The Upside of Disruption

AS our recent history has shown us, disruption does not happen linearly. We can’t expect change to be an extension or an improvement on what we already know. As Terence Mauri puts it in The Upside of Disruption, we must rethink everything. “We can’t have resilient leadership without deliberate and sustained rethinking.” We become irrelevant, trapped in our past successes. Better questions are the answer to the now we find ourselves in.

When operating at the edge of a new world, we must rethink old certainties, search for the upside, and ask what will evolve and what will not change because the untapped value lies there, too.

The question leaders must now ask is, “Does our leadership deliver nutritional value through how we honor the past, define the present, and champion the future?” We can’t continue to lead with an Industrial Age mindset; rather, we need to adapt to an Intelligence Age mindset. The future is about a shift in mindset and related behaviors.

To move our thinking out of the status quo and to find the upside of disruption, Mauri covers four critical areas leaders must address in themselves and their organizations. He refers to it as D.A.R.E. or Data, Agility, Risk, and Evolution.

DATA – Lead with AI

Data refers to AI-driven disruption. Embracing AI is a leadership priority but with a human-centric approach. “The more digital we become, the more human we need to be. The reimagination of mindsets, culture, and capabilities in sync with the rise of Al may be the leadership imperative of the twenty-first century.” Embracing AI requires a culture change. Employees should “feel energized and enabled to use AI as a co-pilot to do value-creating work and waste less time on bureaucratic misery work.”

AGILITY – Great Leaders Unlearn

Mauri defines unlearning as the capacity to reflect (humility), rethink (agility), and then renew (growth). It’s proactive, not reactive. “Half of wisdom is learning what to unlearn,” said science fiction writer Larry Niven.

Unlearning could be the highest form of learning in a post-AI world. It’s the ultimate insurance policy against zombie leadership (dead leadership that fails to adapt to changing circumstances) and “enshittification” – a term coined by academic Cary Doctorow to describe the slow decay in everything we do. It is at the heart of every future-focused organization, allowing leaders to focus on accelerated growth and rethink outdated mindsets.

RISK – The Courage Advantage

The risk is in not having the courage to evolve. Adopt a contrarian mindset. “Willful contrarianism explicitly takes a point of view about the future that runs counter to conventional business wisdom and is a powerful antidote to the curse of sameness. Leaders courageous enough to adopt willful contrarianism are likelier to see the future first and hone a courage edge that helps them take advantage of disruption and seize new growth opportunities.” Our current mindset affects our ability to see the future.

Mauri says courage and humility are inseparable because there is no courage without vulnerability. Overthinking leads to risk aversion.

EVOLUTION – In Trust, We Grow

For some time, trust has been on the decline. Mauri encourages us to adapt the Trust Mindset and utilize its three dimensions: Who We Are (Identity), How We Work (Agility), and How We Grow (Scalability).

The Who We Are question provides clarity. It is about values. But keep it simple. “Too many can be counterproductive. Values should be clear and meaningful and guide mindsets, behaviors, and decision-making about what you are and are not.”

How We Work answers the question, “Are we empowered to work as adults, or is ‘fake empowerment’ the default? Empowerment means control over context and power over trust. It demands deference and erodes initiative.” Move from micro-management to continuous coaching. Be a leader of learning, not tasks.

How We Grow provides a growth story that people can relate to and get behind. “When leaders honor past achievements, define the present challenges, and inclusively shape the future growth story, people don’t just feel included in the journey; they own their part of the future in a crystal clear and irresistible way.”

We won’t succeed in the Intelligence Age if we are stuck in the status quo. We need a beginner’s mindset and the courage to make bold moves.

Whatever the future holds, people will still want to thrive in human-led, trust-based cultures that combine meaning, choice, and opportunity over a lifetime.

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Posted by Michael McKinney at 03:14 PM
Permalink | Comments (0) | Change , Culture , General Business

When Negotiating, Pass the Tension to the Counterparty

ANYTIME there’s a negotiation, tensions arise. Through my work as a negotiator for over 40 years, I’ve essentially determined seven distinct types of negotiation tension — and have learned to both recognize and manage them to open up a path to progress.

Take, for example, the interplay of seven tensions — including tension around relationship, outcome, process, timing, leverage tension, power, agent, and team — in this particular situation: One of my business partners, and I were approached by a potential buyer of a company we owned. My partner was the majority shareholder, but I had a substantial stake. He was 17 years older than me and retiring soon, so for those reasons, it made sense for him to drive the deal in the background and for me to negotiate it.

He said, “We shouldn’t take less than $100 million.” We didn’t have to sell, and while they didn’t have to buy, we would represent a cheap entry into the US market for this European company. I felt outcome tension over the price. I thought it was too high, given where our results were at the time.

Further, my partner’s plans to retire meant he’d never have to deal with these people again. Given my age and role in the company, I certainly hoped to stay. I liked these folks, and I liked the deal. Hence, my relationship tension. My partner, however, exhibited no tension concerning his future relationship with the potential buyer.

My partner also concluded that it was likely we’d sell the company — and if we didn’t, that was okay with him. So, he also felt no tension concerning the outcome. He was in no rush, so he didn’t experience timing tension either. He also thought these Europeans needed a nice American company to enter the US market, so he felt he had the leverage and, therefore, had no leverage tension.

I, on the other hand, had all those tensions. I wanted to sell, and I was worried too high an anchor would scare them off. As I imagined potentially working with them, a new tension developed within me — agent tension. Should I try to persuade my partner, for whom I was a partial agent, to reconsider our price? I thought about timing. Our company was a large S Corp and, as a result, had a potential temporary reduction in taxes due to the Trump tax cuts. Selling now, before those expired, led to some timing tension. Also, my partner was in his late 70s with no children involved in the business. As a result, I felt the full burden of each of these negotiation tensions in this deal scenario.

Fortunately, tension can be moved from one person to the other. It’s true! Have you ever felt someone’s tension pass to you or passed your tension to someone else? No doubt you have. Say, for example, you’re sitting alone quietly when someone who has tension enters the room. Regardless of how intentional they are in their desire to “share” it, you immediately start to feel it and exhibit it. Knowing this, I was determined to pass my tensions on to the potential buyer.

As we began, I said, “My partner says he won’t sell for less than $100 million, so don’t even think of making an offer at less than that amount. We won’t sign it. After all, the company isn’t for sale. We’re looking at a few good years ahead, so we’re fine. After those years, he’ll retire, and we’ll sell the business then. But if you want to prepare a Letter of Intent (LOI) for a sale at $100 million, we’ll sign it.”

Notice how I quickly addressed the tensions of negotiation. The relationship, outcome, and timing didn’t matter. Leverage on their side was non-existent, and I set forth a process for them. I was off the hook as an agent and had perfect team alignment. I’d gone from all seven tensions to none.

Where was the tension now? They needed a relationship with us. They needed to decide if they could reach our ask. Time and leverage were now on our side. Every one of the seven tensions had been moved to them. And I could feel it.

They were quiet for a few days, and we went about our business. After three days, they called and said, “Okay, let’s draft an LOI for that amount.”

While my partner anchored high, there was much more going on in regard to the seven tensions. Anchoring created tension for me, yet we succeeded in passing the tension on so that the counterparty was left having to grapple with it.

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Posted by Michael McKinney at 08:36 AM
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Leadership Vulnerability: A Personal Journey Through the Eye of the Storm

IN THE HIGH-STAKES world of leadership, where every decision can be scrutinized and every failure magnified, the concept of vulnerability often takes on a negative connotation, especially among men, who are taught to equate emotional openness with weakness. Yet, if we delve deeper into the annals of history and the realms of effective leadership, a different narrative emerges—one where vulnerability is not a liability but a profound source of strength.

My own confrontation with vulnerability’s raw power came unexpectedly during a pivotal moment in my career. Tasked with addressing the top 400 leaders of Raytheon Corporation, a defense juggernaut, my inner turmoil was at its peak.

The recent passing of my father had left me emotionally bereft, a state further intensified by the daunting prospect of following luminaries such as General Stanley McChrystal and Jon Meacham. Standing before these distinguished leaders, my vulnerability was not just a shadow—it was my companion.

As I shared my insights, weaving through personal anecdotes of loss and resilience, the connection forged with the audience was palpable. Ultimately, the overwhelming reception to my address was a testament to the power of vulnerability in forging genuine human connections.

Harnessing Vulnerability: A Guide for Leaders

In the realm of leadership, where the pressure to perform and appear unflappable is relentless, allowing oneself to be vulnerable is an act of bravery. It breaks down barriers, fosters genuine connections, and cultivates an environment where innovation and loyalty can flourish. For emerging leaders aiming to chart a successful course, remember that vulnerability, wielded wisely, is not your Achilles’ heel but your strength —fortifying you face the world head-on.

• Embrace Visibility: Brené Brown, a luminary in the study of vulnerability, posits that true leadership requires the courage to be seen, warts and all. It’s about dropping the facade and allowing your team to see you as human—capable but fallible. This transparency fosters trust and encourages others to be equally open, creating a culture of authenticity.
• Solicit Support: The act of seeking help is often misinterpreted as a sign of weakness, yet it signifies the opposite. It’s a declaration of strength, signaling a leader’s awareness of their limitations and their willingness to learn and grow. This humility not only humanizes you it also strengthens the bonds within your team.
• Navigate Vulnerability with Intent: Vulnerability should not be an unchecked floodgate of emotions. It’s about strategic openness with boundaries. Sharing personal stories or challenges should be purposeful, aimed at building connections or illustrating lessons, rather than seeking sympathy. It’s about leading not from a place of invulnerability but from the helm of authenticity, where acknowledging one’s limitations becomes a source of collective strength.
• Lead with Empathy: Showing empathy is a powerful manifestation of vulnerability; it requires leaders to connect with their own experiences of challenge and uncertainty to relate to others. By genuinely understanding and sharing the feelings of another, leaders can create a deeply supportive culture. This connection not only humanizes the leader but also elevates the entire team’s morale and cohesion.
• Cultivate a Culture of Open Dialogue: Teams thrive on clear and open communication. Leaders should encourage an environment where feedback flows freely in all directions. By being open to receiving feedback, leaders demonstrate vulnerability in action—showing they value growth and learning over maintaining an image of infallibility. This openness invites team members to share ideas and concerns without fear, fostering innovation and problem-solving.
• Share Failures as Learning Opportunities: Acknowledging failure as an integral part of the learning process makes it easier for team members to embrace risks and innovate without the paralyzing fear of making mistakes. Leaders should share their past mistakes and the lessons learned from them. This not only demystifies the path to success it also encourages a growth mindset within the team.
• Practice Self-Care and Encourage It Amongst Your Team: My study, State of Working America Report – Thriving in Resilience and Brilliance, found that 82% of working Americans think great leaders have to inspire resilience in those they lead. But how can leaders inspire resilience if they’re not practicing self-care themselves? Leaders must recognize the importance of their own well-being and set an example by practicing self-care. This might include acknowledging when they are under too much pressure, taking time off to recharge, or engaging in activities that nurture their mental and physical health. By doing so, leaders send a powerful message that taking care of oneself is not a sign of weakness but a critical aspect of sustaining performance and leadership over the long term.

Embracing Vulnerability

Incorporating these strategies into your leadership approach not only deepens your own practice of vulnerability, it sets a powerful example for your team. A leader who embraces vulnerability with intention and wisdom opens a path for their team that is marked by resilience, trust, and unparalleled success. Together, these practices transform vulnerability from a perceived weakness into the very cornerstone of strong, effective leadership.

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Posted by Michael McKinney at 06:22 AM
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quickpoint: What Middle Managers Do

IN Power to the Middle: Why Managers Hold the Keys to the Future of Work, authors Bill Schaninger, Bryan Hancock, and Emily Field contend that middle managers are crucial to the new world of work.

What middle managers do is actually much more complex than what either executives or frontline workers do: They manage both up and down, and serve as translators in both directions. What kind of qualities and skills does the job require? Emotional intelligence, resilience, adaptability, technical skills, critical thinking, communication skills, being open to change, seeing the big picture, and managing both full-time and contract/gig workers. Everything they do deeply affects the work, the workforce, and the workplace.

For those who remained in the workforce, the pandemic made the above abundantly clear. At first, some senior leaders thought they could make all the big decisions on how things should run, but they were wrong. They came to realize that they needed middle managers more than ever. The people in the middle were the only ones who could connect the big goals at the top with the details at the bottom, and do so quickly.

Middle managers are the vital link between senior leaders and those on the frontline. They are in an ideal place to see how an organization’s purpose, strategy, and culture are trickling down into the organization and whether they’re actually working. They can inform all three in return. Managers are also the most important guides needed to help teams and organizations navigate the seismic challenges in today’s world of work, including automation, hybrid work, and skill shortages. They are also best positioned to forge the day-to-day human connections that so many workers crave, and critical to improving DE&I, retaining and developing talent, and more.

Consequently,

Senior leaders should make transforming the role of middle managers their top priority. They should invest in their success, placing their most qualified and valued people in these roles, providing training for them to excel, rewarding them within the role rather than promoting them into more senior positions, and most importantly giving them the time to actually manage. By trusting managers to make decisions, and sending a clear message that these roles are highly desirable, middle managers will be better positioned to make an impact.

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Posted by Michael McKinney at 09:38 AM
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How to Ensure Your Organization’s Digital Transformation Succeeds

IN THE AGE of digitization, businesses face a critical imperative: to adapt and embrace innovation or risk being left behind in a rapidly evolving world. This force is called creative destruction, which is the process where innovation and technology advancements are reshaping industries and business models. It is reorienting the competitive landscape — winners will flourish while losers will be at a severe competitive disadvantage, losing ground to competitors and frustrating stakeholders and customers.

To illustrate the potential impacts, in 2007, Nokia had a little over half the mobile phone market with an operating profit of about $7.8 billion. That same year, Apple introduced the iPhone, which revolutionized the industry with its superior touchscreen interface and robust app ecosystem. Nokia just couldn’t keep up. Its phones were quickly viewed as antiquated and difficult to work with for developers. Subsequently, its market share plummeted by 90 percent. In 2013, Nokia’s mobile phone business was sold to Microsoft. A post-mortem was conducted that pointed to a lack of organizational alignment, internal politics, and a lack of technical competence that hindered its ability to transform.

The driving force behind digital transformations is adopting and implementing digital technologies to processes, products, and assets to improve efficiency, enhance customer value, manage risk, and uncover new monetization opportunities. These transformations typically involve a profound change in how a business operates, encompassing people, process, and technology. Beyond digital transformations, organizations are continually tackling other transformations, such as mergers and acquisitions, divestitures, cultural transformations, and much more.

Approximately 89 percent of organizations have already adopted a digital-first business strategy. The spend for digital transformation programs by the year 2030 is expected to exceed $3 trillion.

Shockingly, 70 percent of such initiatives fail to reach their goals, which represents a massive risk with profound implications for those undertaking such a large effort.

This raises some pertinent questions. First, why do these programs fail?

According to McKinsey, the common reasons for failure of transformation programs include a lack of aspiration, lack of a shared vision, lack of engagement, low investment in capability building, and an insufficient structure for the transformation team. I’ve seen many of these in my experiences personally and believe they’re the symptom of the underlying root cause — which is organizational complexity.

Organizations undergoing transformations often operate diverse business lines across various markets, manage aging and complex IT environments, and navigate significant regulatory oversight. Successfully delivering these transformations typically requires a multi-year, multi-workstream program, demanding substantial and targeted efforts across numerous diverse business and functional teams that must collaborate effectively.

This complexity results in challenges such as unique perspectives and languages within diverse teams that hinder communication and accountability. The loss of translation from leadership to implementation teams and across groups that have to collaborate can lead to costly implications. Additionally, organizational complexity can conceal active resistance, and many organizations lack the expertise to govern such massive changes efficiently. Successfully navigating such an environment requires a transformation leader with near superhuman capabilities in order to maintain focus across all the various components toward the goals of the transformation.

The second and more important question remains: How do organizations achieve success?

Success in digital transformation requires organizational alignment, where every element works cohesively to fulfill the organization’s purpose. This alignment encompasses two critical dimensions: vertical alignment, which harmonizes strategies, goals, and activities from the C-suite down to individual contributors, and horizontal alignment, fostering collaboration across various business and functional areas.

To achieve alignment, a common language is crucial. This language creates a shared understanding across diverse perspectives, enabling clear communication by removing ambiguity and confusion. It fosters ownership, accountability, and collaboration in delivering on a complex transformational agenda.

For effectiveness, this common language must meet three criteria:

1. It must be business-oriented, which is critical for driving change through the lens of the business
2. It must facilitate cross-functional collaboration and
3. It must represent different levels of granularity to be useful for senior leadership and lower-level staff.

The sole candidate that satisfies all these criteria is business process.

A common language of business processes allows the organization to envision its digital future through the lens of the business, which enables a digital strategy that’s articulated by impacts to existing processes and the needs for future processes. This would enable the various functional teams, such as business teams, technology teams, risk management, compliance, people leaders, and more to collaborate to effectively implement the future vision. The role of the transformation leader becomes easier as the accountability and transparency delivered by this approach enables them to plan with precision and manage the journey effectively.

To establish this approach, a comprehensive inventory of processes must be developed. Leveraging this inventory to align operational and resource information, various operational data repositories become a unifying Operational Intelligence repository, which is the key driving alignment vertically and horizontally. This also means creating the capability — typically through a Process Center of Excellence (COE) — to build and maintain this information for long-term value.

This framework not only enables delivery of the digital transformation agenda, but is key to operational excellence, which is critical for being an agile organization that can quickly adapt to change.

This strategy requires an investment by the organization, but the choice is clear — invest now and increase your chances for transformational success or face the consequences later.

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Posted by Michael McKinney at 10:41 AM
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Moving Beyond Company Organization Silos: Lessons from the Aviation Industry

IF YOU’VE HAD to be on a plane in the last year or so, especially within the U.S., you’d likely agree with the NBC News proclamation that “the days of fun flying are long gone.” Between surging demand, labor shortages, outdated air traffic management, and travel reservation I.T. systems, air travel feels a bit more like a chore than like a treat.

In the U.S., airline companies have pointed fingers at the Federal Aviation Administration (FAA) as the biggest cause of outages, even as the FAA has fired back at airlines. That’s a shame because the aviation industry as a whole still continues to be an industry model for how to operate with extremely high reliability despite having a highly fragmented set of organizational entities. Yes, we realize this sounds counterintuitive to anyone who’s dealt with a flight delay or a lost bag, but hear us out.

If you think the business processes in your own company are complex, try running an operation globally that moves 5 billion passengers every year in roughly 25,000 commercial aircraft, via 15,000 airports located in 195 countries. And do that with over 99.999999 percent reliability. And just to make things interesting, do it in a decentralized organizational construct where laws, standards, and procedures aren’t as tightly controllable as within a single company. There’s no single CEO-like entity and no hierarchy for single accountability.

In fact, deep lessons can be taught from aviation for most industries and companies who want to operate efficiently and effectively across organizational silos — those insidious barriers that wreak havoc on a company’s efficiency, collaboration, and, ultimately, its bottom line.

The Insidious Effects of Organizational Silos

First, what exactly are organizational silos? They aren’t the structures you’ll find on a farm, nor are they ancient fortifications protecting valuable treasures. They’re the metaphorical walls that separate different departments or teams within an organization. These walls are worse than the physical ones. They result in information hoarding and lack of communication.

The biggest challenge for companies when it comes to operational excellence is siloed behavior. Even worse, functional processes — finance, human resources, sales, etc. — become ineffective with time, as they operate in silos as the company grows.

This issue can become a major performance barrier. Recall how the U.S. Federal Bureau of Investigation (FBI) faced significant challenges in the aftermath of the 9/11 attacks. The lack of information sharing between different divisions hindered its ability to prevent the attacks. This tragic example demonstrates how silos can have real-world consequences.

What We Can Learn from Aviation Regarding Moving Beyond Siloed Operations

The aviation industry operates with high reliability despite its massive complexity. True, we can point to the fact that airplanes are massively engineered for reliability, but let’s look beyond the machinery. The industry directly employs more than 11 million people with varying capabilities around the world. They operate everything from ticketing to airport operations, to aircraft maintenance, to luggage and food services. The fact that such a complex, decentralized, sprawling operation delivers reliable (albeit not always likable) results is a minor miracle.

The aviation industry can teach us about business process excellence in decentralized and complex setups. For instance, how has it minimized the defects that occur in handoffs from one team to another? And how does it address the organization issues of functional silos across thousands of companies?

To understand how aviation has achieved process excellence, we need to back up a bit. It’s helpful to first understand the various stages involved in improving business processes. In general, business processes achieve excellence via five discrete layers of action:

Fix non-standard processes: This is the starting point. Imagine what might happen if there were different steps for each country, or each airline, when it came to handling Air Traffic Controllers’ (ATC) control transfers. That’s the first step in improving processes.

Synchronize siloed processes: Imagine if ATC activities were standard but siloed off from other aviation processes, such as airport gate management. Handoff errors would result. This step addresses that.

Execute End-to-End (E2E) processes consistently: Assume that terminal check-in to gate management to ATC processes have been synchronized, but executional discipline is spotty. That can occur because it takes time to stabilize processes. Handoff errors may still occur.

Add robust fail-safe designs to E2E process execution: Assume that processes from terminal check-in all the way to ATC are well executed. However, if no fail-safe procedures have been designed for the rare situations where problems occur, there will be occasional blowups. That’s because while processes are efficient E2E, there’s no Unified Accountability for an employee to circumvent or fix perfect-storm-type issues.

Design roles for Unified Accountability of Outcomes: At this stage, employees are empowered both to achieve near-zero defects and to constantly evolve processes to keep up process excellence.

The aviation industry has designed its business processes for clear handoffs and accountability. For instance, there’s clear accountability for customer outcomes at each step of the passenger’s journey — the check-in agent for checking in, the gate agent for boarding, the pilot for in-flight travel and safety, the ATC for cross-airplane safety, and so on.

By contrast, business processes in most organizations still struggle with siloed accountability. Take, for instance, the order-to-cash (O2C) or the expanded quote-to-cash (QTC) business process, which runs from taking customer orders, to processing them in an I.T. system to delivering the product via logistics operations, to collecting the cash from customers. There is, on average, a 30 percent loss of efficiency in operating this across the siloed functions of sales, I.T., logistics, and finance. And that loss doesn’t account for the impact on sales growth.

A study by McKinsey specific to the business-to-business (B2B) area suggests that businesses that optimize QTC for end-to-end accountability significantly outperform peers that don’t. They grow four times versus the competition by adding more new accounts, expanding existing accounts, and retaining them at higher rates. And the opportunity only grows when country and regional organization silos are factored in.

What You Can Do to Operate Beyond Organizational Silos

The key is to drive towards clear and unified E2E accountability for a process outcome. The driver of Unified Accountability is one of the three levers of revolutionizing business operations. Here are the initial steps to get going:

1. Commission a study to determine the functional processes that could be aggregated into a centralized “shared services” organization. Assign a multifunctional team, sponsored by senior leaders, to oversee the study and formulate a recommendation.
2. Define the scope of the work by applying best-in-class principles. Candidates for newly created organization processes include those that are common across business units/markets, that are transactional in nature, and that can be “operationalized.”
3. Assign a leader to this organization and establish a leadership team to support that person. Initially, such a team can be pragmatically formed by the process owners of the work in scope (H.R., finance, I.T., etc.). This team’s deliverable is an integrated business plan, which must include minimum price and service-level commitments as well as strategies for greater value creation.
4. Migrate the process operations from the functional organizations to centralized “shared services.” We recommend doing this in stages, as opposed to a “big bang.”
5. Redesign rewards and recognition programs for employees to strengthen the delivery of E2E process outcomes.

Finally, remember that when it comes to organizational silos, the best strategy is to tear them down before they tear your company apart.

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Posted by Michael McKinney at 06:40 AM
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The Flexible Method: How to Survive and Thrive Through the Next Crisis

SOMETIMES you can see it coming. More often than not, you can’t. But you can be prepared and follow a method to futureproof your business against the next crisis.

James Burstsall, the CEO of Argonon, an independent production group, offers what he calls The Flexible Method. It is a way through the next crisis you will face. Argonon fared better during the pandemic than most of the other organizations in their industry using this method.

A crisis is a time for deepening your core values, not abandoning them. The importance of maintaining your values during a crisis is a key factor for taking your team on the difficult journey with you. In crises, winning organizations act like start-ups.

Prepare Now

The first step is to prepare. So, the time is now to think about this. Have a disaster recovery plan. [template] Develop a procedure for every contingency. Create a flexible mindset culture. Adapt. Stay aware of world events and heed the signs.

When Disaster Strikes

Always Put Your People First. Your people are everything. When disaster strikes, get them to safety—you need them healthy, aligned, and ready. Leave no one behind. “For teams to be resilient, they have to feel it is worthwhile to make the effort to be so. They are more likely to do this if they are being valued and supported in a people-focused company.”

Gather Your Generals. Gather together and empower your bravest thinkers. Listen with an open-mind and be open to radical ideas. Lead with calm and purpose—not overreacting. Make each action part of an evolving narrative towards deadlines that everybody can understand and buy into.

Communicate, Communicate, Communicate. During a crisis, people have a heightened need for good, honest communication that gives them information, guidance, helps them adjust and cope emotionally.” Be honest and transparent. That doesn’t mean spilling your guts.

Protect Your Cash. Eliminate all unnecessary expenses. Talk with debtors, creditors, suppliers, and the bank. Negotiate flexible terms. Look for hidden assets that you can repurpose.

Learn From History. Take lessons from the past to constructively plan for the future. “The experience and learnings we are still distilling will prove invaluable tools in the future.”

Hold On to Your Values. “Core values cut across all departments of your business and can unify otherwise separate entities, bringing the whole together.” They are your compass in decision-making.

Collaborate and Connect. The temptation is to baton down the hatches and wait for the storm to pass—but both experience and research from the pandemic and the 2008 financial crisis show that collaborating with others can be a path to growth during disaster.

Adapt. Be open to new ideas. Understand, too, that some people will not like some of the decisions. Act like a start-up.

Supercharge Your Creativity. When adapting is no longer enough, you are going to need an arsenal of fresh ideas. Have the confidence to innovate, think, and experiment.

Seek Help. “In a crisis, it is a positive strength to reach out for help rather than stubbornly struggle alone. It demonstrates that you are a realist and a pragmatist. Both of these positions are core tools of the Flexible Method.” Take whatever the government offers and challenge them for more. Find other backers. Seek non-financial help, such as legal, commercial, and medical expertise.

Care For Your Team’s Mental Health. Another way of putting people first. Be on the lookout for those who are struggling. Be empathetic and listen.

Mind Your Own Health. “Caring for yourself can boost your productivity, memory, focus, creativity, empathy, and decision-making—in other words, your overall effectiveness as a leader.”

Emerging From a Crisis

Set Your Future Course. Emerging from a crisis, assess the post-crisis landscape and identify new opportunities.

Rest, Reward, Review. Thank your exhausted team and encourage them to take a break. Reward them authentically for their tireless work and dedication. Assess what you did right and what you can do better next time. Things have changed, so capture the learnings and forge them into your organization’s new DNA. Then, get back to prepare for the next crisis.

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Posted by Michael McKinney at 07:14 AM
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When a Success Formula Hardens

THERE IS danger when success goes to a leader’s head. King Solomon wrote, “Pride goes before destruction and a haughty spirit before a fall.” When this happens, they are at risk for what Donald Sull calls in Revival of the Fittest, active inertia. He explains what happens:

Managers get trapped by success, a condition that I call active inertia, or management’s tendency to respond to the most disruptive changes by accelerating activities that succeeded in the past. When the world changes, in other words, they respond with more of what worked before.

Managers often equate inertia with inaction—a passive phenomenon in which organizations change more slowly than their environment or fail to change altogether, like the deer in the headlights. But that rarely happens. A better analogy is a car stuck in a rut: Managers put the petal to the metal—and dig the rut deeper. The word active highlights the reality that market leaders rarely freeze up when faced with change; rather, they escalate tried-and-true methods that prove ineffective in a changed context.

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Posted by Michael McKinney at 09:44 AM
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Generation Why: How Boomers Can Lead and Learn from Millennials and Gen Z

MUCH has been written about how the Millennial and Z generations are different, their likes and dislikes, and idiosyncrasies. In Generation Why: How Boomers Can Lead and Learn from Millennials and Gen Z, McGill University professor Karl Moore asks why. He goes behind the observable behaviors and looks at the events that shaped their worldview to better understand why they are the way they are.

Every generation has experienced pivotal events and cultural forces that have shaped their lives and how they react to life. Depression-era kids move differently in the world as they grow older than those that grew up in more prosperous times. Their worldviews are different, so they see the world through different values, expectations, and motivations. I am a Boomer, so my view regarding trust, authority, and truth, for example, is different than those generations that came after me.

The Millennial and Z generations have a Postmodern worldview states Moore. Our education has a huge impact on how we believe the world does and should work. Moore writes:

What university students are taught during pivotal years of their schooling very much influences their behaviour at work and their view of how they want to be led. Though, given their worldview, led may be too strong a word – even manage may be too strong. Perhaps it would be better to say, worked with.

To better understand the Millennial and Z generations, I believe it is helpful to look at their education and the underlying ideas that the education system taught them – that is, their Postmodern worldview. Rather than cover the whole of Postmodern thought, this book focuses on the aspects of their worldview that impact their perception of leadership and work.

The world has changed, and what many of us have been taught is no longer relevant in today’s world. The chart below illustrates some of this change.

The Millennial and Z outlook involves contemporary perspectives on four important leadership issues, which Moore examines in this book:

• knowledge and truth – who has them and who controls them
• hierarchy and its considerable decline
• the way people relate to one another
• the role of emotions in the workplace

Moore interestingly observes, “The knowledge of younger generations, to them, feels (most often, rightfully) more relevant and valuable than the “dated” understanding of the older generation. To a considerable degree, we older people are just not as valuable as older people were thirty years ago when we were starting out.”

After a fascinating look at where these new generations’ worldviews came from, Moore then offers tips on how to work more effectively with Postmoderns, such as:

Privilege all voices. Slow down and listen. “Millennials/Zers firmly believe that their story, or their personal and subjective truth, is as good as anyone else’s, regardless of their shortcomings in experience, age, or educational achievement. However, I argue that, contrary to popular belief, Millennials are not acting entitled, they are simply misunderstood. This is part of a larger characteristic of the Millennial/Z generations, which can be described as the death of meta-narratives and the rise of micro-narratives.”

