constraint
Compare expected results with actual performance, identify the gap, and create an open environment for solving it.

00:14:11 Match Actions to the Business Problem
Different issues—such as low traffic, poor conversion, stockouts, or weak margins—require different responses.

00:16:23 Find the Few Activities That Matter
Use weekly conversations and the Pareto principle to identify high-impact work and remove distractions.

00:18:32 The Five Questions for Weekly Reviews
Clarify each person’s owned outcome, current obstacle, highest-impact activities, success measures, and trade-offs.

00:21:09 Make Room Through Subtraction
Prioritization requires deciding what to pause, simplify, delegate, or stop while maintaining essential operations.

00:23:28 Balance Direction with Ownership
Leaders align outcomes, resolve competing priorities, and remove obstacles while giving teams space to execute.

00:24:33 A 30-Day Team Alignment Exercise
Ask team members about their goals, constraints, impactful actions, measures, and competing work; review progress weekly.

00:25:45 The CEO May Be the Bottleneck
Leaders should assess whether fewer initiatives and more focus on proven work could improve results.

Links and Mentions:

Sales and marketplace tools
“TikTok Shop“: “00:00:00”
“Amazon ad placements“: “00:07:18”

AI and automation
“AI”: “00:01:00”
“Automation”: “00:01:00”

Dashboards and software
“Dashboard”: “00:01:00”
“Sellerboard“: “00:08:18”

Sources of ideas
“Business conferences, webinars, and LinkedIn”: “00:03:42”

Management practices
“Weekly business plan review at Ford”: “00:10:33”

Transcript:

Josh Hadley 00:00:00  Is your team failing to deliver results, or are you keeping them busy with the wrong priorities? Well, today I’m sharing a five question framework to get your team focused, accountable, and actually producing results that truly grow your business. Welcome to the Ecomm Breakthrough Podcast, I’m Josh Hadley. I’ve scaled my own ecommerce brand from 0 to 8 figures, and I’m actively building towards nine figures in sales. This podcast is where I document that journey and share the systems, the strategies, and the lessons learned in real time so that you can learn what actually matters and scale your own business. My name is Josh Hadley. First and foremost, I’m a man of faith. I’m a husband to a beautiful wife and a father of four children. I’ve been selling in the e-commerce space for a decade, doing over $20 million in annual revenue and selling multi-millionaire on channels such as Amazon, TikTok, Shop and Shopify. And last but not least, I’m the host of the number one business strategy podcast for ecommerce entrepreneurs, and that is E-com breakthrough.

Josh Hadley 00:01:00  So look, you can have a team full of hard working people, give every one of them access to AI and still finish the week wondering why your business isn’t moving forward. That is going to be the premise of today’s conversation, and honestly, it’s something that I am actively living in right now and that is the biggest challenge. And honestly, that’s what I love about business, is it’s one of the best leadership training methods that is out there, because every week you are faced with a new obstacle, a new challenge, and as you continue to work with more and more people, things get more complicated and you yourself have to level up as a leader. So let’s dive in. Everyone has updates. Everybody’s completing tasks. Somebody built in automation this last week, somebody created a new dashboard. Somebody researched a tool that could save the company time. But here’s the question I want you to ask yourself did you actually sell more products than you were intending to sell. Did you actually improve profitability, or did you actually fix any of the problems that were holding you back from growing your business, generating more sales and primarily more profit? But not even just more profit, more distributable cash? Because from my perspective, everything I’ve learned about any e-commerce businesses, you can have a lot of revenue.

Josh Hadley 00:02:26  And that’s cool. I know a lot of nine figure brands that have very, very slim profit margins that honestly, I wouldn’t even be interested in operating. And at the same time, you can have a very healthy profit line. But guess what? If you’re on this exponential growth curve, guess what? You don’t have a lot of distributable cash that can come out of the business because you have to continue to fund working capital to purchase more inventory. So look, as I work on scaling our brand, I’m realizing how much of my responsibility as a CEO truly just comes down to one thing. And it’s just focus, because I have to help identify what is actually limiting our results. And then I have to make sure that the people that are on our team understand the outcome that they own. They need to understand their role and how what they do drives what specific outcome. I’m looking for them to drive. I have to make sure that I am very clear with how we’re measuring success, and which activities actually deserve my teams or myself, our time and attention, and I have to stop distracting my team.

