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08.20.21

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

Story of US Business

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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Leading Forum
Richard Vague serves as Pennsylvania Banking and Securities Secretary. Prior to his 2020 appointment, he was managing partner of Gabriel Investments and chair of The Governor’s Woods Foundation, a nonprofit philanthropic organization. Previously, he was co-founder, chairman, and CEO of Energy Plus, an electricity and natural gas company. Vague was also co-founder and CEO of two banks and founder of the economic data service Tychos. His new book is An Illustrated Business History of the United States (University of Pennsylvania Press, May 21, 2021). Learn more at richardvague.com

Illustrated Business History

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History Can Teach Us Age of Enlightenment and You

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

07.16.21

Make It, Don't Fake It

Make It Dont 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.

Fake O Meter

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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What You Do Is Who You Are Credibility

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

07.06.21

Three Skills Managers Need in a Post-Pandemic World

Three Skills Managers Need

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.

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Leading Forum
Angie Morgan is an executive coach who works with high-performing leaders to help them achieve next-level results. After her service in the Marine Corps, she co-created the leadership development firm Lead Star and co-wrote the New York Times best-selling books SPARK and Leading from the Front: No-Excuse Leadership Tactics for Women. Her third book, Bet on You: How Leaders Win with Risk, will be out in spring 2022.

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Be a Spark Influence and Impact



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

06.11.21

The 10 Biggest Business Mistakes: And How to Avoid Them

10 Biggest Business Mistakes

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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Dear Founder Business Wisdom from Bob Seelert

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

05.21.21

101 Things I Learned in Business School

101 Things I Learned

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.

4 Cultures

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.

VisualPresentation

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12 Lessons for Entrepreneurs BurnThe Business Plan

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

05.12.21

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

Scenario Planning vs Forecasting

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:

Scenario Planning Chart

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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Leading Forum
Lance Mortlock is a strategy partner with Ernst & Young, a visiting professor at the Haskayne School of Business, and a board member for the Canadian Energy & Climate Nexus. Mortlock distills cutting-edge research, high-level management theory, and real-world examples to show how scenario planning can help any business be more resilient, build shock absorbers, and take control of its destiny in Disaster Proof: Scenario Planning for a Post-Pandemic Future. Connect with Lance on LinkedIn and his website

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Predictive Analytics Good Strategy Bad Strategy

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

04.12.21

6 New Rules for the Digital Age

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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Attackers Advantage Is Your Organization Digitally Mature

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

03.12.21

Nine Key Strategies for Going Beyond Great

Beyond Greats

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.

Beyond Great

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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Smart Business Soul of Business

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

02.05.21

Unexpected Leadership Lessons that Mobsters Can Teach Lawful Leaders

Lessons that Mobsters Can Teach

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.

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Leading Forum
Jerold L. Zimmerman, Ph.D., is the co-author of Relentless: The Forensics of Mobsters; Business Practices. He is a globally recognized microeconomist and author of seven books and has taught organizational economics, accounting, and finance at the University of Rochester’s Simon Business School for more than forty years. He has consulted with numerous clients, including Fortune 500 companies and management advisory firms, to demonstrate how organizational economics principles can improve a firm’s culture and, eventually, its performance. Zimmerman is also a founding editor of the Journal of Accounting and Economics, one of the most highly referenced peer-reviewed journals in economics, and has served on several public company boards of directors. His fifty published studies and books include textbooks on economics and accounting and a trade book about designing organizations that create value. For more information, please visit jeroldzimmerman.com

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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Consider Youre It

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

12.11.20

The Company I Keep: How Leonard Lauder Built Estée Lauder

Leonard 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.

Estee LauderShe 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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Robert Iger Leadership Lessons A Leader Wears Many Hats

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

09.25.20

Ruthless Consistency: The Foundation of Success

Ruthless Consistency

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.

Ruthless Consistency Model

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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When Growth Stalls Hallmarks of Bad Strategy

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

09.11.20

Has Your Vision Statement Lost Its Focus?

Blendification System

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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Leading Forum
Dan Bruder is the CEO of Fusion Dynamics Group, an Instructor of Entrepreneurship at the University of Colorado, Boulder, and an Instructor of Strategy and Leadership at Colorado State University’s Executive MBA program. His new book is The Blendification® System: Activating Potential by Connecting Culture, Strategy, and Execution. Learn more at www.BlendificationSystem.com

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Hypocrisy Isn’t Going to Get You There Hallmarks of Bad Strategy



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

08.18.20

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

Five Frequencies

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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Culturematic All In

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

06.22.20

Winning Now, Winning Later: Playing the Infinite Game

Winning Now Winning Later

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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The Infinite Game Winning the Long Game



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

05.20.20

No Brilliant Jerks: How to Deal with Maverick CEOs

No Brilliant Jerks

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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Leading Forum
Rob Shelton is a globally recognized Silicon Valley–based consultant, author, and speaker on entrepreneurial excellence, breakthrough innovation, and scaling to drive rapid growth. Over the past 40 years, Shelton served as trusted partner and adviser to board members, CEOs, and senior executives at leading organizations in the valley and around the world. Connect with Shelton via theconundrumpress@gmail.com.

Marc J. Epstein, PhD was, until recently, Distinguished Research Professor of Management at Jones Graduate School of Business at Rice University in Houston, Texas, as well as a former professor at Stanford Business School, Harvard Business School, and INSEAD. Dr. Epstein has written extensively on corporate and nonprofit board governance, and the role of boards of directors. Connect with Epstein via theconundrumpress@gmail.com

Rob and Marc are coauthors of The Brilliant Jerk Conundrum: Thriving with and Governing a Dominant Visionary.

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A Brief Interview with Ram Charan 14 Questions Every Board Member Needs to Ask



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

04.08.20

How to Hold onto Your Customers in a Crisis

Forever Transaction

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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Leading Forum
Robbie Kellman Baxter is a bestselling author of The Forever Transaction and The Membership Economy, named a top 10 marketing book of all time by BookAuthority. She is a speaker and consultant with more than twenty years of experience providing strategic business advice to major organizations, including Netflix, Consumer Re-ports, and LinkedIn, as well as leaders in industries including Software-as-a-Service, Media, Retail, Consumer Products, Healthcare, Financial Services, and Hardware. In the past ten years, her company Peninsula Strategies has advised over 100 organiza-tions on subscription and growth strategy. Kellman Baxter has been featured in the Wall Street Journal, and CNN interviewed on over 50 podcasts and invited as a guest on numerous business shows. She received her MBA from the Stanford Graduate School of Business and graduated with honors from Harvard College. For more information, please visit her website and follow the author on LinkedIn, Twitter, and Instagram.

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The Caterpillar's Edge Artificial Persuasion

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

02.26.20

30 Hacks for Bringing Joy to Your Job

Eat Slep Work Repeat

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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Deep WorkGreat Workplace

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

02.03.20

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

The Answer is Yes

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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Lead Sell or Get Out of the Way Collapse Of Distinction

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

01.22.20

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

What Robert Greifeld Can Teach You

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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Stephen Schwarzmans 25 Rules Robert Iger Leadership Lessons

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

12.11.19

3 Ways to Boost the Effectiveness of Your Leadership

Boost Effectiveness

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.

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100X Leader Xceptional Execution

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

12.04.19

Our Stewardship Responsibility

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.”

Chick-fil-A Cow Campaign

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Horst Schulze The Focus of Leadership

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

10.09.19

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

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.

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Leading Forum
Liz Bywater, Ph.D., works with senior executives and teams across an array of companies, such as Johnson & Johnson, Bristol-Myers Squibb, AmerisourceBergen, and Nike. She brings a rapidly actionable framework for success, which is captured in her book, Slow Down to Speed Up: Lead, Succeed and Thrive in a 24/7 World. She writes a monthly column for Life Science Leader and provides expert commentary for the Wall Street Journal, Fast Company, FierceCEO, and other top media outlets. Learn more at lizbywater.com.

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Bull Inside the Bear Upside of Downturn



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

09.02.19

Artificial Persuasion: The Invisible Brand

Artificial Persuasion

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.”

IBM Project Debater
Anthropomorphic: With advances in natural language processing (NLP), AI agents can convincingly mimic human conversations. “Another important subset of natural language processing (NLP) is something called sentiment analysis, which is a machine’s ability to identify human attitudes.” Chatbots: “There is a growing willingness among many of us to deal directly with machines. A survey of 4500 people in 2017 by Forrester Research found that some 36 percent of adults say they actually prefer using digital customer service—including bots—over interacting with a human.” By 2020, the average person will have more conversations with AI bots than with his or her spouse.

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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Danita Bye Engaging Leadership Is Your Organization Digitally Mature



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

08.08.19

Nincompoopery: Making Organizations Safe for Employees & Customers

Nincompoopery

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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Amish Businesses Herb Kelleher Best Lesson



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

07.19.19

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

Tony Saldanha

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

F

OR YEARS I was taught that growing the business in an industry with strong competition was mostly a zero-sum game. You took away share from competition or they took it from you. Or else, you took on the hard work of growing the entire market. I’ve learned this is not always true. Many digitally native startups seem to find a third way - a digitally enabled non-disruptive creative growth. That's the beauty of digital capabilities. It can drive new business models, open up adjacent products and help you grow the whole market.

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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Leading Forum
Tony Saldanha is president of Transformant, a consulting firm specializing in assisting organizations through digital transformations. During his twenty-seven-year career at Procter & Gamble, he ran both operations and digital transformation for P&G’s famed global business services and IT organization in every region of the world, ending up as Vice President of Global Business services, next Generation services. He is an advisor to boards and CEOs on digital transformation, a sought-after speaker, and a globally awarded industry thought leader. His new book is Why Digital Transformations Fail: The Surprising Disciplines of How to Take Off and Stay Ahead. Learn more at transformant.io.

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Is Your Organization Digitally Mature The Mathematical Corporation



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

06.03.19

5 Leadership Lessons: Think Like Amazon

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.

1  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.”

2  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.”

3  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.”

4  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:

5  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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BurnThe Business Plan How Google Works


Posted by Michael McKinney at 07:46 PM
| Comments (0) | Creativity & Innovation , Five Lessons , General Business

05.06.19

Forging an Ironclad Brand – Your North Star

Forging an Ironclad Brand

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.

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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Brand-Culture Fusion Grow


Posted by Michael McKinney at 07:48 AM
| Comments (0) | General Business

04.24.19

Is Your Organization Digitally Mature?

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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Will AI Take Your Job The Mathematical Corporation



Posted by Michael McKinney at 07:34 AM
| Comments (0) | Artificial Intelligence , General Business

03.14.19

Horst Schulze: 4 Decisions Every Leader Must Make

Horst Schulze

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.

Decision #2: Don’t Settle for Less
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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12 Rules of Respect Servant Leadership Journey



Posted by Michael McKinney at 02:52 PM
| Comments (0) | General Business

03.06.19

35 Leadership Quotes from the 10th Global Peter Drucker Forum

Drucker Forum Quotes

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.

—Linda Hill, Harvard Business School

► It is the age of the employees. Trust them and they will create magic.
—Vineet Nayar, Sampark Foundation

► The most important person is not the CEO, but the person facing a challenge.
—Isaac Getz, ESCP Europe Business School

► You can consume time or you can harvest time. When you meet people you harvest time.
—Charles Édouard Bouée, Roland Berger

► You can outsource your work, but you cannot outsource your responsibility.
—Paul Polman, Unilever

► We need to stay in touch with people. Go out to society and find out what are the feelings of people towards your business.
—Isabelle Kocher, Engie

► Executives need to get out of the building and get into the streets where the hustle is. Leadership should shift from hierarchy to hustle.
—Rosabeth Moss Kanter, Harvard Business School

► Move to the next step. Try some new things and get out of the robotic way. Try getting a little foolish.
—Herminia Ibarra, London Business School

► CEOs should spend some time on a retreat and reflect, read Plato, think more of philosophy.
—Adrian Wooldridge, The Economist

► We must be careful that our humanity is not swamped by the digital revolution.
—Charles Handy, Social Philosopher

► We spend a lot of time with leaders telling them what to do, but we don’t tell them what to stop.
—Marshall Goldsmith, Business Educator & Executive Coach

► A leader today is someone who creates an environment that other people choose to join and do their best in.
—Tamara Erickson, London Business School

► Think of yourself as an artist. It gives you the ability to love, learn and lose it! We need a story that moves us and a space that holds us.
—Gianpiero Petriglieri, INSEAD

► Today, businesses are in permanent crisis mode. The CEO needs to take up the leadership challenge to help others respond to that.
—Constantijn Van Oranje, Special Envoy Startup Delta

► Management has maybe become too machine smitten.
—Julia Kirby, Senior Editor, Harvard University Press

► Many managers mix up formulating a strategy and developing a plan.
—Tim Brown, President and CEO, IDEO

► Busyness means that you are not in control of your time.
—Dorie Clark, Adjunct Professor Duke University

► Capitalism is on the way to destroying itself unless it starts taking responsibility for its effect on society.
—Philip Kotler, Professor, Kellogg School of Management

► Activism is good if it fits your company’s values. Otherwise: Keep your ego under control.
—Peter Oswald, CEO, Mondi Group

► It’s not about fixing capitalism. It’s about fixing society.
—Henry Mintzberg, Professor, McGill University

► If you push solutions onto a problem effects may be temporary and short-lived. The power of pull uses internal capabilities and create long-lasting impact.
—Efosa Ojomo, Research Fellow, Clayton Christensen Institute

► Leadership is a distributed capability throughout the organization.
—David Ulrich, Professor, University of Michigan

► The three keys of successful transformation are leadership, talent and culture. Talent works at the speed of culture.
—Renata Lerch, VP, Scrum Alliance

► If you want to create a movement, you need two things: a sense of ownership and a sense of community.
—Ricardo Vargas, Executive Director, Brightline Initiative

► Institutions change when we change. When we trade resignation for indignation.
—Gary Hamel, Consultant and Professor London Business School

► Companies and workers win from fundamentally redefining work: for the first time workers are doing work that human beings should be doing.
—John Hagel, Co-Chairman Deloitte Center for the Edge

► Define a purpose and then create the culture that drives that purpose.
—Paul Kasimu, Director of Resources, Safaricom

► Productivity and efficiency are challenges of the 20th century. Iconic companies of the future move on to the next challenge now: Mobilizing intelligence. Basically: Thinking!
—Tammy Erickson, Adjunct Professor, London Business School

► You can hire great people and turn them into mediocre or extraordinary performers. It depends on the choices leaders make and the eco-systems they create.
—Professor Bill Fischer, Professor of Innovation Management IMD

► If you want better performance: 1. Adopt mindfulness; 2. Get enough sleep; 3. Stop multi-tasking.
—Rasmus Hougaard, Managing Director, Potential Project

► The great question of our age is: How do we rebuild trust in the state, trust in authority?
—Andrew Keen, Entrepreneur and Author

► What could be a more human endeavor than management? And yet we often approach it with an engineering mindset.
—Julia Kirby, Senior Editor, Harvard University Press

► Power is not given to you by hierarchy. Power is yours when you take the initiative.
—Xavier Huillard, Chairman and CEO, VINCI Group

► You don’t get innovation without diversity and conflict.
—Linda Hill, Professor Harvard Business School

► Surely there are things that can’t be measured; that can’t be digitized. At my best I have imagination and vision. I have dreams. I have hope. I have trust and empathy. I have commitment. I have possibilities. I have all these things that make me interesting. That make life worth living. And work worth doing. So aren’t we lucky that these can’t be measured because otherwise if the organization were purely digitized, purely went through numbers, it would be a very dreary place—a prison for the human soul.
—Charles Handy, Social Philosopher

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Little Kindnesses Matter 12 Lessons for Entrepreneurs



Posted by Michael McKinney at 07:23 AM
| Comments (0) | General Business

02.25.19

Workplace and Life Advice You Can Use

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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What Happens Now Moving Your Agenda



Posted by Michael McKinney at 01:55 PM
| Comments (0) | General Business

02.13.19

Finding Your Flywheel

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.

Giro Flywheel

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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Books By Jim Collins Great by Choice



Posted by Michael McKinney at 08:12 AM
| Comments (0) | Entrepreneurship , General Business

01.09.19

How to Win in Africa

TITLE

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
| Comments (0) | General Business

12.07.18

Iconic: How to Attain the Ultimate Level of Distinction

Iconic

S

COTT MCKAIN wrote the book on creating distinction in a world of homogenization. In Create Distinction he discusses how we got here and how we can create distinction for ourselves and our organizations. Having passion, product knowledge and commitment is not enough. Are you creating a distinctive story so that those who chose you the first time will come back for more? It’s not just a matter of being different. It’s about being uncommonly excellent.

Creating distinction is based on four cornerstones: clarity (being precise about who you are), creativity (built on clarity, it’s about discovering a different approach—delivering creatively), communication (creating and delivering a compelling story), and customer-experience focus (create distinctive experiences for your clients).