Be authentic. This is a complex area that Moore explains well, incorporating a look at both constructive authenticity and existential authenticity. “It appears that “being comfortable with oneself ” and “knowing who one is” are the most relevant attributes of Postmodern authenticity.”

In the age of social media, authenticity for Millennials/Zers is characterized by the consistency and continuity between their online personas and their lives. The more congruence there is between the two, the more authentic a person will appear to be to their peers.

Create purposeful organizations and align personal and professional purpose. Nearly everyone wants to find meaning in their work. What is unique to Millennials and Gen Zers is that they were “found to be seeking purpose and meaning at such an early stage in their careers.” Millennials and Gen Zers tend to be loyal to roles or identities rather than to specific companies or organizations and thus want to feel a sense of control over their careers.

Mentor (and reverse mentoring). Millennials and Zers often crave one-to-one relationships in the form of mentors. They are “hungry for great mentors who are willing to put in the time, accept multiple mentees, and be reverse mentored.” Because of the coaching and feedback received throughout their formative years, Millennials/Zers likely view their mentors as parental figures or teachers, rather than in the traditional role of employer or boss. Millennials/Zers surround themselves with a network of coaches; many Millennials/Zers have several advisors they turn to throughout their careers, for issues both major and minor.” Be open to reverse mentoring too. “Reverse mentoring, done well, can result in better-aligned strategies with a turbulent world and more implementable strategies for the whole organization.”

Give feedback. Millennials and Zers need feedback. They depend on it. Moore explains why. Managers can use the SKS framework both to provide effective feedback: What should I stop doing? What should I keep doing? What should I start doing?

Generation Why will help you to understand not only the Millennial and Z generations but also your own. These understandings will help any leader to form a basis for mutual respect and a productive and healthy work environment.

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Posted by Michael McKinney at 09:35 AM
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7 Tips to Build Trust in Your Negotiations

TRUST is a cornerstone of effective negotiations. From trusting yourself to building trust with the other party, trust itself improves long-term outcomes, relationships, and buy-in. Yet we often don’t give it the attention it deserves.

We rarely include intentional trust-building as part of our preparation work for negotiations, and this is a mistake. Failing to build trust adversely impacts your ability to influence and persuade other people. In other words, it undermines your effectiveness as a negotiator.

What is trust, exactly?

For a long time, experts couldn’t agree on how to define trust, let alone how to build it. There were widely divergent opinions across multiple disciplines on the causes of trust, its nature, and its impact. Everyone agreed it was important, but nobody agreed on why or how.

A 1995 Academy of Management Review journal article, “An Integrative Model of Organizational Trust,” is often cited for its breakdown of the factors of trustworthiness. It suggests three factors determine whether we find someone trustworthy:

Ability: Do I believe the person has the ability to deliver on their promises?
Benevolence: Is the person inclined or motivated to do right by me?
Integrity: Does the person share values and principles that are acceptable to me?

Drawing on this model over a decade later, Stephen M. R. Covey broke the concept of trust into two components: character and competence. Character reflects integrity and intent. Competence draws on capabilities and results.

Would you pass the “trust test” based on these qualities? It’s worth asking yourself this question in advance of every negotiation.

Women Have a Trust Advantage

Surprisingly, women have an edge on the trust front. Justified or not, people tend to trust women more. But why?

Perhaps it’s because women aren’t regarded as threats, given their smaller stature and historical lack of power in business and politics. Perhaps it’s because women are more open with their emotions, which is perceived as transparency and candor. Or maybe it’s the perception that women are more likely to ensure everyone’s voice is heard. Someone suggested to me recently that it’s because women are thought of first as mothers and nurturers.

Whatever the rationale, it translates to increased innate trust, a definite asset in negotiations.

Tips For Building Trust

In our fast-paced world, decisions are made quickly. Our speedy determinations are often based on knee-jerk check-ins about whether we trust the other party—or not.

So, what can you do to establish this trust?

1. Trust yourself

Your first and most important negotiation tool is your own mindset. Building trust with others is hard if you don’t trust yourself. You need to respect yourself to attract the respect of others.

Where should you start? Explore the limiting beliefs that have held you back, challenge your inner critic, seek internal versus external validation, be honest with yourself, and celebrate your value.

2. Maintain your reputation

Losing trust is easier than building it, and it can take a considerable investment to regain trust once it’s lost. Managing your reputation is key. Being known as someone who is untrustworthy can be the kiss of death in negotiations. So always guard your reputation.

3. Give respect

Respect and trust are closely connected. Always treat people with dignity and respect if you expect the same. Doing so builds trust.

4. Bring empathy to the table

Be sure to practice active listening. Seek to truly understand the position and needs of the other party. This will lower their defenses and increase their trust.

5. Speak clearly

When I say, “Speak clearly,” I’m not talking about diction (although that doesn’t hurt) but rather about being clear about your meaning. Say what you mean and mean what you say. Be transparent and open when possible.

Also, speak the “language’” of the other party, using terminology that speaks to them. As an attorney, I learned long ago to master the specialized lingo of my clients. Imagine representing the trucking industry as an attorney without knowing the difference between a truck tractor and a flatbed. You’d lose the client’s trust instantly. The same applies in every sector and industry.

6. Seek mutual gains

Approach negotiations with the goal of finding the highest good for all. Don’t just seek to have your needs met; actively look for creative opportunities to find mutually beneficial solutions and outcomes.

As you do, be prepared to make concessions as a stepping stone to building trust. But don’t randomly offer up items as a compromise. Instead, be intentional about it. Strategize in advance so you can offer up concessions that will be of value to the other side but are easy gives for you. Name your concessions as you give them. Don’t expect the other party to recognize the concession you’ve made or its value.

7. Be clear about your expectations

When identifying your needs in a negotiation—which comes after listening to the other party’s demands—don’t be vague or clever. Be clear. Be prepared to explain your needs.

It’s surprising how often we misperceive and attribute false motivations to the other party. You can avoid this problem by offering your explanations in advance to assist in their understanding of your perspective. Communication builds trust.

Trust Is a Process

Once we master trusting ourselves, trust involves a willingness to rely on someone else. There’s a vulnerability inherent in the giving of it, and our past hurts often make this challenging. Exploring how to give trust allows us to become more trustworthy. It takes intentional practice—and it’s worth it.

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Posted by Michael McKinney at 06:59 AM
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Winning the Relay Race of Family Wealth Transfer

TOO MANY grantors feel that just preparing the documents for the passing on of the wealth — such as setting up a trust — is the end of the process. But it’s really just the beginning because their inheritors need to be prepared to deal with the wealth.

Grantors need to share what they’ve learned about managing wealth. If they don’t, it’s like putting someone into a relay race with no coaching or training. They’ll be paralyzed, or they’ll stumble and fall, or they’ll be pushed off the track.

The way I like to describe wealth management and transfer is that it’s like running a relay race. This metaphor captures the process and the spirit in which we need to take on that process.

Looking at the relay race historically, the first runner is the one who initially created the family wealth. That may have happened some time ago in your family, or you may be that first runner. The baton represents the wealth itself. The other runners are the generations to whom that wealth will be passed.

If you’ve ever watched relay races, you know that passing the baton is often the trickiest part. Many of them get dropped, making it impossible for the team to win the race. But even if the passing of the baton is smooth, each runner must know how to make the most of their strengths and be passionate about how to run the race in order to advance the baton as successfully as possible. When you or anyone else in your family is running their leg of the wealth race — working with the wealth they’ve inherited — they need to know their strengths and be passionate about how they’re using the opportunity that this wealth provides.

In order to run a successful race, the teammates must help and support one another. The veteran runners must share their knowledge and provide support for the rookies. The rookies must be allowed to figure out what kind of approach to running their leg of the race will motivate and excite them and will keep them going when the running gets difficult.

Usually, teams need a coach to help them make the most of their potential. It’s the same way with managing and passing on wealth — the experienced wealth managers in the family, and the coach, must educate the inexperienced members of the family. And they must allow those rookies to figure out how they can best employ the wealth being passed on to them, not dictate to them how to do that.

So, that’s the overall metaphor for wealth management and transfer that I use, and now we’ll look at each aspect of the race more closely.

When you’re handed the baton to run your leg, you are a steward of your family’s wealth management. You have the opportunity to use, develop, and hopefully increase that wealth. Just like a runner needs coaching and training to deal with the challenges that come up during a relay race — weather conditions, the state of the track, the behavior of opponents — you will require support and guidance to succeed at handling your inherited wealth, either from experienced people from within your family or from professional family advisor outside of it, or both.

But, at the end of the day, it’s your responsibility — and your opportunity — to run that leg of the race in a way that’s personally fulfilling for you. At the same time, you should always keep in mind that the baton, your wealth, isn’t just yours; you’re part of a team — your family — and the baton will be passed on to others. So make the most of your time with that baton!

By inheriting wealth, you’re given a lead in life, and you’re also given the opportunity to extend that lead for the next generation. How do you measure that lead? Dollars and cents? Impact on society? Successful perpetuation of the family legacy? It’s usually some of all of these things, but when you get to the end of running your leg of the race, you’re meant to transition to helping those who come after you to run the next leg successfully, to optimize their performance, to help them think through and adjust to any adverse conditions they might encounter.

In the wealth management and transfer process, if someone drops the baton, gets nudged off the track, or gets tripped up, you can be there to support them — the way a veteran athlete helps a rookie — by saying things such as, “Look, you’re not using the best technique” or “Hey, I can show you how you lost your lead there” or “There are ways to ensure you don’t get nudged off track.” You can talk to them and help them along. (This is something the wealth management “coach” can do, too.)

Veterans of dealing with wealth can share what they’ve experienced with the next generation, provide perspective, help them develop their own plan, and monitor their progress. You can share both the responsibility and the success. Because, in the end, what you’re all aiming for is to get the whole family to the top of the podium, shaking hands and celebrating their victory.

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Posted by Michael McKinney at 07:15 AM
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A Cure for the Common Company

IT SHOULD go without saying that the health and well-being of employees have a direct impact on the success of an organization. Yet, it is unusual for an organization to put it on the high-priority list along with profitability and customer service.

The solution is to build it into the culture of the organization. Willpower alone won’t do it. Chief Medical Director of Employee Health and Well-Being at John Hopkins Medicine, Richard Safeer, provides six building blocks to do that in A Cure for the Common Company.

1. Shared Values

Including employees through conversation or, in most cases, online surveys is a good way to know the values are shared. “Don’t try to sweep discontent under the rug. As a manger or leader, if you interact with an employee who doesn’t care for the shared values of the organization, try to help them find their personal connection.”

The challenge, of course, is getting a refined set of values and definition of well-being with the buy-in of dozens, hundreds, or thousands of employees, all of whom have their own values and cultures they bring to work with them every day.

2. Social Climate

“Leaders can promote a positive social climate by building a sense of community, fostering positive attitudes, and creating a shared vision.” Questions to ask include, “What process does your organization have in place to help new employees feel like they are part of the team right away?” “What opportunities do you create for employees to socialize?” “What volunteering opportunities has the organization provided for your employees?”

3. Norms

Norms are the way the organization does what it does—behaviors that we do without much thought. “In organizations around the world, norms that run counter to what is healthy for most people are rampant.” It’s not just free donuts but work hours, after-hour emails, and eating in front of your computer.

“Norms can be identified, and they can be changed, and when we make the effort, we can have a profound positive impact on people, teams, and organizations.” Knowing the impact of soda on the health of the employees, Safeer began tackling that at John Hopkins:

I took a stroll through our buildings. Sure enough, there was soda everywhere: the cafeteria, vending machines, gift shops. It was served at our meetings. Our culture embraced unhealthy beverages. The widespread presence of soda, along with visual cues, product placement, and financial incentive (at the time, a soda cost less than the same size bottle of water) were all contributing to a culture of unhealthy nutrition and making it easier for our workforce to accept that drinking soda was the norm.

4. Culture Connection Points

A cultural connection point is where the design of the workplace acts upon our well-being. “Cultural connection point can influence healthy behaviors and attitude, or they can be complicit in unhealthy behaviors and attitudes.” Connection points like the green leaf symbol tagged to healthy foods, choices placed at eye-level, fitness classes, rewards and recognition all help to support healthy life choices.

5. Peer Support

Willpower is not a good strategy. Peers can provide support and help to build subcultures that encourage healthy choices. “Peer support is unique in that it is based on a trusted relationship, is ongoing, and is grounded in a familiarity with day-to-day circumstances.”

6. Leadership Engagement

Well-Being needs to be on the leadership agenda along with everything else like finance and customer service. Participate in well-being initiatives. “Well-being is not an expense, it is an investment, and without it, you’ll end up with ‘No People, No Profit.’”

Leaders need to eliminate organizational speed-bumps. Safeer points out nine speed-bumps like all talk, no action, a lack of accountability, losing focus, and moving too fast.

The building blocks are pretty straightforward, but part of the challenge is dealing with all of the various subcultures that exist within the organization. While you are trying to create a culture pointing in one direction, there may be subcultures that point its members in a completely different direction, like that group that smokes behind the building.

Subcultures do not have to be solely formed around work-related elements. They can be formed around common interests of a group, such as jogging or sharing the same religious beliefs.

Subcultures often have a more powerful influence on their members than the broader culture because the behaviors, attitudes, and beliefs of the members of a subculture are more deeply intertwined with each other.

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Posted by Michael McKinney at 02:08 PM
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Culture is the Way: 5 Steps to Building a World-Class Culture

YOU CAN CHANGE the results your organization is getting by changing its culture. And every organization has a culture whether it is by design or by default. “Whether an organization has a world-class culture or a toxic one, its future depends on how much attention and focus it puts on growing its culture,” writes Matt Mayberry, the author of Culture is the Way: How Leaders at Every Level Build an Organization for Speed, Impact, and Excellence.

Culture serves as the internal compass for an organization’s fundamental beliefs, how the organization behaves daily, and its level of market performance.

To begin, let’s look at the five most common roadblocks that stop us in our pursuit of cultural excellence that Mayberry addresses:

1. Lukewarm leadership buy-in. “Most senior leadership teams consist of accomplished leaders with a wealth of experience, and the last thing the majority of them will want to do is shift their leadership style or change how they have done things for the past ten to twenty years.”

2. All slogans and no action. “Words don’t build culture or change culture by themselves. It takes action. Culture is not about turning values into behaviors. It’s about turning values into repeatable behaviors, into actions that become daily habits that are shared across the organization.”

3. Temptation of instant gratification. “When we have a strong desire for something, our patience is severely tested. Any goal worth achieving, whether it’s a personal goal, a professional aspiration, or building a great workplace culture, requires a delicate balance of tenacity and extraordinary patience.”

4. Distortion and distraction. Just throwing ideas around and seeing what sticks and what doesn’t isn’t going to get you any closer to a solution, and it could actually do more harm than good. You must use caution when rushing to adopt and implement an idea that you read about.”

5. Lack of cascading change. There is no end date. It is an ongoing commitment. “Being interested is not the same as action taken. Being interested in creating a great culture is exactly that. Interest. It will never progress unless consistent action is taken.”

Here is an overview of his five-step process:

Step One: Define Your Culture

You must be ruthlessly clear about who you are as an organization. The culture has to be clearly defined so that everyone knows what you mean when we say, “our culture is.” Everyone must see the culture in the same way. “Great cultures are defined cultures. This means that every leader, manager, and employee can describe the culture and what it stands for, and the descriptions will be very similar to a large extent.”

Step Two: Discovery Through Collaboration and Inspiration

“Changing culture begins with changing one person’s mindset and behavior at a time. And changing mindsets and behaviors, especially at scale, necessitates making people feel like they are a vital part of the process rather than relying on old engagement methods.” Take a bottom-up approach. “Culture needs to be top-down directed but then bottom-up created.”

Step Three: Launch, Cascade, and Embed

If you want to drive culture change, you need a playbook. That playbook should ensure management team alignment, have an official launch date, a communication strategy, a plan to cascade the message throughout the organization, create a behavioral manifesto, and a plan for feedback. “You must convey a moving and compelling message that sends shockwaves throughout the company.”

Step Four: Drive Long-Term Impact

Creating a sustainable culture “demands unwavering fanaticism to the ongoing process and journey.” Building a culture requires consistent focus for the long term. Mayberry’s Five-Step Fanatical Framework helps you do just that. It entails continuous fanatical attention, development, and nurturing, fanatical focus on the vital areas of improvement, fanatical about alignment, fanatical about follow-through, and fanatical about the why.

Step Five: Leaders Must Blaze the Trail

How well the organization’s leaders practice what they preach will determine the long-term success of the desired culture. Nothing makes up for poor leadership. Leaders should coach for excellence. “The best leaders who get the most out of their teams identify as coaches rather than managers or leaders.”

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Posted by Michael McKinney at 07:59 AM
Permalink | Comments (0) | Culture , General Business , Human Resources

Me vs. We: 3 Strategies for Negotiating in Relationships

NEGOTIATIONS can take on a life of their own. That’s because you plan how you’ll negotiate in isolation, yet you negotiate within a relationship—whether that relationship is professional or personal. Consciously deciding how you’ll approach the negotiation is a crucial part of your preparation. This might sound silly or unnecessary, but clearly stating your intentions to yourself will influence how successful the negotiation will be.

Depending on your tone, the negotiation’s context, and how you frame it, the interaction will either be competitive or collaborative.

Is your stance competitive or collaborative?

If you go into a negotiation with the intention of winning without regard for the other party, you’ll be negotiating competitively. Your communication will be limited because you don’t want to give an advantage to the other side by providing information; your actions will continuously favor your side, your flexibility in being able to shift from your positions to needs will diminish, and you won’t be building trust. All of this will be influenced by your competitive orientation. You’ll win, and the other party will lose.

On the other hand, if you have the intention of winning with the other party, you’ll have a collaborative framing of the negotiation. You’ll encourage open communication, share information to strengthen the other party, work on building trust, and take actions that will bring you closer to arriving at mutually beneficial outcomes. This approach will set the foundation for a healthy, long-term negotiating relationship.

Creating healthier negotiations

You may be wondering: Whose responsibility is it to create these healthier and mutually beneficial negotiations? The short answer is that we all hold some responsibility, but we may not know it.

For example, let’s say you’re negotiating with a senior work colleague about an upcoming deadline. You may believe you don’t have sufficient power in the relationship to do anything but accommodate your colleague’s request. But I would counter that notion; while you may not hold all the power to make the final decision, there are ways you can influence it.

Regardless of your initial intentions and whether the negotiation is going the way you planned, you can still influence the next steps and the direction you’d like the negotiation to take.

For instance, if your colleague demands, “I need this on my desk by week’s end,” you can still respond with a question to find out more information. You might say, “I hear what you’re saying about wanting the results by the end of the week. I’d like to know more about what’s driving the quick turnaround and how I can make the necessary adjustments to accommodate you.”

This technique slows down the negotiation’s pace and keeps you feeling confident that you still have some control over the process and outcomes.

If you’re feeling pressured to produce results before you can comfortably deliver them, you’ll want to know more about the urgency of the deadline. It could be that some of the results are needed before others, so you can split up the work and focus on the more immediate needs first and deliver the remainder afterward.

These actions allow you to be an active participant in the negotiation and parse out the critical information from the rest. Your willingness to hear the other party, understand their needs and make adjustments make you their negotiation partner, not an adversary.

Try these three negotiation strategies

Here are three tips to consider when emphasizing the “we” in your negotiating partnership:

1. Identify the relationship you want to have with your negotiating partner, both for this negotiation and going forward. Too often, we focus on our immediate needs and what we want from a specific negotiation without considering the long-term impact. Taking “the long view” allows you to build better relationships while generating mutually beneficial outcomes.
2. Listen to your negotiating partner—and watch for nonverbal cues. Listen for the expressed thoughts and watch for matching nonverbal gestures, including facial expressions, bodily gestures, and tone of voice. Check that everything is in alignment. If not, probe further to determine the real needs that may not have been expressed verbally.
3. Take the initiative. Make offers in response to overtly and covertly expressed needs. These offers (or modifications of previous offers) should directly satisfy the other party’s needs, and your generous gesture will be seen in that light.

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Posted by Michael McKinney at 07:27 AM
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How Our Current Office Shock Can Lead to a Climate-Positive “Officeverse”

MANY OFFICES that were shuttered during the COVID-19 pandemic had inherent problems even before the crisis. Traditional offices were often unfair, uncomfortable, uncreative, and unproductive. COVID-19 forced millions of people to work and live in ways they’d never attempted before, leading to a state of “office shock.” Fixed became fluid. Unexamined assumptions about offices and office work opened into probing questions that demanded careful thought. It took a global pandemic to shake open executive minds to the possibility of better ways of doing office work.

Further, many traditional offices were climate-negative, while some were climate hostile. But overall, climate impacts improved during the shake-up with the promise of much more to come.

Offices and officing could be an important catalyst for positive climate choices. Buildings and their construction are among the largest contributors to global resource use. In considering the opportunity offices can play in changing the narrative for a better future, legendary architect Frank Duffy offered a stark indictment of traditional offices:

The Taylorist office building has been a perfect machine for delivering environmental degradation because it’s so completely the product of supply-side thinking, which overrides user interests, ignores the public good and takes no account of collateral damage.

Why do we work in offices at all? During COVID-19 shutdowns a lot of productive office work got done without offices. Hybrid work and flexibility are now normalized, but the future of work is up for grabs. Office shock will continue for many years to come. And that can be an opportunity for climate-positive officing.

COVID-19, along with the internet, were catalysts for office shock, which has revealed impossible futures for offices and officing that are now possible. An emerging “officeverse” is shaping new models in an ever-changing mix of work, place, and time options for living and working.

Climate-Positive Offices

In the corporate real estate industry, Duffy argued that the root cause of climate abuse by offices is the office supply chain and its incentives. Facility managers should be rewarded for maintaining highly sustainable environments, not merely reducing costs. Design and construction professionals should be rewarded for making the most imaginative and efficient use of existing spaces, rather than for new building. Finance and development providers should be rewarded for sustainably managing what exists already, rather than pursuing new ventures.

We can all do much to improve the regenerative capabilities of offices. Critical choices must be made to change consumption, produce with circularity, and regenerate the planet. Our current state of office shock could be a much-needed spark for the choices about our future that could rein in impending disasters. Office shock provides an opportunity to reverse the many unsuccessful attempts at doing the right thing. At the same time, the window of opportunity is closing quickly.

The UN Secretary-General, António Guterres, reacted to the Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report published on April 4, 2022, saying the report reveals “a litany of broken climate promises” by governments and businesses. He even accused many of lying when claiming to be on track to limiting future heating to 1.5°C above pre-industrial levels. In a strongly worded rebuke, Guterres said: “It is a file of shame, cataloguing the empty pledges that put us firmly on track towards an unlivable world.”

While technical solutions are necessary, they are insufficient to bring about a change in behavior. To have an effect, we will need to change minds and systems. A climate-positive future will need to incorporate social, economic, political, and cultural changes to address this urgent need and provide a way to examine the span of choices from net-zero, where people and offices don’t contribute to the emission of greenhouse gases, to Regenerative, where active steps can be taken to cultivate and renew the resources of our planet. Finding the harmony of choices that will enable us to fight in this battle for survival is critical to a better future.

A sustainable future requires making choices today to make a climate-positive impact. The office can be the place where organizations converge on a shared purpose of sustainability.

Here are some ideas to adopt for a climate-positive officeverse:

1. Employ a new approach to product acquisition. To take advantage of the opportunity of office shock, begin to view product acquisition like pets — something you own for its lifetime. Just as any person should carefully consider the act of acquiring a pet and its long-term consequences, we will need to start thinking the same way for every product we acquire. Transferring ownership of goods must include a responsibility to resell, recycle, or even repurpose.
2. Think of “office” as more a verb than a noun. As a noun, office denotes office places, or buildings. As a verb, it describes work processes and social interactions to get work done. Changing the meaning of office to a verb aligns with the officeverse — the future anytime/anyplace world of work that better satisfies its individual, organizational, and community purpose.
3. Prototype ways to improve the climate impact of officing. We can now do most office work without offices. Ask yourself where, when, how, and even why you work as you imagine climate-positive officing. Can you make more climate-positive choices for working and living?
4. Move to a more circular business model. In working toward a sustainable future, we need to make a strategic choice: control the linearity of the value chain or move toward a more circular business model. The latter contains a business model choice: produce only when necessary, and offer to repair, recover, recycle, or — even better — reuse the basic materials.

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Posted by Michael McKinney at 08:22 AM
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The Ecosystem Economy

IN THE BEGINNING, as civilizations grew and became more advanced, work was organized around specialized lines of work. These sectors of work, like the mining, textile, or glassmaking industries, thrived with their own supply chains, expertise, and proprietary distribution. And this is basically how we think of business today. But that is changing.

McKinsey partners Venkat Atluri and Miklós Dietz illuminate that change in The Ecosystem Economy. The borders between sectors are dissolving. Sectors like construction, real estate, automotive manufacturing, financial services, and health care have been thought of as distinct categories, each operating in its own spheres. Today we see businesses organizing “into new, more dynamic configurations, centered not on the way things have always been done, but on people’s needs.”

Businesses form ecosystems by collaborating with one another—by sharing assets, information, and resources—and ultimately creating value beyond what would have been possible for each of them to achieve individually.

The term business ecosystem has been used in the past generally to refer to relationships between one organization and its clients. The ecosystem economy that the authors refer to here goes much deeper than that. More like alliances between organizations that pull together the steps in a customer’s journey.

Even if each step in that journey is fulfilled or managed by a different company, the ecosystem integrates them into a single platform, so that from the customer’s perspective, it’s all one experience, one journey. In other words, if an ecosystem can help consumers through the most arduous step on their journey, they will be more likely to trust the broader ecosystem with the rest of their needs.

Tencent, Apple, and Google are all examples of economic ecosystems.

Ecosystems are reshaping the world around us. The question is, how do we adapt and participate in this ecosystem economy?

The two questions we need to be asking first are: Where will you compete now? And what should you do to evolve your value proposition? To answer these questions, the authors say, “you will need to vastly expand your scope—and shift the nature of your planning. You need to fundamentally rethink how you define your customers’ needs, your customer base, your industry, your proposition, and the competitive landscape.” The book provides examples of how to begin to work through this. As you do this, other questions begin to take shape, like, will you build the new ecosystem yourself? Will you participate in someone else’s ecosystem? Or a little of both?

Then you need to transform your organization from within. You will need to rethink your approach to your organizing and operating model, talent, performance management, the underlying culture, and supporting infrastructure.

They boil the lessons of their ecosystem playbook processes and recommendations down to ten principles which I’ll just list here:

1. Start with the customer and end with the customer
2. Choose your role wisely
3. Think and act in platforms, both physical and digital
4. Go all in—set up right and make ecosystems a top priority for you and your leadership team
5. Identify and leverage control points
6. Don’t confuse vendor-customer relationships with ecosystems
7. Be clear-eyed about where you need vertical integration and where you need ecosystems
8. Constantly reevaluate your position
9. Avoid incrementalism
10. Put value creation over profits

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Posted by Michael McKinney at 07:39 AM
Permalink | Comments (0) | General Business , Marketing

Stop Letting the Latest Trend Dictate How You Run Your Company

QUIET QUITTING. Quiet firing. Quiet thriving. What will be the next viral workplace term?

Today’s businesses aren’t plagued by these “new” movements—except for the reactionary movement of buying into the latest buzzword and letting it affect their workplace culture.

As talked about in this Business Insider article, these trends have caused panic among leaders in all industries, who are now looking to combat these “new” issues, and consultants are right there with them, offering all sorts of “solutions.” A quick search on LinkedIn will bring you to the pages of coaches and consultants who claim to solve “quiet quitting,” using the keyword to garner clients.

The truth: These aren’t new problems. These are age-old issues with trendy, new names. “Quiet quitting” is a rebrand of employee disengagement, describing workers who choose to coast through their work hours instead of putting in the effort. “Quiet firing” came about in response to it, describing the passive-aggressive behavior of managers who withhold opportunities from quiet-quitters instead of firing them altogether.

The list of new terms goes on and on, but the point is that while these problems can’t be ignored, they aren’t new trends. There’s one common denominator behind them:

The majority of today’s organizations aren’t talent-centric.

If a company puts its talent first in its strategy and decision-making, these problems won’t arise in the first place.

THE “WHY” BEHIND THE TRENDS

Rather than looking to protect your company from the latest viral movement, look at why your employees are disgruntled, disengaged, or quitting in the first place. Chances are, it’s for one of the following reasons: They don’t feel connected to the vision of the business, they don’t feel heard or appreciated, there’s a lack of communication, or there’s a lack of opportunity for growth.

The simplest way to ensure these needs are met is to center your company around your employees.

START AT THE TOP

Asking questions is the best way to start changing your company. Where are your company’s decisions primarily being made? Usually, they’re being made within your executive team. So, when thinking about your employees and talent strategies, that’s where you must start: at the top.

Ask each person on your executive team what the vision is for your company. Then prepare to be surprised: Your CEO, CFO, and COO may very well give different answers. When your executives have different visions, you have a problem.

Multiple visions make for stagnant companies, with each member of your team rowing toward a different destination. There’s no way to reach a goal when everyone is rowing out of sync. How do you work for a company where your leaders each want to achieve something different? You don’t. This is what leads to employee turnover.

Company leaders and managers must be able to communicate the same vision. It sounds minute, but this one statement sets the tone for all subsequent actions.

When your leaders are aligned, your talent will hum at the same frequency, and you’ll notice more engagement and connection to the greater purpose of your business. When your talent doesn’t know the company’s vision in the first place, disconnection can easily become the norm.

VIEW FEEDBACK AS A PLUS

As a business committed to focusing on your talent, you must commit to hearing from employees. Being talent-centric isn’t about posting “we put employees first” on your website or on a placard on an office wall; it’s about making time to hear from your employees and truly listening.

I call this a culture of feedback. This, too, starts with the executive team. Those in leadership positions set the tone for the entire organization, so everyone must openly show their commitment to wanting feedback from any employee and also giving their own. Feedback must be offered without fear of repercussions. Open your schedule—and your team’s schedules—to allow one-on-one meetings with any worker.

Listening to your staff will establish trust among peers, managers, and higher-ups, which leads to loyalty and engagement. Plus, these one-on-one meetings provide a great time to check in with employees and ask what they need, what their goals are, and how you can help them reach them. Maybe all they need is a mental health day or advice on a new project. By having proactive conversations, you’ll prevent disengagement on their end.

COMMUNICATE EXPECTATIONS

Putting your talent first starts at the very beginning: the interview process. Stay true to the position you’re offering. Don’t embellish or leave out significant (or unsavory) duties the job requires. Most importantly, don’t downgrade the hours needed for the position.