Josh Hadley 00:03:42  That last part is probably the most uncomfortable, but it’s something I’ve learned a lot about because sometimes the person creating the most distraction in the business is actually the CEO. Because, look, we all go to these business conferences, or we watch this webinar, or we hear this new thing or we see it on LinkedIn, right? And then suddenly I have six new ideas for the team. And then it’s true, some of those ideas might have a lot of merit, but every new initiative that takes time and attention away from something else is going to either. Like you have to be able to distinguish, do I really want you focused on this new initiative, or is this just a new shiny object that we’re chasing that’s just going to keep you busy, but actually drive you away from actually delivering on the outcome that I asked you to do? So if I keep adding priorities without removing anything, I’m actually making it harder for the team to do the work I already told them was important to do. And then guess what happens? Inevitably, Friday rolls around and then I’m frustrated that like the biggest priority or the outcome that I was looking for from that team member hasn’t moved.

Josh Hadley 00:04:54  Okay. And I share that all with you, because that’s what I’ve recently lived in. And it was nothing was more poignant than what happened during our kind of back to school season this past year. And back to school season in general is our biggest kind of like selling season of the year. And this year we underperformed our forecast. And to me, I had to take a step back because, you know, we had experienced year over year growth. And for the first time during a quarter, we did not hit the for the financial targets that we had. But yet here’s the constraint that I saw all of the leading indicators that I had been looking at over the past three months all showed up as green, which meant the team members thought that they were working on all the right things, and sure enough, they were doing they were keeping themselves very busy. It’s not like people were just sitting on their hands and that’s why we lost. Like quite the opposite. They were extremely busy. In fact, they were.

Josh Hadley 00:05:59  They kept asking like, hey, we don’t have enough capacity. We don’t have enough capacity. Cool. But what happened is that these leading indicators were just keeping them busy. And then I had to take a step back and look at what are the outcomes that I’m asking the team to drive, and are we actually achieving those results? These lagging metrics were showing us like, hey, we’re in the red. We’re no longer performing, we’re no longer up year over year. Like, what is it? And so we had to like, really like strip everything back and understand, like what are the leading actions and indicators that we should be doing in within the Amazon team every single day? That is actually going to lead to increasing our sales velocity, increasing the revenue, and most importantly increasing the profit for that channel. And so we had to go through and again, this was a conversation with our Amazon team leader to say like what? Why are we off course here? And there was a lot of things that we had to end up saying, hey, there’s a lot on the to do list, stop doing all of these other things and get back to focusing just on the profit and get back to increasing our velocity.

Josh Hadley 00:07:18  And when we did that, instead of worrying about, hey, this new AI tool or this new dashboard or this new report or this new kind of PPC, I guess kind of placement that Amazon’s I feel like rolling out almost every month. There’s something new that you could be focused on that they were focused on all of those things. Those are good things that are happening in the business. Yet it distracted us from the number one thing, which is increasing sales velocity and generating increased profit year over year. And so I had to take a look at that. And honestly, I have to own my contribution to that because it was me going to business conferences being like, oh, hey, did you see this new Amazon ad placement that we could get into? Oh yeah. Hey, by the way, there’s this new AI tool. I heard some other Amazon seller, they’re actually using this to automate X, Y, or Z inside of this. And actually we can build a brand new dashboard. We no longer need to look at seller board or anything like that.

Josh Hadley 00:08:18  Why don’t you just start building our own dashboard okay. And that was me just adding more and more and more. And guess what? I have a very, very capable team. They are great. They’re extremely capable. And that’s honestly the danger of it because I just kept giving them more because then they would do the thing and I was like, that was awesome, let’s go do more. But I started to veer off course and I started to have them working on things that were keeping them busy, but not driving distributable cash in the business. So here’s the thing I’ve learned I can’t tell someone something is their number one priority, and then hand them five more projects and then act surprised when they haven’t made meaningful progress on increasing the profitability. Okay. And that is the core thesis of this. People need clarity and they also need enough uninterrupted time to act on that clarity. here is my biggest caution. In a world where AI allows us to do more than ever and honestly, can be a very shiny object.