In the years since Create Distinction was published McKain realized there was another place beyond distinction. Becoming iconic. Once you achieve distinction, it’s time to become truly iconic. In Iconic: How Organizations and Leaders Attain, Sustain, and Regain the Highest Level of Distinction, he writes:

Iconic organizations and leaders have become such universal symbols of distinction they are not only irresistible to customers in their marketplace, they compel interest and admiration across a wide spectrum.

How do you attain iconic status? How do you maintain and enhance that status once you achieve it? And how do you regain that status if it has eroded in the marketplace? The answers to these questions are explained in detail in this book. Briefly, the process is based on the five factors of iconic performance that take an organization or a leader to a level beyond distinction:

Play Offense

Play Offense. “Every moment you are playing defense against the competition wastes a moment you could be innovating to make them irrelevant.” Play to your strengths and create accountability with clear expectations, measurement, feedback, and consequences. Make it special—leave a trail of tangibles.

Promise and Performance

Get the Promise and Performance Right. People evaluate us on promise and performance. “The challenge is that customers will always evaluate your performance based on the promise from their point-of-view … not yours.” Performance is in the eye of the beholder. “Iconic companies find a way to accelerate their promises while improving their performance to a public that has already become predisposed to expect their excellence.”

Stop Selling

Stop Selling. Build a relationship. “Appeal to the aspirations of your customers and prospects. Then invite them to savor the experience that they desire through your product or service.” Think less like a professional and more like a rapper—let it flow!

Go Negative

Go Negative. This may seem a bit counterintuitive. Know your weaknesses. “Iconic companies are obsessed with learning what they did wrong, so they can change the behavior—or process—that created the unpleasant experience in the first place.” Check your culture. It may be holding you back from iconic status. “Don’t be satisfied with satisfied customers. See to have amazed, thrilled, and overjoyed followers.” Go negative doesn't mean a negative attitude. Instead, develop a defensive pessimism. “Defensive pessimism is examining what has gone—or could go—wrong, so you take the necessary steps to prevent it from occurring.”

Reciprocal Respect

Reciprocal Respect. Disrespectful behavior should never be tolerated. “What you tolerate you endorse.” How do you display respect to others? McKain recommends six ways: Don’t just hear—listen. Display open body language. Don’t nitpick. Show how you’re following up. Don’t withhold praise. Treat others equally and with sensitivity.

Obtaining, maintaining, or regaining iconic status requires brutal honesty. Think like a start-up. Have an innovative mindset and look at everything you do from a fresh customer-centric focus.

Again be sure to examine your culture. “Until your culture is right internally—no matter the size of your organization—many of your external efforts won’t help.” Your efforts may just draw attention to what you’re doing wrong in the eyes of your customers. Everyone in the organization needs to be on board with providing an excellent experience. “All components of the company have to be aligned internally before they can expect results externally.”

The examples McKain uses throughout really help to drive the lessons home and trigger the thinking necessary to implement them in your situation.

By the way, McKain has a great set of five short videos on his Instagram page explaining each of the five factors. Here’s #4 on Going Negative.

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Answer is Yes Collapse Of Distinction

Posted by Michael McKinney at 03:23 PM
| Comments (0) | General Business , Marketing

11.14.18

The 8 Elements of Punk Rock Business

Punk Rock Business

O

K,  I’ll bite. What do the Ramones, the Clash, and the Sex Pistols have to do with leadership?

The title of Jeremy Dale’s book, The Punk Rock of Business, comes from a comment Bono made to Oprah about a project Dale was working on with him for Motorola. Dale and his team had performed the impossible and Bono said, “They are the punk rock of business: no long introductions, three beats and you’re in. They say they are going to do something, and then it just gets done.”

Using that as an inspiration, Dale has taken it to mean so much more. Punk is an attitude. It’s a fight against apathy and complacency. “I’m not okay with the current status quo. We’re into disruption.”

Many businesses these days are clogged up by bureaucracy that thwarts innovation, slows down creativity, and encourages mediocrity. I hate mediocrity. I’d much rather have spectacular success or fantastic failure. I believe mediocrity occurs far too often because too many people in business, particularly those in middle-management roles, are far too cautious, pessimistic, and more concerned about protecting their jobs rather than striving for greatness and being everything they could be. They are fearful of putting their heads above the parapet, so they take a play-it-safe attitude and come up with the conservative, tame, and expected proposals.

Dale has distilled the punk rock movement to eight elements. These 8 elements of Punk Rock Business were at the heart of punk rock music, movement, attitude, fashion, and culture. Elements that are wanting in many organizations.

Element 1: Have a Cause

“Punk was all about wanting something better, being clear about what that was, and making that their cause.” Have a point of view. Find something you’re passionate about and then inspire your team to deliver it. An organization’s mission statement is meant to direct every single decision. A mission statement may not be enough. You may need to create a manifesto to add substance and emotion, creating a story around the mission statement. “We should be committed to being a lighthouse brand; that is, one who shines brightly, whose position is fixed so that people can navigate their world trusting in us and our position on things.” Well put.

Element 2: Build a Movement

“Punk was attractive to like-minded people, and it galvanized that segment of the youth. Punk, more than music, was a mindset, and that attracted people.” It’s all about the people. The followers make the movement. You must get other people on board. Show your commitment to them and the mission by showing up. This is where you bring your emotional brain and not your rational brain.

Element 3: Create New and Radically Different Ideas

“Punk was completely different—never seen before jaw-dropping creation that exploded into our consciousness. No one was ambivalent to punk; you loved it or hated it.” It’s about creating new, different, and better ideas. After all, that’s what leadership is. Punk provided an avenue to express their frustration with the dead-end society that they saw at the time. “Never before had music been played at anything like two hundred beats per minute. Never before had music been played so loudly or aggressively. Never before had the lyrics to the songs been so politically charged or laid siege to taboo subjects.”

Begin by finding out what’s different about what you’re doing. What problem are you trying to solve? Radical ideas come from teams. And when they do they need to be brought to life by showing, not telling. Radical ideas are targets and so need to be protected. “Every project should have a vision and some nonnegotiables. The nonnegotiables are so important, because not only do they prevent the willingness to compromise, they also act as the catalyst for intelligent people to seek creative solutions when the inevitable challenges arrive.”

Element 4: Drive Speed and Action

“Punk was three beats, and you’re in.” Go for it. “When time is tight, great things happen.” You don’t always have to be right. “Decision-making is a portfolio. Not every decision needs to be correct.” The momentum is the important thing.

Element 5: Say It as It Is

“Punk lyrics came with a contagious honesty.” No nonsense. You have to say it like it is—but constructively. Sometimes you have to call others out, and sometime you must call yourself out. Don’t leave people wondering what you think. Speaking plainly saves time, bring clarity, and sets the performance bar where you want to set it.

Element 6: Be Authentic

“Punk gave people permission to be themselves.” Probably the only rule of being punk is: “to be yourself and be comfortable being who you are.” Surround yourself with confidants who will hold you accountable and call you out when you are being a fraud.

“Don’t just endure or play it safe. If you are, work out how you are going to stop that immediately … or, alternatively, work out how you are going to justify that to your grandchild in years to come.”

Element 7: Put Yourself Out There

“To be punk you had to make a very visible and belligerent statement; it required you to put yourself out there, say ‘this is me,’ and invite criticism. It was far more important to just give it a go, rather than to get it perfect.” Grab every opportunity to challenge yourself. Be the first to volunteer. You will be criticized. Get used to it. “You will not always get it right, but my experience is that the impact you have when you do get it right far outweighs the embarrassment when you don’t.” Are you a participant or a spectator?

Element 8: Reject Conformity

“Punk pressed the reset button.” Nonconformist. “However, it wasn’t just its nonconformity, it was the extent to which it didn’t conform that was shocking for many.” Some norms are pointless and irrelevant. “Today’s corporate world is full of mediocrity, slowness, politics, false praise, and people too scared to say it as it is. More and more employees are disillusioned with lukewarm leadership that makes their jobs dull and boring and constrains their creativity, imposing limitations rather than empowering them.”

Don’t take yourself too seriously. “Get over the show, get over your ego, and react based on the quality of work, not the superficial stuff that doesn’t matter.” Joey Ramone said they started a band because in 1974 everything was overproduced. “Being overproduced and perfectly organized kills the lifeblood that spontaneity brings.”

Humility is the X-Factor

“Punk by its very nature is aggressive and in your face.” Humility keeps you out of trouble. “Punk doesn’t need to be aggressive if you apply a degree of care and humility. If people see that you are fundamentally a good person, whose heart is in the right place, whose motives are pure, who has charm and charisma, who isn’t arrogant or conceited, who cares about people, and above all else is human and has humility, then you can apply all eight elements without worrying if you’re going too far.” Dale adds fifteen more key requirements that are needed to implement a punk rock attitude in business.

Unfortunately, I have not conveyed in this commentary the great stories that are used throughout to illustrate the 8 Elements of Punk Rock of Business. They are engaging and entertaining and really help to develop the concept. Well worth the read. The book provides a much-needed perspective on business and leadership in a very unconventional way.

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Humility is the X-factor That Will Never Work



Posted by Michael McKinney at 07:14 PM
| Comments (0) | Entrepreneurship , General Business , Teamwork

10.29.18

Michael Lombardi’s Lessons in Leadership

Michael Lombardi

M

ICHAEL LOMBARDI has been an American football executive for decades. He has worked on the staffs of NFL legends Al Davis, Bill Walsh, and Bill Belichick and with Nick Saban while with the Cleveland Browns. He is also a media analyst writing for Bill Simmon’s The Ringer, where he also hosts his top-ten sports podcast, GM Street.

In Gridiron Genius, you will certainly get the inside scoop on the game of football, but it’s much more than that. As a three-time Super Bowl champion, Michael Lombardi provides lessons in organizational culture, team building, strategy, and character. His philosophies on how to build championship teams were foundational for the teams built by both Walsh and Belichick.

Organizations of all types will benefit from the insights found here. “Football is ultimately a business, and as in any successful business the most important ingredients are a sound culture, a realistic plan, strong leadership, and a talented workforce.” So let’s look at some of the leadership lessons to be found here.

The main lesson that comes through his experience with great coaches and owners is that culture comes first. “If you haven’t created an underlying ecosystem of excellence, short-term success is all it will ever be.”

On Bill Walsh building the San Francisco 49ers in 1979: “From the talent on and off the field, to the quality of the workplace, to the practice fields. No detail was too small for Walsh to consider because, to his assembly line way of thinking, only the sum of them all could produce the organization he wanted. As he was fond of saying, if he managed to perfect the culture, the wins would take care of themselves.”

He writes: “Character assessment is by far the hardest challenge for team builders. More than any other factor, inaccurate character assessment is why draft boards are to this day littered with so many mistakes. For starters, let’s be honest, there’s a sliding scale of morality in the NFL (as in every industry), in which the more talented a player is, the more he can get away with.”

“Each player retains information differently, and it’s the coach’s job to determine the best way to instruct him.”

What Makes a Great Quarterback?

A winning way. (Winning is a habit.) A thick skin. (The measure of who we are is how we react to something that does not go our way.) Work ethic. (Your best player has to set a tone for intolerance for anything that gets in the way of winning.) Football smarts. (A quick mind come with preparation. You prepare so well that you don’t have to think; you just react.) Innate ability. (Born with it quality: Walsh couldn’t define it, but he knew it when he saw it.) Carriage. (Quarterbacks have to inspire. They can always look as if they have it all under control and that somehow they will figure out how to lead the team to victory. No one wants to follow a sulker.) Leadership. (Quarterbacks who fail to gain the respect of teammates leave a team rudderless.)

Building a team: “A big part of Walsh’s genius was his uncanny ability to spot a quarterback in a crowd. Even from a distance and after only a few throws, he could sense immediately if a quarterback could run his offense. Guys like Walsh and Belichick are unusual this way: They can visualize how skill sets fit in their schemes in a way that both maximizes those abilities and fuels the system.”

From Bill Belichick:

“Although practice doesn’t make perfect, it gets you closer to perfection each time you do it.”

“We aren’t collecting talent; we are building a team.”

Mental Toughness: Doing what is best for the team when it might not be the best for you. If players can fight past exhaustion, if they can focus when they’re completely drained, well, that’s mental toughness.

On Bill Walsh:

“His meticulousness was evident everywhere.”

“Walsh opted for less experienced men who shared his curiosity and displayed a willingness to learn his system and methods.”

What Makes a Great Coach?

Command of the Room. Followers need something to commit to. A leader has to have a plan. On Nick Saban at Cleveland: He had a strong plan and an effective way of communicating that plan, and his ability to be self-critical earned the players’ trust in a way that rivaled their feelings for Belichick.

Command of the Message. What good is the plan if you can’t talk about the plan? Players can’t accomplish anything unless they can visualize the path. Delivery isn’t as important as meaning.

Command of Self. Personal accountability is the ultimate sign of strength. Sophocles sums it up best: “All men make mistakes, but a good man yields when he knows his course is wrong and repairs the evil. The only crime is pride.” Ego is the leading cause of unemployment in the coaching world.

Command of Opportunity. Becoming an NFL head coach is a process. You learn on the fly. In the beginning, it is likely you’ll be bad at it. You just have to keep working at it until you get good and pray that you don’t end up a one-hit wonder.

Command of the Process. A leader must be fair and consistent. When rule don’t apply to everyone, the ensuing chaos collapses whatever foundation a leader has tried so hard to build.

In a particularly good section of the book, Combating Complacency he talks about how Belichick and Walsh fight complacency. This was interesting: “Whether the Patriots have just won the Super Bowl or not, the first thing Belichick does is wipe the slate clean. One of his favorite sayings is, ‘To live in the past is to die in the present.’ It’s why you see no Super Bowl trophies as you walk through the players’ entrance and why all the photos from the previous season are removed as soon as the season is over. That clean slate demands a trip back to basic principles and fundamentals after a detailed examination of the current process.” He adds, “What impressed me the most about Belichick and Walsh in their self-awareness. With the same kind of success in the NFL many lesser men have become close-minded, authoritarian, and lazy.”


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Of Related Interest:
  Leadership is Destroying Culture by Michael Lombardi at TEDx
  4th and Goal Every Day

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Posted by Michael McKinney at 12:16 AM
| Comments (0) | General Business , Human Resources , Leadership , Teamwork

10.22.18

Clarity First

Clarity First

T

O BE CLEAR, we live in a VUCA (volatile, uncertain, complex and ambiguous) world. In most cases, it is all man-made, but it is our reality. To be clearer, while our environment may be ambiguous, our organizations should never be. Ambiguity will always be with us and must be dealt with constructively.

Ambiguity can create forward momentum, or it can stop us in our tracks unable to move at all. If ambiguity is pervasive throughout an organization, it will fail.

Great leaders work with it and use it to their advantage. And the advantages are many. Ambiguity is a part of leadership. It’s where the risks are and where the future lies. Like stress, some is good.

The trick is to know what you must bring clarity to. Disorganization is not ambiguity. Confusion is not ambiguity. They are created by a lack of clarity. A lack of clarity is death to an organization.

While author Karen Martin would not seem to agree with what I just said, it is precisely because we live in a VUCA world that her book Clarity First becomes so essential. It is the fact of ambiguity that makes clarity so important.

When clarity exists as a value, individuals and the organizations they work for operate in a way that places a premium on clarity and rewards the people who seek it. In that environment leaders and team members pursue clarity in their daily activities, and cultivate an expectation of clarity throughout the organization.

Ambiguity may exist in the world around us, but we should never be ambiguous about our purpose, our priorities, our process, our performance, our problems, or our communication. In each of these areas, we must be clear. Beginning in chapter 2, Martin delves into a practical discussion on how to bring clarity to each.

Purpose
This is the foundation of all organization (and personal) clarity. Purpose is knowing why you do what you do. As Maritn puts it, “What problem does your product solve?” She takes you three steps to discover your purpose: What do you do? What problem are you solving by doing it? and Why do you do it? A clear purpose makes clarity around priorities, processes, performance, decision-making, and communication possible and enables everyone in the organization in the how of their work.

Priorities
We all think we have priorities, but we probably have too many priorities. Martin divides priorities into two types. First are those priorities relating to the work we do every day. The second type refers to issues that are outside of the normal course of business—special projects, rollouts, strategic initiatives. The key here is that “priorities included on a strategy deployment plan are framed in problem terms—as gaps to be closed—not a predetermined solution…. Most companies frame priorities as actions to be taken, things to be done, changes to be made, and so on. A problem orientation injects clarity into the process, because everyone can see for each priority what the starting point is and where the organization wants to go. There is no room for pet projects or fuzzy ‘solutions’ unconnected to a corresponding problem.”

Process
Many organizations “limp along with ambiguous, undocumented, wasteful, and poorly managed processes.” She adds, “Ambiguity about the specific steps needed to deliver outstanding value is the largest contributor to poor customer experience, runaway costs, and potentially dangerous mistakes.” Internal relationships, job descriptions, and decision-making authority should be clear.