Imagine you’ve accepted a 10-hour-per-week position. After the first month, you realize you’ve been working 30 hours to keep up with the workload. If there’s any way to cause an employee to disengage at work, this is it. Be honest from the very first conversation. It will ultimately lead you to weed out workers who don’t fit your expectations.

IT’S TIME TO REFOCUS

It’s time to look within—and not outside of—your organization for solutions to your problems. Once you take the steps to refocus your company on the people within it, these problems will start to fade.

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Posted by Michael McKinney at 07:31 AM
Permalink | Comments (0) | General Business

It’s Not TV: HBO

MEDIA reporting veterans Felix Gillette and John Koblin trace the history of HBO’s humble launch on November 8, 1972, with “some 375 subscribers,” to the challenges it faces today in an industry they essentially created in It’s Not TV: The Spectacular Rise, Revolution, and Future of HBO.

It is both a cultural history and an engaging organizational story full of drama, industry politics, and changing social mores. Below are just a few excerpts that create food for thought:

❧ Michael Fuchs: If we’re going to establish a character in this business, it’s got to be through original programming.

❧ Michael Fuchs: There’s no modern Dickens. So, I sent a note out and said, “let us be Dickens,” let us look at contemporary society like no one else in the country.

❧ Their mission, in short, was to create quality noise.

❧ The quickest way to go out of business in the internet age, they believed, was to make decisions based on your own business, preferences, political beliefs, desires, and tastes. They vowed to follow the data wherever it took them.

❧ On HBO in the mid-2000s: It just felt like there were a bunch of people who were trying to manage for retirement. Let’s not rock the boat.

❧ 2008: It was a very comfortable company. Everything in the offices is first class. There’s a gym. There’s a cafeteria. There’s an on-site acupuncturist, an on-site tailor, and an on-site masseuse. That creates a certain complacency.

❧ Great television came only from one place. From listening to artists and supporting their instincts and visions zealously. The thing about testing is it tells you about the past, not what the future is. What HBO knew how to do was to find the thing nobody was looking for and turn it into something everybody thought they wanted all along.

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Posted by Michael McKinney at 07:46 AM
Permalink | Comments (0) | General Business

7 Impactful Practices for Women Navigating Leadership

ARE you thriving as a leader? Arrive And Thrive: 7 Impactful Practices for Women Navigating Leadership is written by three successful leaders, Janet Foutty, Lynn Perry Wooten, and Susan MacKenty Brady. Together they offer seven key practices to thrive as a leader.

Practice 1: Invest in Your Best Self

This practice boils down to knowing yourself and is the foundational practice. When you know yourself—strengths and weaknesses—you can learn to lead from your best self. It really isn’t about loving yourself but having a grip on reality regarding your strengths and weaknesses and how they affect your leadership. Or how other people see you and where you might need to improve. Nevertheless, as the authors say, your greatest room for growth is in the areas of your greatest strengths. You want the bulk of your work to draw on your strengths, although not all of your work will.

When we get kicked out of our best self (our flow) into any number of less productive places, it’s usually because something happened.

Whatever the trigger, the occurrence kicks us out of our flow. What we think and feel drives what we say and do, so we need to push “pause” before taking too much action when we aren’t coming from our best self.

This is when practice four comes into play—pausing to reflect.

The reason you must practice mindfulness (noticing) and then pause as quickly as possible (other than all of the consequences for you and your relationships if you don’t) is because the best part of you just got hijacked by your own brain. These moments can turn into a lifetime of anger and fear-based psychological warfare, or these moments can turn into opportunities to practice compassion with self and others and ultimately leave you feeling at peace. War won’t get you back to your best self. Love will. You are in the driver’s seat.

Practice 2: Embrace Authenticity

Bring your whole self to work. “Being authentic self doesn’t mean we eschew filters and boundaries in our self-expression. It means we approach any challenge or opportunity from our best and most transparent self.”

Expect that discovering and embracing your authentic self will feel beautiful and smooth only to a point—until you find yourself confronted with any number of obstacles that may result in:

• Being unable to please everyone
• Causing conflict or disagreement with others
• Causing disappointment among someone or a group
• Taking a different view or decision knowing others won’t approve or will harbor judgment
• Feelings of vulnerability, fear, and doubt

Practice 3: Cultivate Courage

Commit to action. The practice of courage will enable you to overcome setbacks and lead more powerfully.

Cultivating personal courage requires you to acknowledge what you don’t know, ask for help, and act despite risk of failure. All three actions are likely to invite feelings of discomfort and vulnerability.

Practice 4: Foster Resilience

“Resilience is doing well when you shouldn’t be doing well,” says the executive director of the Global Center for Resiliency, Amit Sood. It requires adaptability. The authors suggest becoming a positive deviant—that person who can find a better and more successful solution to the problem even though they have the same resources as the rest of the group.

Fostering resilience means proactively preparing for the often unexpected twists and turns that life brings, and rising up through challenges stronger and wiser. Resilience is the ability to bounce back and adapt. With every bounce back, you become a better version of yourself.

Practice 5: Inspire a Bold Vision

Inspiring a bold vision begins by noticing. Discovering what needs to change and then taking steps to make it happen.

A network for building a vision is not incidental. The offering of this practice builds down to believing in yourself and trusting your judgment as you enroll others, organize a path that will reach the desired destination, and be the one who harnesses the energy of others to achieve it.

Practice 6: Create a Healthy Team Environment

This practice is about personifying your organization’s values while creating a supportive, collaborative, and healthy environment. Leading from your best self, this practice is about getting others to lead from their best selves.

Every individual brings something unique and powerful to the team, and conversely, every induvial retains areas where they are just not strong. Further, it is up to you (the leader) to work with the individual to help them know how they naturally excel, where they need help from teammates, and what shared goals or purpose they’re all using a strengths-based approach to achieve. Specifically, we suggest you use a strengths-based approach to intentionally promote effective delegation, successful partnerships, and deeper collaboration, among other outcomes.

Practice 7: Lead Inclusively

Being an inclusive leader means modeling it for others, knowing yourself, understanding your biases, and supporting others.

As an inclusive leader, you can focus on what you do best and partner with others who are also bringing their best to the table. Together, you will discover more creative, compelling solutions, and you’ll do it from an approach that is much more sustainable. Inclusive leadership means going from the “me” to the “we” and creates a whole that is greater than the sum of its parts.

All of these practices work to support each of the other ones. Although written specifically to women and for women, Arrive And Thrive offers valuable advice to anyone wishing to overcome these common obstacles and thrive in and out of the workplace. As Indra Nooyi writes in the book’s foreword, “the themes explored in this book, when viewed all together, wield immense power in helping anyone thrive in a leadership position.”

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Posted by Michael McKinney at 08:18 AM
Permalink | Comments (0) | General Business

Leadership Agility

WHY do you think agility is a term used when talking about successful leadership? Is it because you will need to make decisions and act quickly as a leader? Is it to keep up with the ever-changing work environment we see these days? Is it because you need to be able to understand all sides fast and decide with only what you have? The reality is the answer is all of the above.

Leadership agility is your ability to move, think, understand, act, and decide fast as a leader. You have to know your workspace, identify motivations and values that drive not only you and the organization, but your team, maximize creativity, and transition your leadership style and team to a self-organized system.

Assess Your Workspace

As leaders and managers, we need leadership agility to help us understand the needs of the organization and the needs of all our employees. In order to do so, you have to know the ins and outs of your workspace. Who is the go-to employee people rely on for information? Who acts fast and has a “let’s get it done now” attitude? Who steps back and asks all the right questions? Who can you count on for a creative touch?

Getting to know your workspace is more than knowing the layout of your office and the chain of command to the top – it’s also about identifying talent and using individual skills to yield best results.

If you need a catchy flyer created, and an employee in Education Services happens to be great a photoshop and creating copy, you may want to ask that person to help, even if it’s not part of their job description. You have a prospect who wants a deep dive of your sales pitch and the products and services you sell, and the Business Analyst on the product development team can explain the intricacies of the product without being too technical, ask that person to present to the potential client.

You may have people who do not want to work outside of their job description, and that’s part of getting to know your workspace. People often can give you more than what they signed up.

Identify the Motivations and Values

While assessing your workspace, it is important to figure out what motivates your team. Is your team motivated by their commission checks? Are your employees motivated by collaboration with other departments? Is your team motivated by paid time off / vacation days?

Whatever it is, figure it out and use it to get everyone’s blood flowing. If you are able to offer additional vacation days to the person that presents the best outcomes for a project, do it. If you can do quarterly commission check additions that help your sales team compete for the highest revenue for the quarter, do it. If you can get other departments to work together to increase the productivity and attention given to a project, do it.

When your employees see that you are trying to help them grow and push them to be better versions of themselves, you will see results.

Maximize Creativity

Leaders tend to have creative minds, and creativity is not a one-size-fits-all term. Some people are artistically creative, some are organizationally creative, and some are creative with their problem-solving. Maximize yours. Put your creativity on display. Lead by example.

If your employees see you using your creativity, showing that “no question is a stupid question” and that you’re thinking outside the box, they will more than likely be less afraid to put their ideas idea out there.

It’s all about leading by example.

Transition to a Self-Organized System

A strong, agile leader is organized. That leader will then share their organizational knowledge with others to create a system.

A self-organized system is one that does not depend on or wait for a manager to assign work or give instruction. This is something extremely important because it enables the team to find their own work and manage their timelines and responsibilities with minimal handholding.

Transition your leadership style and team to a self-organizing system will streamline processes, let people know who and where to go with they need something, and will inspire creative and collaborative solutions – no matter what type of job you have.

As a leader, you want to remove roadblocks. You want your employees to succeed, to be more productive and effective in their roles. It relies on trust, transparency, and a team that is open to constructive criticism. An agile leader shares his vision with his team, and they execute on all levels together.

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Posted by Michael McKinney at 09:01 PM
Permalink | Comments (0) | General Business , Human Resources

5 Leadership Lessons: The Five B’s of Purposeful Leadership

IN The Heart of Business: Leadership Principles for the Next Era of Capitalism, former CEO of Best Buy, Hubert Joly, shares the philosophy behind the resurgence of Best Buy: pursue a noble purpose, put people at the center of the business, create an environment where every employee can blossom, and treat profit as an outcome, not the goal.

He shares what he learned and what he had to unlearn. How we lead matters. He concludes with the five principles of purposeful leadership that guided his leadership.

  Be clear about your purpose, the purpose of people around you, and how it connects with the purpose of the company. I believe that business is fundamentally about purpose, people, and human relationships—not profit, at least not primarily. Companies are not soulless entities. They are human organizations made of individuals who work together toward a common purpose. When that common purpose aligns with their own individual searches for meaning, it can unleash a kind of human magic that results in outstanding performance.

  Be clear about your role as a leader. You cannot choose your circumstances, but you can control your mindset. Your mindset determines whether you generate hope, inspiration, and energy around you—or bring everyone down. So, choose well.

  Be clear about whom you serve. As a leader, you must serve the people on the front lines, driving the business. You serve your colleagues. You serve your board of directors. You serve the people around you first by understanding what they need to give their best, so you can do your best to support them. Executive coach Marshall Goldsmith once told me to see everyone as a customer. Before speaking or acting, be clear about your motivation and whom you are trying to serve.

  Be driven by values. For the most part, we all agree on what is right: honesty, respect, responsibility, fairness, and compassion. On paper, every company has great values. But values are no good if they remain on paper. Bing driven by values is doing right, not just knowing or saying what is right. Knowing and doing what is right is not always simple, of course. If you refuse to give in to the “just this once” and remember to tell the truth and do what is right, choices become easier.

  Be authentic. I have been told the longest journey you’ll ever take is the 18 inches between your head and your heart. It is a long and arduous journey indeed. Like make leaders of my generation, I long believed emotions were not meant to be shared in a business context. I had a lot to unlearn, and it took me a lifetime to embrace the fifth, and for me by far the hardest, “Be”: Ne yourself, your true self, your whole self, the best version of yourself. Be vulnerable. Be authentic. This is something the new generation of leaders seems to grasp more intuitively and naturally.

Our employees are expecting us to be human, and they expect us to grasp who they are and to make them feel respected, heard, understood, and included. This means we have to open up and make ourselves vulnerable, including by acknowledging what we do not know.

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Posted by Michael McKinney at 08:55 AM
Permalink | Comments (0) | Five Lessons , General Business

Who the Hell Wants to Work for You

EMPLOYEE engagement is primarily a matter of how you think about your employees. It is natural think that they are generally the problem and as a result you need to “force, trick, or bribe them into mending their ways.”

Tim Eisenhauer asks in Who the Hell Wants to Work for You, “What if you assumed that people naturally love to work? That they long to contribute? And they are only truly happy when working together towards something they see as bigger than themselves?

If you look at it this way, there is nothing to fix. People are already wired to work with passion if … their work environment calls for it. Who is responsible for your employees’ work environment? That’s right, you are.

Eisenhauer shares workplace principles that express the common needs of most people at work. These are the result of not only the lessons he has learned but those he has learned vicariously and shares through countless examples.

To give you a flavor of the book, here are five:

On doing something offbeat with a job candidate because you can learn so much more about people from their response to the unfamiliar than from their doctored life story: You don’t need to take every job candidate on an African safari, but do give them the chance to learn, react, process information, think on their feet, empathize, make decisions, make requests … In other words, engage in all those activities that, on a very basic level, determine success. Look for spontaneous responses. Any time you exchange canned questions and answers, you are wasting an opportunity to get to know your candidate.

If you want people to pay attention and learn fast, the best way is to let them see what’s going on inside the company. With a small company like Axero, it’s pretty easy. For example, we let everyone listen in on customer interviews. That means everyone gets to learn why different customers hire us and how they use our software.

The difference between managing and micromanaging is compulsion. Of course, you cannot blindly trust people to do the job right. They need to earn your trust. Until they do, you need to stay on top of projects and pay attention to detail. The question is—is it possible for another person to satisfy you? If your record says, “not really,” it means that you check on people compulsively, whether or not it’s necessary, and even when it makes things worse.

When insecurity strikes, resist the temptation to cover it up. Speak your mind and make it okay for everyone to do the same. For example, if you are feeling silent tension in the room, don’t explain it away in your head. Ask what’s going on. What is everyone thinking and not saying?

Freedom and trust must grow with the culture, not ahead of it. The trick is to set your intention. Are you waiting for employees to become trustworthy before you defer to their judgment? Or, are you actively seeking ways to support and empower people as they are?

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Posted by Michael McKinney at 09:08 AM
Permalink | Comments (0) | General Business , Human Resources

Compassionate Leadership

DELIVERING bad news is never easy. As a leader it is part of the job. Many of us try to avoid it or put it off. Some few relish the reputation of being tough. But being nice or being tough is not a choice we have to make.

“The hardest thing for most leaders is to find the courage to enter into difficult situations with other people,” write Rasmus Hougaard and Jacqueline Carter in Compassionate Leadership. They advocate wise compassion. They break it down this way:

In this regard, wisdom in leadership is about having the courage to be candid and transparent with other people and do the things that need to be done—even when it is uncomfortable. Wisdom is to see clearly that if you don’t do the hard things today, they will become even harder tomorrow.

Compassion is the intention to be of benefit to others. Compassion Is not about pleasing others and giving them what they want. Rather, compassion can be tough and direct, such as addressing another person’s behavior if it is out of line. But it is done with the intention that helping them change will ultimately lead to better outcomes for everyone.

The idea is to balance wisdom (courage) and compassion and do hard things in a human way. The secret to doing this right is of course, where you as a leader are coming from. The Wise Compassion Matrix below shows the balance needed.

In Quadrant 3, at the bottom left is the indifferent and ineffective leader. They are too busy to care and often come across as unprofessional.

In Quadrant 4, leaders have the courage and candor to get hard things done, but lack heart. They put results before people.

Quadrant 1 is caring avoidance. We care and wee tend to avoid the hard things. “This can be out of fear of their reaction, or it can be out of empathy, which is different than compassion.”

Quadrant 2 is where we want to be—Wise Compassion. Leaders in this zone balance their concern for people with the courage and candor to get the hard things done.

While we tend to fall in one quadrant over another, we can operate in any of the four depending on “our relationship with the person involved, our level of busyness, or the intensity of the pressure we are facing.”

To operate out of Quadrant 2 we need four skill sets that we practice in this order:

1. Caring Presence—to be here now, with the person you are with
2. Caring Courage—to choose courage over comfort
3. Caring Candor—because direct is faster
4. Caring Transparency—clarity is kindness

Sounds good but it doesn’t make hard things any easier. As a said, this has to become part of you—it’s how you approach other people. The authors devote ten chapters to ten principles to help us make this part of how we lead.

1. Unlearn Management, Relearn Being Human. You must first develop sincere relationships with those you lead. “Wise compassionate leadership is about creating truly human connections between yourself and the people you lead.”

2. Great Power Comes with Great Responsibility. We have an enormous impact on the people we lead. “Therefore, when doing hard things to others, we must ensure we do them in the most human way.”

3. Connect with Empathy, Lead with Compassion. “In leadership, empathy has it’s downsides. We can have empathetic burnout or care so much that we avoid taking necessary action.” Compassion is empathy plus action.

4. Your Oxygen Mask First. “Many senior leaders are plagued by self-criticism and self-judgment.” Silencing that inner critic is key.

5. Busyness Kills Your Heart. “Busyness kills our heart and thereby our ability to do hard things in a human way.”

6. Be Here Now. “Mindfulness enables compassion.” Know yourself and how others experience you.

7. Courage Over Comfort. “Having the courage to willingly approach confrontations is one of the most important skills of wise compassionate leaders.”

8. Direct Is Faster. “We must hold people accountable while maintaining a level of compassion.” We apply caring directness, “so people receive necessary messages quickly, enabling real conversations to begin.”

9. Clarity Is Kindness. “If we are clear and open, it helps create a culture of transparency that fosters a greater sense of psychological safety.”

10. The Only Way Out is Through. Practice is required to make this thinking a reality. “By stepping into a difficult situation and coming out on the other side with a little more wisdom and a little more compassion, we become more skillful at doing the hard things necessary to lead in a wise compassionate way.”

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Posted by Michael McKinney at 08:05 AM
Permalink | Comments (0) | General Business

Lessons Learned from 200 Years of Booms and Busts in the U.S. Economy

THE business cycle in the United States has been characterized by an ongoing series of economic booms and busts, bubbles and bursts, despite efforts by the Federal Reserve to stabilize the ups and downs.

The first recognizable boom and bust cycle in the U.S. economy occurred after the War of 1812 when inflated prices created an unstainable boom. Expansionist activities of farmers, exporters, and, particularly, investment bankers — spearheaded by the Second Bank of United States — sowed the seeds of the boom leading to the bust. Supply of money declined, and liquidity became a problem for many sectors, and the Panic of 1819 soon followed with all the characteristics of future business cycles in the 19th century.

Boom-bust cycles, for many decades, were called “panics.” Thirteen financial panics occurred from 1792 to 1896, and the last official panic occurred in 1907. After that, panics were renamed — first to depression and then to the milder sounding term, recession.

Following the recovery from the Panic of 1907, President Woodrow Wilson signed the Federal Reserve Act into law in 1913. The Federal Reserve was charged with preventing financial panics and stabilizing the economy. America’s bankers, who spearheaded the effort, finally got a central bank whose mission was to be a lender of last resort, smooth out the business cycle, and maintain the purchasing power of the dollar.

Congress expanded the Federal Reserve’s responsibilities in 1946, directing it to promote maximum employment, production, and purchasing power. And in 1978, Congress added price stability and promotion of long-term growth to its mandate.

Yet, as history proves, the business cycle hasn’t been “smoothed out.” The U.S. has subsequently been rocked by the Great Depression, followed by several recessions. The reoccurring phenomenon of money creation, speculation, boom, malinvestments, crisis, and depression hasn’t ended, but rather, the Federal Reserve destabilizes the economy by manipulating short-term interest rates.

The federal government primes the pump with deficit spending, and the Federal Reserve opens the money spigot to give the economy additional oomph to boost the economy. The inevitable bust arrives when the Federal Reserve raises interests rates and withdraws liquidity from the financial system to dampen the overheated economy.

More recently, the dot-com bubble of the late 1990s and the housing bubble of the mid-2000s reaffirm the consequences of the Federal Reserve’s easy money infusions.

We’re now in what some analysts call the “everything bubble,” which was well underway before the pandemic struck in 2020. If history is any guide, it could last until the end of the 2020s.

The boom-bust cycle, therefore, isn’t inherent in the market economy but instead is a consequence of the Federal Reserve intervening in the short-term money markets ostensibly to stabilize the economy and promote economic growth and full employment.

To ride out the peaks and troughs of the boom-bust cycles, businesses must understand and adjust their behavior to the cycle. Here are ways to identify that the economy’s boom cycle is about to end:

1. A downturn in the employment rate. The boom phase of the cycle is when widespread optimism creates a kind of euphoric period of increasing sales, plentiful jobs, and a surging stock market. But once employment plateaus, the economy has reached its business cycle peak.
2. Consumer price inflation unfolds. As of now, we’re seeing evidence that consumer price inflation has accelerated, which isn’t surprising given the 25 percent increase in the money supply in 2020 to respond to the pandemic. Money supply growth always precedes price inflation.
3. The yield curve tops out. When the slope of the yield curve — the interest rate for short- and long-term securities — turns downward, a recession is likely in the coming year.
4. A rise in the Fed funds rate. The Federal funds rate is among the U.S. economy’s most important financial indicators. The funds rate is set eight times a year based on economic conditions. It affects critical aspects of the broad economy, including growth, employment, and inflation. When the Fed funds rate stops increasing, the bust is right around the corner.

The U.S. economy has become dependent on more and more debt — and financial boosts — to generate economic growth. But as history shows, when it comes to the business cycle, what goes up must come down.

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Posted by Michael McKinney at 01:48 PM
Permalink | Comments (0) | General Business

The Story of U.S. Business Is the Story of Real Estate

THE STORY of American business is the story of real estate — a story of more than 200 years of claiming, seizing, developing, settling, and speculating in vast areas of land. Even though business histories often give more attention to the history of the manufacturing industry, real estate has been the more dominant factor.

Wealthy colonials organized massive land companies well before the American Revolution. Land had been the source of power and wealth in the Old World, and so for Europeans, the vast acreage of the New World held great promise, whether for farming, housing, or other ends. The early colonial years included land charters and grants, such as those to William Penn and George Calvert, but these often went to absentee landlords.

From the outset, ambitious American colonists well understood that buying land and waiting for the population to increase was a path to riches. Dating the beginning of true American business correlates not to the first mills or manufactories but to the Ohio Company of Virginia, which was formed in 1748 to acquire hundreds of thousands of acres of land. Many of its shareholders and administrators — Virginia’s elite, including George Washington — were born on American soil.

The American Revolution itself was in large part about land, as land speculators including Washington and Patrick Henry bristled under edicts imposed on colonists in 1763 and 1773 that restricted their ability to buy and settle on lands west of the Appalachians. Rights to the land instead were reserved for others, such as the wealthy in England.

Since then, the history of American business has had as one of its key elements an unbroken march of real estate speculators and developers, from Robert Morris and William Bingham to John Jacob Astor, Fred French, Eli Broad, Trammell Crow, and many more.

At $60 trillion in 2019, real estate was the single highest-value asset in the United States, greater than the value of stocks, bonds, or any other major asset category. Yet extensive as it is, real estate is a hidden giant. It’s always had much broader ownership than most other large-scale businesses, with a higher number of smaller concerns, and doesn’t lend itself as readily to conventional corporate and public equity structures. So, although massive, real estate hasn’t shown up as prominently on the lists of the largest businesses, industries, and wealthiest individuals that shape our economic imagination.

With America’s Industrial Revolution in the 1800s, infant mortality fell, life spans increased, and the country saw an unprecedented explosion in population growth — and the real estate business does very well when the population grows rapidly. More people meant more buyers.

Owning and improving land necessitated getting to that land, and so a booming real estate enterprise led to America’s transportation industry. This history threads through the centuries, from the earliest toll road and canal companies to the almost century-long, tumultuous domination of the railroad industry to the 20th-century network of roads and highways to serve the automobile revolution. The mammoth steel, coal, and petroleum industries that tower over U.S. business history can be interpreted as suppliers to the transportation industry. Alongside this came the financiers that supplied the funds to make it all possible. Real estate was the base of the economy.

The country spent billions to build canals, railroads, and highways, but the money spent to buy and develop the surrounding real estate — the homes, offices, retail, and farms in the land surrounding these new transportation arteries — exceeded even that amount.

The future of America’s real estate industry will follow a similar course:

1. Real estate developers will capitalize on infrastructure investment. The paradigm played out through the history of real estate speculation attaching itself to expansions in transportation applies to today’s infrastructure legislation. As infrastructure is built, modernized, and expanded, the spaces contingent on the public infrastructure investment will yield private wealth through real estate.

2. Commercial real estate will profit even as it transforms. The COVID pandemic has brought talk of office buildings — and even the cities that aggregate them — going obsolete. Others have predicted that, with the explosion of intangible, virtual “space,” the tangible space of land and commercial real estate will lose importance. But even with this, real estate continues to be a dominant factor. Virtual commerce still relies on actual land. Companies such as Amazon and Google gobble up acres of land for their warehouses and server farms, and the growing roster of such futuristic businesses as genetic engineering firms seize new buildings with specialized labs designed for their work.

No matter what the future may bring, real estate will remain a dominant part of the story of business in the U.S.

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Posted by Michael McKinney at 07:31 AM
Permalink | Comments (0) | General Business

Make It, Don't Fake It

FAKE IT ‘TIL YOU MAKE IT is a common refrain in our culture. But it has been wrongfully used to justify all kinds of poor behavior and outright lies, as Sabrina Horn correctly points out in Make It, Don’t Fake It.

Of all the business and career memes to gain popularity, few have compromised integrity in business, leadership, and personal success more than the expression “Fake it till you make it.” With roots in well-intentioned early twentieth-century psychotherapy, this phase has degenerated into a mantra that has encouraged and even normalized lying for the purpose of getting ahead. Now a product of modern American culture that rolls all too easily off the tongue, its mere existence tells you it’s okay to lie, from twisting the truth just a little to flagrantly deceiving others for personal gain.

How true. We can’t be surprised by this in a culture that encourages selective truth, self-promotion, and short-cuts. While some use this maxim to fake a persona or misrepresent who they really are, it was never intended to be about lying. It is about becoming. It is a means to become something, not a state of being.

In the same way, some people embrace vulnerability to ignore their weaknesses. The vulnerability culture that has sprung up is often used to help us justify our weaknesses rather than facing the truth and doing something to grow them to a non-toxic level. If, in our self-awareness, we realize that our authentic self is getting in our way and undermining our leadership, it’s time we did something about it rather than closing our eyes and slapping an authenticity label on it.

Fake It ‘til You Make It is about acting “as if.” If you want more friends, it’s not about going around talking about all of the friends you have, but beginning to act in a way that invites friendships—like being friendly and smiling. Fake It ‘til You Make It is about taking on a mindset to produce results, not playing footloose with the facts, and lying about things that aren’t as though they were.

To counteract this cultural condition, Make It, Don’t Fake It is about “ethics, passion, confidence, pride, resilience, commitment, and survival in a business context. It is about doing the right things the right way. This almost always means doing them the hard way.”

Varying degrees of faking it falls along a continuum from acting “as if” to outright fraud. Horn discusses these various degrees of fakery—or call it what it is—deceit. In the heat of the moment, most of these fabrications are easy to fall into. It gets us by. But they take a toll not only on our character but also the enduring success that could be ours.

Horn then takes us through her journey as the CEO of a public relations and marketing communications agency. So, she knows what is fake and what isn’t and the consequences of each. We often think of PR and spin as one and the same, but done right says Horn, it isn’t. I like her perspective on it:

There is a big difference in intent between misleading people by making something look better than it really is and simply bringing life to what is most compelling about it for the purpose of earning attention, interest, and trust.

In our drive to succeed, the temptation is always there to cut corners and misrepresent ourselves. Horn begins with her first pitch to her first prospective client.

I walked into PeopleSoft’s main conference room armed with a pack of business cards emblazoned with the initial name of my future company, Sabrina Horn Public Relations, and a logo the resembled a towel monogram. I had no employees, no clients, and except for the business cards, no evidence of a company, really.

For anyone that has started their own company, this is an easily relatable scenario. What do you do? Misrepresenting the truth comes to mind. Faking it.

Honestly, there were moments I was anxious enough to say to myself, Who am I kidding? This is nuts. They won’t take me seriously, so I had better make something up to sell them on me.

But she didn’t. She disarmed her fear with preparation.

When you are first starting out, doing and being anything to win the business is tempting—and also dangerous. You have to be bullish and yet stay grounded in the reality of what your company can realistically do, and then target those customers that want what you have to offer, with relatively few modifications.

Horn covers what it means to start a business, the emotional ups and downs, the temptations, the risk, controlling growth, and the importance of establishing your values from the beginning.

Throughout my career, whenever I was facing a crisis or felt rudderless, I attacked fear, uncertainty, and doubt and any stirrings of the imposter syndrome by referring to factual reality. I sought information to develop new strategies and options.

Like a detective, I just had to find it, or piece it together. I knew that the answer I needed and the decision I needed to make, as complex and hidden as they might be, were within reach. This self-knowledge saved me countless times over the years.

There is a way to do it right. At the core of everything you do is integrity. And that includes creating and staying an authentic brand. The brand is the responsibility of the company’s founders and represents the why or the reason for being. Horn devotes an excellent chapter to your brand and culture and the issues involved in protecting and evolving it in a changing marketplace.

She says leadership consists of two parts: winning and losing. While we like to focus on the wins, we will lose more often than we would like. No one is immune. And “it is really hard to act like a leader when you feel like a loser.”

Horn shares a significant failure and the necessary after-failure postmortem. The value of a postmortem “is that it makes you face reality and keeps you from laying the blame elsewhere. The truth is, while relationships and stunts do matter, intelligence, insights, creativity, passion, and sheer effort can matter more. You lost, not because of what they did but because of what you didn’t do.

There are situations where there’s just no winning. You can’t fake your age or your size or manufacture relationships you don’t have. Stay grounded, align around your core values and mission, and remind your team what you stand for. There is a reason why you and your people work at your company, and why other people don’t. Losing in these situations can be a blessing in disguise.