Josh Hadley 00:09:24  I think that discipline of being able to say yes to certain things, but more importantly, to say no to the 1000 other things is even more valuable. And that’s why I think that human talent isn’t going extinct. AI gives you, if we thought before AI we had, hey, there’s a thousand different ways for us to grow our business. A thousand different levers I could pull. Well guess what? With AI, it now almost feels like it’s infinite, right? It’s a million. It’s a trillion different things that I could be doing. An AI is going to give me a whole lot of ideas, but it’s not the ideas that are going to generate the impact or drive the outcome. It is in the execution of finding the one thing that, if that is done properly, solves all the other problems. And in the world of Amazon, it’s increasing my sales velocity while also improving the profitability at the same time. So here’s a story that I think made this made so much sense to me, especially with what we went through during Q3.

Josh Hadley 00:10:33  For us, it’s a story from the former CEO of Ford that illustrates the problem that I went through, perfectly. So his name was Alan Mulally, okay. He became the CEO of Ford in 2006, and the company was heading toward a 12.7 billion annual loss. He was walking into a business with serious problems. Okay. But one of the processes that he introduced was a weekly business plan review. And so if you’re listening to this like a weekly business plan review isn’t anything new. But this is important. I’m going to share with you the similar analogy that I experienced in my own business, because guess what? I do have a weekly business plan review, and I did have a bunch of KPIs that my team was tracking or leading indicators that all showed it. Everything was moving along swimmingly. Everything is green. So let’s talk about what happened here with with Ford. The leadership team from Ford would come together every week and they would review how the business was performing against that plan. Were they on track? Where were the serious problems and where did someone need help? Okay.

Josh Hadley 00:11:49  they used a color coding system similar to what I described to make the status visible. But early on, all of the reports were just green. So think about that. Especially at a large corporation like Ford, the company was losing billions of dollars. Yet the leadership reports were all showing green. So eventually Mark fields brought forward a red status on one of the projects that he was working on. And the CEO, Mulally. He actually applauded for the first time. He welcomed the fact that someone had surfaced, a problem that the team could actually help solve. And that is the story. That is the part of the story that I, I think a lot about how often do our businesses have the exact same version of that disconnect where everyone has a positive update? Things are getting done in the business. Everyone can point to things that they accomplished. Everyone is working, everyone’s busy, but the financial results aren’t what they need to be, or the launch isn’t performing, or the customer experience isn’t proving you’re not increasing your overall brand reputation.

Josh Hadley 00:13:09  Mulally described his review process as a way to keep checking performance against the plan, and identifying areas that needed special attention. that’s useful for a company of almost any size. Here’s the questions you need to answer. What did we expect to happen? What actually happened and what is causing this gap? And what are we actually going to do about it? Because if you can answer those questions honestly with your team, then you have an actual chance to make progress. But if you’re just mainly trying to show that the department is doing a good job, you can miss what the actual business needs. which really just brings me all back to the theory of Constraints, right? How often have I talked about like, hey, identify what is the number one constraint in the business and then go attack it with the sledgehammer. I think that this is where you, as the CEO, need to like, step up and help your team and create an open environment where they feel like they’re not just going to get berated by you.

Josh Hadley 00:14:11  If they come in and they’re like, the results aren’t what you wanted them to be. It needs to be a collaborative process where you are able to say, here’s the outcome. Hold them to high standards, but then encourage them and help them troubleshoot what the true constraint is, and then help them identify the key priorities that they should actually be focused on, and what they should primarily be able to say no to so that they can actually drive the results that you’re looking for. And when I say constraint, I mean the factors that are limiting the results that you’re trying to achieve and then identifying it requires more than just saying, like, hey, we need more sales. Of course you’re going to want more sales, but what is it that’s actually preventing them? And so let’s go use my Amazon or just any Amazon product as an example. Maybe you need more qualified traffic. Maybe people are finding the product, but the listing isn’t converting. Or maybe the product sells well, but you keep going out of stock, right? Maybe the revenue looks great, but the advertising and discounts are eating up all of the profit.