Performance
To effectively run an organization you need to know where you are. You need data of some kind. The first step of course is to define what you need to know and then determine where you can find it. Once collected and understood, “make sure that what you measure does not move leaders and teams to take actions that work against the broader interests of the organization.”

Problem-Solving
A problem occurs when we discover that we are not where we want to be. There is a gap that needs to be closed. Clarity requires that we know exactly what that gap is. Problems don’t go away unless you are fixing the real problem. Too often we jump in before we have taken the time to understand what we are dealing with. Martin provides a question-based process called CLEAR problem solving to help you to dig deeper into the issue you are facing. When your purpose is clear, problem-solving becomes much easier—at all levels.

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Clarity Principle Leading Clarity



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

10.03.18

John Chambers: Connecting the Dots

John Chambers

S

INCE STEPPING DOWN as CEO of Cisco in 2015, John Chambers founded the venture capital firm JC2 Ventures specializing in startups. That experience has led him to write Connecting the Dots as a way to help others to learn from the key events in his life and career as they navigate business and life.

It has always been true, but it is worth repeating: “What will differentiate the winners from the losers won’t be technology or capital but leadership and a willingness to learn.

Experiences early in life taught him to be calm under pressure. Manage your fear until you can work a solution. This has been a critical skill throughout his whole career. “When you stay calm, the people around you are less likely to panic and the situation you’re dealing with is less likely to spin out of control.”

A reoccurring lesson he learned from the economic changes in his native West Virginia is one of the perils of success: doing the right thing for too long. Many of Cisco’s competitors disappeared along the way because they failed to see the transitions happening around them. They didn’t disrupt themselves, so they were disrupted.

The lessons learned in West Virginia taught him to stay ahead of the next big wave. “If disruption isn’t at the core of your strategy, you’ve got a problem.” In business or life, it is important to remember this: “When you compete against another company, you’re looking backward. When you compete against a market transition, you learn how to see around corners.” It is, in part, why comparing ourselves to others is not a good strategy.

The ability to connect the dots comes from being able to see the big picture. “The visible condition of any one person, company, state, industry, or country is always a symptom of a deeper issue. To address the real problem, you have to investigate the specific underlying issues and learn to step back to see the patterns and trends that point to the big picture.”

You have to begin by disrupting you. “The strengths that you build can be deployed in a new way. It’s not easy, but if you start by shifting your focus to the big picture and look for clues to what’s around the corner, you’ll have a head start on those who are focused on preserving the past.”

Being curious and hungry to learn is critical to success. “A lot of leaders would say they’re curious. I can tell you from personal experience that most leaders are not. They don’t ask a lot of questions, rarely challenge conventional wisdom, stick with what they know, and often turn to sources that reinforce their existing point of view.” Chambers believes that “my curiosity about things I don’t understand has been a critical factor in my success as a leader.”

Curiosity stems from humbleness. “As a general rule, leaders are not a humble bunch. It takes confidence to lead people and a certain degree of cockiness to make tough decisions when there are smarter people in the room who disagree. You have to connect with them on an emotional level. You don’t do that by dazzling them with your talents. You share a part of who you are.”

Focus on outcomes. “When you plan around an outcome, you can adapt your behavior when new factors arise.” Know where you want to end up and think through the path you will need to take to get there. First, know where you are and define it in human terms. Cisco was an “internetworking router provider.” Chambers reimagined it to be a company that would change the way we “work, live, learn, and play.” Focus on the outcome and work back from there.

Don’t personalize every crisis. Just because it’s happening to you doesn’t mean it is about you. Thinking that way can “lead to a whole truckload of emotions, from anger and denial to a desperate feeling that we have to do something—anything—to turn things around.” Determine first if the crisis was self-inflicted. “If the problem is market inflicted, don’t dramatically change your strategy.” Additionally, “Do what’s necessary—ideally in one decisive move—to weather the tough times and stay focused on the long term. To come back stronger, you have to be brutal in addressing the flaws that let you become vulnerable.”

Too often in a crisis, we miss this bit of advice from his Dad: “Focus on the issue at hand, deal with the world the way it is, and respond appropriately.” It’s easy to deny reality and just simply complain.

Chambers deals with acquisitions, building teams, creating a culture, communication, and our digital future. He also answers thirteen questions that entrepreneurs want to know. While optimistic about America’s future, he does leave us with this caution:

In the United States, we are not moving at anywhere near the speed or with the focus on startups that our global peers are achieving. We are missing major market transitions; we continue to do the right thing for too long; and we’re failing to reinvent the drivers for new job creation and household incomes. In short, we are not reinventing ourselves. We act as though our success is a given. It’s not. The United States is the only developed country in the world that lacks not only a digitization plan but also a national plan for startups, something almost every other country in the world is already implementing. As a result, we do not have a well-thought-out strategy for creating the kinds of infrastructures, education, tax strategies, regulation simplifications, skills training, and public policies to promote innovation and startups.

It's a startup world.

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Learning to Lead Williams That Will Never Work



Posted by Michael McKinney at 07:54 AM
| Comments (0) | General Business

09.11.18

Smart Business is Business Redefined

Smart Business

I

N CHINA, near the turn of the century, Singles Day (11/11) was celebrated as a time for single people to meet. In 2009 it was reimagined as an online shopping festival. It is now the biggest shopping event in the world.

In 2016, Alibaba facilitated sales of $15 billion. In 2016, Black Friday and Cyber Monday saw less than 3.5 billion dollars. In 2017, three minutes after the day opened at midnight, $1.5 billion in sales had been transacted. At the peak, Alibaba’s technology platforms processed 325,000 orders and 256,000 payments every second. It’s amazing when you think that VISA’s stated capacity as of August 2017 was 65,000 payments per second globally.

Logistics? “Just twelve minutes after the midnight start, the first package arrived at a customer’s door in Shanghai. Three minutes later, a woman in Ningbo on China’s Pacific coast received the first imported package. Before 9:30 a.m., a hundred million packages had already shipped.”

Singles Day is a technological marvel. But it would be wrong to think of Alibaba as China’s Amazon. To think of it this way “obscures Alibaba’s breakthrough business model and the window it provides on how the economic scene is evolving.” The technology and business model Ming Zeng, the chairman of the Academic Council of the Alibaba Group, describes in Smart Business: What Alibaba’s Success Reveals About the Future of Strategy.

Unlike Amazon, Alibaba is not even a retailer in the traditional sense—we don’t source or keep stock, and logistics services are carried out by third-party service providers. Instead, Alibaba is what you get if you take every function associated with retail and coordinate them online into a sprawling, data-driven network of sellers, marketers, service providers, logistics companies, and manufacturers.

Alibaba’s mandate is to apply cutting-edge technologies—from machine learning to the mobile internet and cloud computing—to revolutionize how business is done.

Zeng summarizes the formula for smart business with this simple equation:

Network Coordination + Data Intelligence = Smart Business

“That simple equation reveals what is behind Alibaba’s success and captures everything you need to know about business in the future. Success is strength in both networks and data.”

In its broadest sense, network coordination is the breaking down of complicated business activity so that groups of people or firms can get it done more effectively.

Impossible for humans, this level of interaction is the essence of network coordination: autonomous coordination with almost unlimited scale and a boundless number of partners over the internet.

Data intelligence is what I call this business capability of effectively iterating products and services according to consumer activity and response.

Under this approach, companies will use network coordination to achieve value, scope, and scale greater than that of their competitors and will deploy data intelligence to make their business smart enough to adjust nimbly to changes in the outside environment and the minds of consumers.

Smart business then, is when all participants involved in achieving a common goal are coordinated in an online network and use machine-learning technology to efficiently leverage data in real-time to generate relevant responses.

A case in point:

25-year-old Zhang Linchao is the head of China’s online clothing brand, LIN Edition. Turning her clothing hobby into a business, she turned to Taobao, Alibaba’s Chinese e-commerce platform.

In 2015, she prepared to sell a batch of 15 new clothing items at 3:00 p.m. Ten of thousands so of fans are waiting for the sale to begin having already seen previews of this sale on social media. She expects to sell several thousand items but has only had 1000 pieces in stock—total. At 3:00 p.m. 60,000 users are visiting the store. Within one minute, everyone one of the fifteen clothing items sells out. Now preorders are sold. By 3:45 p.m., she has sold more than 10,000 items with each customer spending an average of $150 per order.

Linchao has created an on-demand business—but at mass production price points. What is remarkable is that she finds her customers on social media, keeps almost no inventory, and owns no factories. Yet the customer has the product in 7 to 10 days. The business model is efficient and responsive. Smart businesses like LIN and many others rely heavily on machine-learning technology to achieve scale and manage complexity. Alibaba uses “technology to coordinate business activity across a nearly unlimited number of interconnected parties.”

A business strategy is no longer based on competition, but coordination. Routine decisions are made automatically by machines driven by data. “Organizations are no longer static, hierarchical structures that need managing and controlling, but rather are dynamic, fluid networks of interconnected players that must be engaged by mission and opportunity.”

Strategy Is About Learning, Not A Plan

Strategy in a smart business is not long-term or short-term planning. It’s not planning at all. It’s more like learning. Strategy is continually updated by continuous real-time experimentation and customer engagement, which “creates feedback, which leads to adjustment of the vision, which in turn guides new experiments.” Can we run a business like an algorithm?

What Does this Mean for Organizations?

The Creativity Revolution is here. Organizations in the Creativity Age will focus on creativity and innovation. “An organization’s goal is to improve the efficiency of innovation founded on human insight and creativity.” This cannot be managed in the traditional way.

A smart business is “no longer a vessel for conveying orders from the top. It is a vacuum sucking up information about its environment and then generating and coordinating effective responses. The job of leadership is not to manage this experiment, but to make it possible and boost its success rate.” Think enabling not managing.

Through enabling mechanisms, management provides the necessary conditions to tackle business problems through innovation as opposed to the execution of tried-and-true procedures. This means managers must now focus on things like articulating the mission and providing the environment that attracts the right collaborators, supplying the tools for them to experiment and scale successful ideas, and providing a market to assess the innovation’s success. Instead of micromanaging the firm, management creates the organization’s architecture to run itself.

To do this you need a strong culture and the people that fit that culture. “Hiring is the single most important thing a company can do to preserve culture.” Culture “works to segregate as much as it does to bring people together.” To that end, Alibaba has HR workers randomly assigned to interview employee candidates called, “chief olfactory officers. Their job is to sniff out the match between candidates and the strong corporate culture.”

From Zeng’s perspective, “the individual has more potential than maybe at any other time in history.” New technologies can free individuals from static organizations. New technologies “need not swallow the individual, but instead can propel you forward toward greater heights.”

Smart Business is one of the most fascinating books you’ll read this year on strategy and the future of business. At the very least it will expand your perspective. Zeng details the principles and practices that companies need to become smart businesses and the implications to the organization of those implemented principles and practices.

Singles Day is an example of what is possible when networks and data are brought together at the same time. “Thousands of companies come together seamlessly and instantly to provide millions of customers with what they want. Unimaginable scale is possible when businesses are smart.”

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Posted by Michael McKinney at 07:35 AM
| Comments (0) | Artificial Intelligence , General Business

08.20.18

How to Break the Hold Inertia Has on Your Organization

Break Inertia

O

RGANIZATIONS get sluggish. They get clunky and myopic. They fall into patterns of inertia. And, in time they fail. But there are signs.

In Transforming the Clunky Organization, Samuel Bacharach takes on the two fundamental sources of organizational inertia—the tendency to be clunky and the tendency to be myopic.

The clunky organization is characterized by a state of organized anarchy. You’ll find overlapping structures, unclear decision processes, chaotic communication, and poor integration. This creates a general lack of focus. People are focused on their own activities but are not attentive to the activities of the whole. The clunky organization is missing the big picture.

The myopic organization is characterized by an addiction to their past successes and behaviors, as a result, they find it difficult to make adjustments. “While they can adapt and improve, they do so by making repetition-based improvements.”

Which type of inertia are you facing?

It's probably not either/or. Most organizations face a little of both and it can vary from one organizational issue to the next—one department to the next. There are some questions you can ask to conduct a self-assessment. Questions related to the clunky organization would include: Are the business units integrated? Are the lines of decision-making authority clear? Is there ambiguity or a lack of goal alignment? Do competing agendas lead to turf and silo issues?

Questions related to the clunky organization would include: Is the organization driven by one product or mindset? Is there centralized control of organizational mission and processes? Is it difficult to convince others to explore new directions or new opportunities? Is there a risk-adverse mind-set?

Great leaders break inertia because they know that in order for an organization to thrive and reach their potential they must “engage in robust discovery and focused delivery” as a way of life. In other words, they must be able to read the signals and take action to bring those innovations to life.

Engaging in robust discovery and focused delivery requires certain skills on the part of the leader as outlined below:

Break Inertia

Robust Discovery

To assure robust discovery, leaders must master the contextual competence of explorers and the ideational competence of innovators. To explore, they must scan the environment for useful information, read signals, and create partnerships. … Leaders who are innovators take steps to move an idea to germination.

As an explorer, a leader looks for signals that the organization needs to adjust or to move in a new direction. Leaders should not just be scanning the familiar sources, but should also diversify the content they consume on a daily basis. If not, the tendency is to simply reinforce what we think we already know. Some signals need to be acted on immediately, others need to be thought through. “A strong signal elicits a question: What needs to be done? The weak signal asks, What does this mean?”

Then those signals need to be transformed into an agenda. If you can see where a change needs to be made but can’t translate that into an actionable concrete agenda, a leader can actually drive their organizations into sluggish territory.

Focused Delivery

To assure focused delivery, pragmatic leaders must master the political competence of campaigners and the managerial competence of sustainers. …To engage in focused delivery, leaders must have the political competence to overcome the headwinds of resistance that sabotage forward movement and have the managerial competence to overcome challenges that could lead to dropping the ball.

The important second half of the solution to breaking inertia in your organization is implementing the new agenda and seeing it through to get the desired result. “Leaders in sluggish organizations may have impeccable discovery, but they may stumble when it comes to making those good ideas a reality.”

And then there’s the resistance. Ideas themselves are rarely threats. But “the moment that a specific idea shows concrete potential, the forces of resistance jump into action.” A leader must know where other people are coming from. “In clunky organizations issues of turf, transaction costs, and fear of losing power can lead to resistance. When the myopic tendency is in play, the fear of losing face or the security that comes from habit will cause many leaders to retreat into accepted business models and the old ways of doing things to preserve some semblance of safety.”

It’s a fact that old game-changing agendas can become the new organizational pattern leading to inertia—the sluggish, myopic organization. Leaders must always be willing to seek out signals that old agendas need to be changed to regain organizational momentum.

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Moving Your Agenda Why We Find it Hard to Change Our Behavior

Posted by Michael McKinney at 08:30 AM
| Comments (0) | Creativity & Innovation , General Business

07.02.18

I Love Capitalism!

I Love Capitalism

I
N ONE WAY OR ANOTHER, we all feel a bit entitled. “Entitlement, writes John Townsend in The Entitlement Cure, “is the belief that I am exempt from responsibility and I am owed special treatment.” It’s about choosing the easy way instead of the hard way.

Ultimately capitalism is about personal responsibility, ownership, and commitment. That can be hard to swallow in an age that encourages entitlement. Ken Langone, the now-billionaire co-founder of Home Depot among other accomplishments, wrote a book titled, I Love Capitalism! An American Story. Shallow thinking might lead you to say, “Well yeah. Of course, he loves capitalism. What billionaire wouldn’t?” But there is a more than that to his life’s story.
Capitalism works. And—I’m living proof—it can work for anybody and everybody. Blacks and whites and browns and everyone in between. Absolutely anybody is entitled to dream big, and absolutely everybody should dream big. I did. Show me where the silver spoon was in my mouth. I’ve got to argue profoundly and passionate: I’m the American Dream.

And so begins Langone’s story of the American Dream. His parents—Angie and John—“were very simple people. Neither of them ever got close to graduating from high school. My mother dropped out in the seventh grade. My father didn’t want to work in the sand pits, so he went to trade school and learned to be a plumber.”

He has said, “You work hard. You work smarter. And maybe you lower your sights, but you get on a ladder. There has to be something inside you to make you push.” Again, you have to take ownership if you are going to accomplish anything worthwhile.

Langone had help along the way. As a freshman at Bucknell he wasn’t doing well in school. His economics professor took him aside and told him that if he applied himself and work hard, he would talk to the other professors on his behalf. He did. Professor Headley told the others, “Look, I think this kid is a diamond in the rough, and I think we ought to make the effort to try to pull him out of his nosedive.” He confesses he would not be where he is today without his help and direction.