And then there’s winning. When you are on a winning streak, know that things can and will change. Begin to plan for what is next. And a crisis will inevitably come out of nowhere. Plan for it, too, before it happens.

Make It, Don’t Fake It is an excellent look at starting and leading a company from beginning to end with an integrity-at-all-costs perspective—how to make it without faking it.

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Posted by Michael McKinney at 12:30 PM
Permalink | Comments (0) | Entrepreneurship , Ethics , General Business

Three Skills Managers Need in a Post-Pandemic World

COVID undoubtedly disrupted our worlds, especially the way we work.

During the pandemic, not only did the concept of “office” shift dramatically but so did the needs and preferences of workers. Caught in the middle of all this were managers, the face of the organization to their teams.

Over the past 15 months, managers spent a considerable amount of effort mediating and negotiating on behalf of their teams to their business and from their business to their teams. Throughout the process, many managers expressed how unprepared they felt leading their teams virtually and taking care of their team’s whole-life needs, as well as being compassionate while reinforcing the need to focus on delivering business results.

As we continue to anticipate and prepare for a post-pandemic world, it’s safe to say that the working world, as we knew it, won’t return. It’s time to prepare for the skills managers need to develop in order to support both their teams and their business.

Here are the three skills managers need to focus on and develop right now:

#1. Virtual Presentation Skills. Even though Zoom fatigue is still real, virtual meetings aren’t going away. Virtual platforms will be a part of our workplace experience for the foreseeable future. Not only do managers need to grow more comfortable leveraging the technology, but they also need to learn how to present themselves and engage others while using it.

Pre-COVID, when a manager wasn’t skilled in running a meeting or delivering a presentation, they were given grace. Some of them could even overcome their lack of skill with humor. Now, in the virtual room, if a manager’s presentation skills aren’t where they need to be, it’s no laughing matter. The manager runs the risk of low engagement and loses assurance that the message they’re sending is being received.

Managers need to own responsibility for:

• Telling better stories with their data
• Using features in the technology to increase engagement
• Enhancing their visual impact (like their backgrounds, to include lighting)
• Being more comfortable with limited audience feedback (such as silence)
• Creating a team environment with the tools available
• Presenting to a live audience on-site and a virtual group at the same time

#2. Advocating. If COVID taught us anything, it’s that our team members are unique and have very personal, very real challenges related to being able to perform to their fullest potential at work. They also have goals for themselves, personally and professionally. Many desire to make changes in their lives to maintain the positive aspects and benefits of working during COVID, such as increased family time, more time to focus on their wellness, and the savings gained from not commuting to work.

Managers realize that being flexible throughout COVID was their key to retention. In order to ensure retention and engagement, they need a framework to understand how to advocate and negotiate on behalf of their teammates, as well as an understanding of how to discern which employee requests should be taken into consideration and which ones should be renegotiated to better accommodate the business’s needs.

As managers are often the go-to person for both the business and the employee, they can get caught between conflicting priorities. A skilled manager knows how to handle these issues with deftness, as well as how to bring creativity into the scenario in an attempt to create win-wins.

#3. Leading in a Virtual World. As many businesses are embracing workplace flexibility, it’s certain that a hybrid working world will be the reality most workers encounter for the rest of their careers. Managing and leading in-person is easier when you’re available for pop-ins, can oversee directly work product, and can give real-time feedback.

Leading in a virtual world requires intentional interaction. Team members and their managers must force time to engage and collaborate, and both need to be willing to keep coordinated time on their calendar for such engagement.

It’s on the manager to make sure their rhythm allows for multiple types of conversations:

• One-on-ones to discuss updates on projects
• Feedback as it needs to happen
• Informal and formal feedback sessions to discuss overall performance objectives
• Career development conversations
• Agenda-free conversations – check-ins to inquire on the overall well-being of their employees

Managers need to be structured, proactive, and disciplined to have this necessary – and high level of engagement.

These three skills have long been valuable for managers; in a post-COVID world, their interpretation and implementation have taken on a new twist. Yet, these skills are possible for any manager, at any level, to embrace, develop, and express.

Posted by Michael McKinney at 08:07 AM
Permalink | Comments (0) | General Business

The 10 Biggest Business Mistakes: And How to Avoid Them

IF YOU CAN LEARN from other’s mistakes, you have a better shot at success. Lawyer, CPA, and serial entrepreneur, Patrick Burke, says he has made most of these big mistakes and has (barely) lived to tell about it. He chronicles them in The 10 Biggest Business Mistakes: And How to Avoid Them.

Some of the lessons learned are timing issues. Some seem like common sense, but in the heat of the moment and the hubris that often accompanies entrepreneurship, these lessons are easily forgotten. The uncertainty and the need for resources lead many into mistakes. Slowing down and thinking about these things will increase your odds of success. Here is a brief overview of the wisdom Burke offers:

Mistake #1: Buy or Start the Wrong Business

It’s not a bad business, it’s just not your business. The most critical element in a business’s success is a sustainable advantage. If you are the sustainable advantage, be careful. “Many is not most small businesses are (or at least start out as) personality cults. There’s nothing wrong with that, but a cult is not sustainable. If you are buying a business, make sure it’s not based on the last personality. “If you’re starting your own business, create processes that allow others to be you so you can successfully scale.”

Mistake #2: Lifestyle

Lifestyle businesses are not inherently bad. “The problem occurs when a business could be a growth business and should be a growth business but instead is starved for cash because the owner is treating it as an ATM.”

A good lifestyle business coupled w2ith smart investing will result in financial security, but not real wealth. Real wealth results from building a growth business with a sustainable advantage that can someday be sold at a high multiple of earnings.

Mistake #3: Professionals

Hire professionals with the expertise required for what you are trying to do. “There is no reason to continually learn from your own mistakes when you can draft off professionals who can prevent them. You should always be willing to pay for and follow great advice. Paying for advice is a capital investment in a valuable piece of mental machinery.”

Mistake #4: Partnering

The gold standard for taking on a partner: “A business owner should bring someone in as a partner only if that person possesses a skill that is absolutely critical to the success of the business and that skill cannot be acquired for money alone.” Treat the equity in your business as your most valuable asset.

Mistake #5: The Wrong Team

Most entrepreneurs hire too fast and fire too slow. “Most entrepreneurs are imbued with a super-strong work ethic and boundless optimism. They truly believe they can transform employees, even those with below-average skills and drive, into valuable players through their excellent example and the sheer force of their iron will. This is patently not true.”

Mistake #6: Think Big

Johann Wolfgang von Goethe is said to have written, “Dream no small dreams for they have no power to move the hearts of men.” This should inform your business decisions. “If what you’re doing is not leading you to your destination, you may be thinking too small.”

Mistake #7: Close Too Soon

Develop a good cash forecast prior to opening the business, one that can survive a downturn in the beginning. If you are successful in building a brand, “even though the business is not yet profitable, it should continue. A brand is the ultimate sustainable advantage and should be fully exploited.”

Mistake #8: Close Too Late

Avid the sunk cost trap. Once you have invested so much time, effort, and money into something, it’s hard to let go. Many entrepreneurs persist beyond the point where the odds of success are in their favor. “The impulse to throw good money after bad to prop up a failing business is extremely common. In my opinion, this impulse has resulted in more business losses than any other factor.”

Since sunk costs are irretrievable, it’s nest to act like you have only the present and the future—because you do. With that in mind, it’s easier to detach yourself emotionally from your past decisions.

Mistake #9: Sell Too Soon

It’s hard to get the price you want when you want to get out. “The idea that the price paid for companies is based on past performance is only partly true. However, the idea buyers will actually pay for tomorrow’s potential is mostly wrong. By far, the most important data to a buyer is current performance and, based on the company’s processes and metrics, how predictive that is of future performance.”

And keep this in mind too: “If your company is too early in its life cycle to attract more than one potential buyer, negotiating will be impossible because the only alternative is no deal.”

Mistake #10: Sell Too Late

Timing is everything. Greed is sometimes the reason owners stay too long; trying to get a few more years of profit. Some “wait until their energy and passion are waning and then take their business to market. At that point, the business is generally in decline if not fully distressed.”

I have been advising clients for years not to pay for potential when acquiring a small business. I suggest that a seller’s puffing about new opportunities, products, and services be countered with pointed questions about why those ideas haven’t already been implemented.

If your business is a lifestyle business, stick with it as long as possible and then close the doors.

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Posted by Michael McKinney at 07:43 AM
Permalink | Comments (0) | General Business

101 Things I Learned in Business School

BUSINESS is not a discipline, but an endeavor made up of disciplines such as accounting, communications, economics, finance, leadership, management, marketing, operations, psychology, sociology, and strategy.

101 Things I Learned in Business School, written by Harvard MBA, Dr. Michael Preis helps to provide the broad knowledge based needed to succeed in business. Each lesson is concise and illustrated by Matthew Frederick. It is valuable for those just beginning o study business and a tool to explore more into areas where you could profit from learning more about.

Some of the lessons (with excerpt) include:

Lesson: Those who think theory “isn’t the real world” don’t understand what theory is.

Those who are adverse to theory may thrive in business as long as the parameters familiar to them remain in place. Those who embrace theory are more likely to seek out, adapt to, and benefit from new situations.

Lesson: Write it Once

A well-written contract defines or explains each term or condition only once. Repeating contract language in an effort to impart greater emphasis is dangerous, as differences in context can lead to confusion in meaning and an unfavorable interpretation in a court of law. Further, because negotiations invariably require editing of contract language, a redundantly worded contract will require changes in multiple locations—leading to the possibility that one location will be missed and an inconsistent document will result.

Lesson: A profitable company may be chronically short of cash.

A business typically makes a sale before payment is received from the customer, while the costs related to that sale, such as materials, labor, commissions, and overhead are borne up front. Consequently, a business may be short of cash until payment is received. An especially fast-growing company with rapidly increasing sales can be chronically short of cash, because the costs of growth (hiring and training new employees, acquiring new facilities and equipment, financing an ever-growing inventory, etc.) perpetually exceed the cash receipts from the previous, smaller sales volume. Procuring and maintaining adequate capital is crucial especially for new businesses. Undercapitalization is one of the most common causes of business failure.

Lesson: Learn an organization’s culture before working with or for it.

A poor culture match can not only create discomfort for workers, but can compromise endeavors at a corporate scale—undermining mergers, partnerships, and working relationships that are a good match by non-cultural measures.

Lesson: Moral Hazard

A moral hazard exists when organizations and individuals are not required to bear the negative consequences of their failures. Moral hazards can result from a positive feedback loop: for example, a lender insured by the government against loan default may make very risky, high-interest loans to uncreditworthy customers because it will do no worse than break even, and may realize a very high rate of return.

Lesson: The higher one rises in an organization, the more one must be a generalist.

At the lower level of an organization, employees usually have direct knowledge of specific activities. … Managers often lack such specific knowledge and skills but have generalized understandings of personnel, training, motivation techniques, evaluation, product distribution, compensation, and budgeting. …At the highest executive levels, officers and board members may be concerned with the philosophical direction of the company, the organization’s mission, and the meanings of the company’s brand in the market.

Lesson: If all options appear to be equal, get more information.

When feeling stuck while weighing an important decision, it is almost always helpful to seek out new, objective information on any aspect of the matter—even if the effort tor information to be gained initially seems of little value. Even the most modest new data on a market, client, or technology, when probed seriously, can provoke expansive new insights that point toward a more informed decision.

Lesson: An expert isn’t always the person who knows the most.

Experts know a lot, but often it is better to know how to organize, structure, and contextualize, knowledge than to simply have knowledge. Innovative thinkers don’t merely retain and retrieve lots of information; often they identify and create new patterns and connections that reorient or reframe what others know.

Lesson: The point of a visual presentation is to get the audience to listen.

It can be tempting to pack slide or presentation boards with extra information to look smart or give the audience extra value. But he most effective visual presentations are clear, concise, and even terse. … If you have additional details to convey, put them in a takeaway handout or send them afterward in a thank-you email.

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Posted by Michael McKinney at 03:12 PM
Permalink | Comments (0) | General Business

Scenario Planning vs. Forecasting: 6 Questions to Ask to Prepare for a Post-Pandemic Future

AS WE finally start to see the light at the end of the tunnel of the catastrophic COVID-19 pandemic, many business leaders are looking for ways to better anticipate future disruptions and prepare for uncertainty ahead.

There is often confusion between scenario planning and forecasting, with the terms used interchangeably and inconsistently. But these are different methods that involve specific activities, outcomes and value add.

Scenario planning is focused on the future and involves defining different stories behind different paths that will lead to that future. You could also say it is based on a dynamic sequence of interacting events, causal processes, and critical decision points. It offers enhanced flexibility and preparedness to deal with risk and uncertainty instead of purely quantitative forecasting. It is about understanding multiple plausible futures without blinkers on, identifying what could happen, and describing that outcome in a compelling, engaging narrative. Scenarios are also collaborative—typically involving teams of people, often from various levels within an organization—and there is often a creative dimension, as opposed to being purely based on quantitative number-crunching. Scenarios provide longer-term, multiple futures based on unknown risks and uncertainties (e.g., the results of a U.S. election).

Forecasts, on the other hand, are constructed on the assumption that the world in the future looks much like it does today. Forecasting is a less creative process and does not anticipate significant shifts in the business environment, which can cause considerable challenges for organizational strategy and a firm’s performance. Also, forecasts do not factor in risks and uncertainty as part of a broader stakeholder dialogue or research exercise. Instead, forecasting uses quantitative inputs and methodology to help predict what will, or should, happen in the future, mainly by interpreting historical data. Forecasting is a shorter-term tool that provides certainty based on known variables in the system (e.g., passenger traffic for airlines).

To put it more bluntly:

Forecasts offer one possible future, whereas scenarios offer multiple possible futures. Neither tool is better than the other; they simply offer different approaches to solving problems and should be used in a complementary way.

The table below provides a more detailed contrast between scenario planning and forecasting, comparing various features and explaining the differences:

When deciding which tool to apply to a problem or opportunity, there are six typical questions that you can ask to help identify whether scenario planning or forecasting will be more effective:

1. Is the future uncertain and unpredictable, or certain and predictable?
2. Are one or multiple futures more likely?
3. Is the focus on qualitative or quantitative analysis?
4. Is the organization looking for an objective, fact-based discussion with stakeholders or a subjective, wider-ranging discussion?
5. Is the organization looking for a shorter-term (within one year) or longer-term (multi-year) perspective on the future?
6. Can the analysis results be replicated on an ongoing basis, or are they a one-time representation of unique information?

As Paul Saffo, a technology forecaster based in Silicon Valley, said, “the goal of forecasting is not to predict the future, but to tell you what you need to know to take meaningful action in the present.” In a world of so many different management tools at the fingertips of leaders, it’s vital to ensure you select the right one to drive the outcomes you need to be successful.

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Posted by Michael McKinney at 11:11 AM
Permalink | Comments (0) | General Business , Leading Forum

6 New Rules for the Digital Age

EVERY NOW AND THEN, a book comes along to give you the insights you need to see and understand the world you live in and how to thrive in it. Rethinking Competitive Advantage: New Rules for the Digital Age by Ram Charan is one of those books. The ideas and terminology you’ve heard and read about come together here to give you a holistic view of where you need to go next.

Charan has taken years of observation and distilled it into six practical rules to guide you into this digital age.

To begin:

In the digital age, competitive advantage is the ability to win the ultimate prize—the consumer’s preference—repeatedly, through continuous innovation on behalf of the consumer, and to create immense value for the shareholders at the same time.

As opposed to:

Until recently, the greatest competitive advantage went to companies that controlled distribution channels, had hard assets on the largest scale, or had established brands or patents.

In other words, it’s more about what a company does than what it has.

Digitization defines the playing field. “The old adage ‘stick to your knitting,’ for example, a colloquial version of ‘build on your core competence,’ tends to narrow a company’s imagination. Yet a bold imagination is a requirement for leaders today.”

Digital companies like Netflix, Amazon, Google, and Alibaba, have certain elements—or approaches—in common:

• They imagine a 100x market space that doesn’t yet exist.
• They have a digital platform at their core.
• They have an ecosystem that acerates their growth.
• Their moneymaking is tied to cash and exponential growth.
• Their decision-making is designed for innovation and speed.
And,
• Their leaders drive learning, reinvention, and execution.

These elements lead to six rules that a leader must work with if they are going to thrive in the digital age. The way forward is understanding the new rules of competition and playing a different game. Charan explains several roadblocks like—an overreliance on outdated theories—to moving forward in the digital age that insightful. The first four rules represent building blocks for building a competitive advantage. The last two relate to the human side of bringing this all together.

Rule #1. A personalized consumer experience is key to exponential growth.

The digital companies connect with the end-user and creating a customized experience. They work from the end-user backward. The customer is not the retailer but the end-user. “The key is to identify an experience that can both be personalized and appeal to a very large number of people, regardless of national or cultural boundaries.” Most traditional companies don’t think big enough.

Rule #2. Algorithms and data are essential weapons.

Algorithms and data must become central to your business. Charan distinguishes digital capability and digital platform. Digital capability usually means that the company has utilized algorithms to improve internal processes. In contrast, a digital platform is “a set of algorithms that collect and analyze data. Combining and refining algorithms over time helps a company build a competitive advantage.”

Converting to a digital platform should be done incrementally. Leaders must understand what technology can do for them and have good judgment about how to use it. A digital platform can personalize the consumer experience, create market spaces of 100x, eliminate intermediaries, utilize dynamic pricing, and use data to uncover opportunities for exponential growth.

Rule #3. A company does not compete. Its ecosystem does.

The ecosystem is the arrangement between partners that can be created. “Moving forward requires seamless systems and technology platforms, taking advantage of the latest technical developments, meeting a range of consumer preferences, and processing massive amounts of data to improve the outcome of things.”

Conceiving these ecosystems takes imagination and a specific set of leadership skills. Fundamentally, “it’s about building relationships with people from other cultures and with different incentives.”

The predominant challenge is to conceive of the ecosystem in its entirety, how it will deliver a great experience for the consumer, how the partners will enhance each other capabilities, and how success will be measured and shared.

Rule #4. Moneymaking is geared for huge cash generation, not earnings per share, and the new law of increasing returns. Funders understand the difference.

When it comes to digital companies, earnings per share is not the focus. Revenue growth and cash gross margin is.

Moneymaking is different in the digital age. Of course the components of moneymaking—things like revenues, cash, gross margin, cost structure, and funding—are the same as ever. But the emphasis, the patterns, the timing, and the relationships among them are different.

In digital companies, as revenues grow, so does gross margin because of the law of increasing returns.

As digital companies grow revenues and improve percentage gross margin, they exponentially increase their gross margin in cash. In essence, they become a cash-generation machine.

The gross margins of born-digital companies are generally higher than those of their conventional counterparts.

The digital connection that digital companies have with their customer base makes it easier for them to keep them engaged and gather more data. “Algorithms can then help detect the causes of certain behaviors, including customer defections, and test ways to improve the customer experience.”

Rule #5. People, culture, and work design form a “social engine” that drives innovation and execution personalized for each customer.

The social engine, a company’s culture and way of organizing work, helps drive the growth of the big digital companies.

Most of these digital giants operate with only three or four layers below the CEO. Organizing into functionally focused teams makes for better and faster decisions and implementation. Important too is who is on those teams. Who you choose to lead those teams speaks volumes about the values of the company. Beyond just plain competency, you need people who want to learn, grow, and get things done. Laslo Bock said that at Google, they “disqualified anyone who gave even a small signal that they might not be collaborative or intellectually humble.”

Once established, the culture becomes a magnet for others who share those values and behave that way.

Rule #6. Leaders continuously learn, imagine, and break through obstacles to create the change that other companies must contend with.

Speaking of intellectual humbleness, leaders must be at the forefront of curiosity and learning—continuously growing. “Any company that is or wants to be digital must have leaders who match up against the criteria a digital company requires.” The main difference Charan sees between traditional leaders of legacy companies versus leaders of digital companies has to do with their “cognition, skills, and psychological orientation.” Among these traits are:

They have the mental capacity to think in terms of 10x or 100x, to imagine a future space that doesn’t exist, and the confidence that they will overcome whatever obstacles they might encounter.

They have a facility for and are comfortable with data-based analysis. Facts and knowledge—not predictable outcomes—give them the courage to act.

There is fluidity to their thinking. They welcome change and even seek it.

They are hungry for what’s next and are willing to create and destroy. Their psychology is geared toward high speed, urgency, and continuous experimentation.

They are literate in the application of algorithmic science and value fact-based reasoning.

They are willing to reconceptualize the organizational structure so that decision-making takes place closer to the customer to improve the speed and quality of decisions.

This insightful and very accessible book is one of Charan’s best. It should be widely read. Even if you do not want to join the current reality and perhaps go down with the ship, at least you’ll know why.

Here are a few more thoughts from the book:

Dissatisfaction with the status quo and a search for what’s next is a universal human endeavor. It does not reside in one person, department, or organizational layer. The flow of ideas cannot be blocked by bureaucratic layers. Do the people at traditional companies welcome change? What happens to the good ideas that emerge? How quickly do they get converted into action?

Today transformational change is the norm. Every company has to be able to perceive what will make their best-laid plans obsolete tomorrow and change direction quickly.

Trying to build on your core competence can be a liability in the digital age. Why? Because it tends to promote an inside-out perspective and narrow a leader’s peripheral vision and constrain imagination.

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Posted by Michael McKinney at 08:52 AM
Permalink | Comments (0) | Entrepreneurship , General Business

Nine Key Strategies for Going Beyond Great

TO THRIVE in a new, more tumultuous era of social tension, economic nationalism, and technological revolution, you need to go beyond great. Great is no longer good enough.

In Beyond Great, three partners from the Boston Consulting Group—Arindam Bhattacharya, Nickolaus Lang, and Jim Hemerling—make the point hat being great is no longer good enough to succeed when the very notion of outstanding business performance is being reinvented.

There are three fundamental forces that are transforming the nature of global businesses. First is the interrelated tension created by the “worsening of the strain on our natural ecosystem and the rising discontent with capitalism and the resulting inequality.” Second is “rising economic nationalism and the ongoing erosion of U.S. hegemony.” And third is “a technological revolution fueled by the exponential growth of global data and digital technologies.”

With this in mind, they offer a new standard of performance defined by nine key strategies in three areas—growth, operation, and organization.

Growing Beyond: Redefine What Great Growth Looks Like

Strategy #1: Do Good, Grow Beyond

Reimagine core operations to deliver societal impact and hence long-term, sustained total shareholder returns rather than regarding social impact as an activity apart from the core. Firms that can thoughtfully integrate doing good into their strategies and operations will deliver sustained high shareholder returns while positively impacting all stakeholders.

Strategy #2: Stream It, Don’t Ship It

Offer compelling digital solutions and experiences, not just physical products or services. Today’s leading-edge companies are taking complete ownership of outcomes and experiences for customers. Leveraging digital technologies, they’re going deep into the usage life cycle to fulfill unmet needs, either grafting new solutions onto physical products and services or replacing physical products and services entirely.

Strategy #3: Refine Your Global Game

Grow selectively (that is, where they can claim profitable market share) and in ways suitable for the local environment, not everywhere all at once. Leading-edge firms are using asset-light, digital, or e-commerce-centric business models to enter into new markets and expand rapidly. They’re also becoming more selective about which markets to enter and paradoxically deepening their reengagement in their chosen markets.

Operating Beyond: Rethink How Their Companies Operate

Strategy #4: Engineer an Ecosystem

In addition to conventional supply chains, many global companies are forming digital ecosystems as new-age value networks to create and deliver solutions, outcomes, and experiences that customers crave. But as leading-edge companies are discovering, some ecosystems work better than others.

Strategy #5: Flex How You Make It

Invest in high-tech, multilocal factories and delivery centers that, combined with low-cost capabilities, can deliver customized offerings fast. Today’s delivery models must be high speed, responsive, and resilient in the face of disruption, in addition to low cost.

Strategy #6: Let the Data Run Through It

Build a global data architecture and analytical capabilities to underpin the other eight strategies. Leading-edge companies regard global data as the precious fuel that not only predicts future performance or consumer behavior but also drives winning value propositions.

Organizing Beyond: Constantly Reinvent How Their Company Is Organized

Strategy #7: Get Focused, Fast, and Flat

Move away from the traditional matrix organizational model in favor of agile customer-focused teams supported by platform capabilities. Bureaucracy and distance from the customer are death in an age of volatility—and today’s leading-edge firms know it.

Strategy #8: Thrive with Talent

Acquire, retrain, inspire, and empower a digitally savvy, engaged workforce. Companies today must attend more closely to what a new generation of employees wants and needs. They must fundamentally shift how they find, inspire, and develop a twenty-first-century workforce.

Strategy #9: Embrace Always-On Transformation

Embrace always-on transformation instead of traditional one-and-done change initiatives. This strategy is essential for succeeding with the other eight. To compete and win in volatile, rapidly evolving business environments, global companies must become adept at pursuing multiple transformations on an ongoing basis.

Each chapter concludes with advice for leaders and a helpful section on key insights. What all of this demands of a leader, aligns with what you’ll find elsewhere on this website: lead with conviction, be open-minded, elevate and embed a continuous learning mindset, embrace transformational leadership, and develop the ability to navigate through ambiguity, tension, and paradox.

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Posted by Michael McKinney at 09:18 AM
Permalink | Comments (0) | General Business

Unexpected Leadership Lessons that Mobsters Can Teach Lawful Leaders

LEADERSHIP is a broad term, and it applies to those who you might not have a positive perception of — including mobsters.

We discovered through a rigorous analysis applying 70 years of Nobel-prize winning economics that Mobsters have leadership teams and structures that enable their success despite continuous efforts to disrupt them. Many of these crime syndicates have survived over a hundred years despite enormous law enforcement resources devoted to their daily demise. How is that possible when mobsters cannot simply have team members sign up for an online training course or activate their methods through “Mafia Academy?”

In our book, Relentless: The Forensics of Mobsters; Business Practices, we discovered the leadership principles of organized crime syndicates that forge high-performance teams of very loyal gangsters, incredibly strong brand names and cultures with a long-term perspective and an unrelenting customer focus. Relentless offers five transformative leadership lessons that leadership training programs must incorporate and promote. These include:

1. Follow the Same Fundamental Economic Principles as Mobsters

All organizations, lawful and unlawful, face the same corporate governance problem: how to attract, retain, and motivate a self-interested workforce to achieve the organization’s mission and strategy. All firms must empower people with the knowledge and incentives to execute the task to benefit the organization. Then these individuals’ performance must be measured and rewarded. Finally, leaders must develop a culture that communicates the organization’s vision and strategy.

The American Mafia survives using well-defined organization charts that empower small crews of mobsters that specialized by racket: gambling, loan sharking, extortion, union corruption, and so forth. These crews kept roughly 75 percent of their illicit profits, passing the remainder up as a type of franchising fee. The mob bosses constructed enduring crime rings using core economic concepts of corporate governance that lawful managers also must follow. The same economic principles underlying McDonald’s franchising model as a corporate governance scheme also are used by mob bosses running large families of criminals. Relentless teaches these time-honored principles using crime syndicates as case studies.

2. Mobsters Relentlessly Adapted Their Strategies and Corporate Governance to An Ever-Changing World

History is replete with countless leaders trying to pivot to a new reality when their world suddenly changes. Take Kodak trying to adapt to digital imaging, or JC Penny trying to compete in a new retail space, or everyone today trying to adapt and survive in a pandemic. Leaders’ ecosystems evolve, and so too must their strategies. But new and bold strategies often require modifying corporate governance to attract, retain, and motivate a self-interested workforce to implement the often-controversial new strategies. It turns out that organized crime syndicates relentlessly search out and implement new rackets as opportunities present themselves.

National Prohibition in the 1920s offered local Mafias the opportunity to ramp up their bootlegging to provide the now banned alcohol, thereby generating enormous cash profits. During World War II, basic staples like sugar, meat, and even tires were rationed via coupons. Relentless and resourceful gangsters quickly filled the void with stolen or counterfeit rationing coupons.

Recently, INTERPOL issued a global alert warning law enforcement in hundreds of countries to expect organized crime networks to target COVID-19 vaccines, both physically and online. The Mafia’s corporate governance system created high-performance teams of entrepreneurial mobsters who quickly seized new openings. So too must lawful leaders relentlessly scan their environments for new opportunities and threats, adjust their strategies accordingly, and then make appropriate corporate governance adjustments to how they empower and motivate their workforce to achieve the amended strategies.

3. One Size Doesn’t Fit All

Every leader must design a unique corporate governance scheme that matches its exclusive strategy. The Mafia, Hells Angels, and the Sinaloa Cartel had different missions and strategies, and so their leaders developed unique corporate governance schemes. While lawful leaders cannot simply mimic gangsters’ governance schemes, they must apply the same economic principles mobsters follow that channel employees’ self-interest to pursue new strategies. In other words, don’t merely copy the corporate governance methods used by successful lawful companies because they unlikely will apply to your company’s unique mission and strategy. Understand what motivates your workforce and design fulfilling jobs, performance measures, compensation schemes, and corporate cultures that create high-performance teams to deliver products and services that exceed your customers’ expectations.

4. Ensure That All Four Pieces of the Organization’s Corporate Governance Are Coordinated and Complement Each Other

Mafia crews sat around all day scheming possible heists. They had informants at airports who fed them information about valuable outbound cargos. The crew would hijack the truck and fence the goods splitting most of the money among themselves. The family boss empowered this crew to boost valuable cargo at airports. The crew had specific knowledge about the cargo. The performance measures were very simple – money generated and not getting caught. Performance was rewarded by the cash generated. And the culture attracted and retained immoral, very loyal, resourceful, and relentless criminals.

All four pieces of the Mafia’s corporate governance were perfectly matched and complemented each other. Too often, lawful leaders deploy far too many performance measures that only confuse and dilute the subordinate’s efforts. The mob kept their performance measures simple and few in number.

5. Make Corporate Culture the Differentiator

Culture consists of the values, norms, and behavior of how things are done around here. Engaging leaders know that alignment across hundreds, and even tens of thousands of employees takes time and nurturing through story-telling. They articulate and strive to live the norms, values, and behaviors that will drive performance and know that if they don’t practice it from the top, no one down the ranks will even care.

One of the most surprising lessons we learned in researching Relentless was the importance of their cultures. The Mafia values immorality, loyalty, resourcefulness, and steadfastness and attracted and retained mobsters with these values. Wannabe Mafioso often waited decades before becoming made men. Once admitted, the Mafia family offered them protection from other bad guys and enormous prestige. Staying in the family required unyielding loyalty and a code of silence. Surviving since the 1920s testifies to the enormous strength of the American Mafia’s culture. Lawful leaders should seek to build a culture that differentiates their organization from others.