Josh Hadley 00:15:18  Those are all kind of like different problems. And most importantly, they all require different actions if you want to solve any of those problems. So if we’re going out of stock asking the advertising team to push harder, we actually make the situation worse. But if the listing isn’t converting. Paying more on PPC traffic could mean actually paying more people to send to a page that’s not even converting, which ends up losing you more money at the end of the day. If the product is selling at an unhealthy margin, celebrating revenue growth can hide the fact that we’re creating more work even without generating enough profit. So before I ask the team to do more, I need to actually understand what is actually limiting the result. And I think it becomes extremely clear for you to articulate to your team members what is the goal? Because even for myself, I’ve articulated this to the team. Yes, I want increased sales velocity, but I. But revenue is vanity. At the end of the day, I want profit.

Josh Hadley 00:16:23  And that profit needs to be growing year over year. And so it is that focus that I got distracted with with my Amazon sales team that allowed them to stay very busy doing a lot of things and checking off a lot of boxes and therefore having a lot of green on their report. But at the end of the day, that outcome that I wanted from them started to slip away. And this is where, like the 8020 principle, the Pareto principle is super helpful. And by the way, I don’t even need the exact ratio to be 8020. The real question is this which small number of activities are creating the most value to drive that profit? So let me try to like wrap this up with like a pretty bow and share with you kind of like a that five step framework that you can use and you should use whenever you have a weekly one on one meeting with your team members. And number one, if you’re not having a weekly kind of performance meeting with your team members, that’s the number one thing that you need to get implemented.

Josh Hadley 00:17:26  Because if you don’t have that, you just have people that are just off following whatever checklist or sop that you gave them, and just having that or even just an email update is not going to cut it, because this is what I’ve seen time and time again, in order to truly identify some of the biggest constraints they have all come through. Actual conversations they haven’t come through. Oh, I just sent off this email or just pondering by myself. more often than not, it comes through an actual conversation with the team member understanding what their constraints are. Why is this not being achieved, and then brainstorming with them how we solve that and what we’re going to say no to. And so as the CEO, I have to hold myself to that standard whenever I’m meeting with any of my team members. Okay. it also means that I can’t ask the team to stay focused while I spend the week just sending them a bunch of interesting AI tools that I saw on LinkedIn or that I found at a conference or something like that.

Josh Hadley 00:18:32  The standard has to apply to my ideas to, and I, as the CEO, need to be locked in knowing what are my three priorities every single week. What is the one thing that I am actually trying to drive? Am I am. And am I actually steering us off course? So here’s that practical framework that I’m trying to bring to all of this, and the the weekly conversations I have with my team. I want each person on my team, including myself, to be able to answer the following five questions. Number one, what outcome do I own that should be more specific than just like a departmental name or a job title that says like, oh, I am in charge of Amazon Marketplace. Okay. Two broad. Amazon is a channel and also marketing is a function. What result are you actually accountable for improving? Okay, as soon as you can answer that, you get to move on to the second question. What is currently preventing that outcome? And this is where we need like an actual diagnosis.

Josh Hadley 00:19:42  And if you don’t know that’s okay. That’s the immediate work that you need to go do to gather enough information to actually understand the problem. But you should distinguish between investigating the constraint and then repeatedly guessing at solutions. All right. Third, which 123 activities are most likely to improve the result that we’re after. And this is where focus becomes real. Most people can name like ten things that they could work on. Okay. You as the leader and as the CEO have to help them decide which ones deserve the attention now and which ones can be put on the back burner. Fourth, how will we measure whether it worked or not? I like connecting an outcome metric with an activity that the person can actually influence, because we need to know whether the result improved. But most importantly, we also need to understand what the person is actually doing in order to move it, so it can become a repeatable process that allows us to have like a useful conversation when the results fall short. Because we get to ask ourselves, did we execute the action? Did the action have the effect we expected? Was our diagnosis wrong? Did another obstacle get in our way? A KPI should help make those decisions for you.