Kai Ryssdal of Marketplace, asked Langone “What do you do if you're somebody in this economy, and there are many of them, who don't have people to help them out?” Langone replied:
“I feel very sorry for them. What do I do? I think there couldn't be a more lonely existence to not have at least one person in your life, at any one point in time in your life, that you couldn't pick up the phone or you couldn't go see and say, "Hey, what do you think?" Or "I need your help." Or "Can you do this for me?" Or "Can you do me this favor?" So that description, you tell me about that person, that’s a very sad — I will tell you this though, and I don't mean this in a lecturing way: My father had a wonderful expression. He said if you want to have a friend, you got to be a friend. So maybe that fellow wants to take a step back and ask himself the question, what has he done to nurture those kinds of friendships and relationships?”

Again, personal responsibility, ownership, and commitment. He writes:
Some guys who get wealthy like to brag about being self-made men. I can’t imagine they’re not leaving somebody out of that equation. The thing I can’t say and never will say is that I’m self-made. To make that claim, would be to commit a grave sin against all the many, many people who helped me get to where I am.

Langone’s story is a story of putting himself in place to better himself, to learn what he needed to learn, paying attention, and building relationships. There was luck along the way to be sure, but as Louis Pasteur said, “Chance favors the prepared mind.”

Langone followed his interests. He found work that gave him experience and trained him to better understand and expand his interests and talents. With 40% of college graduates going into finance, he tells them that that’s a big mistake. “I tell them they should learn the nuts and bolts of a business before going out and trading that business’s stock. I didn’t realize how stupid I was back then when I was a salesman at Pressprich! I would look in the most superficial way at the companies whose stocks and bonds I was selling: I never truly understood how those businesses worked. It wasn’t until I got wealthy enough to buy pieces of companies that I developed a much deeper understanding of them.”

Here are a few lessons he learned along the way:
Supply and demand goes through everything in life. Early on I caught the fact that if you have a special talent, or if you have something unique that provoke people to do something that you can make a profit on, that’s a good thing.

In short order, he taught me to understand that a man’s public persona usually has very little to do with his private persona. Without that lesson, I would have felt subservient toward these muckety-mucks, but with that lesson under my belt I felt completely equal to anyone I dealt with.

If he’s talking with a group of people and someone says something interesting, Frank [Blake] will stop speaking immediately and give the floor to that person. He has the greatest quantity of humility I’ve ever seen in a man.

I never bought a pencil without an eraser on it, and God invented erasers on pencils for people like me.

Too many people measure success the wrong way. Money should be at the bottom of the list, not the top. I woke up soon enough to realize that if the only way you can define life is by the size of my bank account, then I’ve failed. Fifteen or twenty years ago, a guy asked me how much I was worth, and I answered without thinking, “My net worth is what good I do with what I have.”

One of the most important lessons in my life is this leave more on the table for the other guy than he thinks he should get.

I can’t think of a deal I’ve ever done where I couldn’t have gotten more out of it than I did. As I’ve made clear, I like making money. But it’s amazing what you can accomplish when you look beyond sheer profit to getting buy-in by other people. I’d rather own 10 percent of a billion-dollar company than 100 percent of a $100 million company. The numbers are exactly the same, but by owning a piece of the billion-dollar company I get the benefit of everybody else pulling with me, and that’s a huge benefit.

What a tech company needs to do during the precious period when it has product exclusivity is spend a lot of money to obsolete itself.

Arrogance is the enemy. For many years, Bernie Marcus and I never, ever went into a Home Depot store—never once—unless we were pushing carts in from the parking lot. I used to pray I would see a piece of trash on the floor so I could pick it up. Why? There are entry-level tasks for the kid who works in that store. When he sees the top guys doing them, he can say to himself, “If it’s not too small for them, it’s not too small for me.” The minute you take away all the artificial barriers between you and your people, you’re on the way to phenomenal success. But it takes a little bit of humility.

What distinguishes the winner from the losers is the ability to turn adversity around: resilience and creativity.


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Posted by Michael McKinney at 07:54 AM
| Comments (0) | General Business

03.23.18

What if Sellers Behaved as Leaders?

Sellers Leaders

J
AMES KOUZES, Barry Posner and Deb Calvert have taken the ideas from the classic leadership book, The Leadership Challenge and asked, “What if sellers behaved as leaders?” What if sellers stopped selling and started leading?

In Stop Selling and Start Leading, the authors report that buyers what sellers who create personalized value and build bonds of trust, sellers who provide a meaningful and relevant experience, and sellers who demonstrate genuine leadership. Your buyers want you to inspire and motivate them while giving them an opportunity to participate in creating something extraordinary. They want you to collaborate with them, strengthen them, and encourage them in the process. This book demonstrates how to change from a selling mindset to a leadership mindset that buyers want.

Using the Five Practices of Exemplary Leadership they found that sales effectiveness, like leadership effectiveness, can be significantly increased by choosing to behave differently. Without a doubt, leaders are always selling.

Briefly the Five Practices are:

Model the Way
The first step is getting in touch with your personal values and beliefs. It an inside job. Selling from who you are will give you credibility. “Buyers are on the lookout for seller behaviors that demonstrate credibility, reliability, relate-ability, and an orientation focused mostly on the interests of others.”

Inspire a Shared Vision
Like shared values, a shared vision requires finding common ground with your buyers. Translate the solution you are selling into benefits relevant so the buyer so that they can clearly see themselves a part of it. “Exemplary leaders don’t impose their visions of the future on people; they liberate the vision that’s already stirring in their constituents.” Create a story. “When you weave the emotional connection to what matters most to the buyer together with the logical case for change, you animate the vision.”

Challenge the Process
A seller who leads is always listening and always learning. They are always looking for ways to improve and challenge the status quo. Take the initiative to find dissenting and diverse views. “Making assumptions about buyers’ needs happens all the time in selling. Sellers often have a preconceived notion of what product or solution will work best for a buyer. As the buyer describes his or her needs, the seller subconsciously filters what’s being said and mentally prioritizes the information that confirms what the seller set out to sell.” Leaders always remain open to alternative paths and provide value to the buyer in the process.

Enable Others to Act
Of all the Practices, Enable Others to Act matters the most to buyers. Buyers want to share control of the sale. It makes them feel trusted, informed, and empowered. One buyer said, “A seller who can brainstorm to improve my business with my own ideas and make them come true is my choice every time.” Mutual respect. “When sellers invest in relationships, buyers will too.”

Encourage the Heart
Through the Practice of Encouraging the Heart, sellers cement meaningful connections with their buyers. Thank, recognize, and encourage your buyers. “If a buyer is making decisions you like, taking actions you want to support, or otherwise behaving in ways that move you closer to your shared vision, then you will want to see more of those actions. Recognizing them increases your chances of seeing more of the same.” Create a spirit of community. “Buyers measure seller caring by the extent they are listening, empathizing, collaborating, asking questions, sharing a vision, and being encouraging.”

Everyone Has the Responsibility to Lead Sellers who lead bring out the best in others and make extraordinary things happen. You can give your buyers “the courage to persevere when they meet challenges and must work inside their organizations to champion the shared vision.”

You can sell by example, create a story, find alternatives and exciting opportunities for your buyers, respect and enable others as part of a team, and say ‘thank you.” Differentiate yourself by leading. “The more frequently you choose to lead, the more you will create those awesome connecting experiences that make extraordinary things happen.”

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Posted by Michael McKinney at 06:02 PM
| Comments (0) | General Business

01.22.18

Killing It! How to Run a Startup in a Healthy, Joyful Way

Killing it

A

MERICA WAS FOUNDED by entrepreneurs. Along with all of the other freedoms granted to its citizens, the freedom to risk and to fail encourages our culture of innovation and entrepreneurship.

Entrepreneurship has never seemed so popular as it is today no doubt because it is easier than ever to start a company. Especially in the tech sector, barriers to entry have fallen, and there is greater access to risk capital for startups. Steve Anderson, the founder of Baseline Ventures, said, “Ten years ago, you needed $5 million to start a business. Today, you need $70 and some coding skills.” It is a golden age for entrepreneurs.

But with the implied success is a dark side that is rarely talked about. The cost is often the entrepreneur’s physical and mental health and the impact their work has on their family and friends. Sheryl O'Loughlin tackles this head-on in Killing It! The entrepreneur’s personal life is often the hidden cost of building an uber-successful career or business.

Sheryl who has taught entrepreneurship at the Stanford Graduate School of Business understands the ups and downs of being an entrepreneur. She served as the CEO of Clif Bar, was the Co-Founder and CEO of Plum Organics and is now CEO of REBBL. In Killing It! she offers empathetic support for entrepreneurs with candid discussions about her own experience and those of other entrepreneurs she has known.

Many people start a business without really knowing what they are getting into. Starting a business for money is a bad bet since around 95 percent of startups fail. There needs to be a real love for the problem you’re trying to solve. Professor, social entrepreneur and investor Will Rosenzweig, told Sheryl, “Many thought they were going to launch a business coming out of school, not necessarily to solve a problem, but the problem they were trying to solve was their own unemployment and livelihood.”

Execution

Once you get past the idea, execution is everything. “It’s this build phase that catches many entrepreneurs by surprise—after so much excitement; they’re shocked at how mundane it all is. Remember the Buddhist saying, ‘After enlightenment, the laundry.’ Oh, and how much laundry there is.”

Sheryl says you have to make others love your business as well and connect to the company’s purpose—and it’s ongoing. You do that by inviting others to be part of the story. You help others to connect their personal passions to the company’s purpose. You and your team need to live the experience your customers have with the product. You need to be a leader that models love, compassion and care and hire people that can do the same.

At the same time, love can blind you to realities. So “let reality in,” she cautions. “You don’t have to love every moment, but you do have to love enough of them.

Entrepreneurs believe they have to do it all. Show no weakness. But we do have weaknesses. We need to talk to each other. “When entrepreneurs don’t rely on one another, they don’t harness the power of possibility. Too often we approach our work from a mind-set of scarcity and not one of abundance—a mistake that holds us back. The entrepreneurial profession requires that a person be vulnerable in order to remain healthy, and it’s critical to have a space in your life with others that allows for that.” When it comes to running your own company, business and personal issues are all intertwined.

Friendships

Hang on to your friends. “Friendships are crucial for the emotional well-being of an entrepreneur, but they are often the first thing to hit the chopping block when things get busy.” There are three good reasons for this:

  1. It’s Good for Your Business. Entrepreneurs can easily become myopic. “The point is, you have to stay connected to the world outside your narrow one in order to make sure your ideas are still relevant—not according to some marketing study or other, but according to common sense.”

  2. It Helps Maintain Your Full Identity. “You are not your startup. Being a friend or a family member forces you to take on that identity. You can’t just take in the relationship; you have to give, too. Valuing these relationships reminds you that it’s not in fact all about you. Being a friend offers a buffer against narcissism and obsession. Remember that the intensity that entrepreneurs are so susceptible to must be guarded against so that it doesn’t become destructive. If you’ve been spinning all day long about a decision, just sitting with someone else and offering your attention and care to them can pull you out of that dangerous headspace.”

  3. It Helps Heal You (and Them). “There are dozens of studies that show the friendships are good for our health. Choose a friend you trust and open up to him or her. Write down a list if your greatest fears with your business and share them.”

Risk-Taking

I’ve risked it all is not a good strategy. “A skilled entrepreneur is the one who will assign risk to somebody else. The entrepreneur will that the resources when they are there. Would you go climbing without the proper gear? Probably not, and you shouldn’t approach business any differently. Entrepreneurship is about minimizing risk.”

You need a Plan B because most of the time you will need it. Most ventures will fail. “You can’t make the mistake of thinking you’ll beat the odds just because you have a fancy degree, stellar experience, and great contacts.”

Self-Worth

We are conditioned to believe that money equals success. It’s vital, but your self-worth isn’t tied to the company’s net worth. “To keep a healthy self-worth/net worth separation, you have to continually ask yourself what role money is serving in your endeavor? Is money becoming your identity?” What are you proud of? We talk about family values, but they aren’t as easy to measure as money.

Your self-worth is probably the most important message of her book. Self-worth “is the quality that must be the strongest and most fight-ready before you start a company.” No matter what happens, you are not the company. “What must endure is a deep feeling that you are living in line with your values, that you are fundamentally grounded. You have to have resilience, and you have to know that you can fall down, get back up, and wipe yourself off, aware that deep down you are okay. Without this strong sense of self-worth, no matter how supportive your partner or your kids or your friends, no matter how bold or humble you are, you are at risk, even if your company isn’t.”

Most new businesses fail. And most entrepreneurs would do it all over again. But if you know up front the dark side of entrepreneurship, hopefully, the journey will end up happier and healthier for you. Before you start a company, think of entrepreneurship in terms of your life as a whole. Invest in your wellbeing. Killing It! is a great place to start.

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Dear Founder Build Your Dream Business



Posted by Michael McKinney at 03:39 PM
| Comments (0) | Entrepreneurship , General Business

12.06.17

12 Lessons for Entrepreneurs from Richard Branson

TITLE

R
ICHARD BRANSON titled his autobiography Finding My Virginity because “You can only lose your virginity once. But in every aspect of my life—building businesses, raising a family, embarking upon adventures—I try to do things for the first time every day.” His child-like, curious approach to life has served him well.

In Finding My Virginity, Branson shares his ups and downs in his entertaining, candid style. “If your life is one long success story it won’t make for a good read. What's more, you’re most likely a liar. We all have ups and downs, trials and tribulations, failures and triumphs: we just hope to come out stronger on the other side.”

What follows is some sound advice Branson shares about what it means to be an entrepreneur.

Work Fast

Generally, we like to work fast: try ideas, see if they stick, and, if they don’t, quickly move on to the next one. I work best when my mind is able to jump from one topic to the next in quick succession. It keeps things lively, and it’s amazing how often good ideas for one company come out of another completely unrelated business.

Listen

Too many people presume they are right and don’t listen to other points of view. They speak categorically and then close their ears. I consider myself a good listener and apportion a good deal of my success—not to mention my marriage—to this. Some entrepreneurs surround themselves with brilliant people and then ignore them. Most people who behave in this autocratic way get their comeuppance. I know I am not better than anyone else, so I take a different road.

Value of Entrepreneurs

It may be controversial to say it, but there is no job more important than being an entrepreneur. When you analyze everything about the world and all the improvements that get made, almost without exception, it is an entrepreneur that has made them. It might be an entrepreneurial doctor, or architect, or artist—anything.

While business may have changed from when I started out, the principles are the same and still fit what I am good at: finding markets that need shaking up, coming up with ways to make people’s lives better, then finding brilliant people to bring it to life. Once an entrepreneur, always an entrepreneur.

Invest in People

What I am good at is coming up with interesting ideas and then finding amazing people to turn them into reality. I see investing in start-ups in the same way. I’m not always caught up in the details of what a particular app will or won’t do; I’m more interested in the personalities behind the companies, and the purpose within their visions. I’d happily invest in a company that ends up failing in order to find a young entrepreneur who will go on to change the world.

Youthful Spirit

I have seen so many companies come and go, largely because they didn’t reinvent themselves. They stayed in a sector that had died, whereas Virgin was always one step ahead of the game. Most people think: know your onions, then stick to them. My worry is that people will get bored of onions and move on to carrots instead, putting your onion out of business.

No matter what is happening in my business life, regardless of what situation my companies are in, somewhere in the back of my mind I will be mulling over a new idea. I like to think it is my curiosity and thirst for fresh inspiration.

I think entrepreneurship is our natural state—a big adult word that probably boils down to something much more obvious like playfulness. When we are young, before we have our childlike wonder beaten out of us by adult life, we are at our most inventive and ambitious in our actions. I’ve always tried to keep that youthful spirit.

Now, it’s absolutely critical to keep that early hunger I had. I mustn’t get complacent; I’ve still got to be fleet of foot and quick to jump upon opportunities.

Tell Stories

Having the facts on your side is one thing, but telling a great story with just enough charm and chutzpah can make all the difference.

Get Help

Asking for support is a strength, not a weakness. If you try to do everything yourself, you won’t succeed and will make yourself miserable along the way.

Note-Taking

Virgin has a note-taking culture and I’m certain it wouldn’t be the success it is today without it.

I jot down ideas, thoughts, requests, reminders and doodles every single day; if I didn’t I would forget them before I could ever put them into action. Making lists is both a way of remembering things and of ticking off achievements to make progress. Without notes and follow-ups, chances are nothing would get done. If somebody works for me and doesn’t take notes, I ask them: “Are you too important? Note taking isn’t beneath anyone.” I take notes in every meeting, to keep the frame of mind to learn. I edit as I go along, and follow up with dates and tasks in order of importance.

Encourage Ideas

Any manager who punishes their staff for expressing an opinion hasn’t got the faintest idea about leadership. People in charge should empower their employees, not scare them into silence.

Value People

I have always thought it refreshing, and sensible, for leaders to get right among their people. That way you get to know them, hear their ideas, build stronger ties and create relationships in a way you never can sealed off behind a closed door.