Daniel P. Forrester is the co-author of Relentless: The Forensics of Mobsters; Business Practices. He is the founder of THRUUE, Inc an expert consultancy that assists leaders in bridging the gap between corporate culture and corporate strategy. He works with CEOs, boards of directors, and C-suite leaders, helping them align around a clear strategy while understanding reputational and cultural risk. Daniel has spent the past twenty-five years successfully building consulting practices in the financial services, telecommunications, and public services sectors, utilizing his entrepreneurial approach to strategy. His previous book, Consider: Harnessing the Power of Reflective Thinking in Your Organization, examines how leaders responded to the explosion of data and hyper-connectivity impacting organizations and the role reflection can play in dramatically changing corporate outcomes. For more information, please visit danielforrester.com and follow Daniel on Twitter.

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Posted by Michael McKinney at 12:36 AM
Permalink | Comments (0) | General Business

The Company I Keep: How Leonard Lauder Built Estée Lauder

ESTÉE LAUDER founded what would become the Estée Lauder Corporation in 1933 on the conviction that “every woman can be beautiful.” Her ambition was to have a life filled with beautiful things, and that “rested entirely on her ability to sell her skincare products.”

The first five chapters of The Company I Keep: My Life in Beauty are a must-read for any entrepreneur. Her son, Leonard, details the tenacity, business acumen, salesmanship, and mindset of a superstar businesswoman. Her Uncle John developed a face cream, and she began demonstrating it in high school. She wrote, “Deep inside, I knew I had found something that mattered much more than popularity. My future was being written in a jar of cream. My moment had come and I was not about to miss seizing it.”

She pioneered the “sales technique of the century:” the free sample. No woman would ever leave empty-handed. Estée Lauder was built on the free sample.

She also personally trained the saleswomen at the counter.

My mother didn’t realize it at the time, but her insistence on personally training saleswomen would be a key differentiator when she eventually opened counters in department stores. Other brands used saleswomen to merely sell products; thanks to my mother’s training program, her salespeople taught customers how to use her products to look their best.

Her hands-on approach—what her father had dismissed as “fiddling with other people’s faces” —was a charm. “Touch your customer and you’re halfway there,” she would preach.

And she was a tenacious saleswoman even following New Yorkers who headed south to winter in Miami—staying for months.

My mother stopped at nothing in order to inform every woman about her products so that she would tell more women. No one escaped. She stopped strangers on the street and on trains to give them beauty tips. She famously interrupted a Salvation Army sister’s bell-ringing to explain how she could make her skin look and feel fresher. “There’s no excuse for looking untidy,” she admonished. An acquaintance from those years remembered how my mother would approach someone she had never met before, evaluate her makeup, and proceed to tell her how to correct it. “She would end up selling her $40 worth of Cosmetics.”

Leonard learned many lessons watching his mother, and his quest for excellence served him well during his time in the Navy. One of the greatest lessons he learned there was, “No matter how smart you think you are, there’s always someone who’s smarter. No matter how good you are, there’s always someone better. I would search out and hire exactly those people.” This belief, he says, would help play an enormous role in the growth Estée Lauder. And if he had to fire someone, he took responsibility. “Everyone has worth. The fact that we have no been able to take advantage of your skills is not your fault. It’s our fault.”

He wanted to build Estée Lauder into the General Motors of the beauty business, “with multiple brands, multiple product lines, and multidimensional distribution.”

The book is full of great lessons and the stories behind them. Here are some I pulled out.

Positioning is the product.

Launch at the top and stay at the top. If you launch into the heart of the market, there’s always someone who will sell a similar product cheaper than you, and you have no way to go but down in what becomes a race to the bottom.

Having everyone know that they had to be good at their job and a good person to succeed made all the difference in the world.

Every brand president needs the opposite skill set in their number two. That’s what makes a great team.

Don’t fall into the trap of “How do we compare to others?” as opposed to “This is who we are.”

When you criticize, do it verbally. Never put it in writing. If you put criticism in writing, the person will read it again and again and again and get angry and stay angry. Conversely, if you put praise in writing, they will read it again and again and again and feel good about you.

Don’t hire your best friends, and don’t hire your former classmates. Friendship is friendship, but business is business.

It is very easy for established companies to get stuck in the trap of “this is who we are,” rather than follow the path opened by “this is who we must be.”

Act like an owner to get people to think like an owner. Ownership doesn’t come from the shares of stock that you have. It comes from the responsibility you feel for your company and your colleagues.

Our director of creative services, June Leaman, often said, “One idea is a great idea. Two ideas are less effective. Three ideas are ineffective.” I never relied on a committee for a final decision. Committees are the death of creativity and productivity.

Make tactical mistakes, not strategic ones. A tactical mistake is one that, if you make it today, will only cost you today. A strategic mistake is one that, if you make it today, will cost you tomorrow—and tomorrow and tomorrow.

Listening for, summarizing, and articulating a shared perspective was the first step in making progress. It’s easier to get things done if you start with a “yes” than if you start with a “no.”

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Posted by Michael McKinney at 02:12 PM
Permalink | Comments (0) | General Business , Leaders

Ruthless Consistency: The Foundation of Success

STRATEGIC change fails without consistency—an uncompromising commitment to your stated purpose. A single inconsistent act can call your credibility into question and undermine your change effort.

Michael Canic, author of Ruthless Consistency, can help you put the odds of success in your favor. By ruthless consistency, he doesn’t mean robotic repetition. It doesn’t mean inflexible. In fact, “varied and creative are requirements of ruthless consistency, not enemies.” Our changing environment demands it. What he does mean is “the relentless alignment of intentions, decisions, and actions.”

Ruthless consistency means that everything you do—as varied and creative as it might be—is consistently aligned with your purpose, your intentions.

Three Principles

The foundation of ruthless consistency begins with three principles. First, “what matters more than anything you do is everything you do.” Everything you do must be aligned with the direction you want to go to. That involves doing three things: develop the right focus, create the right environment, and build the right team.

“Developing the right focus means identifying and articulating why your organization must change, what you intend to achieve, and how you intend to achieve it. Creating the right environment means aligning every organizational touchpoint, so that your team can and will execute on the right focus. Building the right team means securing the right collection of talent to make it happen.” Canic devotes a section of the book to each ingredient.

The second principle is “what you do is not as important as what your people experience.” We naturally look at things from our own perspective, but as leaders, we need to flip that around. “What matters is what they perceive, what they believe, and how they feel.” Canic adds, “It’s not about you. It’s through you. What you do is validated only by what they experience and, as a consequence, what they do.”

For people to do what you need them to do and perform at their best, first, you have to understand their perspective. Ultimately, this is about empathy. Seeing through their eyes. Thinking through their minds. Feeling with their hearts. And then taking the right actions.

The third principle is “you’re not as committed as you need to be…yet.” What does it take to achieve the result you need, and are you willing to do what it takes to get there?

Commitment is best summed up by what I heard a fellow football coach said many years ago: There’s a big difference between the will to win and the will to do what it takes to win. Exactly. And you’d better understand that difference. Many of us have the will to win. We love the feeling of winning. We want to be around winners. But do we have the will to do what it takes to win?

What can hold you back as a leader from ruthless consistency? Complacency, distractability, and ego.

The first enemy you must defeat is complacency. Are you constantly looking forward? Is your work your passion? Are you immersed in it? People who don’t just achieve success but sustain success have an inspiring next goal.

Are you passively distractable, your attention is easily diverted, or actively distractable, you choose to divert your attention when warranted?

Recognizing team members’ accomplishments strengthens your credibility. It sends a message that you value them and that you’re secure enough to surround yourself with strong talent. Remember, like any leader, you don’t create success. You create the conditions that enable your team to be successful.

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Posted by Michael McKinney at 09:06 AM
Permalink | Comments (0) | General Business

Has Your Vision Statement Lost Its Focus?

COMPANY vision statements have been a key tool for leaders over the past several decades, but the traditional vison statement does not connect with the wave of new workers. Further, when asked, many senior leaders struggle to remember their organization’s vision.

I started observing how vision statements were losing focus several years ago. I was touring a large manufacturing company and, as I walked through the office, there was a gigantic display of their vision statement on the wall. I complemented the CEO on the impressive presentation of their vision statement. He laughed and said, “No one in the company, including me, really knows our vision statement. The truth is, it was a good way to fill up the space on the wall when we moved into our facility.”

Later, I was teaching a capstone MBA class and the topic was evaluating company vision statements. After going through the standard overview, I asked the students what their thoughts were on organization vision statements. For the next five minutes, we talked about the textbook definition. I then asked what they really thought about the term “vision.” Still, more textbook answers, until one student brilliantly said, “I think it’s a bunch of crap!” He elaborated (and I paraphrase), calling it just corporate jargon so senior management can tell people a bunch of feel-good stuff that they don’t believe. Finally, I thought to myself, the answer I was looking for—and you won’t find that in the textbook.

For decades, there has been discussion about the importance of having a vision statement. As a result, many organizations have gone through the exercise of creating a vision and then having it printed and handed out to employees. Some have even gone so far as to copy and paste it to their email signature. The process typically ends with a vision statement that has no connection to the employees, customers, or community. Thus, the vision becomes a lost statement that does little to move the organization forward.

Why have vision statements fallen out of focus? The key reason: they typically do not connect to what drives and motivates employees. Today’s younger workforce does not trust the traditional vision statement where focus is placed on industry or world dominance.

Traditional vision statements do not energize or align today’s workers. While competitive dominance and service excellence are nice goals for senior managers, they do not motivate frontline employees. At their core, people get motivated for a cause. A cause gets them out of bed in the morning. A cause keeps them thinking about their contribution even when they are hiking, sitting on the beach, biking, or skiing. A cause brings people together. It is the foundation for extra effort to identify breakthrough solutions.

From an organizational perspective, a cause is how I see the world as a result of my company’s behaviors, actions, and habits. A cause solves a meaningful problem. It’s inspirational, motivational, and energizing; it connects with our emotions. Traditional vision statements do not have that type of impact. A group of unified people aligned with a common cause has the power to change the world and lead your organization to its highest potential. A cause makes a bold statement.

Consider what Wikipedia aims to create, or its cause: A world where every single person is given free access to the sum of all human knowledge.

Teach For America’s cause is equally compelling: All children in this nation will have the opportunity to attain an excellent education.

An effective Statement of Cause isn’t restricted to large organizations. Here are a couple of examples from smaller companies:

• Dependably providing comfort to our community that improves peoples’ lives. —200-employee HVAC company
• Wildly succeeding in building our skylines, enveloping beauty and protection, transparently providing a clear vision. —100-employee commercial window manufacturer

These are the types of statements that motivate, align, and energize people. A Statement of Cause helps organizations attract and select new hires and evaluate existing employees. It provides the fuel for meetings and the motivation to remain focused. If done right, a Statement of Cause sets the foundation for culture that aligns strategy and influences operational execution.

When vision is simply a tagline at the bottom of an email or a sign on the wall, it cannot possibly be the driving force for activating personal and organizational potential. True leaders understand that having a cohesive cause becomes the focal point of the organization, inspiring employees and building a culture that delivers on the brand promise. Great leaders know that a Statement of Cause is the foundational catalyst that enlivens an organization and engages customers, ultimately enhancing employees’ lives, their communities, and all others touched by the organization.

Forget meaningless vision. It is time to replace the traditional, old school vision statement with a Statement of Cause.

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Posted by Michael McKinney at 08:14 AM
Permalink | Comments (0) | General Business

Five Frequencies That Are Driving Your Culture (for better or worse)

IS YOUR CULTURE holding you back? Are the signals you are broadcasting as a leader, creating the culture you want—you need?

Culture experts Jeff Grimshaw, Tanya Mann, Lynne Viscio, and Jennifer Landis say in Five Frequencies that to make a good culture great, leaders must deliberately transmit strong and steady signals. Leaders create culture for better or worse, through the signals they are consciously or unconsciously broadcasting over five frequencies. To change a culture, you need to broadcast a strong, steady signal on each of these frequencies:

Their Decisions and Actions

Example is everything—especially when it is inconvenient and costs you something. If it is truly a “value,” what are you willing to pay for it? Think in the long-term. “Go long-term greedy.” “This can mean avoiding ethical shortcuts, hiring people smarter than you, delegating more, and helping prepare high performers for success beyond your team.”

What They Reward and Recognize

Reward the behaviors you want to see more of. “You are responsible for the dysfunctional behaviors that so bother you.” Everyone brings their emotions to work. “Understand and leverage the emotional algorithms that motivate your people.” Understand that it is all relative, scarcity and timing matter, and everyone appreciates being appreciated.

What They Tolerate (Or Don’t)

“Leaders are ultimately defined by what they tolerate.” Be sure the boundaries are clearly defined as well as the consequences. And don’t make excuses because you don’t want to feel bad or you can’t hold a particular star performer accountable, or because it’s really no big deal. It’s all-important, and consistency is vital.

What you tolerate or don’t tolerate is a balance. “When you decide to become more tolerant of some things (like where people work), you must become, if anything, less tolerant of other things (like the work not getting done). As Harvard professor Gary P. Pisano puts it:”

A tolerance for failure requires an intolerance for incompetence. A willingness to experiment requires rigorous discipline. Psychological safety requires comfort with brutal candor. Collaboration must be balanced with individual accountability.

How They Show Up Informally

When you show up, you “bring the weather.” People notice a leader’s tone, mood, and focus. They are weather in any organization. What do kind of weather do you bring?

When considering how you show up, the authors advise you to relinquish your raft. They introduce the concept with a story:

A traveler on an important journey comes to a raging river. It seems there’s no way to cross. And that’s terrible news because this is an important journey. Fortunately, she spots a rickety old raft on the bank, off in the brush. With trepidation, she pushes the raft into the water, hops on, and amazingly, uses it to reach the other side. She’s able to continue her important journey. She thinks: I may encounter other raging rivers down the path, so I must keep this raft. So she carries the raft on her back as she continues her journey. It’s a heavy raft, and it slows her down. When fellow travelers point this out, she’s incredulous: “You don’t understand,” she says. “If it wasn’t for this raft, I wouldn’t be where I am today!” And she’s right. That’s literally true. The problem is: If she doesn’t put down the raft, she may not get to where she needs to go on her important journey.

It’s your baggage. It’s your reactive tendencies that may have worked for you in the past that are no longer getting you where you need to be. Reactive tendencies like going with the flow, control, the need to be the hero, or being overly protective of your ego, eventually bring you diminishing returns.

Their Formal Communications

Formal communications don’t work on their own, but they serve to reinforce the other four frequencies. Approach your communications as a story to make it memorable. And say it over and over. “Go past the puke point because that’s often the turning point where employees are just starting to truly get it.”

Have a backstory. Know where you came from. “Look for stories of people demonstrating the behavior you want to see more of, especially when it’s not easy for them to do so.” Fill the communication vacuums. “Don’t push your people to the black market.”

Know, Feel, Do

To establish a reliable culture, you need to measure where you are and where you need to go. The authors call it Know, Feel, Do: what employees know, what they feel, and what they do.

The authors advise us to work backward and forwards. Looking forward, they ask, “What is the culture that makes this outcome possible and probable? What will employees consistently KNOW? FEEL? DO?” Looking at each of the five signals, what will you need to broadcast to your employees in each of the five signal areas?

It is also necessary to look backward and see where your current culture came from. What did each of the signals contribute to your current culture? It will help you to know what to change in order to close the gap from where to are to where you want to be.

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Posted by Michael McKinney at 04:15 PM
Permalink | Comments (0) | Culture , General Business , Human Resources

Winning Now, Winning Later: Playing the Infinite Game

WHEN David Cote became CEO of Honeywell in February of 2002, the company was a train wreck. He inherited unhealthy accounting practices, unresolved environmental liabilities, and a board and staff that were denying reality.

Cote shares in Winning Now, Winning Later, a practical example of playing the infinite game. When he took over, Honeywell was plagued by short-termism. The problem was that he had to deliver something in the short-term to the investors for survival but had to set the company up for tomorrow too. He did both.

I realized we could do both at the same time. Short- and long-term goals were more tightly intertwined than they appeared. By taking the right actions to improve operations now, we could position ourselves to improve performance later, while the reverse would also hold true: short-term results would validate that we were on the right long-term path.

He developed three principles of short- and long -term performance that forced them to consider the long- and short-term implication in every decision they made:

1. Scrub accounting and business practices down to what is real.
2. Invest in the future, but not excessively.
3. Grow while keeping fixed costs constant.

The process begins by defining reality and banishing intellectual laziness. Short-term thinking is often one dimensional—what it takes to meet the expectations of the current quarter without concern for the consequences. What is needed is drilling down to root causes and finding new and creative solutions. This means eradicating the quick fixes that “keep people stubbornly focused on today at tomorrow’s expense.”

The quality of thought in a team or organization matters. If you want a business that performs both today and tomorrow, you need to take apart your business and put it back together again so that it works more efficiently and effectively. This means instilling an intellectual mindset, spurring your people to think harder about every business decision they face. Set the standard for intellectual engagement. Demand that your people pursue two seemingly conflicting things at the same time. Make it your mission to understand the nuances of your business so that you can shape and guide your teams’ intellectual inquiry.

Making decisions for both short- and long-term performance isn’t something that you learn to do all a once. It is a process. It requires a “period of up-from investment, during which performance might lag for a little while. As a leader, you have to suck it up and make sure your investments pay off.”

Cote offers example after example of what this looks like in terms of changing the culture of the company and the thinking developed as people worked through issues and broke down processes to find the previously undiscovered efficiencies within.

At the end of the book, he leaves us with some sound advice. He shares his self-defeating behavior early in life that led him nowhere and the commitment that was required to turn his life around.

As we’ve seen, winning today and tomorrow requires extraordinary effort and commitment on the part of leaders, teams, and organizations. I share my life story of how I got my life together to illustrate a simple but underappreciated fact: individuals and groups can push themselves much further than they think. So many teams and organizations produce disappointing short- or long-term results because they don’t know how to operate differently than they have, but also because they don’t think they can operate differently. You have it in you as a leader to push your people to do two seemingly conflicting things at the same time, and your people have it in them to deliver, so long as you provide diligent encouragement, guidance, and oversight along the way, while also making sure you have the right people in the right positions. When providing guidance, tr to do more than just saying, “Do better.” Provide some thought starters or suggestions that can mobilize your people to think differently about the issue at hand.

The resistance to the winning now, winning later mindset often comes from the leadership and not the frontline staff because they live the consequences of short-term think every day.

Final advice:

Create the virtuous cycle in which you generate short-term actions sufficient to satisfy investors while still supporting long-term investments. If you do, you’ll find that over time the short-term results will begin to take care of themselves.

Work, too, on the quality of your own thinking. And challenge yourself to think independently. Remember, smart leaders abound, but leaders who can think independently are rare.

By implementing this thinking at Honeywell, under Cote’s leadership, market cap grew from $20 to $120billion, cleaned up legacy environmental issues, and created 2,500 401K millionaires because employees had invested in the company, 95% of them below the executive level.

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Posted by Michael McKinney at 05:36 PM
Permalink | Comments (0) | General Business

No Brilliant Jerks: How to Deal with Maverick CEOs

BOARDS and executives are feeling an unusual amount of pressure these days. And it’s not from covid-19—the squeeze started several years ago. Witness that the average cost of directors and officers insurance has almost doubled in the past two years and experienced a 70 percent jump in the 2019 third quarter.

There are many underlying sources for the increased stress and skyrocketing insurance rates. But these days a maverick CEO is often at the center of board and executive consternation and investors’ claims that leadership failed to protect the company. Elon Musk’s various Twitter meltdowns have created significant indigestion among stakeholders and in May, Tesla disclosed that Elon Musk would provide personal liability insurance for the company’s directors and execs to offset the increased costs and strain from legal challenges.

Increasingly, investors’ challenges come from allegations of an unhealthy workplace climate because a strong-willed CEO who created a corrosive corporate culture. Travis Kalanick's brash operating style and the toxic working environment he created led him to be tossed out of the company. After reviewing the culture created by Kalanick and seeing employee and shareholder reactions, one exasperated Uber board member proposed adding “no brilliant jerks allowed” to Uber's list of cultural values.

Adam Neumann's actions at WeWork are classic brilliant jerk moves. He is a smart, entrepreneurial visionary with great charisma. But he also established a corporate culture that was filled with large doses of alcohol and drugs (according to employees). Martin Winterkorn, Volkswagen’s CEO, was fired because he created an extreme company culture—described by Der Spiegel as “North Korea without labor camps”—that drove employees to create and install illegal software that cheated on vehicle emissions tests.

Companies will always embrace visionary leaders that challenge the status quo and create great companies even if they create a hard-driving culture. Steve Jobs, an obstreperous CEO, returned to Apple after his ouster by the board to create a trillion-dollar giant. Reed Hastings created a powerful no-holds-barred Netflix culture, navigated through tough competitive challenges, and changed the entire media industry. Jeff Bezos envisioned and created Amazon—a company with an intense culture and an immense competitive footprint the likes of which no one has ever seen before.

To maintain company vitality, guide the creation of a healthy culture, and head off pressure from stakeholders, leadership needs to up their game with a maverick CEO to simultaneously support the game changing talent of the hard-driving visionary and maintain the structure, systems, and guidance required for effective corporate governance. To understand how that balance is struck, we talked with experienced board members and senior executives to capture the hard-won lessons of successfully working with a rule-breaking visionary.

Here are several of the lessons learned.

1. Close the door. Executive sessions with the CEO out of the room are essential. The SEC mandates these closed-door meetings, but they take on critical importance in a brilliant-jerk scenario. Executive sessions are the times when the board grapples with if, when, and how to get involved.

2. Curate the culture. Cultural erosions at VW and Uber were not detected early enough, and destructive behaviors spread throughout the company. To give culture the attention it deserves and head off corrosive environments, boards establish a committee to actively oversee goals, incentives, practices, and processes that drive behaviors and the company culture.

3. Mind the gaps. One of the most important functions of the board is supplementing the change maker’s managerial gaps. Whether the founder is young and inexperienced, or just has not been exposed to key functions, the board has the responsibility to provide guidance to the CEO on how to supplement their leadership toolbox. Consider adding a senior executive that can join and balance out the leadership role like Schmidt did at Google.

4. Be contrarian. The CEO’s brilliance generates the electricity that energizes a company’s success, but not everyone can be right all the time. Challenging ingenious leaders and keeping them focused on the critical activities is one of the leaderships most important jobs. “Often the board does not act sufficiently suspicious. Only a small percentage of directors are good at pushing back. They tend to trust the CEO too much” was the observation of a seasoned board member.

In the course of our discussions with leaders we identified three framing principles you need to embrace to put the best practices to use.

An authoritarian trailblazer requires special handling. Traditional corporate governance principles are needed but must be supplemented with additional practices. With an inspired and highly controlling powerhouse at the helm, boards, investors, and employees need to be ready for a different kind of journey.

Your actions depend on the type of visionary you are dealing with. Dominant, disruptive visionaries are not all the same. With some, there is a risk of getting in the way and curtailing the value they could create—you need to use the best practices to help them attain their vision. With other types, complacency is a huge mistake. Left unsupervised, their behavior could obliterate value and possibly destroy the company.

The best defense is a good offense. Boards and executive leaders should act to avoid the pressures that can be generated from a disruptive CEO—not wait until they are feeling squeezed.

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Posted by Michael McKinney at 09:04 AM
Permalink | Comments (0) | General Business

How to Hold onto Your Customers in a Crisis

SUBSCRIPTION-BASED businesses seem to be the most resilient during this time of crisis. With predictable recurring revenue, they have greater flexibility to withstand the storm. But there’s more to it than just revenue. To hang onto customers during a crisis, you need to build a forever transaction with the people you serve.

Your team has to know what your “forever promise” is—the organization’s commit-ment to customers that justifies customer loyalty. If you don’t have a forever promise, you’re sunk.

I’ve observed companies panicking and doing anything they can to manage short-term cash—and destroying hard-earned relationships at lightning speed.

Companies are making bad decisions for good reason. They are letting short-term financial objectives become the North Star in an effort to keep the lights on. But when the dust settles, they will have lost the trust that makes customer loyalty possible. And, they will have lost the trust of the employees they’ve counted on for years to serve those customers with grace, passion, and perseverance.

Customers will remember which hotels and theaters offered a refund on unusable reservations, which newspapers dropped their paywall and provided free content, and which gyms quickly mobilized to send out daily video fitness classes. They will also remember the companies that took advantage of the crisis by gouging on price. Or those that laid-off employees with little to no notice, leaving these formerly loyal workers to fend for themselves when their rents and mortgage payments came due.

In times of crisis, relationships become much more volatile—people can quickly move from love to hate with a company that lets them down. In these times, customers are quicker to connect, let their guards down, and trust. But these same customers are also quicker to end their relationship forever with a company that violates their trust. Reputations that took years to build can be destroyed in two weeks. Relationships that used to take years to unravel can unravel in days.

On the other hand, companies that have a long-term focus and take good care of their customers and employees during a crisis win lasting loyalty. This phenomenon is especially powerful for subscription businesses and any business—subscription or not—that has a true “membership mindset.”

Companies with a membership mindset do everything they do with the objective of creating long-term value for each and every customer. Their businesses are not comprised of anonymous transactions, and their customers are not just an account number or the next person in line. Every customer is a special person with special needs, who is a pleasure to serve.

Those that have predictable recurring revenue streams are better positioned to survive the crisis. Products and services people subscribe to are used by customers on an ongoing basis, which means that they’re habits—so customers are less likely to stop. Also, it takes more energy to proactively make a decision to buy than to make a decision to stop paying for something that has already been decided.

In this crazy time, some businesses have seen a massive spike in demand. Video communications, headset manufacturers, content creators, delivery services, and manufacturers of cleaning supplies, face masks, and toilet paper are inundated with new demand. For these organizations, the question is how to turn this spike into an ongoing relationship. Hint: It’s not by price-gouging…it’s by onboarding these new members to stay for the long-term.

Here are six things you can do right now to build and maintain strong customer relationships during this crisis.

1. (Re)focus on your forever promise. Consider the bigger promise you’re making to your best customers. What problem are you going to solve for them, or what goal are you going to help them achieve, forever? Step back from your products and services and just think about the situation the customer faces and how you can help them to succeed in meeting their objectives.
2. Determine who your best members are and, more importantly, who they aren’t. Be very specific about who you serve and why.
3. Expand “customer success” beyond your support teams. It’s all hands on deck right now. Everyone in the business should be working together to make sure that customer needs are met, and communications with customers are clear.
4. Consider including one or more members of your frontline team in the brainstorming discussion. These individuals have a much clearer line of sight to the customer and the problems those customers face.
5. Find a way to have the customer “in all rooms” where decisions are being made, both in structured and unstructured meetings. You want to feel as if your customers are watching you, eager to see how you are leading, and hoping you’re worthy of their trust. Amazon leaves an “empty seat for the customer” in meetings to ensure customer-aware decisions.
6. Identify the biggest challenges that are preventing your best customers from achieving that goal you promised to help them with. And determine if this crisis requires a different, short-term approach to take better care of current and future members, right now.

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Posted by Michael McKinney at 07:57 AM
Permalink | Comments (0) | General Business

30 Hacks for Bringing Joy to Your Job

STRESS is a given in our lives. Not all of it is bad. For most of us it comes and goes, but for about 25% of us, it is a severe and constant reality according to one NPR/Harvard study. Many are experiencing anxiety leading to burnout at increasingly higher rates.

There is something we can do to put joy back into our work. To that end, Bruce Daisley, a former VP at Twitter, offers 30 hacks for bringing joy to your job in Eat Sleep Work Repeat.

Daisley draws on insights from a range of researcher and experts to identify three themes for creating happier work environments:

Recharge

Twelve simple hacks to restore energy, enthusiasm, and creativity. The fundamental problem is that we simply aren’t practicing behaviors that recharge us. And it shows. Several suggestions include:

Try Going for a Walking Meeting. When we get our blood pumping through our bodies, there is evidence to suggest that walking rather than sitting will clear our heads and increase our creativity by up to 60%.

Eliminate Hurry Sickness. Constant business doesn’t equal achieving more. Calibrate urgency. “On the next occasion, you find yourself asking for something urgently, ask yourself whether you really do need it ASAP. If you can make some things less urgent, you’re being more honest with yourself and helping to create a better working environment for everyone else.” Take time to reflect.

Turn Off Your Notifications and Have a Digital Sabbath. Set up microboundaries to make technology work for you. Avoid weekend e-mails and work. Cal Newport says, “The modern work environment is actively hostile to Deep Work. I think the way that we’re approaching knowledge work we’re going to look back at in maybe fifteen years from now and say hat was disastrously unproductive.” We don’t know how to use the technology we have.

Get a Good Night’s Sleep. Getting a good night’s sleep is “better than any other performance-enhancing intervention.” If you think you need to burn the midnight oil to get more done, consider that “you’re more likely to get where you need to be after eight hours sleep.”

Sync

Eight strategies that will bring trust and connection to your team, enhancing your powers of collaboration and building your collective intelligence. Several of the ways to improve team culture:

Move the Coffee Machine. The secret to building Sync is to get people talking together. Help people come together by design.

Create a Social Meeting. People experience Sync best in social situations. “Social time turns out to be deeply critical to team performance, often accounting for more than 50 percent of positive changes in communication patterns.”

Laugh. “The looseness of thought that laughter provokes triggers our creative juices, encouraging free association of ideas.” A lack of laughter may signal that something is wrong on the team.

Know when to Leave People Alone. Getting a team involved in a project too soon can be counterproductive. But we all need feedback and discussion to perform better. So there is a balance. “Sync is about people working together in harmony—but no amount of Sync will change the power of individuals applying gray matter to difficult problems alone. Creativity is about thinking and then discussion—a team in Sync will make sure it’s doing both.”

Buzz

Ten ways to get your team to a “buzz” state—a sense of engagement and positive energy. Positive Affect (our inclination to experience the world in a positive way) + Psychological Safety = Buzz. How can we bring Buzz into our workplace?

Frame Work as a Problem You’re Solving. If we frame the challenge as a problem we all need to solve, we learn faster and together. “Frame the work as a learning problem, not as an execution problem,” and “introduce a clear sense of uncertainty into the room.”

Focus on the Issue, Not the People. If you provide incentives to cooperate, employees will share information and train others, but if you pit people against one another, they will naturally think only of themselves. It comes as no surprise that “workplaces that put too much emphasis on individual performance find themselves achieving worse results.” Again, there is a balance. “Remove the personal element and encourage people to focus on the work at hand than the individuals involved.”