Josh Hadley 00:21:09  And last but not least, the fifth question what are we prioritizing to make room? To be honest with you? I think this is probably the most important question that you can ask, which is so many of us think that we are going to grow by addition, where in reality is for entrepreneurs is you are probably actually going to grow better by subtraction. And what do I mean by that? When you are focused on like prioritizing certain things, the question forces a trade off because saying something matters doesn’t automatically create more hours in the week. You have to decide what weights, what gets simplified, what gets delegated, or what completely stops altogether. You can’t tell your team, hey, I need to go make this product a smashing success and then launch ten new products and say, oh well, sales is down. We really want to focus on this new product launch that we have, but I also want to increase my odds of having a win. So I’m launching ten new products all at once, because then guess what happens.

Josh Hadley 00:22:20  Your team is now kind of like. Their mind is now kind of distributed across ten other ideas. And those ten ideas have their own unique nuances as to what’s going to help them succeed in the launch. And so being able to say, no, we are just going to focus on one launch right now. and that can be uncomfortable. Sometimes we’re stopping something that you’re actually excited about. Maybe it’s multiple products launching all at once. and sometimes we’re admitting that a project that we started no longer deserves the time and resources that you’ve been giving it, but leaving everything to just be active and everything needs to be maintained has a big cost as well. It spreads attention across too many things, and it makes it harder to actually finish the work that truly matters. And I actually want to make like one distinction. People still have essential operating responsibilities such as, you know, Customers need responses. Orders need to be shipped out. Financial records need to be updated and accurate. We all have commitments that we still need to fulfill.

Josh Hadley 00:23:28  I’m not just saying like, throw everything out. What I am saying is like, focus has to account for those those responsibilities that are necessary and just need to get done. But the goal is to understand the capacity that you actually have. Protect the work that keeps the business healthy and be intentional about where the remaining effort goes. And it also doesn’t mean that the CEO dictates every task for every team member. Like, don’t get me wrong. The people closest to the work often understand the problem better than I do, and I want them challenging my assumptions and bringing recommendations. That is the purpose of my weekly performance review. It’s not me dictating. Here’s what I think you should do. Instead, they’re coming to me with here’s how last week went. Here’s what I think needs to be done this week. Here are my priorities. Do you see it any way, any differently? And that’s where the coaching comes in from my side. My responsibility is to make sure that we agree on the outcomes, resolve the competing priorities and help remove the obstacles that they can’t resolve themselves.

Josh Hadley 00:24:33  Then those team members need room to just go execute. That balance matters too. Little direction leaves people guessing, and too much kind of micromanagement prevents them from even owning the result to begin with. And constantly changing the direction makes accountability, like, literally impossible, because you can’t just step in on Wednesday unless something’s, like, truly on fire and say, hey, we gotta shift gears and we gotta start focusing on that. So here’s an exercise I would encourage you to do with your team. At your next meeting, ask each person to explain the most important result that they are working toward over the next 30 days. Then ask them what is holding that result back, and ask which activities they believe will have the greatest impact, how they’re measuring progress, and ask what other work is competing for their attention that needs to be prioritized. You may find that everyone has a clear, consistent answer, but more often you’re going to find that people have very different interpretations of what actually matters. And that’s super valuable information.

Josh Hadley 00:25:45  It gives you a chance to clarify the priorities before another month goes by of them staying super busy but not moving the needle. And then when it comes back to each week, you need to ask what changed? What improved? What did we learn? Where do we need help? That shared plan matters and the willingness to surface problem matters, and the consistent review helps turn those problems into something that the team can actually address Together. So to me, this is like an ongoing leadership lesson that I feel like I’m going through. I wanted to share this, to say, hey, you as the CEO sometimes can be like the biggest obstacle inside of the business. And if you feel like that’s you, that you just keep giving your team new, new, new, new new, more ideas, more ideas. I want you as the CEO to honestly kind of self-assess yourself and say, could we actually grow by subtraction? Because I think more often than not, once you’ve once you’ve hit a decent velocity, it is truly through the subtraction and allowing your team members to put more of their time and effort into the things that are already working and winning to drive the outcome you want them to is where you get the better results.

Josh Hadley 00:26:59  If you found this podcast to be helpful and interesting and thought provoking for yourself, share it with another entrepreneur. Drop it in another slack channel or a mastermind group. That is the biggest thank you that I could get from you. And until next time, good luck!