The word “family” gets used too often by companies who treat their staff as anything but. I wish more businesses really did run like families. When things are going well, everyone has an even better time celebrating together. When things are tough, you can rally around and help each other get through it.

Making It Work

Sometimes it is necessary to pivot a business into a new idea, and wait for another opportunity.

Leadership

The way to become a great leader is to look for the best in people—seldom criticize—always praise.

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

08.11.17

Leadership Lessons from a 19th Century Genius

William James

W
ILLIAM JAMES, one of the great thinkers of the late 19th century and the father of modern American psychology, has much to offer the modern executive. Here is just a small sample of how James’s insights have helped me in my career:

“A great many people think they are thinking when they are merely rearranging their prejudices.”

Much of the time we should spend listening is spent preparing a response instead. As we progress through our careers, keeping a truly open mind becomes increasingly difficult. Real problem solving comes when we allow the experience of others room to inform our thinking.

I know that my own obstinacy has sometimes prevented me from seeing a better way forward. Some years ago, I was presented with the opportunity to hire an exceptionally talented individual. There was no open position that aligned with the individual. But make no mistake, this was a true talent and a good person. Rather than crafting a role that made sense, I tried to force a fit. At the time it seemed like the right approach – we had an opening that this person could fill, and over time we could have expanded the role. Instead, I let short-term tactical thinking cloud my execution.

I have also found that remembering your own frustration when others are not open to your input helps you put aside your own prejudged ideas aside to allow others to contribute.

“When you [decide] to make a choice and don’t make it, that is in itself a choice.”

Some may be more familiar with the more recent formulation of Rush’s Neil Peart: “If you choose not to decide you still have made a choice.” The point is that putting off decisions, no matter how big or small, has impact. This is not to suggest that all decisions should be made on the spot without properly assessing data and input. But too often the trap of always seeking more, or letting the quixotic quest for perfection prevent the implementation of the good, turns a “no” decision into the decision. Rarely is the no decision the right decision.

I can think of a time when I allowed myself to delay making a decision that I knew needed to be made. I had done the needed analysis and knew what the right call was, but because it was an exceptionally tough – and impactful – call to make I put it off longer than I should have. I needed to make a staffing change that would significantly shift responsibilities away from one person. This was someone who had made a positive impact but who had, over time, become less effective in his role. The change would be difficult for him personally and financially, and carried with it some risk of fallout in other areas of the organization. Ultimately the call got made and proved to be the right one, but the delay had a cost.

“Act as if what you do makes a difference. It does.”

I think most people wrestle with the question of whether what they are doing is truly meaningful. Call it the legacy question.

I have been blessed with the ability to provide for my family, and am proud of the hard work I have done in my career. But I am most proud of the times I have been able to assist someone else in their development – both professionally and at times personally. I’m particularly proud of the success of one person whom I “inherited” when I took over an established team some years ago. It became clear to me that he was not realizing his full potential – mainly because he had not received enough guidance or support in order to be successful. He was very responsive to being challenged, to see beyond the tactical aspects of his role and embrace a more strategic one. As a result, he transitioned from being a capable contributor to a leader. He needed strong backing initially to help counter some very strong personalities who carried more senior titles. But he prevailed.

“Nothing is so fatiguing as the eternal hanging on of an uncompleted task.”

As the demands on our time increase, the temptation to multi-task grows. One of the basic tenets of product management is that it is better to solve one problem completely than address multiple ones partially. This holds true beyond the realm of the product manager. Multi-tasking sounds positive. It conveys business, which is often equated to importance, and suggests competence. Time slicing does not sound nearly so positive. It communicates that only a fraction of our time and attention is being devoted to a task. Multi-tasking and time slicing are, in fact, one and the same.

There are so many approaches to task prioritization. Find the one that works best for you. Resisting multi-tasking is an everyday challenge. Don’t give in. This is a lesson I need to relearn whenever I catch myself giving in to the temptation to time slice.

“The art of being wise is the art of knowing what to overlook.”

Not everything requires your attention. There are decisions we must make and problems we must address. But teams exist to share that workload. Trust your teams to execute.

One of the most self-aware people I have worked with builds teams with people who are strong in areas he is not. One of the benefits of this approach is that he knows he can rely on his team to address challenges and attack opportunities that he cannot. An honest accounting of our own strengths and weaknesses is a difficult, but beneficial task. Getting input from others we trust can be of great value.

Knowing what to overlook also means knowing what not to overlook. I have learned that the number one thing not to overlook is attitude. The presence of a negative attitude has persistent harmful effects. Understanding and addressing the causes of a poor attitude can work wonders to overcome this. But there are times when negativity outweighs whatever contributions a person makes—and he has to be removed in order to preserve the organization.

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Leading Forum
This post is by Mike Tierney. He is CEO of Veriato, which provides employee monitoring and behavior analytics software for companies of all sizes and industries in more that 110 countries around the world. Mike leads the execution of Veriato’s strategic direction, and heads up the Marketing group. He has a diverse background covering sales, operations, marketing, and product management. Follow Mike on Twitter: @mikejtierney

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Posted by Michael McKinney at 05:14 AM
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06.20.17

Humility is the New Smart: Are You Ready?

Humility is the New Smart

S

MART used to be a quantity game. “I know more than you. I get more things right.” But Ed Hess and Katherine Ludwig say that in the new Smart Machine Age, that’s a losing game. The new smart is about quality. Specifically, the quality of your thinking, your listening, and your relating and collaborative skills.

Are you ready?

The Smart Machine Age (SMA) will revolutionize how most of us live and work. In Humility is the New Smart, the authors state that “smart technologies will become ubiquitous, invading and changing many aspects of our professional and personal lives and in many ways challenging our fundamental beliefs about success, opportunity, and the American Dream.” This means that the “number and types of available jobs and required skills will turn our lives and our children’s lives upside down.”

New skills will be needed. Uniquely human skills. Those skills, while uniquely human, are not what we are typically trained to do and require a deal of messy personal development. We will need to become better thinkers, listeners, relators, and collaborators while working to overcome our culture of obsessive individualism in order to thrive in the SMA. Humility is the mindset that will make all of this possible.

Most of today’s adults have had no formal training in how to think, how to listen, how to learn and experiment through inquiry, how to emotionally engage, how to manage emotions, how to collaborate, or how to embrace mistakes as learning opportunities.

In short, say the authors, we need to acquire and continually develop four fundamental NewSmart behaviors:

Quieting Ego

Quieting Ego has always been the challenge for us humans. As they observe, “Even if we don’t consider ourselves part of the ‘big me’ cultural phenomenon, for many of us to feel good about ourselves we have to constantly be ‘right,’ self-enhance, self-promote, and conceal our weaknesses, all of which drive ego defensiveness and failure intolerance that impedes higher-level thinking and relating.” This tendency negatively affects our behavior, thinking, and ability to relate to and engage with others.

Managing Self—Thinking and Emotions

We need to get above ourselves to see ourselves impartially. We all struggle “to self-regulate our basic humanity—our biases, fears, insecurities, and natural fight-flee-or-freeze response to stress and anxiety.” We need to be willing to treat all of our “beliefs (not values) as hypotheses subject to stress tests and modification by better data.”

Negative emotions cause narrow-mindedness. Positive emotions, on the other hand, have been scientifically linked to “broader attention, open-mindedness, deeper focus, and more flexible thinking, all of which underlie creativity and innovative thinking.”

Reflective Listening

Because we are limited by our own thinking, we need to listen to others to “open our minds and, push past our biases and mental models, and mitigate self-absorption in order to collaborate and build better relationships.” The problem is “we’re just too wired to confirm what we already believe, and we feel too comfortable having a cohesive simple story of how our world works.” Listening to others helps to quiet our ego.

Otherness

To create these new behaviors and mindsets, it should become obvious that we need to enlist the help of others. “We can’t think, innovate, or relate at our best alone.” As Barbara Fredrickson observed, “nobody reaches his or her full potential in isolation.” Jane Dutton out it this way: “It seems to be another fact that no man can come to know himself except as the outcome of disclosing himself to another.”

The NewSmart Organization

Optimal human performance in the SMA will require an emphasis on the emotional aspects of critical thinking, creativity, innovation and engaging with others. “The work environment must be designed to reduce fears, insecurities, and other negative emotions.

To do this it means “providing people a feeling of being respected, held in positive regard, and listened to. It means creating opportunities for people to connect and build trust. “It means allocating time and designing work environments that bring people together to relate about nonwork matters.” Finally, it means getting to know employees and helping them to get the “right training or opportunities to develop and provide feedback.”

The NewSmart organization needs to be a safe place to learn. “Feeling safe means that you feel that your boss your employer, and your colleagues will do you no harm as you try to learn.”

The New Smart

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Learn or Die Humility Wide Net

Posted by Michael McKinney at 05:28 PM
| Comments (0) | General Business , Human Resources , Leadership Development , Personal Development , Positive Leadership

05.19.17

9 Key Principles for Business & Life from Sam Zell

Sam Zell

B

ILLIONAIRE investor Sam Zell has put down on paper an account of the principles that guide how he does business in Am I Being Too Subtle?

He doesn’t claim to be self-made. He credits his parents with handing down to him values that have served him well in life. He is the son of Jewish immigrants who fled Poland in 1939 to avoid the Holocaust. “My parents were very disciplined and very focused on work and achievement, and they led by example.” His parents “never dumbed down the conversation for the kids.” Lessons were taught through examples and stories.

His parents provided Zell with a different perspective than his friends. They were given a bigger-picture orientation. As a result, he was “more comfortable standing apart” than he was trying to fit in. It was to be a defining characteristic of his life. “Conventional wisdom,” Zell writes, “is nothing more to me but a reference point.” But he notes, you can’t create your own playbook “unless you understand the rules of the game and play well within the lines. As long as you know where everyone else is, you can play the game.”

Below are nine of Zell’s key philosophies for how he approaches business and life:

1. Be Ready to Pivot
I never hesitate to pursue a new endeavor just because I haven’t done something similar before. I just use what I’ve learned that might cross over. I see myself as a frontline player, and that means being able to envision where demand is going to be, or where it won’t be—not just in the next five years but in the next twenty or thirty years. It means not sticking to assumptions that limit your opportunity. The fact is, I am eclectic, and the fun of my life is being able to gain access in new arenas.

2. Keep it Simple
I stay true to the fundamental truths: the laws of supply and demand; liquidity equals value; limited competition; long-term relationships. They offer a framework through which I view potential opportunity. Problem-solving is my passion. Breaking issues down to their barest elements, simplifying them. Finding the fulcrum. It’s something anyone can learn to do. After that, experience makes the difference—doing it again and again until it becomes distinctive. Experience builds discipline and insight that sometimes allows you to see over the abyss before you step into thin air. It’s being risk aware. It is a matter of organizing your thinking.

3. Keep Your Eyes (and Mind) Wide Open
I rely on a macro perspective to identify opportunities and make better decisions. I am always questioning, always calculating the implications of broader events. If there’s one consistent theme, it’s that I’m always on the lookout for anomalies or disruptions in an industry, in a market, or in a particular company. Recognizing the psychology of market extremes can lead to attractive points of entry. Any event or pattern out of the ordinary is like a beacon telling me some interesting new opportunity may be emerging. If you’re a seeker of information and a serious observer, it’s all there to be learned. But with today’s access to an overwhelming amount of information, most of it drivel, you have to focus on what’s meaningful.

4. Be the Lead Dog
In my businesses, I like to be the lead dog, to control the “scenery” in every industry I enter. It means not being less than number two in any industry, and referable being number one. If you’re not the lead dog, you spend your whole life responding to others.

5. Do the Right Thing
When you’re in it for the distance, you do it right. Ethics are a cornerstone. I have always known that success for me would be guided by principles. For that reason, there are some deal I just won’t do. Everything I do is predicated on the assumption that there’s another deal. And the way you get to the next deal is to lay it straight. Sometimes my team argues with me—they can’t believe we’re leaving money on the table. But I want to create an environment where everyone wants to keep playing.

6. Shem Tov – A Good Reputation
In everything I do, I’m consistent, and I’m never tempted to something that’s at odds with my name. In business, people always want to know who you are—in other words, will you do what you say, will you make a reliable partner? Reputation is your most important asset.

7. Prize Loyalty
I believe loyalty defines your character. Do you stick with your friend, colleague, or partner when it’s not easy? Do you consider their circumstances as much as you consider your own? As you can imagine, for someone in my position, loyalty and trust are priceless commodities. And they go both ways.

8. Obey the Eleventh Commandment
Don’t take yourself too seriously. Ego and pride have their places, but when they are not self-regulated, they can be detrimental, if not debilitating. But for me the Eleventh Commandment implies something more. Simply put, it’s being the first person to laugh at yourself. To me, the Eleventh Commandment acknowledges that we’re all human beings who inhabit the world and are given the gift of participating in the wonders around us—as long as we don’t set ourselves apart from them.

9. Go All In
The minute you acknowledge that a problem is insurmountable, you fail. If you just assume there is a way through to the other side, you’ll usually find it, and you will unleash your creativity to do so. I equate this fundamental truth with an entrepreneurial mind-set. It’s tenacity, optimism, drive, and conviction all rolled into one. It’s the commitment to get it done, see it through, make it work. In my world, I call that being an owner.

Zell advocates an owner/entrepreneurial mindset in business and life. “An owner is consumed with making the most out of what he already has. He’s all in. An entrepreneur is always looking for a new opportunity. He’s always reaching.” As he tells his grandkids, “Your responsibility is to maximize the skills you were given. But whatever you decide to do, invest everything you have in it—excel. What I’ve done is not the example I wanted to set; it’s the way I’ve done it that I hope you emulate, through focus, effort, and commitment.”

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Posted by Michael McKinney at 05:29 PM
| Comments (0) | General Business , Leadership Development

04.24.17

The Reciprocity Advantage

Reciprocity Advantage

G

IVE TO GROW. Partner for greater value for more players.

In The Reciprocity Advantage, authors Bob Johansen and Karl Ronn state that the next competitive advantage will be reciprocity advantage. Reciprocity and advantage will spark new business models for innovation and growth.

Most business is transactional but “reciprocity is the practice of exchanging with others for mutual benefit. In a reciprocity-based model, I give you something, and at some later point in time, I trust that I will learn how to get even more value back in return.” It’s what the authors call “smart giving.” “The reason for giving assets away isn’t just about doing good—it’s an important part of an ongoing value exchange spread over time where partners commit to looking out for each other as part of a shared vision.”

While the principles they lay out apply both organizationally and individually, they note that reciprocity advantage must be done on a large scale to make a significant difference.

“A reciprocity advantage is a chance to do good while also doing very well. A reciprocity advantage is delicate to achieve and maintain. Go too wide, and you’re a philanthropist. Go too narrow, and you’ll be back doing transactions.”

Reciprocity ModelFour Steps to Reciprocity Advantage:

1. Uncover Your Right-of-Way
Your right-of-way is the space within which you can create your reciprocity advantage. Uncovering your own right-of-way involves understanding that every company is really in three businesses: Product, Service, and Experience. Which of your assets have value for others and could also help you create complementary business growth? Essentially, what underutilized assets could you give away now that would yield greater value later. The first step is to reassess your strengths to find those underutilized assets. Access to these assets is the right-of-way that will be the basis for your new partnerships.

You begin by defining your core business. This is where you will find the right-of-way assets you can share. Not all should be shared. You must do this inventory and then decide later what to keep and what to share.

Then reinvent your business as a service. The rights-of-way that your core needs to survive disruption are not to be shared. This would hurt your business. Instead, invest to prevent long-term obsolescence.

Finally, redefine your business as an experience. Having attained clarity on what you do as a service, focus on the users of your service. What are you being hired to do? By looking for services that people want but don’t yet have, you will find new ways to complement your core business. The rights-of-way that enable this are the core of the new reciprocity business.

2. Find the Best Partners
Partnerships are hard. So don’t form one unless you by doing so you are doing something that you could never do alone. In a VUCA World, partnerships are hedges against risk, but they will also be more attractive ways to innovate and grow scale. The best partners will demonstrate their worth by looking out for one another, thereby protecting themselves over time.

3. Learn by Experimenting
Prototype, listen, learn. Give away assets intelligently in order to learn how to create value in new ways. The goal is to experiment to learn in an open, low-cost, and repetitive way that allows for time to discover which questions to ask. How can you and your partners learn how to make money in new ways within your right-of-way?

4. Scale It
Creating your reciprocity advantage will allow you to make a big difference for a long time. Reciprocity is good, but massively scalable reciprocity is growth that reshapes industries. This requires designing for scale from the beginning. You will know your reciprocity advantage is ready to scale when your service or product meets three criteria—it’s desirable, viable, and ownable.

So, how will you know if your idea is desirable, viable and ownable?

The authors have created a scorecard to direct your development efforts. Each of the three areas is divided into two opposing measures:

Is it desirable? To scale it must be transformational and intuitive. Is it viable? To be viable it must be affordable and structurally attractive. Is it ownable? It needs to be feasible at your intended scale and have a source of sustainable competitive advantage.