Replace Presenting with Reading. While awkward at first, consider beginning each meeting by reading a document prepared for subsequent discussion. It can level the playing field. “Teams that have a more equal distribution of communication tend to have higher collective intelligence because you’re hearing from everybody, we’re getting information and input, and effort from everybody is they’re all contributing.” Successful teams are good at reading the nonverbal responses of others and adapting their behavior accordingly.

Relax. “One reason why Buzz so often seems to be beyond our grasp is that we’re not good at being ourselves.” A good sense of humor goes a long way to create positive affect and psychological safety. “Researchers found that “those who laughed together were significantly more likely to share intimate details with one another, and to be closer to their real selves, than those in a nonlaughing control group.”

While it’s true that for the vast majority of us, we can’t make these ideas company-wide policy, or control every demand placed upon us, we resort far too easily to blaming our circumstances on our company. We can do a lot for ourselves by approaching what we do differently. With a little personal responsibility and resourcefulness, most of these helpful hacks are within our grasp. Even a few of them would go a long way to improving our disposition.

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Posted by Michael McKinney at 11:21 PM
Permalink | Comments (0) | General Business

The Answer is Yes! Now, What Was Your Question?

YOU SHOULD shoot for the moon when it comes to customer service says customer experience guru Micah Solomon. When you are small it is easy to give that personalized service to each customer. But when the orders begin to pour in, the attentiveness begins to slacken.

In Ignore Your Customers (And They’ll Go Away), Solomon says that “there’s no such thing as ‘customers’ in the plural. Rather, there’s just one customer: the one who’s being served right now.”

He begins with a concept he calls “automatic positivity.” It is an approach that says “yes to customer requests, rather than defaulting to an easy ‘no’ or one of the many synonyms for no.” The point is to find a way to accommodate your customers.

In the event that you have to say no, “there’s almost always a way to soften the blow. The solution, generally, is to restrain yourself from delivering this final no without having a yes to offer in the same breath. Offer an alternative solution and an apology that is likely to make your ‘no’ easier to accept.” There are obvious exceptions to this approach when there are health, safety, or security issues involved.

How to Build Automatic Positivity

1. Model “yes behavior” yourself.

If you hear yourself frequently telling customers some version of, “I’m afraid we cannot accommodate that request,” your employees will follow suit and find opportunities to like wise refuse to accommodate customers.

2. Spell out your commitment to yes.

Write the default o yes (including the nuances of what to do when you can’t say yes) into your company standards—and publicize those standards throughout the company.

3. Preach the gospel of defaulting to yes, starting in the very first minutes of employment.

Make it clear, from the first days of an employee’s tenure, that the way things are done around here is with customer-focused flexibility; that working here involves an ongoing attempt to maintain, in almost all situations, a default of yes.

4. Support your employees in getting to yes.

From their first fledgling, awkward attempts to find a yes for customers to their later, more-refined performances, employee efforts at yes deserve encouragement and applause.

Solomon goes behind the scenes of some of the great customer service organizations like Nordstrom, Zappos, The Ritz-Carlton, and many others. The end of each chapter has a Reader’s Cheat Sheet/Summary as well as a Reading Group Guide to help make the insights actionable.

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Posted by Michael McKinney at 11:17 AM
Permalink | Comments (0) | General Business

What Robert Greifeld Can Teach You About Getting Your Organization On Track

TURNING AROUND an organization requires a new story. A very clear and well-told story. When Robert Greifeld was asked to take the helm of Nasdaq in 2003 to execute a turnaround, he came with a new story. As he relates in Market Mover, the story had five parts:

1. Get the Right People on Board
2. Reduce Bureaucracy
3. Embrace Fiscal Discipline
4. Overhaul Technology
5. Stop Being Satisfied with No.2

In any cultural or business turnaround, the right people make all the difference. You can’t predict the future, so you need people that get the new story.

You can’t control circumstances, but what you can do is to ensure that you have the best people in place so that when the world changes around them, they can adapt, respond, and step up. That’s why my motto has always been people first.

He believes that you should promote before you recruit and offers this advice on finding them:

Often, the people who are right for the new culture are not individuals who thrived under the previous regime. Change the culture, and inevitably, people with skill sets more apropos to the next context suddenly stand out.

He wasn’t looking for just smart people, but people with bandwidth. That is, people with the “capacity to fruitful focus one’s attention on multiple areas.” He also encouraged debates among his executive team.

The point of the debate wasn’t to enact a perfectly democratic ideal. It was to achieve better clarity on all of the issues involved so everyone understood the reasons for proposed changes, and my decision-making was both transparent and much better informed.

Next, Greifeld had to get people working on the right things. “A common trait of those who fail, I believe, is that they end up working on the wrong things.” Prioritizing is the challenge.

As a leader, I consider it my job to focus on what’s not working. Optimism is essential if you’re to take risks and succeed; indeed, it’s probably true that the only people who really accomplish things are the optimists. But that optimism must be tempered by a disciplined and critical perspective.

Shine the light into areas of vagueness, confusion, or conflict, knowing that there is leverage to be found in creating clarity, alignment, and resolution.

A focus on cash is vital, but it’s important to remember that you can’t save your way to success. “When a culture is focused entirely on thrift, the next big thing is usually invented somewhere else.”

To address the technology gap at Nasdaq, Greifeld went outside to buy winners—smart acquisitions.

Today’s outsiders are tomorrow's establishment. Business leaders should always cultivate an attentive disposition toward outsiders, especially in industries impacted by technology. Always be on the lookout for new ideas, products, and technologies happening on the edges of your business ecosystem, where outsiders are developing a different picture of your future in apocryphal garages and basements.

Naturally, Nasdaq must deal with regulation and government oversight, but no matter what business we are in, we must sell ideas to others. “Don’t feel like you’re above politics—none of us are. Learn to work with it and use it to increase your competitive advantage. Lobbying is education. It’s an opportunity to get important perspectives on the table so legislatures and regulators can actually make informed decisions.”

Motivation to change is easier when you are threatened, but when times are good, when you have things where you want them, change is much harder. You always need to be looking for ways to change and grow.

Any moment reflecting on the past is a moment you’re not focused on the future. Just because you were successful yesterday does not mean you will be successful tomorrow. If you’re not careful, personally and organizationally, past success will be a weight on future success, and the greater the success, the heavier the weight.

As NASDAQ grew and matured, Greifeld realized that he was not as essential as he had been. It was time to move on. He left the CEO position to someone he promoted when he first arrived, Adena Friedman.

“Business is a marathon, not a sprint, and to be a leader in the marathon takes an unusual degree of fitness—mental, emotional, and physical.”

Market Mover is of course, full of the nuts and bolts of financial technology and the digital economy, but it is so much more. It is not just about the revival of Nasdaq’s near-death experience but is a course in leadership and the entrepreneurial spirit that drives innovation and growth. He writes candidly of the most critical moments of his thirteen-year career at Nasdaq with each chapter focusing on a headline-making event. He takes us through his response and the lessons he learned. This book will not only help you be a better leader, but the insights you will find here will prove invaluable in guiding you as you build your organization.

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Posted by Michael McKinney at 02:35 PM
Permalink | Comments (0) | Entrepreneurship , General Business , Leaders

3 Ways to Boost the Effectiveness of Your Leadership

THE RESPONSIBILITIES that fall under a leadership title vary significantly at each company. Still, one thing is true for all—organizational leadership must be effective for teams to succeed. Without effective leadership in place, organizations can’t achieve their goals, and employees may start looking for jobs elsewhere.

Leaders are often tasked with many projects that overload their schedules, which can prevent them from effectively leading and managing their team the way they should. There is also a noticeable gap in skills and training for leaders today. Closing the gap on leadership skills is the number one priority of 58% of companies, while only 18% feel their leaders are “very effective” at achieving business goals.

By finding a practical approach to invest your time into the right priorities, the efficiency at which you perform your role, and respect your team has for you, can improve significantly. Let's take a look at three leadership strategies you can implement today to boost the effectiveness of your leadership.

1. Become more self-aware

It's easy to fall into a rut in your position, but it’s harmful to the organization and your team when your leadership is on autopilot. Blind leaders often get tunnel vision, causing them to forget what's going on around them. While it’s easy to blame an individual team member for being negligent and causing a mistake, it’s important not to assume you are right. Having an open and consistent dialogue is crucial. Many leaders don't account for blind leadership. Neglecting an employee by providing minimal feedback and support is an issue that lies within the management position, not the employee.

A strong leader is often characterized as someone able to identify their unique strengths while also having the courage to acknowledge their weaknesses. Self-awareness is a skill that can be learned over time through reflection. Many of the world's most successful leaders take time for self-reflection each day. If you’re not aware of your own actions, you can’t expect to fully understand what is happening with your team.

2. Foster an environment for employee growth

Your position as a leader goes far beyond team management. Everyone wants to move up in their career. Your team will likely turn to you for guidance in getting to the next step on their path. You must foster an environment where employee growth is encouraged.

One of the best ways to understand what your staff are looking for is to host ongoing career conversations. Inquire about your employees’ goals and where they see themselves growing in the company. Knowing this can help you develop a path for their career growth together.

Delegating tasks to employees that are outside of their standard job description is another way to foster employee growth. This will help them develop new skills that can be applied to higher positions at the company when they are ready. By relinquishing control of some of your tasks through delegation, you will have more time to engage with your team. Delegation and management are often the most challenging aspects of a leadership position, but using an Enterprise Resource Planning (ERP) solution can help you manage your business processes and assign the associated tasks to the right people. ERP systems help increase efficiencies to drive better decision-making over time, allowing you to spend more time focusing on being an effective leader.

Furthermore, you should be providing and obtaining constant feedback from your team. Most employees may feel that they do not receive enough feedback, and when they do receive any, it's too vague. Companies that provide consistent feedback have been shown to have less employee turnover. When employees feel respected, they become more engaged in the success of the company and their role in that success. Because of this, it's important to motivate and inspire your employees through ongoing, regular feedback.

3. Communicate effectively and often

Leaders who do not communicate effectively regularly fail in their positions. Many may argue that communication is the most critical aspect of the job.

You can start by being an active member of the conversations that you have with each of your employees. It's easy to get distracted when you're busy balancing many tasks at once, but your employees deserve your undivided attention during meetings. Make sure you're mindful of the fact that your team members have different communication styles. Actively listening to your employees and directly asking them to specify their preferred methods of communication can be helpful ways to understand your employees better. Being able to adapt your communication style to fit your team is a tremendous step toward becoming an effective leader. Not all leaders can manage relationships with their staff effectively. Don’t fall into this category!

Prioritize your goals so you can allow time in your schedule for open office hours where employees can stop by unannounced for assistance or to talk through an issue. This transparency and willingness to be present can be invaluable to your employee's trust. There will be times when you deliver an important message to your team, and they may have questions for you. Be ready to answer these questions as openly and honestly as you can and always treat everyone with respect.

Posted by Michael McKinney at 07:56 AM
Permalink | Comments (0) | General Business

Our Stewardship Responsibility

THE CHICK-FIL-A corporate purpose statement goes like this:

To glorify God by being a faithful steward of all that is entrusted to us and to have a positive influence on all who come into contact with Chick-fil-A.

In Covert Cows and Chick-fil-A, former executive vice-president and chief marketing officer, Steve Robinson explains that for Truett Cathy, founder of Chick-fil-A, the most important phase in the purpose statement was, “by being a faithful Steward.” And the most important word in that phrase was “by.”

His premise was this business does not glorify God unless it is built upon great stewardship of the assets, talents, influence, and relationships entrusted to us. He felt accountability to his Creator—accountability for everything the Creator put into his hands and, thus, our hands—so he wanted a business that focused on doing those things well.

Caught up in our day-to-day work, the idea of stewardship easily moves into the background. For Chick-fil-A, it guides everything they do. Even when drawn into controversy, regardless of personal beliefs, they act as stewards and, therefore, the need to have a positive impact on all who come into contact with Chick-fil-A. That’s the power of a clear purpose statement. “We were not a Christian business,” writes Robinson, “but rather a business where the owners and leadership aspired to apply and live out biblical principles.” Truett said that they weren’t a ministry and that he wanted “people to discover what we believe because of how we treat them.”

The stewardship idea guides their marketing. Marketing is about more than transactions. It’s about relationships.

When you’re building a brand based on emotional engagement rather than transactions, an investment at the personal engagement level is many times more efficient and effective than a media-weighted strategy.

We didn’t look at customers as “Oh, we have two thousand customers a day going through a particular store.” No, we’ve got two thousand people choosing to visit that store. They each have their own issues, problems, challenges—they each have their own story. They’re in the midst of a story at the very moment they encounter Chick-fil-A. Now, how did we impact their story? How did we deliver “where good meets gracious”? How did we help make their story today better? Quite frankly, they may not be having a good day, and Chick-fil-A has the potential to help change the script.

They contacted Horst Schulze and Danny Meyer to better understand service and hospitality. Horst told them, “Don’t look to be better than the other fast-food restaurants. Those limited expectations will just weigh you down. Instead, aspire to the next level of service—restaurants with a price point that are at least double Chick-fil-A’s, and build a service model that resembles those.” That mindset led them to create the Core 4: create eye contact, share a smile, speak with an enthusiastic voice, and stay connected to make it personal.

The Cow Campaign

The iconic Cow “Eat Mor Chikin” campaign developed from an idea by David Ring of The Richards Group. It is, as Robinson describes—engaging, endearing, and enduring. Stewardship comes into play here too. A former Chick-fil-A marketing consultant said, “They don’t wavier. They don’t shift. That is refreshing, and from a marketing standpoint, it can be very valuable, as you can see with the Cow campaign. They have resisted the urge to gussie it up, to change it, to get rid of it, or to do the wrong thing with it.”

We also took great care ensuring the Cows never became shills for Chick-fil-A. They were in this thing for their own self-interest, not Chick-fil-A’s. If their work started to look too much like they were advertising for Chick-fil-A, such as promoting specific products and ingredients, they would quickly lose their edginess and even their believability.

The cows are not on the Chick-fil-A payroll.

Six Legacy Principles

These six principles, based on Truett Cathy’s leadership, have guided every decision at Chick-fil-A and help to keep it uniquely different.

1. Being a Good Steward
The concept of Stewardship allows one to be both generous and thrifty. “Every dollar mattered whether invested in the business, people, or charity. Stewardship is an idea you live.

2. Building Long-Term Relationships
Truett wanted all relationships to be for life. “He was giving his full commitment, and he wanted the same in return. In his mind, if you were going to be a part of Chick-fil-A, there was no reason for you to ever go anywhere else in your career.”

3. Providing Hospitality
Truett’s heart of hospitality is captured in the phrase, “My pleasure” that he asked everyone to say. “My pleasure creates an immediate communication that you really do matter. The phrase is transformative in terms of the guest’s experience.”

4. Taking Personal Responsibility
When Truitt “selected people to work at Chick-fil-A or to become restaurant Operators, he sought people he knew could do the job, and then he trusted them to do it. He gave us the keys then stepped out of the way.

We were personally accountable to him, to the brand, and to our customers. We were accountable in the deals we created, in the relationships we built in the business, in our behavior on the road, in how we talked about the business, even in our language on the golf course. When he placed his trust in us, we responded with personal accountability.

5. Choosing Personal Influence over Position Power
Truett and former company president Jimmy Collins believed, “If I ever have to use position power to influence somebody, I’m probably only going to get to do that once. And if I have to do it at all, it probably does not bode well for their future.”

6. Having Fun
Don’t take yourself too seriously. “One of the virtues that evolved in the business was a tangible effort to be unexpectedly fun.”

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Posted by Michael McKinney at 12:35 AM
Permalink | Comments (0) | General Business

What Every Business Leader Needs to Know to Thrive in an Economic Downturn

A convergence of troubling signs forecast a looming economic downturn. Many believe it’s certain that a recession is pending.

Proactive business leaders aren’t worried. They see any economic change as a springboard for profitable growth and competitive advantage. Rather than spreading a message of caution, worry or gloom, they’re sending a more strategic message: “We will not decline when the economy falters. We will instead show the market what we’re made of.”

The strategic leader knows the importance of stepping out of the busyness of business despite the temptation to go faster in times of economic uncertainty. But speeding up only adds pressure and overwhelms the workforce. Stretching employees to the limit by having them put in longer hours, sell more, and get faster results only leads to burnout and neglects the longer view. By attending to the here-and-now and neglecting the longer view or bigger picture, organizational leaders and their teams may do well enough for a while. But they’re unlikely to thrive over time.

True success lies in knowing when to slow down and when to speed up. Building in a strategic pause, or deliberate break in the day -- or week or month -- allows leaders to stop doing and start thinking. It allows time for developing a high-impact plan of action with clear accountabilities, timelines, and pathways of communication. They can then come away with a renewed sense of confidence, purpose, and optimism.

To recession-proof their businesses, companies should be slowing down and allowing time to identify ways to be proactive, strategic, and future-focused.

Use strategic pauses to assess these six factors that can lead to accelerated growth and a recession-proof business:

1. Assess the competition. Make time to understand in which ways the competition has the advantage. What are your competitors’ gaps or weaknesses? How can you differentiate and elevate your organization to gain advantage and increase market share?

2. Assess your organization. Determine where you are today as a team and a company. What do you bring? What are your signature strengths and talents? Do you have the right people in the right roles, doing the right things to ensure success today and accelerate growth and innovation for a stellar future? And, importantly, are you adding value in ways that mean the most to you, the company, the customer, and your clients?

3. Assess the market. What will differentiate your organization as a future-focused, customer-centric, innovation-driving engine of growth? Where will you see profitable openings in the market? Ask yourself: Will less agile organizations struggle to keep up? How will we pick up customers in need of access to the products and services we offer? Which new products and services can we provide to fill the void?

4. Assess risk. Where might you lose market share in the face of an economic downturn? Which employees are likely to become worried about the future of the company or industry? What’s your plan for retaining and developing your top talent?

5. Look out over the horizon. While it’s essential to continue providing exceptional customer service, product reliability, and your tried-and-true client offerings, you must also be laser-focused on driving meaningful innovation that improves all your product lines and service offerings.

6. Assure your stakeholders. Make sure that your employees, customers, and investors see you and your company as confident, courageous, savvy, and ready to make the most of any economic shifts that come along.

Slowing down and pausing can feel implausible and impractical in the midst of an economic free-fall. But by taking the time to develop a more thoughtful path forward, you will be ensuring your success in any economic climate.

Posted by Michael McKinney at 01:40 AM
Permalink | Comments (0) | General Business

Artificial Persuasion: The Invisible Brand

MASS MEDIA has been replaced by mass personalization through the rise of Artificial Intelligence. William Ammerman states in The Invisible Brand, “AI will play an increasingly important role in our lives in the years ahead as marketers turn vast amounts of computing power to the problem of influence people’s decisions.”

Buried deep within the media we consume and the apps we use, unseen forces are working behind the scenes collecting data about us to pair with AI and digital advertising to influence everything we do. As a business, the challenge is how to best use this technology to promote ideas and products. As a consumer, the challenge is to understand how this technology is influencing us. Most of the time, it serves us well enhancing our lives and improving efficiency, and we welcome it. There are times when it feels like Big Brother is watching us. A better understanding of what is actually behind the technology will help us to ask better questions and respond in a measured and responsible manner.

In a highly accessible way, Ammerman goes into great detail to explain how this technology is emerging and permanently altering the human-computer relationship. He identifies this emerging field as psychological technology, or simply psychotechnology. His focus is on marketing, but psychotechnology is working invisibly to reshape our behaviors in other areas of our lives. (Indeed, broadly speaking, everything we do is marketing.)

Psychotechnology combines four areas of innovation:

Personalization: Personalization is the norm in digital advertising. Machine learning connects all that data and allows marketers to tailor their messages just for you with your personality in mind.

Persuasion: Marketers can use our innate human characteristics to influence our behaviors and thinking. Persuasion is not a new science, but today, it can be executed in new ways. “The science of persuasion is uncovering these unconscious reflexes that trigger specific behaviors.” Ammerman provides a fascinating look at how the science of persuasion is deployed behind the scenes in ways that influence our emotions and brain chemistry.

Able to Learn: The amount and kind of information that is and can be gathered about our lives is astonishing. We don’t even think about it. Combined with AI, all this data gathering can be exploited through the power of machine learning. “Algorithms can learn by being fed data about what works and doesn’t work, and they can adapt in real-time to changing information.”

We can now have conversations with machines based on data about what we like, where we go, and who we know that is not unlike the conversations we would have with friends. Increasingly, people are creating emotional bonds with AI-powered machines.

Our personal AI-powered tutor could help us to be continual lifelong learners—“a resource to help us learn the skills we need for our jobs, or even help us to identify the various flora and fauna we might spy on a mountain hike.”

Ammerman raises questions regarding who owns our data, what is the government’s responsibility, should there be limits, and it’s use in political propaganda.

For better or worse, the invisible brand is with us, and we have come to depend on it. “Behind all of this psychotechnology is an army of interests: corporations, governments, unions, politicians, religions, scientists, and universities, all vying for our hearts and minds. Through psychotechnology these brands operate invisibly, but collectively they are reshaping the market and the role of marketing.”

Tim Berners-Lee remarked, “If you put a drop of love into Twitter, it seems to decay, but if you put in a drop of hatred, you feel it actually propagates much more strongly.” Perhaps we are hardwired to develop trust and connections slowly, being ever on the lookout for deceit and deception. A drop of love must be confirmed over and over across a long expanse of time to gain traction. We are slow to trust. Conversely, our instinct for survival has us on edge, always ready to respond aggressively to threats. A drop of hate triggers us more quickly, as we respond with less hesitation. This is an exploit the Invisible Brand can use against us by hacking our hate.

To remain competitive, business must understand the forces shaping the marketplace. And consumers must educate themselves to the opportunities and dangers and develop the wisdom to think for themselves.

Continue the discussion with these thought starters from William Ammerman:

▪ We’ve gone from delivering the same message to everyone at the same time through mass communications, to technology that can deliver different messages to every individual, on demand, through mass customization.

▪ We have shifted from consuming information we need, to consuming information we like.

▪ Through personalized information, the Invisible Brand is accelerating its ability to influence the way we think.

▪ It will soon be easier for a robot to recognize a human than for a human to recognize a robot.

▪ Where previously we may have believed that our strongest emotions were reserved for interpersonal relationships, it is clear that our empathy and emotions play an important role in how we relate to machines. (Researchers have found that 93 percent of 8 and 9-year-olds won’t share embarrassing issues with family members or friends—but they will Alexa.)

▪ We will soon lose our ability to discern whether we are programming the machines or they are programming us.

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Posted by Michael McKinney at 10:00 PM
Permalink | Comments (0) | Artificial Intelligence , General Business , Marketing

Nincompoopery: Making Organizations Safe for Employees & Customers

NINCOMPOOPERY is the crazy stuff we do (or don’t do) that drives our customers crazy and makes life difficult for employees and keeps organizations from getting what they want.

There are nincompoops, and there is nincompoopery. But when an organization is driving people crazy, it’s a nincompoopery problem. Usually, the organization knows what’s wrong; it’s just that nobody has the courage to overcome the tradition, the inertia, or the apathy to fix it. And so, it persists.

John Brandt writes in Nincompoopery: Why Customers Hate You—and How to Fix It, that the good news is that there is a plan to fix it and you already know enough to get started.

Most organizations are rife with Nincompoopery, which deadens the souls of their employees (including, sometimes you and me) and lead them (us) to act like nincompoops. To wit, we get stuck in old ways of doing things; we convince ourselves that change would be impossible because nobody could fix such a nincompoopish company anyway; or we fret that even if we tried to lead a change, none of the nincompoops to whom we report or work with would listen. Really, human beings are endlessly inventive in thinking of reasons why not to change ourselves, our companies, and our fates—in other words, we’re really good at remaining nitwits and stuck in Nincompoopery.

So, you need a plan and some good politics by managing relationships, providing safety and meaning in order to make the changes out of nincompoopery. Brandt offers a plan organized around three simple strategies: innovation, talent, and process.

Innovation

Innovation is not always the game-changing products that change a culture. Customers think differently about value. Innovation should revolve around “How can we make our customers’ lives simpler, happier, less stressed, and more productive, by removing or solving multiple issues with a single solution?”

Talent

“Leading companies recruit for smarts, diligence, and caring.” Character matters. “The only way that we create a difference at any individual customer’s moment of truth is by the investment we make in talent, training, and culture. That difference, for good or bad, will determine our bottom lines for years to come. If you hire right, train right and get out of their way, your employees will deliver.

Process

With god process in place, you can reap the benefits of the time, effort, and money you’ve invested in innovation and talent. Look at your company through your customer’s eyes. How do you create customer value? What are you good at, and what are you terrible at? Your customers know. Brandt says excel, improve, and fix—or kill. Start with what you are terrible at and fix it or kill it because it is driving customers away.

With a little bit of strategic thinking and a whole bunch of empathy for customers and employees, you can lead change and eliminate nincompoopery.

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Posted by Michael McKinney at 04:58 PM
Permalink | Comments (0) | General Business

3 Ways to Break Out of a Zero-Sum Game of Growth with Your Competitors

How true disruptors use innovation, including digital,
to grow the market and create new business models

F

1: Open adjacent product areas: For the people across the 147 countries around the world who learned about colors and the alphabet from Sesame Street, there's one more lesson that the beloved TV program can offer. We can learn about how the program created an entirely new segment of preschool “edutainment.” Sesame Street did not disrupt a prior market for childhood education. It created a new one. For more information on this and the concept of non-disruptive creation see this blog post.

2: Create new technology enabled business models: GE’s Jeff Immelt and Dartmouth Professor Govindarajan are back, with lessons on digital transformation. Other than emphasizing that digital transformation is hard work, they make a valid point about how industrial manufacturing firms that used to sell hardware and give the software away for free, have created new business models selling personalized performance-enhancing software too. This article also has good advice to leaders not to talk themselves out of the hard work of digital transformation.

3: Grow the whole market using digital capabilities: Digital disrupters affect their industries in complicated ways. AirBnB did not take market share directly from established chains. According to this article from the US Bureau of Labor Statistics, 42-63% of established hotels probably would not have taken the rooms that AirBnB gained in the lodging business. However, the overall profitability of the hotel industry went down 3.7% with the introduction of AirBnB.

While some disruptors can completely change the nature of the industry (as Netflix did with Blockbuster) others slowly change industry profitability and grow the entire market. In either case, Digital Transformation is an opportunity for established companies to play a more innovative role in non-traditional ways. Now, more than ever, you can grow your business in the new and adjacent areas enabled by technology.

Go forth and transform.

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Posted by Michael McKinney at 04:04 PM
Permalink | Comments (0) | General Business

5 Leadership Lessons: Think Like Amazon

LONG-TERM THINKING is the key to what goes on at Amazon. Jeff Bezos has said, “What we’re really focused on is thinking long-term, putting the customer at the center of our universe and inventing. Those are the three big ideas to think long-term because a lot of invention doesn’t work. If you’re going to invent, it means you’re going to experiment; you have to think long-term. These three ideas, customer-centricity, long-term thinking, and a passion for invention, those go together. That’s how we do it, and by the way, we have a lot of fun doing it that way.”

Former Amazon executive, John Rossman provides 50½ ideas that have worked for Amazon and can help you succeed in the digital age in Think Like Amazon. He writes, “Jeff Bezos and Amazon have a remarkably consistent way to approaching and meeting challenges, operating their business and technology, and thinking about new ideas, markets, and growth.” All 50 ideas are a great look behind the scenes. They all may not work for you off-the-shelf, but the principles can be applied anywhere. The 50½ ideas deserve serious consideration, but I‘ll just focus on five here.

  Reset Your Clocks. Your Journey Will Not Be Short or a Straight Line. Bezos said, “If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people. But if you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that. Just by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue. At Amazon, we like things to work in five to seven years. We’re willing to plant seeds, let them grow—and we’re very stubborn. We say we’re stubborn on vision and flexible on details.”

  Don’t Go Along to Get Along. The Risk Social Cohesion Poses to Achieving Hard Results. “Being nice and getting along are necessary and valued. You can’t achieve the right results if you have nothing but burned bridges behind you. But getting along is simply not the most important thing. Think about your organization’s priorities and social norms. If getting along is more valued than being right, the business will become more about getting along than about doing the right thing over time.”

  Are You Willing to Be Misunderstood? “The most impactful and underappreciated aspect of innovation is challenging common and long-held assumptions about how things work. When you create an alternative to these assumptions, exact many doubters.” Rossman adds, “If you’re going to innovate, you not only have to be willing to be misunderstood but you must have a thick skin. If you aren’t upsetting someone, you likely are not disrupting much of anything.”

  Process versus Bureaucracy. Creating Processes That Scale. “Well-defined processes help prevent bureaucracy or expose it if it exists.” Bezos believes, “Good process is absolutely essential. Without defined processes, you can’t scale, you can’t put metrics and instrumentation in place, you can’t manage. But avoiding bureaucracy is essential. Bureaucracy is process run amok.” Rossman adds, “Bezos understood that A-level performers hate bureaucracy and will leave organizations where it encroaches upon them. Bureaucracy lets underperformers hide, and that’s why they like it.” You know bureaucracy when you can’t get a straight answer or when the rules just don’t make any sense. “As you work to invent and perfect processes, always remember that simplicity is an essential bulwark against the creeping onslaught of bureaucracy.”

And one just for would-be entrepreneurs:

  What’s Your Just Walk Out Technology? Use the Internet of Things to Reinvent Customer Experiences. Amazon Go offers “No lines, no checkouts, no registers.” You simply check in with you Amazon Go app upon entering the store and begin shopping. Anything you pick up is automatically added to your cart. Just walk out. Rossman says it’s easier than shoplifting.

It’s the Internet of Things. At Amazon, it begins with obsessing over their customers. And that means trying many things that often don’t work out and sticking with things that do or might work out. Obsess over better customer experiences to build long-term trust.

There are countless opportunities to deliver unique customer experiences by leveraging connected devices. What is the path to make the Internet of Things work for you? Rossman lays out four thoughts:

Start with the Customer

“Walk yourself through an entire day in the life of your customer. Not just with your product or service, but broadly and deeply. How might connected devices change the way that your product or service fits into that day?

Remove Friction

Identify and remove friction. “Sometimes, the best way to create a great customer experience is to start by imagining a terrible customer experience.” (Example: Amazon Kindle Fire’s Mayday feature. Service agents can take over a user’s screen remotely to fix problems for them.)