The breakthrough occurs when you resolve the three pairs of opposing forces. When you have all six parts working for you, run! Your idea is now no longer risky. Until then use keep experimenting cheaply.

The authors conclude, “We believe that givers will be much better at creating reciprocity advantage for their companies and for themselves.”

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5 Leadership Literacies Ten Leadership Skills You Need

Posted by Michael McKinney at 10:22 PM
| Comments (0) | General Business

02.22.17

Kaleidoscope: 9 Foundational Stones that Drive Sparkling Service

Kaleidoscope

PEOPLE DON'T talk about good service, “they boast about unique, captivating services experiences.”

In Kaleidoscope, Chip Bell explores what makes an experience so good that people want to tell their friends about it. What makes people become zealous advocates of your business?

Creating these kinds of customer experiences works in much the same way a kaleidoscope works.

Every time you turn a kaleidoscope you get a unique image, but the stones inside that form those images never change. They are the core of what makes the kaleidoscope work. Kaleidoscope is about these basic, foundational "stones" and concepts that should drive innovative customer service. These stones can be presented in unique combinations that will drive brilliant service.

Bell presents nine stones that form the basis of sparkling innovative service:

Enchantment:
How can you add a little magic? What could your service experience smell like, sound like, feel like, look like, taste like if you wanted to truly excite your customers in a fashion that sticks in their memory?

Grace:
Honor your customer. Graceful service is an assertion, not a response. It’s an attitude not a tactic. Customers treated with goodness assume the behavior and attitude of goodness. Be the giver of hope your customers become. Respect is not what you believe; it is what you show. You can start igniting grace with a simple, “I am here to serve and daringly make a difference in your life.”

Trust:
Honor and trust are the lifeblood of repeat business. Treat different customers differently. One-size-fits-all treatment shows ignorance of their uniqueness and indifference to learning about them. Find ways to make every customer’s experience feel like it has his or her monogram on it.

Generosity:
Adopt an attitude of abundance. Give more than is expected. Great service means caring so much about the experience you are authoring or the product you are caretaking that you are willing to invest more in it, purely in the pursuit of the remarkable.

Truth:
Truth telling shortens the distance between people. It frees customers from anxiety and caution. It triggers a potent connection with the humanity in each of us. Everything in your customer’s experience is personal. Corporate speak and sanitized legalese communication, by definition, violate that principle.

Mercy:
Mercy’s presence in a relationship comes when it is being tested, challenged, or disputed. Mercy is more than forgiveness. It is a relationship surrendering to what it could be rather than controlling or containing what it is. It is neither an expression of pity nor an air of tolerance. Rather, it is expanding the boundaries of the relationship to allow it to reform, renew, and reward.

Alliance:
Customers enjoy being a partner. Great partnerships care about fairness, not a perfect fifty-fifty split. Great partnerships have built-in shock absorbers. They affirm their relationships more through ebb and flow than give and take. Examine your business practices. Do you make customers go to the nth degree to get what they need?

Ease:
The key to innovative service is appreciating its complexity, understanding its impact, and paying attention to the detail that rigger customer angst and discomfort. Be your customers’ pathfinder to ease by examining their experience through their eyes, not yours.

Passion:
Passion-filled service is fundamentally about commitment. It is the outcome that results from the fervor to be all-in, to serve without reluctance. identify a service “souvenir” – a small, delightful takeaway that could extend the customer’s experience beyond adieu.

Bell’s focus in Kaleidoscope is delivering customer service experiences that are value-unique, not just value-added. Deliver a masterpiece.

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Posted by Michael McKinney at 07:58 AM
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02.20.17

Ryan Blair’s Five Rules for Being a Rock Star

I Am Keats

RYAN BLAIR is a serial entrepreneur and the co-founder and CEO of ViSalus Sciences. In Rock Bottom to Rock Star he shares lessons from his own journey. Not surprisingly, the journey begins with taking personal responsibility. Without it you can’t move up from your rock bottom. You are your own competition.

Blair explains, “There is a way to shape everything in life so that it serves you and drives you toward success.” In whatever you chose to do “your timeline will be filled with smile sand cries. Ultimately, success will be determined by whether or not you have the right psychology to control them.”

Here are Blari’s five rules for being a rock star:

Rule 1: Don’t listen to the noise. Especially in this day and age, any fool with a mobile phone and a social media account thinks he’s an expert, so don’t listen to useless, negative messaging, and only take advice from those who are qualified to give it.

Rule 2: Don’t believe your own hype. The moment you start celebrating, you’ve left the stage. It wasn’t celebration that made you a rock star, it was hard work. Remember that.

Rule 3: Practice. There will be times where you’re going to get rusty, and you’re going to ask yourself, can I still do this? You have to get out there, play, rehearse, get feedback from your “audience,” and modify your performance.

Rule 4: Surround yourself with the right musicians. You have to constantly assess the people you choose to hang with. Are they helping you move forward or are they just along for the ride? Are they building you up, or tearing you apart? I’ve lost relatives over this.

Rule 5: Always remember where you came from.

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Posted by Michael McKinney at 01:22 AM
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01.09.17

Shoe Dog: How to Succeed in Business with a Little Luck

Shoe Dog

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.

2016 best book pick

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12 Lessons for Entrepreneurs Dear Founder

Posted by Michael McKinney at 08:03 AM
| Comments (0) | Entrepreneurship , General Business

12.05.16

Hopping Over the Rabbit Hole

Rabbit Hole

SO MUCH OF SUCCESSFUL ENTREPRENEURSHIP is learning to lead yourself. It requires some luck, but more than anything it means always pressing forward and a good dose of creativity especially when things don’t look good.

It’s not surprising then that Anthony Scaramucci’s book, Hopping Over The Rabbit Hole: How Entrepreneurs Turn Failure Into Success is not just an important read for would-be entrepreneurs but anyone who looking move through life in a forward direction.

Scaramucci is the founder of SkyBridge Capital, a global investment firm with around $12 billion in assets. The firm also produces the annual SkyBridge Alternatives (“SALT”) Conference, a premier global investment and thought leadership forum. But his road to success has not been without a number of failures and near-misses. And he shares many of them to our benefit. He points out that SkyBridge’s success was ultimately defined by “our ability to learn from mistakes and turn failures into success.”

He writes: “I’m a firm believer in the idea that you’re either moving forward or backward. You’re either growing in confidence or swelling with hubris. The moment you become complacent is the moment you lose your edge. There is always somebody working harder than you, and there are always copycats ready to take the model you’ve built and make it better.”

So “we need to put our egos on the floor, get outside of our comfort zones, and push ourselves, while maintaining some level of gracious audacity.”

Life and business bring with it regrets. But we can learn from them or let them hold us back. The danger is to look for to blame and not taking responsibility for your outcomes.
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.
When he was fired from Goldman Sachs his impulse was to lash out. But his boss told him that he would be angry, but “This is important Anthony. You’ve got to move through that stuff. And you’ve got to accept this is happening to you.”

By sharing his own shortcomings throughout this book, he helps us identify where we also fall short. He then shares practical solutions.

He points out that “starting your own business is the most terrifying and nausea-inducing thing you can do. The dream comes first, and if you’re lucky, smart, and work your tail off, money will follow. Success should never be viewed as a given. If you are afraid of failure, don’t become an entrepreneur.”

When beginning a business it is easy to begin spending money on the wrong things. Thriftiness is key.
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.
Pressing forward and never giving up requires a special mindset regarding negative feedback:
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.
In the beginning you need the right kind of people:
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.
Finally, Scaramucci says, “There is no skill more vital to an entrepreneur than networking. Your ability to connect with people on a personal level will differentiate you from your peers.” And you need to get comfortable with public speaking.

If you want to get to where you want to be, he says you have to believe that you are enough. You will do what it takes to get the job done. “It’s your attitude that will make you.”

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Posted by Michael McKinney at 10:27 PM
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10.03.16

Richard Koch on Principles

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
| Comments (1) | General Business

06.17.16

Why the Rules of the Entrepreneurial Game Are Changing

Steve Case

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.

Third Wave

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
| Comments (0) | Entrepreneurship , General Business , Government

01.05.16

The True Value of Leadership

True Value of Leadership

LEADERSHIP, emotional intelligence, authenticity, and charisma are not enough. Leaders succeed when they add value to others. Without making others better, all the personal qualities of leadership are more self-serving narcissism than true leadership. Good leaders inspire employees to do their best. Better leaders build organizations that outlast and outlive individual leaders. But, the best leaders create investor confidence in future success.

In recent years, investors have begun to look beyond current earnings to determine a firm’s true market value. Investors have examined intangibles like strategy, brand, and R&D to ensure that a firm will produce future not just past earnings. More recently, we have found that 25 to 30% of investment decisions can be traced to investors confidence in leadership.

To determine the quality of leadership, investors can now access a Leadership Capital Index (see the book Leadership Capital Index: Realizing the Market Value of Leadership). This index gives investors a thorough and rigorous way to evaluate leadership. We envision investors starting to access and assess leadership insights much like they do financial and intangible results. The Leadership Capital Index examines both the personal qualities of a leader and the leadership team and the human capital systems that the leader puts in place.

But, how can a leader initiate conversations that give investors confidence in their leadership ability? Here are some tips for leaders who want to realize more market value through their leadership.

As an individual leader, you and your leadership team can inspire personal confidence from investors when you demonstrate:
  • 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.

As a leader, you should create an organization that has unique capabilities to deliver sustainable value over time. Work on creating:
  • 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.

When you show investors that you have created both individual leaders and organization capabilities, they will respond and give you more market value. This is the next agenda for both leaders who add value and investors who want to realize that value.

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Leading Forum
This is a post by Dave Ulrich and Justin Allen. Dave Ulrich is the author of The Leadership Capital Index in which he details how equity or debt investors can systematically and predictably determine the quality of leadership to make faster and more informed decisions and gain a critical information advantage over their competitors.He is also the Rensis Likert Professor of Business at the Ross School, University of Michigan. Justin Allen is co- author of HR Transformation, Co-Founder of Ulrich Leadership Capital, and a Principal at The RBL Group.

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Posted by Michael McKinney at 04:01 PM
| Comments (0) | General Business

07.03.15

5 Reasons You Need to Make a Connection Culture Your Highest Priority

A culture that connects people would seem to be a high priority to leaders. Building a sense of community would seem to be a necessary first step before a leader does anything else. But a connection culture is not a common as you might expect.

Perhaps this largely because our human nature still leads us to believe that we can always default to command and control when we have to. Or perhaps we just get so busy that we have no time for relationships. We just need to get the work done.

Connection Culture
Michael Lee Stallard makes the case in Connection Culture that in order to achieve sustainable, superior performance, every member of an organization needs to intentionally develop both task excellence and relational excellence. That is they need to be continually learning and developing healthy relationships with others.

Stallard notes that “most organizations contain a mixture of connection cultures, cultures of control, and cultures of indifference, indicating that most leaders are not intentional about developing connection and connection cultures. Creating connection cultures should be an organization’s highest priority because:
  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.
Stallard goes into the how of creating a connection culture with five building blocks for each of the core connection elements of vision, value and voice.

Vision: When everyone in the organization is motivated by the mission, united by the values, and proud of the reputation.

Value: When everyone in the organization understands the needs of people, appreciates their positive unique contributions, and helps them achieve their potential.

Voice: When everyone in the organization seeks the ideas of others, shares their ideas and opinions honestly, and safeguards relational connections.

Connection is a character issue. It’s about your attitude, language and behavior. Start on your local culture where you have an influence either formal or informal. Stallard advises that we also “consider how it applies to your family, your neighborhood, the community organizations you are involved in, and other areas of your life, and then take action to increase connection in those spheres as well.”

If you are looking to take your leadership to the next level, connect with others at every level.
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Posted by Michael McKinney at 08:08 AM
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03.09.15

How to Build ROPE Teams in Sales Organizations

Leading Forum
This is a post by Susan Ershler co-author of Conquering the Seven Summits of Sales.

Neil Armstrong’s historic step onto the lunar surface was not his achievement alone, but the result of decades of effort by a team of thousands. In this, as in most complex human endeavors, teams outperform individuals.

Teams have also played a central role in my life by ensuring that I received the support needed to achieve two cherished goals: leading sales organizations at several of the nation’s largest technology firms and climbing the Seven Summits, the highest peaks on each of the seven continents.

Along the way, I learned a great deal about team development and leadership. I saw that successful leaders compensate for their personal shortcomings by recruiting team members with complementary skills and temperaments. I observed how they motivated and inspired their teams to achieve something ambitious and meaningful. And then I put those lessons to work in my own business and climbing careers.

One of the most critical lessons I learned from climbing mountains and the corporate ladder is that every member of a well-constructed sales team should have a specific role, skillset, and set of responsibilities that aligns with the exigencies of the business being pursued. Equally important, each member should meet the essential “ROPE” criteria I developed over decades of climbing. In other words, they should be:

• Reliable and Responsible
• Opportunity-driven and Organized
• Professional and Practical
• Enthusiastic and Expert

Inside ROPE Teams

As a sales leader, I was responsible for assembling both “Inside” and “Outside” ROPE teams. Our Inside ROPE teams were comprised of colleagues in our company’s marketing, accounting, finance, engineering, support, purchasing, and other functional units. I knew I would need their cooperation and support in order to successfully orchestrate a complex, months-long sales campaign.

Inside ROPE teams provide another important benefit. In most companies today, employees are under constant pressure to do more with less. They may feel overburdened and resistant to shouldering new responsibilities. But the members of your team will be much more likely to go the extra mile if you demonstrate a sincere commitment to helping them succeed in their own careers. Once motivated in this way, your Inside ROPE team members will become invaluable assets in helping you to compete successfully for the scarce company resources you’ll need to bring a long and arduous sales campaign to a successful conclusion.

Outside ROPE Teams

Outside ROPE teams are equally essential to the success of any campaign. To recruit these team members, you’ll want to reach outside your company to forge mutually-beneficial relationships with industry experts, business executives, and other community leaders who can help you expand your industry knowledge, stay abreast of emerging business and technology trends, and secure personal referrals to new prospects. Your Outside ROPE team will play an essential role in helping you find and close business.

Keep in mind that Inside and Outside ROPE teams cannot be assembled instantaneously. They must be cultivated over time, using the same strategies you apply to nurture new client relationships. First, you’ll need to identify the most viable prospects, learn what motivates them, and help them become successful. Then, you’ll have to set specific team-building goals and track your progress.

Generally speaking, it’s easier to recruit Inside ROPE team members since you’ll be drawing from a limited pool of fellow employees and will have more opportunities for face-to-face interactions. However, you can create ongoing opportunities to build your Outside ROPE teams by networking with members of your local civic or business communities. Kemper Freeman, CEO of Kemper Development Corporation, for example, has been an active member of the Rotary Club for decades.

Finally, as a leader, it will be your responsibility to ensure that your relationship with every member of your Inside and Outside ROPE teams is positive and mutually beneficial. After completing a successful sales campaign, for example, I made sure to inform our executive leadership team about the contributions each of our Inside ROPE team members made to our collective success. I was also careful to fulfill every commitment I made to members of our Outside ROPE teams and to proactively pursue opportunities to help them achieve their personal and professional goals.

By effectively leading your Inside and Outside ROPE teams, you will build enduring communities that will sustain you throughout your career. Kemper Freeman said it best: “My entire life, I’ve lived by the principle that building a community is one of life’s greatest rewards. To me, building a community means working together, understanding each other, and creating opportunities that are mutually beneficial for everyone.”

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Conquering the Seven Summits
Susan Ershler is co-author of Conquering the Seven Summits of Sales: From Everest to Every Business, which illustrates the principles that lead to high achievement with anecdotes drawn from her sales and climbing careers. In 2002, she and her husband, Phil, became the first couple in history to climb the Seven Summits—the highest mountain on each of the world's seven continents. Today, Susan is a renowned keynote speaker, inspiring business professionals to push past perceived boundaries to achieve their most ambitious dreams and helping Fortune 500 companies transform their sales organizations into dynamic forces for revenue growth. For more information, visit her web site: Reaching New Heights

Posted by Michael McKinney at 06:14 PM
| Comments (0) | General Business

01.02.15

Are You Trapped in Survival Mode?

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.

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Posted by Michael McKinney at 10:53 AM
| Comments (0) | General Business , Thinking

11.28.14

Accelerate (XLR8)

Accelerate

XLR8
IN order to reliably maintain an organization nothing beats a well-organized and well-developed hierarchy. But in order to grow, avoid collapse, and take advantage of the changes happening all around us, we need something more.

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.

XLR8 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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Urgent Patience Develop and Maintain a Sense of Urgency

Posted by Michael McKinney at 02:28 PM
| Comments (0) | General Business , Management

07.24.14

What it Takes to be an Entrepreneurial Leader



Leadership
If success for entrepreneurial success is to get your enterprise to the point where it is self-sustainable, then most people fail.

But they don’t have to.

Given the proper skills and insights, most entrepreneurs can become successful or what Derek Lidow calls entrepreneurial leaders. He discusses these ideas in Startup Leadership and is based on his popular course at Princeton University.

Enterprises go through four stages of maturity—customer validation (a product or service that someone is willing to pay for), operational validation (deliver and satisfy the customers), financial validation (financial security under changing market and competitive conditions), self-sustainability (creating a process of innovation that enables the enterprises to be renewed)—and entrepreneurial leaders must grow with them. Stage four should not require the founder.

To be able to meet the needs of the enterprise, the entrepreneur must be able to demonstrate five skills, consistently in high-stress situations: self-awareness, facility with the basics of the business, relationship building, motivation, and leading change. Lidow says that an entrepreneurial leader does not need to be the best in each of these skills but shout have mastered them to the point that they are beyond simply competent.

Self-awareness is the key and probably the hardest of them all. It is crucial to get this right because personal accountability is an extension of it. In any situation, but certainly when a crisis occurs, entrepreneurial leaders “ask themselves how they need to change to make the situation better, not how to get everyone around them to act more like them.” Lidow continues, “Self-awareness is important in times of crisis, to the extent that it helps entrepreneurs understand that their traits, motivations, and skills make them vulnerable to repeatedly making certain types of mistakes. Without this level of self-awareness they are unprepared to change and do not recognize when they make crises worse.” And you see this very thing played out from time to time in organizations because some leaders are more concerned about being the leader than they are about the growth and survival of the organization. Which bring us to another point Lidow makes.

He says that all entrepreneurs are selfish. Initially it’s all about you. And it’s understandable because entrepreneurship is far more demanding and requires greater sacrifices than many imagine. But you have to be selfish enough to be selfless. That means that you need to be dispassionate enough to do what is right for the business even if it isn’t your personal preference. You serve the business—not the other way around.

Quote 
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.

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Posted by Michael McKinney at 10:33 PM
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02.19.14

Culture Counts

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.
When a widening gulf in salaries and benefits between the top and bottom ranks of an organization exceeds acceptable bounds, employees are less likely to feel a need to work harder, let alone possess the sense of loyalty, responsibility, and trust needed to help solve a company’s most pressing challenges. They will often point to the C-suite where executive perks and bonuses are out of control and say “Let them solve it!” As companies have had to cut costs to survive and, as result, expect remaining employees to pick up the slack, the disparity in compensation has become a battle cry across the business landscape that is now reverberating in the halls of Congress.

The younger workforce presents challenges as well. This generation is far less enamored by traditional organizations and is more independent than any that came before. They can pose major challenges for today’s managers, especially if those managers are part of a different generation. New forms of stimulus and incentives should be created to appeal to these technologically savvy, bright, and environmentally conscious young minds. Presenting more stimulating assignments, frequent two-way dialogue, and company-supported affinity groups can help achieve this.

The values of many former great leaders were forged by the experiences of the Great Depression, the wars in Afghanistan and Iraq, and humble beginnings. They understood the impact that a strong, adaptive corporate culture has on organizational performance, the true mark of leadership.

They treated workers as their greatest asset, investing in and motivating them. They understood that the purpose of business was to serve the customer. They expected high standards for employee behavior which they themselves modeled and reinforced.

Perhaps if today’s business leaders took a page from history, their companies would achieve the success created by the enlightened leadership of past corporate giants. And that would be a good thing.

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Leading Forum
Ritch K. Eich, Ph.D. (Michigan), is president of Eich Associated, a marketing and public relations consulting firm. He is the author of numerous publications in the field of leadership, organizational behavior and management. He is the former Chief of News and Public Affairs at Stanford University Medical Center and is the author of Real Leaders Don’t Boss (Career Press, 2012) and Leadership Requires Extra Innings (with Second City Publishing Services, 2013).

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Earn Respect Real Leaders Dont Boss

Posted by Michael McKinney at 07:32 PM
| Comments (0) | General Business

08.27.13

The Art and Science of Perfect Timing

Art 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:

Musical Score
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
| Comments (0) | General Business , Management , Vision

06.28.13

Want to be an Entrepreneur? The Pumpkin Plan

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 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 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 client 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
| Comments (0) | General Business

06.05.13

The Clarity Principle

Clarity Principle

Clarity Principle
The Clarity Principle by Chatham Sullivan, is about a widespread issue facing many (most) organizations: who are we and what are we doing? What is our purpose? It is a vitally important question that is rarely answered—not really. It's a difficult question to answer and is the cause of much of the dysfunctional, painful and absurd activity in many organizations. Instead of leading we are being lead by the business we are supposed to be leading.

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.
Corporate life so often disappoints writes Sullivan, because "the loss of shared purpose makes the experience of business feel as though it's every man or woman for him- or herself. People who feel disconnected from the primary task of the business become isolated from one another."

Sullivan provides numerous examples of conversations that have gone on inside companies in search of their purpose. Their struggles can be quite enlightening and helpful in determining our own.

What if you're not the CEO? Take responsibility for those things within your ability to control.
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.

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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
| Comments (0) | General Business , Management

04.29.13

Are You a Giver or a Taker?

Give and Take

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.

Leadership
But here's the thing, givers also land at the top of the ladder with takers and matchers in the middle. Adam Grant explores in Give and Take, what separates givers at the bottom and top. And the difference is not competence, but the kinds of strategies givers use and the choices they make.

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."

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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
| Comments (0) | General Business , Management , Personal Development

04.15.13

Nice Companies Finish First

Leadership
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 work force 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, 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."

Book Giveaway

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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
| Comments (0) | General Business , Management , Marketing , Positive Leadership

03.18.13

Fred 2.0 – Leadership in Action

You are no doubt familiar with Fred, first introduced to us in The Fred Factor by Mark Sanborn. Fred exemplified an attitude of exceptional service delivered consistently with creativity and passion in a way that values other people.

Leadership
Now Fred 2.0 brings us fresh insights, deeper understanding and wider application of the Fred Principles—and an update on the life of the real Fred Shea.

Fred 2.0 is about a specific way of approaching life and business. It’s an attitude that extends far beyond customer service. It comes from within and says I will do extraordinary things because that’s who I am. It’s not a feeling—it’s who you are. It is not dependent on the performance of anyone else.

Why Would You Live this Way?

Sanborn says it’s because being a Fred enriches others, expands you, puts more life into your living, breaks the bonds of self-absorption, makes you more employable, offers you a better way to live, creates a positive influence, and is more fun.

“Creativity is an essential ingredient in delivering extraordinary results,” writes Sanborn. Being creative is doing something different that adds value. More often than not, it’s the little things we notice that can be done better. This applies not only to the “things” we do, but also to our relationships; how we respond and interact to those around us.

Sanborn shows very specifically how to build better relationships, elevate the experience for those we come into contact with, how to build a team of Freds and how to instill the Fred approach in your kids philosophy of life.

The Fred Philosophy is Good Leadership

The Fred philosophy is ultimately what good leadership is all about. It’s a battle against mediocrity says Sanborn.
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.
The Fred philosophy means:

• Leading by example
• Starting with what’s right instead of what’s wrong
• Encouraging people to try
• Asking for and sharing good ideas
• Removing barriers and obstacles
• Being a champion of those around you
• Giving people the freedom they need
• Teaching the Fred philosophy consistently
• Recognizing and rewarding
• Make the process enjoyable

“It’s our choice whether we’ll use our time, effort, and talents to turn ordinary work into something extraordinary.” writes Sanborn. It begins as always, with integrity. If you value it, those around you will too.

Fred 2.0 will show you the thinking behind extraordinary leadership and apply it in every area of your life. “When you know what is important to you in your life and work, you should apportion your talents and efforts so you can give the best you have to those things.” Love what you do and love the people you do it with.

Quote 
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.

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Posted by Michael McKinney at 05:17 PM
| Comments (0) | General Business , Human Resources , Leadership Development , Personal Development

02.13.13

Rebooting Work: How to Make Work— Work for You

Rebooting Work

Rebooting Work
Rebooting Work by Silicon Valley legend Maynard Webb and Carlye Adler is a sensible look at the changing nature of the workplace and how you can use emerging technologies to take charge of your career. To become a CEO of your own destiny.

Less than half of Americans (47 percent) are satisfied with their work. Companies are changing too. They can no longer provide the safety nets that were expected in the last century. Employees must become more self-reliant. That of course means a workplace that rewards people for their performance rather than their time in. An organization that supports entitlement over results, writes Webb, “can limit growth and opportunity.”

Giving someone a leg-up is one thing, entitlement has a permanence to it that both hinders employees and harms companies and neither performs up to their maximum potential.

Webb believes that technology presents us with an opportunity. It has the power to enable people to do something about their dissatisfaction with work and move on to careers that can provide both fulfillment and financial security. “Understanding and embracing today’s technological trends is the fastest way to travel to the career of your dreams.

Rebooting WorkWebb presents us with four ways of looking at work. We may move from frame to frame but we tend to operate in one. They are Company Man or Woman, CEO of Your Own Destiny, Disenchanted Employee, and Aspiring Entrepreneur. Where we should all be headed, states Webb, is to the mindset of the CEO of Your Own Destiny. We are living in the age of the entrepreneur.
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.
Today personal and professional development is on the employee. It “requires you to be relevant every day and to be voted on to the team you want to play with.” But with this freedom come accountability. In an entrepreneurial age it is more important than ever that you think like a leader—no matter where or at what level you work.

As research indicates, many people find themselves in the Disenchanted Employee frame: you are waiting to be discovered or recognized, you don’t understand why others don’t see how good you really are, your career isn’t going as expected, and you believe your circumstances are someone else’s fault.

This kind of thinking is not just unproductive, it feeds on itself and keeps you just where you don’t want to be. One of the most important things you can do is to get a mentor; someone to help you see the reality of your situation and offer constructive advice to get you moving again. Webb also offers these ideas:
  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.
Technology is pushing flexibility in the workplace. Technology doesn’t replace the need for human contact but it can make work more efficient and face time more rewarding. It provides the opportunity to create how you do your work in new ways if you are willing to perform. Outcomes become more important than ever. If you give more you will receive more.

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Of Related Interest:
  Dear Founder

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Posted by Michael McKinney at 01:55 PM
| Comments (0) | General Business , Human Resources , Marketing , Personal Development

01.08.13

Antifragile or How We Become Fragile

Antifragile

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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Resilience Is Key Bounce Forward



Posted by Michael McKinney at 10:00 PM
| Comments (0) | General Business , Human Resources , Learning

12.07.12

Do Leaders Really Matter?

Leadership
Are individual leaders truly responsible for the end result, or do they just happen to be there—for better or worse? asks Gautam Mukunda in Indispensible. To be sure, Lincoln and Churchill have mattered, but does every leader matter?

Of course, every leader matters to someone. But here Mukunda is talking about leaders who matter on a larger scale—those that matter to all of us. What would have happened if someone else had filled the same role. “Leader impact can best be thought of as the marginal difference between what actually happened and what would have happened if the most likely alternative leader had come to power….Will he or she make significantly different choices than the other plausible candidates.”

It gets down to how we choose our leaders and how we advance people through an organization. This process, Mukunda calls the Leader Filtration Process (LFP). A given LFP will filter candidates through a process designed to find those who conform to a specific value system—a Modal or standard leader. Occasionally an Extreme candidate will slip through. Many organizations weed out potential Extremes. The military’s promotion system is an example of a tight filtration process. At the other extreme, entrepreneurship is a very loose process—you become an entrepreneur just by deciding to do it.

EXTREME LEADERS

A leader that has bypassed an LFP is likely to be an Extreme. Charisma helps leaders bypass filtration. “Family connections, personal wealth, and celebrity, for example, all smooth the path to power without subjecting candidates to the risk of being Filtered out by the LFP.”

Modal leaders can be highly successful under normal conditions. They are good at maintaining the status quo. I would associate management with Modal leaders. Extremes, on the other hand, are all about innovation. “Extreme leaders will be much more likely to change the goals their organization or state is pursuing and to adopt means to achieve those goals that other leaders would not—that’s why they have such marked impact compared with other Modals.”

If you are stuck, an Extreme leader may be just what you need. But while Extremes deviate—and that may be a good thing—they are “far more likely than Modals to have dramatic successes and failures.”

“Filtration is supposed to prevent leaders with undesirable characteristics from gaining power.” This is quite understandable. However, “many of those undesirable traits aren’t purely negative—in the right situation, they can be a huge asset.”

What helps make an Extreme great is when they couple their decisions with humility. “The Extreme leader does what others would not do, even when others advise him or her against it. To make this sort of choice when the stakes are high takes enormous confidence. Sometimes, however, the Extreme’s advisers will be right. When that is true, the great Extreme leader will have the humility to defer to their judgment. It is this almost paradoxical combination of self-confidence and humility that marks the transcendentaly great leader.”

Mukunda’s Leader Filtration Theory has implications as to how and when we choose certain types of leaders to lead us. He recommends that if you are a Filtered leader that you bring a few Extremes into your inner circle.

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Posted by Michael McKinney at 05:11 PM
| Comments (0) | General Business , Government , Human Resources , Management

10.23.12

quickpoint: The Long Tail of Talent

Leading Blog quickpointThe labor markets are changing. With the Internet proximity is not an issue. Chris Anderson describes it this way in Makers: The New Industrial Revolution:

"The Web allows people to show what they can do, regardless of their education and credentials. It allows groups to form and work together easily outside of a company context, whether this involves “jobs” or not. And these more informal organizations are much less constrained by geography; talented people can live anywhere and shouldn’t have to move to contribute."

What does this mean? “The new era will not mark the end of the blockbuster, but the end of the monopoly of the blockbuster. So, too, for manufacturing. What we will see is simply more. More innovation, in more places, from more people, focused on more narrow niches. Collectively, all these new producers will reinvent the industrial economy, often with just a few units at a time—but exactly the right products for an increasingly discriminating consumer.”
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Posted by Michael McKinney at 11:39 PM
| Comments (0) | General Business , quickpoint

10.19.12

Leading Apple With Steve Jobs

Leading Apple With Steve Jobs

JAY ELLIOT, former Senior Vice President of Apple, has spent a lot of time with Steve Jobs. In Leading Apple with Steve Jobs, he writes that “Isaacson’s Steve is not the Steve I knew.” He believes that there has been too much focus on the negative aspects of how Jobs dealt with people and not enough on the positive. “I think,” he writes, “most people who worked for him, including me, would say they did the best work of their lives for him and don’t regret the experience a bit.” While his stories regarding his time with Jobs don’t do much to polish his image, he does bring out aspects of his thinking that undoubtedly have given people the opportunity to feel that in spite of the negative aspects of Jobs' behavior, Apple is where they wanted to be.

When analyzing anything, it always a challenge to pull out the important lesson and learn how to integrate the good without the bad. We are all a complex mix of motivations and behaviors and everything we do seems like an indispensable part of achieving our success (or not). But we can always improve—diminish the negative and emphasize the positive.

It is not unusual for any of us to find ourselves in a position where our intention is admirable but we lack the skill to implement it in the most beneficial way. Frequently, we can find ourselves stuck without alternatives to our own patterns of behavior. As leaders, we have to constantly be learning—by reflection and reading about the lives of others—to discover where we could expand our thinking and therefore our options.

Not only does Elliot help us understand why Jobs was the way he was, he does a good job of explaining the development of and reasoning behind much of the Apple mystic that is worth implementing.

Jobs said that “It’s not my job to pull things together from different parts of the company and clear the ways to get resources for the key projects. It’s my job to push the team and make them even better, coming up with more aggressive visions of how it could be.” Jobs believed that accountability, attention to detail, perfectionism, simplicity, and secrecy, would sustain innovative leadership at Apple.

Getting the right people was as important to Jobs as creating a new product. “When you’re in a startup, the first ten people will determine whether the company succeeds or not.” Elliot says that he learned from Jobs the value of “knowing your own values so well that you can instinctively recognize someone who shares those values.” It would be good to reflect on our own values from this standpoint. Another way of thinking about this would be to consider: if you don’t know why you do what you do, why would anyone want to follow you?

The right people make the difference. “A leader in the Steve Jobs model needs to have a set of lieutenants who can translate his goals and vision into detailed action plans. The success of Apple through the years has largely been due to Steve’s talent for surrounding himself with people who could bear the heat when he wasn’t satisfied, were strong enough to stand up to him when he was wrong, and were able to relay not just his instructions but his commitment, drive, and vision to the crew.”

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Posted by Michael McKinney at 02:54 PM
| Comments (0) | Communication , Creativity & Innovation , General Business , Human Resources , Management

10.11.12

Rebel Entrepreneurs Avoid Conventional Wisdom

Leading Forum
This is a guest post by Jonathan Moules author of The Rebel Entrepreneur. Moules shares lessons learned from hundreds of companies that point to a rebellious entrepreneurial approach. He describes lessons like don’t rely on others to fund your idea, imitate creatively, keep value higher than price, pivot often, and why they typically don’t get loans from big banks.