Think Broadly

Think beyond your immediate area of expertise. For Amazon, the pain point for customers goes beyond just the shopping experience and the products they offer. It extends to the delivery of the product. “Connected devices empower you to learn more about your customers and use these deeper insights to build better products and services for the environments in which they are used. What data would help you understand your customers and their experience better?”

Don’t Commit to Scaling

Run trials for as long as necessary to get it right before scaling. “One of the biggest mistakes companies can make is to commit to scaling a new feature or capability before it has been thoroughly tested and perfected. Keep new approaches in a beta state and for a limited number for customers. Set their expectations to be realistic, telling them that this is new and a trial.”

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Posted by Michael McKinney at 07:46 PM
Permalink | Comments (0) | Creativity & Innovation , Five Lessons , General Business

Forging an Ironclad Brand – Your North Star

A BRAND properly conceived is more than a marketing activity. It’s more than a logo. It’s more than a great ad. It’s more than what you do on social media. It informs all of those things and more. Your brand is your North Star as Lindsay Pedersen defines it in Forging an Ironclad Brand.

An Ironclad brand is one that unleashes your competitive advantage. Your brand acts as a filter in the customer's mind defining who you are and what you mean to your customer. Importantly, it “provides a North Star to guide employees to grow the business you want to build, and to do so with autonomy and cohesion.” Because your brand is an articulation of your purpose, it allows your employees to focus on what is important, and it communicates what your customer can expect—your promise—what makes you different.

Creating an ironclad brand is not just the function of the marketing department.

Pedersen believes an ironclad brand should meet nine criteria:

1. It must be big. It should represent a big promise—a big benefit—in the customer's mind.

2. It must be narrow. Big enough to matter but narrow enough to own.

3. It must be asymmetrical. That is, you must find that strength where you can dominate. What is your asymmetrical, lopsided, disproportionate strength that far exceeds the rest of the market?

4. It must be empathetic. It should reflect the emotional life of your target customer.

5. It must be optimally distinct. It needs to strike a balance between old and new, familiar and novel. Make your brand idea new enough that it brings the newness we crave alongside familiarity.

6. It must be functional and emotional. Your emotional benefit must be firmly rooted in a functional one. Similarly, your functional benefit should give rise to an emotional reward. For example, Amazon Prime’s functional benefit of fast delivery enables the emotional benefit of instant gratification.

7. It must be sharp-edged. An ironclad brand clarifies. It brings contrast and can usually be summed up in a word or two. Sometimes the best way to sharpen your edges is to remove things, to simplify. John Maeda says,” simplicity is about subtracting the obvious and adding the meaningful.”

8. It must have teeth. Your brand needs to be demonstrably true. Your brand’s promise should be very specific. Specificity increases believability.

9. It must deliver. Your brand must be something you deliver on every time, all the time.

With these nine conditions as a backdrop, Pedersen presents her eight-step process for crafting a brand strategy—The Ironclad Method.

Step 1: Orient
The Ironclad Method begins by establishing context. In the first step of creating your brand strategy, you orient to your target customer and your competitive frame of reference.

Step 2: Listen
In the second step of the method, you listen to your customers to identify the insights from which your brand strategy will spring. By getting into a listening mindset, and preparing for and conducting customer research, you set up the richest building blocks for your brand strategy.

Step 3: Examine
In step 3, you examine the insights you have collected and synthesize them into the Uncommon Denominator framework. This reveals your potential positioning themes that strike the overlap of being both relevant to the customer and ownable by your business.

Step 4: Ladder
Now you establish the linchpin of your brand strategy. In step 4, you develop a ladder of benefits and reasons to believe that specify the promise your business makes, how you prove that promise, and what your customer ultimately enjoys as a result of experiencing that promise.

Step 5: Characterize
With your benefit ladder complete, the method’s fifth step shifts you to characterizing your business. By pinpointing your character archetype and defining the personality and tonality of your business, you enable yourself and others to embody your brand consistently and genuinely.

Step 6: Stage
In the sixth step, you will define each stage of your customer’s journey with your brand. Explicitly describing the stages enables you to tailor your messages for maximum impact.

Step 7: Activate Creative
The seventh step shows how to activate creative once you are executing a specific communication tactic. This step establishes the strategic directive, stripping out the extraneous and subjective before beginning the creative development process, setting the conditions for effective communication.

Step 8: Zoom Out
For the final step of the Ironclad Method, you zoom out to begin seeing brand in everything your business does. By the end, you will have created an ironclad brand strategy to serve as your North Star in creating a flourishing business.

The final step really gets to the power of an ironclad brand. “When you zoom out, you enable yourself to view the breadth and depth of how your brand can come to life. The more you imbue everything with your brand, the more it can deepen customer love.”

Pedersen explains each of these steps in detail and has also created an online course available through her website.

There is much to learn and apply in this comprehensive look at brand and brand strategy. As the subtitle of this book suggests—“A Leader’s Guide”—the material covered is not something to be delegated and dismissed. As a founder or leader of any function, the brand is your business. Live your brand. “Demonstrate with your words and with your actions, formally and informally, with colleagues of all levels, that brand is the priority. Let your brand strategy guide you and let your people see that it is guiding you. This gives them permission and encouragement to use brand as their North Star, too.”

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Posted by Michael McKinney at 07:48 AM
Permalink | Comments (0) | General Business

Is Your Organization Digitally Mature?

WE’RE not in Kansas anymore. Unlike Dorothy in the movie version of the Wizard of Oz, there’s no going back.

Many companies experience digital disruption in the same way as the tornado in the Wizard of Oz—swept up by forces beyond their control. But the story is not about the tornado, but how they made their way through the strange new world they found themselves in. In the same way, digital disruption is not about the technology as much as it is about how companies can make their way through the new competitive environment they find themselves in.

Digital disruption is more about the people than it is the technology. People are the focus of The Technology Fallacy by Gerald Kane, Anh Phillips, Jonathan Copulsky, and Garth Andrus. “It’s about how to manage disruption, adapt to disruption, and thrive in a world and a time marked by disruption.”

The main problem facing organizations is not the pace of change itself but the “uneven rates of assimilating these technologies into different levels of human organization.”

Technology changes faster than individuals can adopt it (the adoption gap); individuals adapt more quickly to that change than organizations can (the adaptation gap), and organizations adjust more quickly than legal and societal institutions can (the assimilation gap). Each of these gaps poses a different challenge for companies.

Only by fundamentally changing the way the organization works—through flattening hierarchies, speeding up decision making, helping employees develop needed skills, and successfully understanding both opportunities and threats in the environment—can an organization truly adapt to a digital world.

Digital Maturity

The authors introduce the concept of digital maturity. “Digital Maturity is about continually realigning your organization and updating your strategic plan to account for changes in the technological landscape that affect your business.”

Digital maturity should be the goal that most companies should aspire to in order to compete in a digital world. They note that the idea of tightly aligning an organization's people, tasks, structure, and culture is not new; it plays out differently because the conditions under which those management principles operate has changed.

Digital maturity is a gradual, ongoing process. In a digitally mature company, the digital strategy is a core part of the organization’s overall business strategy. Business should experiment with new technologies, but more importantly, they need to be able to “clearly articulate why they need to invest in these technologies or what business purpose they could serve.” Digital leaders need to focus on business value.

Digital strategy isn’t just thinking of new initiatives that enable organizations to do business in the same way but slightly more efficiently. Instead, it involves fundamentally rethinking how you do business in light of all the digital trends occurring both inside and outside your organization. It involves identifying potential new services, sources of revenue, and ways of interacting with employees.

What About Leadership?

Does the essence of leadership really change in the digital age? Or are greater and greater levels of uncertainty causing us to forget the essentials and focus on the latest bright and shiny object?

The fundamental principles of leaders never change. We tend to forget that in the face of rapid change. New environments demand a different emphasis. The authors rightly note, “Digital leadership is just leadership, albeit in a somewhat new environment.”

But what is different? “Leaders cannot readily assume that any information can be kept private and must be prepared to deal with all situations publicly.”

They shared this from the Australia and New Zealand Banking Group (ANZ):

The second skill needed to be a great leader in today’s context is to be inherently curious. Today’s leaders need to lead through influence rather than through command and control. That’s quite hard for people who have really only had one quiver [sic] in their leadership bow, which is command and control.

What they meant was arrow but point well taken. I liked the metaphor. The point they make regard command and control has always been so, but in the industrial age you could get away with it, so it has become the baggage we have to deal with.

What Skills Do Digital Leaders Need?

From their research, the most important skill is transformative vision and a forward-looking perspective. This includes not just knowledge of markets and trends, but how they are evolving and how the business should respond. It would be the ability to know what is foundational to the business and what changes are relevant and might impact that base.

Next is digital literacy. That is, understanding the general principles of how a technology works and thus the possibilities that come from so that one can determine if a particular technology is or is not relevant for certain business applications. It is difficult to provide purpose and direction if you have no idea how or why a technology will impact your business.

A leader must be change-oriented or open-minded. Willing to adapt and comfortable with a changing environment. Beyond this, a leader must demonstrate the ability to deliver and decisively lead the organization into the future.

One other key difference to leadership in a digital age: where leadership is found within the organization. In the twentieth century hierarchical corporation, people looked only to the top of the org chart for leadership. With the pace of change, that is no longer practical—nor is it always where you can find effective leadership. When we talk about leadership, we are referring to leadership at all levels of the organization.

One characteristic of digitally immature companies is that leadership is trapped at the upper levels of the organization.

Digital Talent

Attracting and keeping digital talent is a challenge for many organizations. With the pace of change and innovation, not only must individuals have a growth mindset, but organizations must also create a culture of growth and continuous learning.

The focus for all needs to be on lifelong learning. Even for the digital natives, time marches on. While older generations have much to learn from the millennials, the fact that they are early adopters doesn’t mean they necessarily know how to adapt that technology in an organizational setting. “Millennials are not inherently digital, at least not in an organizational sense. They may have adopted technology individually, but they will not instinctively know how to help your company adapt. Even if they come out of college more digitally minded than their older counterparts, that edge will atrophy without continuous learning and a growth mindset.” Continuous learning is your best defense in a changing environment.

The authors go on to discuss the conditions for successfully adapting to digital disruption that most organizations will need to create. They address such topics as organizing, cross-functional teams, enabling stronger collaboration, cultivating a more experimental mindset, and an approach for measuring digital maturity in your organization.

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Posted by Michael McKinney at 07:34 AM
Permalink | Comments (0) | Artificial Intelligence , General Business

Horst Schulze: 4 Decisions Every Leader Must Make

HORST SCHULZE knew from the time he was eleven years old that he wanted to work in a hotel. It was at the end of his first apprenticeship in an assigned essay he coined the phrase that would guide him the rest of his life: “Ladies and Gentlemen Serving Ladies and Gentlemen.”

This guiding principle—Ladies and Gentlemen Serving Ladies and Gentlemen—is the bedrock of everything Schulze does and teaches. It has a wide application because it is about having enough self-respect to treat all others with respect.

Schultz, the co-founder of the Ritz-Carlton Hotel Co. and Capella Hotels & Resorts, has captured his philosophy in Excellence Wins: A No-Nonsense Guide to Becoming the Best in a World of Compromise. Throughout the book, he shares the practical application of respect and how it shapes people, workplaces, and the customer experience. Here are a few of the lessons from his experience that stood out:

Real knowledge of the customer is absolutely essential.

Sometimes a customer service problem—or any defect, for that matter—is rooted a much as five steps away from where it shows itself. One solitary person at a counter somewhere can’t solve it alone. It needs the best thinking of everyone connected to the process, because they are fully connected to the process, because they are fully committed to giving the customer every reason to keep coming back—again and again.

Elegance is warmth without arrogance.

When we look at any employee, or even at an applicant, we need to stop and recognize; This is the kid I used to be. He wants to be inspired by a dream.

When t comes right down to it, the vast majority of people in this world want to excel at something. They just need a context in which to do so. They look to us as leaders to provide that setting.

Schultz says leadership is about a lot of conscious decision-making. “It is about making up your mind that certain things are going to happen because you’re going to pursue them relentlessly.” There are four decisions every leader must make:

Decision #1: Strive to Inspire

Because employees are important, I will create an environment where people want to do a good job. I will invite, not dictate. I will get results by inspiring, not by controlling or dictating.

I won’t settle for less than the vision. No excuses allowed, either from myself or those who work with me. There is no beauty in the excuse or “explanation.” No forward motion comes from it. I don’t pay people to think up “explanations”; I pay them to find answers.

How can I serve? Not “it can’t be done.”

Decision #3: Let Nothing Cloud Your Vision

I will not let my company’s growth and complexity cloud my vision. The bigger an organization becomes, the more people you hire, the more departments you set up—and as all this evolves, the easier it is to neglect the vision. Something negative happens on any given day, and managers write a policy to keep that from happening again. The next month, something else happens, and another policy gets written. Soon the policy manual is four hundred pages thick.

This is what is called a bureaucracy. People are afraid to get outside of the rules and regulations. Growth is stunted. So is creativity.

Decision #4: Always Look to Improve

I will always keep looking for new ways to improve, to be more efficient. True leaders never stop asking, “How can we improve this process? Who should I ask to help me think of a better approach? Am I willing to hear things that don’t fit my preconceptions?

You can build a life and business around the principles found in Excellence Wins. Here is one more thought worth contemplating. It directly relates to his mantra: Ladies and Gentlemen Serving Ladies and Gentlemen.

Someone said to me,”Well not every guest acts like a lady or a gentleman. Some of them can be very obnoxious.”

“Yes, I know,” I replied, “but it’s not up to us to judge or categorize. They may have made their decision to be cantankerous, but we’ve made our decision to respect them regardless. This is our value; this is our identity. It’s who we are, regardless.”

Always stick to the vision.

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Posted by Michael McKinney at 02:52 PM
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35 Leadership Quotes from the 10th Global Peter Drucker Forum

THE 10th annual Global Peter Drucker Forum was held in November 2018 in Drucker's home town of Vienna, Austria. This year’s theme was Management: The Human Dimension. The following are 35 quotes from the two-day event that are worth reflecting on:

► Innovation doesn’t happen by one person having an aha moment.

Posted by Michael McKinney at 07:23 AM
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Workplace and Life Advice You Can Use

THIRTY-NINE LEADERS were interviewed on subjects related to leadership and were assembled by Roger Dean Duncan into LeaderSHOP Volume 1: Workplace, Career, and Life Advice from Today’s Top Thought Leaders (not to be confused with the LeaderShop). Duncan asks great questions, and the responses are interesting and well worth reading.

The book is organized around 10 topics. Here is a sample from each:

Meaning and Purpose
Bill George: “Almost everything we do as young people is based on individual performance—whether it’s grades in school, how we do on tests, etc. Then we go to work and we get judged on individual performance. It’s important that we learn to look beyond that.”

Mental Maps
Robert E. Quinn: “Effective change leaders are not experts with a plan. They are facilitators with a vision…. The conventional assumptions that we all make from the time we can talk as based on fear and the need to be in control. In left-brain analysis of any problem, the subject of the analysis is an object. When we see people as a problem, we objectify them. Our most basic assumptions about organizations and authority are inherently disempowering.”

Workplace Practices
Jodi Glickman: “The most important thing in giving feedback is to be specific. Don’t just tell someone they need to get better. Offer specific examples and tips. Otherwise, you giving frustration, not help. Be prepared to tell the person what you think he should do differently, or what he should stop doing, or what he should start doing.”

Behaviors
Roseanne Thomas: “Disrespectful behavior is rampant, but it’s not always intended. Any combination of stress, fatigue, and fear can get the better of an otherwise amiable coworker. To make sure you don’t personalize what is not meant personally, try to understand and empathize with the person…. Being civil does not require that we accept legitimately unacceptable behavior, only that we confront it in a civil way.”

Trust and Teamwork
Samuel Bacharach: “Smart agenda movers know that once they have an idea, the first thing they must do is anticipate where others are coming from. Even the best ideas will go nowhere if you don’t anticipate the potential resistance of others. Anticipating resistance can’t be an afterthought. Leaders need to anticipate resistance early in the change or innovation process.”

Culture
Edgar H. Schein: “The warning signs are never ‘cultural.’ They are always performance issues that lead to specifying new behaviors needed to fix the problem. The culture gets involved if the new behavior won’t work because of the culture.”

Feedback and Accountability
Ira Chaleff: “Intelligent Disobedience is the term used in training guide dogs for people who are blind. After the dog learns how to obey all the commands it needs to support the individual, it is taught how to disobey if obeying would result in harm to the team of human and dog. That is exactly what leaders need from their own teams. Leaders can inadvertently create a climate that does not encourage intelligent disobedience, in which case they can put themselves and the organization at risk. One strategy is for leaders to always present their ideas as first drafts instead of immutable orders and ask ‘Am I missing anything?’

Communication
Carmine Gallo: “Here’s a great exercise for anyone with an idea, product, or service to pitch—explain it in a sentence short enough to fit in a Twitter post. In Hollywood pitch meetings, it’s called the ‘logline.’ A screenwriter must be able to convey the gist of the movie in one sentence. I’ve heard the same tactic used in venture capital meetings. An entrepreneur should be able to summarize an idea in one short sentence. Otherwise, it hasn’t been thought through.”

Career Management
Mark Nevins: “Many stalled leaders go back to the well and tap what’s always served them before—their drive, their intellect or knowledge, classic management tools. But often those won’t work, business eh business is now demanding that they pull back, escalate, and tap into different skills, a new mindset, and a radically changed pattern of behaviors than what made them successful in the past.”

Personal Balance
Brian Tracy: “If you make a list of everything you do in a week or a month, it will usually contain 20-30 tasks or activities, sometimes more. But when you analyze your list, you will find that only three of those tasks are responsible for 90% of the value of your contribution to your company, your work, and your personal income. [Then ask], ‘If I could so only one thing, all day long, which one task would make the greatest contribution to my company?’ Circle that task on your list. The ask the question two more times: ‘If you could do only two things, or three things, all day long, which would make the most valuable contribution?’ From this day forward, focus on those three tasks all day long, and dedicate yourself to continuous improvement in each one. This can change your life and make you one of the most valuable people in your organization.”

Some of the advice will resonate and some will not. Much of it you will agree with and some will sound more like pandering. But as Jon Acuff points out in his chapter, “If none of this advice applies to you, find some advice that does. Just don’t be like the young college graduate I met. I asked her, ‘Who is doing the kind of dream job you’d like to do someday? Who can you learn from?’ She said, ‘No one is doing what I want to do.’ I immediately thought, ‘Sure, you went 0 for 6 billion. There’s not another human alive you can learn from.’ I don’t think every bit of advice fits every situation, but I promise there’s someone out there who has some you can apply to your career.”

You will find some very good advice in LeaderSHOP.

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Posted by Michael McKinney at 01:55 PM
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Finding Your Flywheel

GREATNESS NEVER HAPPENS in one fell swoop—no single action. It is the result of a series of correct actions that build on each other. Jim Collins likens it to turning a giant, heavy flywheel. In Turning the Flywheel, he describes the process:

Pushing with great effort, you get the flywheel to inch forward. You keep pushing, and with persistent effort, you get the flywheel to complete one entire turn. You don’t stop. You keep pushing. The flywheel moves a bit faster. Two turns … then four … then eight … the flywheel builds momentum … sixteen … thirty-two … moving faster … a thousand … ten thousand … a hundred thousand. Then at some point breakthrough! The flywheel flies forward with almost unstoppable momentum.

The flywheel concept was first introduced in the bestselling Good to Great. In Turning the Flywheel, Collins shares practical insights and clarity about the process. You can see it at work in successful organizations, but the trick is finding your flywheel. While it your flywheel may be similar to another organization’s flywheel, “what matters most is how well you understand your flywheel and how well you execute on each component over a long series of iterations.” Collins lists seven essential steps to finding and capturing your flywheel.

Collins explains the flywheels of Amazon, Vanguard, Intel, Giro Sport Design and others. Giro’s flywheel is illustrated below. As with all proper flywheels, each step or action in sequence is the almost inevitable consequence of executing the step before it. So, in the case of Giro, by creating a great bike helmet that elite athletes want to wear, it naturally inspires weekend warriors to wear it, which in turn attracts mainstream customers, which builds brand power and allows you the resources to invent more great products. And the flywheel turns faster and with more power.

If you understand your flywheel’s underlying architecture as distinct from a single line of business or arena of activity, you can evolve, expand, or extend your flywheel in response to changes in your environment. That is to say the underlying logic of your flywheel—what your organization is doing. If you understand that, you can apply it to other areas.

Some Rules

The very nature of a flywheel—that it depends upon getting the sequence right and that every component depends on all the other components—means that you simply cannot falter on any primary component and sustain momentum.
To sustain and renew the flywheel you need to embrace the Genius of the AND (as presented in Built to Last).
When you reach a hundred turns on a flywheel, go for a thousand turns, then ten thousand, then a million, then ten million, and keep going until (and unless) you make a conscious decision to abandon that flywheel. Exit definitively or renew obsessively, but never—ever—neglect your flywheel.

Collins also makes it clear that a flywheel operates within a context—a framework of principles that great organizations adhere to. The framework has four stages:

Stage 1: Disciplined People
Stage 2: Disciplined Thought
Stage 3: Disciplined Action
Stage 4: Building to Last

The flywheel principle operates at the pivot point from Disciplined Thought into Disciplined Action. Collins explains each stage in detail and the principles that apply to each like Level 5 Leadership, the Hedgehog Concept, 20 Mile March, and Fire Bullets, Then Cannonballs. But I found this observation interesting:

An overarching theme across our research findings is the role of discipline in separating the great from the mediocre. The only legitimate form of discipline is self-discipline, having the inner will to do whatever it takes to create a great outcome, no matter how difficult. When you have a disciplined people, you don’t need hierarchy. When you have disciplined thought, you don’t need bureaucracy. When you have disciplined action, you don’t need excessive controls. When you combine a culture of discipline with an ethic of entrepreneurship, you create a powerful mixture that correlates with great performance.

Every entrepreneur should read this because it organizes your decisions around a principle that compounds your efforts. Turning the Flywheel is a short but necessary read to help you understand your business and what can and will make it successful. Executing well on a well thought out flywheel will give you years—even decades—of success.

More importantly, if leaders communicate their organization’s unique flywheel so that everyone at every level understands it, it will bring clarity and purpose to each individual’s work. It provides tangible evidence as to their part in the organization’s success.

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Posted by Michael McKinney at 08:12 AM
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How to Win in Africa

IN THE WESTERN WORLD, we often do not have an accurate picture of Africa as a growing marketplace. We frequently imagine a continent of villages and stories of corruption and violence dominate our perspective.

Authors Acha Leke, Mutsa Chironga and Georges Desvaux of McKinsey and Company, take a different view in Africa’s Business Revolution. They say business leaders tend to “underestimate Africa’s size and potential as a market, and overestimate the challenges of doing business there.”

There are one-hundred companies with annual revenues of a billion dollars or more. In the next 20 years, 80 percent of its population growth will occur in cities. And technology? “This young continent, with a median age of around twenty, is an eager adopter and innovator in all things digital and mobile.” Africa is the next growth market.

The authors believe that companies and investors in every part of the world should take a look at Africa and its place in their long-term growth strategy because Africa is a 1.2-billion-person market in the midst of a historic economic acceleration, it has a huge unfulfilled demand, making it ripe for entrepreneurship and innovation at scale. They compare Africa to China 25 years ago. Would it have made sense for your company to get into China then? Now is the time.

They present five trends that are not without their challenges which they explore in detail:

1. A fast-growing, rapidly urbanizing population with rising spending power—but with average incomes still low by Western standards and high levels of economic inequality
2. A trillion-dollar opportunity to industrialize Africa, both to meet rising domestic demand and to create a bridgehead in global export markets—provided manufacturers can overcome a myriad of barriers ranging from power outages to trade barriers to productivity challenges
3. A big push by governments and the private sector to close Africa’s infrastructure gaps, including those in electricity, transport, and water—although it will be a huge challenge to resolve the massive backlog
4. Continued resource abundance in agriculture, mining, and oil and gas, with the prospect of rising innovation and investment in these sectors unlocking new food production, energy, and wealth for Africa—but, just like manufacturers, companies in these sectors must overcome steep barriers to realize that potential
5. Rapid adoption of mobile and digital technologies that could leapfrog Africa past many obstacles to growth—provided companies can marshal the investment funding and technical talent needed to overcome historic underdevelopment and achieve scale

Determining a strategy is the real trick. To win in Africa, your strategy needs to factor four key considerations:

Map an Africa Strategy: Africa is huge. It will be important to pinpoint those areas where you can create an ecosystem to thrive in. Part of that ecosystem should include local partners who understand the lay of the land. “You will have to dispense with generalizations, and truly understand the differences in countries’ wealth, growth, and risk profiles.”

Create Innovative Business Models: “To profitably serve African customers in meaningful numbers companies need to build high efficiency and low cost into their business models.” High volumes—low margins—cost-effective—technology-driven.

Building Resilience for the Long Term: A long-term view will be necessary to ride out short-term volatility. It will be essential too, to diversify by building a balanced portfolio across countries or sectors. They also recommend integrating up and down your value chain to ensure reliable access to inputs (including what would usually be outsourced). Build relationships with relevant governments to be sure your voice is heard.

Unleash Africa’s Talent: Invest in people. Skill shortages are a major concern for a number of reasons but primarily Africa’s underperformance in education. Subway has found that most applicants “don’t know what it means to have a full-time job and don’t understand the standards we demand here.” Turnover is high. Training for entry-level and frontline employees is essential. Develop programs to grow talent from within and make gender diversity a priority.

Africa’s successful business leaders are driven by a deeper purpose. “They look at Africa’s high levels of poverty; its gaps in infrastructure, education, and health care; and its governance problems, and they don’t just see barriers to business, but human issues they feel responsible for solving.” But then that’s what real leaders do. They have empathy, and they take responsibility. “To be successful, you need to be more than a businessman—you need to be a responsible citizen.”

Importantly, the solutions companies find to succeed in Africa, could also be hugely beneficial in terms of efficient products, services, and business models for the rest of the world.

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Posted by Michael McKinney at 11:50 PM
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Iconic: How to Attain the Ultimate Level of Distinction

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The 8 Elements of Punk Rock Business

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Michael Lombardi’s Lessons in Leadership

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Clarity First

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John Chambers: Connecting the Dots

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Smart Business is Business Redefined

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How to Break the Hold Inertia Has on Your Organization

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I Love Capitalism!

What if Sellers Behaved as Leaders?

Killing It! How to Run a Startup in a Healthy, Joyful Way

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12 Lessons for Entrepreneurs from Richard Branson

Leadership Lessons from a 19th Century Genius

Humility is the New Smart: Are You Ready?

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9 Key Principles for Business & Life from Sam Zell

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The Reciprocity Advantage

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Kaleidoscope: 9 Foundational Stones that Drive Sparkling Service

Posted by Michael McKinney at 07:58 AM
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Ryan Blair’s Five Rules for Being a Rock Star

Posted by Michael McKinney at 01:22 AM
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Shoe Dog: How to Succeed in Business with a Little Luck

PHIL KNIGHT'S memoir about creating Nike, Shoe Dog, covers the time from his “Crazy Idea” to going public in 1980. It is a down-to-earth account of the sacrifices and struggles, failures and successes of what it takes to succeed in business.

Any would-be entrepreneur would do well to read it before venturing out on their own.

Knight says that the act alone is the destination. “Let everyone else call your idea crazy . . . just keep going. Don’t stop. Don’t even think about stopping until you get there, and don’t give much thought to where ‘there’ is. Whatever comes, just don’t stop.” And that’s different from “giving up” as he explains: “Sometimes you have to give up. Sometimes knowing when to give up, when to try something else, is genius. Giving up doesn’t mean stopping. Don’t ever stop.”

He admits to the stress of it all. “The years of stress were taking their toll. When you see only problems, you’re not seeing clearly. At just the moment when I needed to be my sharpest, I was approaching burnout.” In the end he gives credit to hard work and luck. It’s not uncommon to see the IQ of successful entrepreneurs rise at least 50 points as they become experts on nearly every topic. But quite candidly, Knight writes:

Luck plays a big role. Yes, I’d like to publicly acknowledge the power of luck. Athletes get lucky, poets get lucky, businesses get lucky. Hard work is critical, a good team is essential, brains and determination are invaluable, but luck may decide the outcome. Some people might not call it luck. They might call it Tao, or Logos, or Jñāna, or Dharma. Or spirit. Or God.

Put it this way. The harder you work, the better your Tao. And since no one has ever adequately defined Tao, I now to go regularly to mass. I would tell them: Have faith in yourself, but also have faith in faith. Not faith as others define it. Faith as you define it. Faith as faith defines itself in your heart.

Shoe Dog is an amazing story of how he made that luck happen.

The now ubiquitous list of 10 Nike Principles was written in 1977 by the former Nike director of marketing Rob Strasser. Retired Nike historian Scott R, had this to say about the memo:

A day in 1977 when Strasser was purportedly in a fit of pique that employees were losing sight of the company’s values. He stormed into his office and pounded out on his typewriter what became a list of 10 bullet points that he felt were the central core of who/what Nike was. He slammed the sheet of paper on the copying machine, made dozens of duplicates and then taped them on office doors and put them on cubicle desks all over the building.

NIKE PRINCIPLES

1. Our business is change.
2. We're on offense. All the time.
3. Perfect results count -- not a perfect process.
   Break the rules; fight the law.
4. This is as much about battle as about business.
5. Assume nothing.
   Make sure people keep their promises.
   Push yourselves, push others.
   Stretch the possible.
6. Live off the land.
7. Your job isn't done until the job is done.
8. Dangers:
   Bureaucracy
   Personal ambition
   Energy takers vs energy givers
   Knowing our weaknesses
   Don't get too many things on the platter
9. It won't be pretty.
10. If we do the right things we will make money damn near automatic

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Posted by Michael McKinney at 08:03 AM
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Hopping Over the Rabbit Hole

What regrets really speak to is a measure of self-awareness. The trick is how we chose to deal with them. Successful people have the ability to accept the past, embrace it, learn from it, and ultimately move forward. Less successful individuals tend to wallow in regrets, constantly reliving a series of events and asking themselves over and over what could have been, what should have been, and ultimately what ought to have been.

Whatever series of events conspired to separate what “ought” to have happened from what actually happened is ultimately your responsibility.

This is an important lesson for any entrepreneur—if you are starting a new business, you should maintain the appearance of a start-up. You want people to know that you are hungry and focused on one thing: work. Your customers come first. Your employees come a close second. Always keep your expenses down.

If you can take ridicule and negative opinions roll off you like raindrops, don’t be afraid to take a chance and be an entrepreneur.

Most people—myself included—care what others think. But what you can’t do is allow that to impact your business, your performance, your potential.

You have to believe you are going to be successful. You need to think positively if you want a positive outcome.

Start-ups don’t have the luxury of hiring people to fit specific job functions. They typically lack the money to fill specialized roles. Instead, start-ups look for people who are problem solvers. People who can do a little bit of everything.

You need staff that have the entrepreneurial mind-set to lead your company’s evolution. I value a self-starter mentality.

You can be right about everything or you can be in a partnership.

True leadership requires personal subordination. True empowerment requires trust and personal subordination.

Posted by Michael McKinney at 10:27 PM
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Richard Koch on Principles

PRINCIPLES ARE WONDERFUL THINGS, because if they are really powerful they can save us enormous effort and stop us going down dead ends. In science and business there are just a few such principles; but whereas most scientists are aware of the beautiful principles in their field, few business people are guided by principles in their daily work, preferring to rely on methods—the next level down.

Yet as the nineteenth-century philosopher Ralph Waldo Emerson said, “As to methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.”

To qualify, a principle must be so overwhelmingly powerful that ordinary mortals—such as you or me—can reliable create ordinary results, not through personal brilliance, but just by following the principle carefully and with a modicum of common sense.

Adapted from Simplify: How the Best Businesses in the World Succeed by Richard Koch and Greg Lockwood.

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Posted by Michael McKinney at 08:19 PM
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Why the Rules of the Entrepreneurial Game Are Changing

THERE WAS A TIME when AOL was how most Americans got online. Co-founded by Steve Case, American Online at its peak handled nearly half of U.S. Internet traffic and was the first Internet IPO. From his unique vantage point, Case shares his playbook for the future in The Third Wave.

Case believes we are now entering the Third Wave of the Internet. The First Wave was building the Internet. The Second Wave was building on top of the Internet. And the Third Wave is integrating the Internet in seamless and pervasive ways throughout our lives.

Leading on the Third Wave of the Internet

The Third Wave is about leveraging partnerships. Entrepreneurs of the Third Wave will spend a great deal of time focused on things other than tech as they work to connecting the Internet to everything else. It will be a matter of connecting ideas to create context.

“The entrepreneurs of this era are going to challenge the biggest industries in the world, and those that most affect our daily lives. They will reimagine our healthcare system and retool our education system. They will create products and services that make our food safer and our commute to work easier. The Third Wave of the Internet will be defined not by the Internet of Things; it will be defined by the Internet of Everything. We are entering a new phase of technological evolution, a phase where the Internet will be fully integrated into every part of our lives… As the third wave gains momentum, every industry leader in every economic sector is at risk of being disrupted.”

For example, education will be more personal, more individualized, and more data driven. “Education innovators were often too focused on technology in the First Wave, and too much on content in the Second Wave. The winners in the Third Wave will leverage technology and focus on great content, but also understand the importance of context and community.”

Case believes that if you are to start a successful company in the Third Wave it’s going to come down to partnership, policy, and perseverance.

Can You Work with Others?

Your partnership skills may very well be the determining factor in the success or failure of your product. Partnerships help to bring credibility, momentum and a sense of inevitability.

Can You Work with the Lawmakers?

The government is a key force in the Third Wave. Third Wave entrepreneurs will need to figure out how to work with governments. “No matter how good an idea, a Third Wave company that lacks a clear strategy for policy is a dangerous gamble for investors. It is not that success is impossible, but the odds make it a difficult bet.”

Are You Adaptable?

Of course perseverance is critical in nearly everything of any importance. But Third Wave entrepreneurs will need to have a special kind of perseverance in a changing world to manage tensions. “The winners of the Third Wave will be those who chase big-impact ideas with a sense of urgency—but also methodically and diplomatically. It requires a fresh perspective and the ability to look a new paradigms without being burdened by legacy dogma.” He adds, “Third Wave entrepreneurs must find a way, then, to bring both viewpoints to bear—the nuanced perspective of the defending incumbent and the relentlessly disruptive mind-set of an entrepreneur on the attack.”

In the Third Wave innovation can happen almost anywhere—anywhere there are experts in the field your are trying to disrupt. “During the Third Wave, though products will be tech-enabled, they won’t be tech-centric. They’ll use apps, but the product won’t be an app. And so the benefit derived from being surrounded by the tech world won’t be as high. Instead, being surrounded by experts in the industry you’re trying to disrupt may reap the biggest dividends.”

Case makes a distinction between “startups” and “small business” especially where policy is concerned. While startups are businesses that can scale quickly and disrupt an existing category, small businesses are focused on steady growth in the long term. More to the point: “The difference between the two is reflected both in the kinds of problems they are trying to solve and in their effect on the broader economy. Indeed, it is not small businesses but new business startups that account for nearly all of the net new job creation in the United States.”

Collaboration is Key

On a final note, Case reiterates: “Entrepreneurs as ‘Soloists’ will be replaced by orchestras playing a stronger, more credible tune. If you want to go far in the Third Wave, you must go together.”

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Posted by Michael McKinney at 06:49 PM
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The True Value of Leadership

• Learning: Show investors that you are constantly learning and growing in your role. Talk about the future more than the past. Demonstrate to investors personal energy and vitality in creating a future.
• Strategic Clarity: Report challenges you see in the industry and have a clear strategic point of view about how to respond to those challenges.
• Predictable Execution: Deliver on promises over and over and over again.
• Leverage Talent: Say “we” more than “I”; share credit for success; make others feel better about themselves when they meet with you.
• Situational: Know how to adapt your leadership style to the situation. Make your customer brand promises your personal leadership guide.

• Cultural Clarity: Make sure that your internal culture matches the brand promises you make your customers.
• Talent Flow: Show investors that you have industry leading ability to bring the best people into your organization, to develop and grow them, and to remove them if necessary.
• Positive Accountability: Hold people accountable for results without becoming locked into burdensome performance appraisal systems. Learn to have positive conversations with employees.
• Information Flow: Be adept at managing the flow of information into your organization through analytics and improve decision making.
• Work Logic: Build a governance system that enables agility and responsiveness.

Posted by Michael McKinney at 04:01 PM
Permalink | Comments (0) | General Business

5 Reasons You Need to Make a Connection Culture Your Highest Priority

1. Employees who feel connected perform at the top of their game. They are more energetic, optimistic, make better decisions, are more creative and live longer.
2. Employees who feel connected give their best effort. They go above and beyond because they care about the community they are a part of.
3. Employees who feel connected align their behavior with organizational goals. Research has shown that nearly one in five employees works against his or her organization’s interests. Organizations with a connection culture experience a higher percentage of people who pull in the same direction.
4. Employees who feel connected help improve the quality of decisions. Employees who care are more likely to speak up and share information even if they think the decision makers would rather not hear it.
5. Employees who feel connected actively contribute to innovation. Connected employees actively look for ways to improve the organization and contribute to its marketplace of ideas.

Posted by Michael McKinney at 08:08 AM
Permalink | Comments (0) | Culture , General Business

How to Build ROPE Teams in Sales Organizations

Posted by Michael McKinney at 06:14 PM
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Are You Trapped in Survival Mode?

THOMAS PLUMMER is a coach to the fitness industry. In a Facebook post he advised fitness professionals:

The mindset of survival that keeps you alive in tough times is also what will kill your business during good times. Keeping a struggling business alive during tough markets is a skill that drains the life out of you. Everyday you fight for pennies, do the work of many and learn the techniques necessary to keep going when others are failing. This same mindset is also what leads to failure for these owners during good times because they forget how to attack the market and grow the business.

The skill set needed for survival mode, based upon lean spending, tight staff and little marketing, is totally different from the one needed to grow a business where bold and daring is often needed. It is easy to get trapped in survival mode and fail there because you never realize the market has changed and you haven't.

The New Year is upon us. Are you trapped in merely keeping what you have or are you willing to let go and let your business grow next year?

Question your mindset and style. You may be the problem and not the solution you think you are.

Most often the thing that got us to where we are is not the thing that will get us to the next place we need to go. Sometimes we get so focused on what we have become good at, that we miss the changes around us.

It’s easy to get stuck repeating what we’ve always done. When we do we come from a place of weakness rather than strength.

Inertia can keep us from considering the possibilities. Reintroduce possibilities into your thinking. Survival isn’t enough to give your life to. It’s a self-defeating approach to life. Choose to be remarkable.

Posted by Michael McKinney at 10:53 AM
Permalink | Comments (0) | General Business , Thinking

Accelerate (XLR8)

John Kotter provides that extra something we need in Accelerate (XLR8). He writes that management-driven hierarchies are “still absolutely necessary to make organizations work.” So what he suggests is not an either/or but a both/and. It is a dual operating system. A second system that is organized as a network that works in cooperation with the existing hierarchy.

Building leaders and being responsive in a disruptive, ever-changing environment “will no longer be improved by tweaking the usual methodology or adding turbochargers to a single hierarchical system.”

The second operating system does not take away from the existing organization but it adds to it, enhances it, feeds it. It is based on a few basic principles:

• Many people driving important change, and from everywhere, not just the usual appointees. It recognizes the possible contribution made by anyone in the organization. “You need more eyes to see, more brains to think, and more legs to act in order to accelerate.” It gives more people the latitude to initiate—the foundation for developing leaders.

• A “get-to” mindset, not a “have-to” one. Your existing people will step up but only if they “are given a choice and feel they truly have permission to step forward and act.”

• Action that is head and heart-driven, not just head driven. Logic alone is not enough. People will want to help you if you can give them greater meaning and purpose to their efforts.

• Much more leadership, not just management. Management is the guts of the engine, but “the name of the game is leadership, and not from one larger-than-life executive.” Both practices are crucial but management alone will “not guarantee success in a turbulent world.”

• An inseparable partnership between the hierarchy and the network, not just the enhanced hierarchy. “The two systems, network, and hierarchy, work as one, with a constant flow of information and activity between them—an approach that succeeds in part because the people essentially volunteering to work in the network already have jobs within the hierarchy.”

Kotter has found that “just 5 to 10% of the managerial and employee population in a hierarchy is all you will need to make the network function beautifully.” He describes eight accelerators for launching and sustaining this two-system model.

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Posted by Michael McKinney at 02:28 PM
Permalink | Comments (0) | General Business , Management

What it Takes to be an Entrepreneurial Leader

Startup Leadership has valuable ideas to help you rethink how you approach your business or even a business unit within a larger organization. The section on building relationships is especially helpful for understanding how an entrepreneurial leader ultimately makes it all work. Enlisting the help of others is critical.

Posted by Michael McKinney at 10:33 PM
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Culture Counts

CORPORATE AMERICA has had no shortage of heroes: Kellogg, Hewlett, Disney, Packard, Kroc, Watson, Ash and Iacocca. These leaders come to mind as examples of lions that have emblazoned their names as corporate giants. But far more important than heroic reputations are the values these captains of industry personified and instilled within their organizations.

When reading the news these days, I sometimes wonder if we have completely forgotten the tenets these titans used to shape American industry. While it is true that history can both illuminate and obfuscate, we would do well to remember the past in the case of these great examples.

Several years ago, I had the privilege of spending a summer at Abbott Laboratories in North Chicago as a PhRMA Fellow. There I observed a wide array of Abbott executives, scientists, and managers. I was struck not only by their disciplined approach but also by their freedom to discover, develop and design within broad operating parameters—conditions I did not typically associate with large, for-profit corporations. It was there that I first became fascinated with the question “what makes a successful organization.”

As a manager “on loan” to Abbott from the University of Michigan, I quickly found similarities between the two organizations. While it may be better known to some for its legendary football, winged helmets, and “Hail to the Victors” fight song, Michigan, much like Abbott Laboratories, is one of the world’s premier research institutions where scientific rigor, intellectual freedom, and disciplined scholarship thrive in a lively, entrepreneurial and decentralized university environment. I realized then that the same core principles could apply regardless of industry.

Perhaps the most crucial linking pin connecting great leaders and their vision is the personal value system they demonstrate and teach to others which becomes ingrained in the fabric of the firm, the so-called “corporate culture.” Today’s best leaders realize that a strong corporate culture is the glue that unites people and provides them with a raison d’ etre that’s bigger than any product or service. Profit is necessary, but it shouldn’t be the paramount goal. Results from a seven-year study conducted by the Workplace Research Foundation and University of Michigan investigator Palmer Morrel-Samuels, as reported recently in Forbes, confirmed that, as employee morale improves, a firm’s stock price enjoys higher returns.

Undeniably, today’s global marketplace is a far cry from the insular corporate environment of the past. Perhaps two of the biggest barriers today to establishing and perpetuating an enduring corporate culture are:

• excessive CEO and executive compensation packages, reflective of greed and a short-term mindset; and
• a workforce comprised of increasing numbers of younger employees who do not often remain at a company for more than a few years.

Posted by Michael McKinney at 07:32 PM
Permalink | Comments (0) | Culture , General Business

The Art and Science of Perfect Timing

WE SAY timing is everything. And it is. But most of the time it just seems like good luck.

In When, Stuart Albert says that using the right tools we can become better at managing and deciding issues of timing. Good timing is a skill that can be acquired.

We miss timing issues “because the way we describe the world and the tasks we must accomplish omit the kinds of facts we need….They fail to include all the sequences, rates, shapes, punctuation marks, intervals, leads, lags, overlaps, and other time-related characteristics that are part of the temporal structure of everything that happens, every action that is taken, every plan that is implemented.” And we routinely omit them from our thinking. I had never thought of it that way. I was intrigued.

If we don’t look for and note time-relevant characteristics like sequences, rates, duration, beginnings, and endings, we won’t have the information we need to make good timing decisions. For example, we question whether or not the incentives we have chosen are the right ones, but we don’t consider why those incentives became important at that particular time.

Albert likens the structure of timing analysis to the structure of a musical score. There is a horizontal and a vertical dimension to it. Five horizontal—sequence, punctuation, interval, rate, and shape—and there is a vertical dimension—polyphony. The way they come together in an organization gives us insight into timing. These patterns form the temporal architecture.

Sequence refers to the order of events, like the notes in a melody.
Temporal punctuation refers to the times when events or processes begin, pause, or come to an end.
Interval (and duration) indicates how much time elapses between events and how long each event will last.
Rate refers to how quickly events are happening.
Shape describes rhythms and other patterns such as cycles, feedback loops, peaks, and valleys.
Polyphony is the questions the interrelationship between all things happening at the same time.

We have to learn how to listen for the rhythm of what is going on, for its moments of tension or release, for moments when we must pause and change direction. Learning to view events in this manner will help us to spot opportunities first, execute on them well, and avoid costly mistakes.

The worst timing mistakes are not those that have significant human or financial costs, but those that appear to be inexplicable, where we ask, “How could someone have made a mistake like that?” One example of a sequence issue is Cooper Union’s decision to build a 166 million dollar engineering building on its campus in New York with the hope that a donor would step forward to fund the building. As of May 2013, nobody has. This is a classic sequence inversion error, playing notes out of order—in effect putting the cart before the horse. The first step should have been to attract the donor, who would help select the architect, and then become involved in the design of the building.

In order to get the timing right Albert says we need to move beyond spheres and networks, boxes and arrows, trees and branches, and instead think in terms of a tall polyphonic musical score in which a large number of processes and events are playing at the same time. Here’s more:

Re-imagining the world as a polyphonic, polyrhythmic score shifts how we think about the causes and consequences of events. Most of us spend a considerable amount of time looking “down the road” to the next period of time, the one we call the future. So, naturally, when we think about the consequences of our actions, we think in terms of a line, antecedents to the left, consequences—separated by some amount of time—to the right.

When we say A causes B, we are focusing on the horizontal dimension of the score. We are focused on what comes before (the cause) and what comes after (the effect). That is fine, but we should also be paying attention to what is going on vertically, to what must and must not go on at the same time.

When provides a more insightful way to look at events and the seven essential steps in a timing analysis. Timing issues are not always obvious but Albert helps us to know where to look and what to look for so we will be much more likely to get the timing right.

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Posted by Michael McKinney at 01:37 AM
Permalink | Comments (0) | General Business , Management , Vision

Want to be an Entrepreneur? The Pumpkin Plan

SERIAL entrepreneur Mike Michalowicz, has turned a prescription for growing giant pumpkins in to a formula for building a great business. He calls it The Pumpkin Plan:

Step One: Plant promising seeds. Identify and leverage your biggest natural strengths.

Step Two: Water, water, water. Sell, sell, sell.

Step Three: As they grow, routinely remove all of the diseased or damaged pumpkins. As your business grows, fire all of your small-time, rotten clients.

Step Four: Weed like a mad dog. Not a single green leaf or root is permitted if it isn't a pumpkin plant. Never, ever let distractions—often labeled as new opportunities—take hold. Weed 'em out fast.

Step Five: When they grow larger, identify the stronger, faster-growing pumpkins. Then, remove all the less-promising pumpkins. Repeat until you have one pumpkin on each vine. Identify your top clients and remove the rest of your less-promising clients.

Step Six: Focus all of your attention on the big pumpkin. Nurture it around the clock like a baby, and guard it like you would your first Mustang convertible. Focus all your attention on your top clients. Nurture and protect them; find out what they want more than anything, and if it's in alignment with what you do best, give it to them. Then, replicate that same service or product for as many of the same types of top clients as possible.

Step Seven: Watch it grow. In the last days of the season, this will happen so fast you can actually see it happen. Watch your company grow to a giant size.

The Pumpkin Plan is an honest look at what running a business is all about. Read it at any stage of your business life-cycle—especially before, certainly during, but even after (you might have a few ah-ha moments). The principles explained in this book can be implemented in real-time.

Michalowicz lays it out clearly, cutting through all of the drama and rationalizations and explains what really needs to be done to grow the giant pumpkin.

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Posted by Michael McKinney at 07:47 PM
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The Clarity Principle

The Clarity Principle states that clarity is derived from purpose, and purpose from a pivotal act of choice that leaders make about the business. Sullivan says that the problem isn't that organizations define themselves incorrectly, it's that they don't choose at all. Choosing "is a risky prospect, fraught with personal, political, and cultural risks for the organization and its leaders." Leaders often "duck their responsibility for choosing because they cannot accept the tradeoffs, risk, and loss that accompany an act of commitment to choose one definition of the business over the other."

A purpose is not necessarily set in stone especially in today's business climate. "Companies do and should reinvent themselves. But there is a big difference between redefining your purpose and attempting to stitch together conflicting business models." He adds, "attempting to simultaneously preserve and replace the core is very likely a fool's errand. There is only so much artful balancing a company can endure. The goal of achieving balance between contradictory models often becomes the biggest excuse for failing to make the bigger choice."

We may avoid the choice out of a desire to protect the organization and its people—to maintain a perceived stability and collegiality. To address one choice over the other would disrupt the way in which people have become used to operating. But in the long run, this silence will end up hurting the organization.

Sullivan writes that "Leadership's primary responsibility is to define the purpose of the business. This means understanding and making choices to resolve strategic dilemmas confronting the organization."

We see dysfunctions in the business not merely as "people problems" but as upwelling expressions of larger foundational business dilemmas. Thus what may at first appear to be a turf battle between two departments is really descended from a persistent failure to clarify the company's purpose or a painful fight with a coworker is less a personal failure or conflict of styles than evidence of an important strategic dilemma.

Acts of small leadership can thus have outsized impact. They perform the role of making monumental undertakings more easily achievable. In truth, you don't have to be a top executive to resist, confront, and even reverse the contagious effects of a crisis. If the conflicts in the business can flow down from on high, generating breakdowns throughout the organization, so too can creative solutions and purposeful action flow upward to help resolve the crisis.

What you can do:

1. Be attuned to the dynamics unfolding around you
2. Feel a sense of responsibility to the community
3. Remain faithful to the principle of doing the right thing instead of just going along.

The issues addressed in this book will resonate with most of us. "The battle against ambiguity is never-ending," says Sullivan. Choice defines and establishes that some things are more crucial than others. It's the leader's job.

Just when you think you have defined your purpose, a book like The Clarity Principle comes along and pulls you up short. Maybe you're not there yet. Turf wars, low morale, bad politics, and misguided strategies: these are issues that claim much of a leader’s time. But this parade of dysfunctions and messy “people” problems actually points to an organization confused about its core business, torn between competing ideas about what it is and wants to be—an organization facing an identity crisis.

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Posted by Michael McKinney at 11:36 PM
Permalink | Comments (0) | General Business , Management

Are You a Giver or a Taker?

RESEARCH shows that givers sink to the bottom of the success ladder. Givers may make others better off, but they do so at their own expense.

Grant notes that in "purely zero-sum situations and win-lose interactions, giving rarely pays off…. But most of life isn't zero-sum."

The giver advantage is often hard to see in the short term because the "giver advantage grows over time." Chip Conley, founder of Joie de Vivre Hotels, explains, "Being a giver is not good for a 100-yard dash, but it's valuable in a marathon."

The Strength of Weak Ties

Givers connect with the people they know casually--their acquaintances. Although it is harder to ask them for help, they are the faster route to new leads and ideas. "The dormant ties provided more novel information than the current contacts. Over the past few years, while they were out of touch, they had been exposed to new ideas and perspectives."

The Five-Minute Favor: "You should be willing to do something that will take you five minutes or less for anybody."

Givers create a ripple effect around themselves. "Giving, especially when it's distinctive and consistent, establishes a pattern that shifts other people's reciprocity styles within a group." Givers take on the tasks that are in the best interests of the group.

Developing Others

As leaders, givers don't look for talent first, they focus on motivation. "Because they tend to be trusting and optimistic about other people's intentions, in their roles as leaders, managers, and mentors, givers are inclined to see the potential in everyone."

Takers have a general distrust of others. "Even when takers are impressed by another person's capabilities or motivation, they're more likely to see this person as a threat, which means they're less willing to support and develop him or her." Takers desire to be the smartest person in the room.

"The matcher's mistake lies in waiting for signs of high potential. Since matchers tend to play it safe, they often wait to offer support until they've seen evidence of promise."

Otherish Givers

Givers that end up on top are otherish. "Being otherish means being willing to give more than you receive, but still keeping your own interests in sight, using them as a guide for choosing when, where, how, and to whom you give." Giving energizes and is meaningful when it is done out of choice rather than duty or obligation—and otherish givers give more than totally selfless givers.

To avoid being taken, it is important to distinguish between givers and takers and those that pretend to be givers. Givers become matchers when they are dealing with takers.

Grant provides a lot of fresh examples—people from all walks of life. What he finds most magnetic about successful givers: "they get to the top without cutting others down, finding ways of expanding the pie that benefits themselves and the people around them. Whereas success is zero-sum in a group of takers, in groups of givers, it may be true that the whole is greater than the sum of the parts."

Every time we interact with another person at work, we have a choice to make: do we try to claim as much value as we can, or contribute value without worrying about what we receive in return? In the workplace, says Adam Grant, givers are a relatively rare breed.

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Posted by Michael McKinney at 09:10 PM
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Nice Companies Finish First

WHEN you have the power usually associated with leadership, it's easy to begin thinking that you can do anything you want. You can treat people any way you want. Sometimes it works in the short term, but it never works in the long term. It's self-centered, and it eventually kills your influence. It's the core message of Nice Companies Finish First by Peter Shankman: "Being a selfish bastard who doesn't believe the rules apply to you simply won't get you very far."

Shankman cites a study where 700 people from a variety of industries reported on the treatment they received from their managers:

31% reported that their supervisor gave them the "silent treatment" during the year.
37% said that their supervisor failed to give credit when due.
39% noted that their supervisor didn't keep promises.
27% reported that their supervisor spoke negatively about them behind their back.

And it goes on. Not surprisingly, this kind of abusive behavior results in a workforce that "experienced more exhaustion, job tension, nervousness, depressed mood, and mistrust."

Shankman says your manager might be a jerk if they: are a know-it-all dictator, are uninterested in feedback, take sides unfairly and openly, are wasteful of resources, are a Desert Island boss (non-existent), a builder of empires, are a talker and not a doer, think adversaries work better than teams or are in a constant cycle of crisis.

The Nine "Nice" Characteristics

Shankman then identifies nine "nice" characteristics that will eradicate "jerk" behavior beginning with "enlightened self-interest" since it underpins all of the others. A leader with enlightened self-interest will think in terms of the transactional benefits of everything they do. To be sure, there are times when a leader must make unpopular decisions, but, says Shankman, "you can make beneficial decisions and lead your company to greatness without resorting to third-grade schoolyard tactics."

An enlightened leader is accountable, invests in others, consults with those affected by decisions, seeks counsel, expects the truth, and reacts mindfully and positively to any situation.

The other traits he describes are:

Accessibility (Inaccessible, aloof CEOs can run successful businesses for a while, but in the long run, they make bad leaders.),

Strategic Listening (leadership is "a lot less about convincing people and more about benefiting from complex information and getting the best out of the people you work with. Listening for comprehension helps get you that information, of course, but it's more than that; it's also the greatest sign of respect you can give someone."),

Good Stewardship (Good stewardship is about responsible management and ethical standards that are in sync with the concerns of all of the constituents who are important to your business, including shareholders, stakeholders, investors, neighbors, and communities.),

Loyalty (360 Loyalty–loyal to what works for the whole company and for all good employees.),

Glass-Half Full POV (Seeing the difference between "Everything's OK!" and "Everything will be OK if we do the following things."),

Customer Service-Centric ("Makes it easy for people to become and stay customers in every way possible." Serving first selling second.),

Merit-Based Competitor (Compete by differentiation. It's OK to be nice to your competition. Kill them with kindness.), and

Gives a Damn ("Turning down the easy buck to instead do the right thing is one of the hardest choices we have to make.").

You can't fake being nice. "As communication becomes more fluid, leaders will be more exposed. We won't be able to hide anything anymore."

There's no way to institutionalize or "corporatize" niceness–it comes from the top person and permeates the place. And it is the most cost-effective way to promote what you do.

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Posted by Michael McKinney at 12:14 AM
Permalink | Comments (0) | General Business , Management , Marketing , Positive Leadership

Fred 2.0 – Leadership in Action

The first job of leadership is to help people see their significance. Leaders recognize that those who feel insignificant rarely make significant contributions. An effective leader is able to show people that they are significant in ways they may not realize.

Fred 2.0 makes a significant contribution to focusing our minds on what leadership is all about. By living it and sharing it you can build a team of Freds in your organization, community and family.

Posted by Michael McKinney at 05:17 PM
Permalink | Comments (0) | General Business , Human Resources , Leadership Development , Personal Development

Rebooting Work: How to Make Work— Work for You

Prior to the Civil War, most Americans worked in agriculture or as small merchants or tradesmen. Success was the result of self-direction, self-motivation, and self determination. In a way, everyone was self-made.

The Industrial Revolution brought opportunities to work outside the home, reversing the entrepreneurial spirit and giving rise to the paternalistic company, but now the Age of Entrepreneurship is bringing it back.

1. Make sure you do something every day to show others you deserve to be a part of their team.
2. Have a great attitude. You might be brilliant, but if you are hard to manage, it’s easy to find someone else.
3. Work for a higher purpose. Your job has more impact than just making money.
4. Pick your battles. Fight only about things that are really important and that will move the needle.
5. Don’t be afraid of change.
6. Be brutally honest with yourself. Know your strengths and weaknesses. It does you no good to kid yourself here.
7. Don’t confuse action with traction. Focus on outcomes, not face time.
8. Focus on expanding your sphere of influence; it will give you the opportunity to have an impact over more areas.
9. Take time to sit back and reflect on where you are and where you want to be. Make time for a “compass check.”
10. Be brave and be bold. Most things worth doing are hard.

Posted by Michael McKinney at 01:55 PM
Permalink | Comments (0) | General Business , Human Resources , Marketing , Personal Development

Antifragile or How We Become Fragile

IN Antifragile, Nassim Nicholas Taleb reports on things that are fragile and things that are antifragile and how they became that way.

Taleb says antifragile isn’t resilience given his narrow definition of it. It’s more. Resilience survives. Things that are antifragile don’t just survive, they get better with random event and shocks. The opposite is fragile. Though often unintentionally, we tend to make things fragile.

We have been fragilizing the economy, our health, political life, education, almost everything … by suppressing randomness and volatility. … Complex systems are weakened, even killed, when deprived of stressors. Much of our modern, structured, world has been harming us with top-down policies and contraptions which do precisely this: an insult to the anitifragility of systems.

This is the tragedy of modernity: as with neurotically overprotective parents, those trying to help are often hurting us the most.

By trying to make things simple and linear we run the risk of underestimating randomness and its role in everything. And more importantly, we fail then to benefit from them. Thus while we may be resilient or robust, we are not antifragile. “You only get a measure of order and control when you embrace randomness,” says Taleb.

Our character should be antifragile. Random events should serve to make you better than before. Rules are fragile. Principles are resilient. Virtue is antifragile. Classroom learning is fragile. Real-life and experiential knowledge are resilient. Real-life and a library are antifragile.

Success actually makes us fragile. We need to be antifragile to survive it.

“When you are fragile, you depend on things following the exact planned course, with as little deviation as possible—for deviations are more harmful than helpful.” Mistakes and successes—especially those of others—give us a lot of information. If we can learn from them, they can make us antifragile. Taleb writes:

My characterization of a loser is someone who, after making a mistake, doesn’t introspect, doesn’t exploit it, feels embarrassed and defensive rather than enriched with a new piece of information, and tries to explain why he made the mistake rather than moving on. These types often consider themselves the “victims” of some large plot, a bad boss, or bad weather.

Randomness is not a bad thing. We make our organizations fragile when we are overprotective; when we try to iron out all of the variations and wrinkles that are a part of life. The longer we go without randomness, without variations, without setbacks, the worse the consequences when the unpredictable occurs. “Preventing noise makes the problem worse in the long run.” Yet we still think we benefit from protecting people and organizations from volatility—from life. It’s a practice with unintended yet harmful side effects. A fact of life: “no stability without volatility.” A little confusion can lead to teachable moments, growth and stability.

Antifragile is an interesting and at times entertaining read. Taleb borrows from all disciplines to explain “how to live in a world we don’t understand or, rather, how not to be afraid to work with things we patently don’t understand, and, more principally, in what manner we should work with these.”

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Posted by Michael McKinney at 10:00 PM
Permalink | Comments (0) | General Business , Human Resources , Learning

Do Leaders Really Matter?

Posted by Michael McKinney at 05:11 PM
Permalink | Comments (0) | General Business , Government , Human Resources , Management