There is a dirty little secret that most famous entrepreneurs and those that back the start-up culture prefer not to tell you—success in business is a minority sport.

In most developed countries, the overwhelming majority of all privately held enterprises are small – about 95 per cent, according to the OECD, the economic body that measures such things. The vast majority of these are sole traders. There is also an incredibly high failure fate among new ventures. About 8 out of every 10 of the companies started each year do not make it to their fifth birthday. Only a small percentage of those businesses that manage to struggle on beyond infancy then go on to create the real growth drivers of an economy.

However, it is these companies that are so important to the success of economies, providing new products and services as well as improvements in productivity that raise the standards of living of a society, and, perhaps most importantly, the lion’s share of new private sector jobs. Just 7 per cent of businesses are responsible for more than half the new employment created in the UK economy, the British think tank Nesta recently calculated. This figure is about the same across developed nations, according to the OECD. Nesta went further than this in its analysis, however, concluding that the job creation is actually only happening among very young fast-growing companies. Successful entrepreneurship, it seems, is a very exclusive club indeed.

What is it that sets these companies apart? One way to define them and their leadership is as rule breakers. That is what my book, The Rebel Entrepreneur, is all about. I am not saying that founders can only succeed by engaging in illegal behaviour. Sadly, there have been too many examples of this in recent years, but these people are criminals not wealth creators. No, the true rebel entrepreneur knows that the best way to get ahead is to avoid being sucked in by conventional wisdom.

Take pricing strategies, for instance. In hard times, conventional wisdom may say cut your prices to preserve customer numbers and therefore sales. However, as many successful companies have shown, the best policy is often to raise your prices. Look at Apple, the world’s most successful technology business, which insists on raising the prices of its products even as the western world struggles to recover from recession. Does this put off the customers? Not a bit of it. In fact, the high price appears to act as a guarantee of quality. More than this, by maintaining the high price, Apple is able to continue to increase revenue and profit even if sales dip.

Rebel entrepreneurship can be found in most areas of business building if you are prepared to look. Just be prepared to resist following the crowd.

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Leadership
Jonathan Moules is the Enterprise Editor for The Financial Times, where he has profiled hundreds of companies and their owners. He has written extensively on successful entrepreneurs. Moules spent 5 years in the FT's New York office, where he held numerous positions, including technology, media and telecoms news editor. He wrote specifically about the US mobile phone industry and new media businesses, and he covered the dotcom bubble and its aftermath.

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Posted by Michael McKinney at 07:09 PM
| Comments (0) | General Business , Leading Forum

09.12.12

The Strategy Book

The Strategy Book

“Strategy is about shaping the future,” writes Max McKeown. There are five basic questions that strategy tries to answer: Where are we? Where do we want to go? What changes have to be made? How should changes be made? How shall we measure progress?

There are a number of ways to get the answers to these questions. Max McKeown has created a strategy reference work – The Strategy Book – to guide you to the answers.

Each chapter defines the objective, the context and the challenge—and then what success looks like and the pitfalls you might encounter. Well thought out and helpful.

Part of thinking like a strategist is learning to recognize unplanned opportunities and reacting. In fact, says McKeown, unplanned opportunities may be your best chance of creating a great strategy. The problem is following a plan so closely without responding to events that you will “lead the company efficiently in the wrong direction.”

In a sense, strategy creates risk. “Strategy involves completion of goals, and the risk is the difference between those goals and the ability of the organization to achieve them.” Because “uncertainty can only be reduced by committed decisions and actions,” you can choose to create a “certainty of purpose and direction.”

The Strategy Toolkit at the end of the book is not just another nice add-on. It is worth as much as the rest of the book. It contains concise explanations (without all the jargon) of some of the most popular strategy tools and how to use them. In his own words: “First, there are the most popular tools—those that are used most often in the workplace. Second, there are some of the most influential tools from the field of strategy and management. Third, there are tools that I have found valuable in my work with some of the most successful organisations in the world."

The tools include: SWOT analysis, Porter's 5 forces of competition, McKinsey's 7-S framework, BCG’s product portfolio matrix, Kim and Mauborgne's blue ocean, Kaplan and Norton's balanced scorecard, Mintzberg’s deliberate and emergent, Prahalad's bottom of the pyramid and twenty-one more.

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Posted by Michael McKinney at 10:20 PM
| Comments (0) | General Business , Management

09.07.12

Adaptability: The Art of Winning In An Age of Uncertainty

Adaptability

MAX MCKEOWN accurately argues in Unshrink that our beliefs have shrunk us. They have limited our responses. And it profoundly affects our ability to adapt.

Adaptability
Adaptability is a book about how people adapt. It is about how to win more often. “In the future,” writes author Max McKeown, “you can try to maintain what you already have, or you can attempt to transcend the constraints of your situation.”

Of course, to begin, you have to recognize the need to adapt. That’s not always as easy as it sounds mainly because we have to admit that something isn’t right. You have to understand what’s going on. Enthusiastic ignorance often rules the day. And so as, McKeown points out, “stupid survives until smart succeeds.” Knowing the rules and when to break them is essential to successful adaptability.

If you find a system failing, then you have also found a system that is failing to adapt. You need to discover, first, what adaptations are needed for the system to succeed. Second, you should understand what has stopped the system from adapting successfully. And third, you should find out how to free the people in the system to make the necessary adaptations.

Once you recognize the need to adapt, you need to understand what adaptation is required. In times of great uncertainty, we need the knowledge creators, the radical and the rebels. “When times are easy, almost anyone can look effective….When choices seem obvious, unimaginative leaders may be rewarded for making the obvious choices even when they know they’re the wrong choices.”

Leaders too, need to release its stranglehold on what is considered acceptable and unacceptable thought. Effective adaptation will not happen when there is a dominance of a couple of people over the way everyone else is allowed to think and act.

It is important to not only identify what needs to be done, but to keep on learning until you get it right. Something to think about:

Most people lock on to a particular course of action, they make their minds up early and fail to adapt to evidence that their choices are wrong. As a result, only a small portion of most people’s experiences lead to new learning.

Finally, you need to actually make the changes necessary to adapt. “The most successfully adaptive companies are those that never grow up.” It is rare to find leaders that are comfortable with “learning what is necessary from the people who do the work and know the answers.” McKeown rightly observes that being all knowing is not a human quality.

When attempting to adapt, “it is very tempting to try to remake a new situation to match an old situation.” We tend to continue to do what we already know.

“In adaptive terms, if you are still in the game, then it’s always the beginning.” This is a critical mindset for successful adaptation. “You can imaginatively rethink your actions so that wherever you are becomes the best place to start.”

Quote 
Adaptive intelligence is the ability to perceive how well a behavior fits in with a particular circumstance. It’s about fit. These ideas also have implications for our relationships as well. Failing relationships may be seen as a failure to adapt to the presence of another person. Sometimes that's called self-centeredness.

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Posted by Michael McKinney at 09:29 AM
| Comments (0) | Change , General Business , Management , Personal Development

08.21.12

The Main Thing: How to Keep Organizations Centered on What Matters Most

Leading Forum
This is a guest post by George H. Labovitz and Victor Rosansky, authors of Rapid Realignment: How to Quickly Integrate People, Processes, and Strategy for Unbeatable Performance. They say that the first challenge of alignment is to get everyone on the same page by understanding the organization in the same way. That means getting to the unifying concept of the organization to which everyone can contribute.

"The main thing is to keep the Main Thing the main thing!"

We loved that expression when we first heard it from Jim Barksdale, then the COO of FedEx. That single sentence captures the greatest challenge that executives and managers face today: keeping their people and their organizations centered on what matters most.

Every organization needs a Main Thing—a single, powerful expression of what it hopes to accomplish. Without it, it's not possible to align the four elements that produce organizational efficiency and effectiveness: strategy, people, customers, and processes.

Does your organization have a Main Thing? Do your people understand it? Are they guided by it?

Fred Smith, the Founder and CEO of FedEx, once described to us his understanding of The Main Thing—which he refers to as the "theory of the business."
Every successful business has, at its heart, a theory of the business—an underlying set of supporting objectives and a corporate philosophy that gives people a foundation on which to operate. Working inside that framework, they've got an idea of what we want them to do—to prioritize. We [at FedEx] have a very clear business mission and a business theory which is understood certainly by every member of the management team, and probably by 90 percent of the work force."
The Main Thing is critically important. It is the end that strategy and human effort serve. We cannot achieve and maintain alignment without consensus and conviction about The Main Thing. Yet we are always amazed by how few people can articulate their organization's main thing. When we ask participants in workshops, "What's your Main Thing?" we see people digging into their wallets for the latest mission statement. Others look questioningly to the person sitting next to them. We wonder how these people can formulate a strategy or know how well they are doing if they cannot even state—or agree on—the ultimate purpose of their work.

Some people, however, can articulate their Main Thing without hesitation. Here are a few examples:
  • For people at FedEx, The Main Thing is: "People-Service-Profit."
  • An official in charge of nutrition at the U.S. Department of Agriculture stated her organization's Main Thing as "Ending hunger in this country."
  • An electrical utility executive explained his company's purpose crisply and clearly: "To be the power source of choice."
  • The CEO of Connecticut's Farmington Bank told George that its Main Thing is to "Drive economic development in central Connecticut."
  • The U.S. Navy's huge Naval Aviation Enterprise, which supplies aircraft and trained crews to the fleet, has boiled its Main Thing down to a simple phase: "Aircraft and crews ready for tasking at lower cost."
  • Boston's Port Authority, which has responsibility for bridges, airport, and harbor terminals, once described its Main Thing as "Advancing Boston's pace of economic development."
Our good friend, Claude Roessiger has long experience with luxury brand management. He likens our concept of The Main Thing to a strong brand. "A brand, he explained, "produces an emotional response and at the same time communicates to all how to behave." Your Main Thing should do the same.

What is The Main Thing for your organization? Can you articulate it clearly and concisely? Can your subordinates? In many organizations, people have no clear answer, or will offer a confusing list of lofty goals. Others will describe their strategy. But a strategy is not The Main Thing; it is merely its servant. In some cases senior management defines The Main Thing one way and the people in the trenches define it in another. In these cases people and policies work at cross-purpose; one person is pulling when the other guy is pushing.

As you formulate a Main Thing for your organization, keep these guidelines in mind:
  • The Main Thing for the organization as a whole must be a common and unifying concept to which every unit can contribute.
  • Each department and team must be able to see a direct relationship between what it does and this overarching goal.
  • The Main Thing should be clear, easy to understand, and consistent with the strategy of the business.

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Leadership
Dr. George H. Labovitz is the founder and CEO of ODI, an international management training and consulting company, and professor of management and organizational behavior at the Boston University Graduate School of Management. Victor Rosansky is co-founder and president of LHR International, Inc. He has more than 25 years of experience as a consultant, helping Fortune 500 clients to drive rapid strategy deployment and alignment.

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Posted by Michael McKinney at 02:39 PM
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07.25.12

If It's Important, Be There

If Its Important Be There

IN Contented Cows Still Give Better Milk, authors Bill Catlette and Richard Hadden make the point that organizations with contented employees understand that one of the most fundamental precepts in the whole workplace arena is that “the person who started for them this morning is as close to a ‘model employee’ as they’re ever going to get.” So the best companies do something about it. They are fanatical about training people not only with skills they need, but they also carefully train them in the organization’s traditions, values, and philosophies.

But this is the part (too) many leaders just don’t get:

“People want to know that the training course they’re taking the time to sit through is as important to senior management as it is supposed to be to them.” How do you communicate that? “This often requires senior management to ride along with them—not in their own condensed mini-versions, but alongside everyone else.”

Catlette and Hadden go on to say, “There should be no executive parking spaces when it comes to training. Managers must participate enthusiastically and, more important, be able to demonstrate the skills they expect everyone else to learn.”

The message is clear. If it’s important to you, it will be important to them. It’s quite common to hear, “If this is so important, where are they?” Without the visible support of the leadership, commitment to the training is compromised. Leaders need to visibly communicate: “This is important—so important that I went through it before you did. I’m using it, and now I want and expect you to do the same. That’s why I’m here."

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Lead By Example Yoritomo Leading By Example

Posted by Michael McKinney at 11:49 PM
| Comments (0) | Education , General Business , Human Resources , Leadership Development

07.11.12

Having an Informed Faith

Whether developing an organization or (especially) an individual, having an informed faith is essential. We value seeing things as they are—seeing reality. But potential is as much as part of reality as cold hard facts. Being able to see where an organization or an individual could go is vital for any leader.

The authors of Higher Ambition put it this way: it’s the “ability to envision and believe in a company’s potential and to understand, within an environment often characterized by confusion, crisis, and underperformance, the real possibilities of success.”

This is even harder to do when applying this idea to developing people. It’s easier to give up on people than to take the time to help them over their hurdles.

To see what is and to see what could be. The combination is essential for leadership. They add, “On the one hand, these executives see the reality with clarity. This keeps them from being easily deluded or distracted, builds the confidence and trust of those around them that they ‘get it,’ and motivates them to make difficult decisions about which activities to pursue and which to jettison, as well as which people to retain and which to encourage into other endeavors. But they also see the potential with real excitement and enthusiasm.

“As Roger Dickhout, co-founder and CEO of Pineridge Group, put it: ‘It’s believing in the potential of what you want to be, as opposed to describing what you are. That intention attracts opportunities to you.’”

Make potential part of your reality.

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Posted by Michael McKinney at 07:26 AM
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06.28.12

Innovation at Bell Labs

Innovation at Bell Labs

BILL GATES once remarked, “My first stop on any time-travel expedition would be Bell Labs in December 1947,” That was the year Bell Labs invented the transistor—a tiny invention that makes possible the technology we have today.

Finding an aspect of modern life that doesn’t incorporate some strand of Bell Labs’ DNA would be difficult. Cellular communications, the laser, digitized and synthesized music, the solar battery cell, the first orbiting communications satellite, and the UNIX operating system, are all products of Bell Labs.

AT&T officially created Bell Telephone Laboratories on January 1, 1925. At its peak in the late 1960s’, Bell Labs employed about twelve-hundred PhDs and produced 13 Nobel Prize winners.

In The Idea Factory, author Jon Gertner brings back to life not only the story of Bell Telephone Laboratories through the people that worked there, but the story of innovation—how it happens, why it happens, and who makes it happen. It is a well told and fascinating story.

Our Mr Sun
(My first encounter with Bells Labs was like many school aged kids in the sixties, through their series of science filmsHemo the Magnificent, Our Mr. Sun, Gateways to the Mind and others. A great way to spend an hour in science class.)

John Pierce is one of the brilliant and interesting people we are introduced to in Gertner’s story. It was Pierce that suggested calling the new device of 1947 a transistor. Peirce was what Gertner calls an instigator. “An instigator is different from a genius, but just as uncommon. An instigator is different, too, from the most skillful manager, some able to wrest excellence out of people who might otherwise fall short.” Pierces real talent was “in getting people interested in something that hadn’t really occurred to them before.”

Humans all suffer from a terrible habit of shoving new ideas into old paradigms. “Everyone faces the future with their eyes firmly on the past and they don’t see what’s going to happen next,” observed John Pierce.

For creativity to flourish, it needs both freedom and structure. When pierce first came to Bell Labs “he was given free rein to pursue any ideas he might have. He considered the experience equivalent to being cast adrift without a compass. ‘Too much freedom is horrible,’ he would say in describing his first few months at the Labs. Indeed he eventually came to believe that freedom in research was similar to food; it was necessary, but moderation was usually preferable to excess.”

Gertner writes, “We usually imagine that invention occurs in a flash, with a eureka moment that leads a lone inventor toward a startling epiphany. In truth, large leaps forward in technology rarely have a precise point of origin. At the start, forces that precede an invention merely begin to align, often imperceptibly, as a group of people and ideas converge, until over the course of months or years (or decades) they gain clarity and momentum and the help of additional ideas and actors. Luck seems to matter, and so does timing, for it tends to be the case that the right answers, the right people, the right place—perhaps all three—require a serendipitous encounter with the right problem. And then—sometimes—a lead. Only in retrospect do such leaps look obvious. When Niels Bohr—along with Einstein, the world’s greatest physicist—heard in 1938 that splitting a uranium atom could yield a tremendous burst of energy, he slapped his head and said, ‘Oh, what idiots we have all been.’”

Today there is nothing quite like the Bell Labs of AT&T and Western Electric to produce the creative technology that they did. Bell Labs laser scientist Herwig Kogelnik describes the magic of Bell Labs well: “It’s the interaction between fundamental science and applied science, and the interface between many disciplines, that creates new ideas.

First Transistor
The first transistor created in 1947 was a quarter of the size of an American penny. Now a computer-processor chip the size of a postage stamp contains 2 billion transistors. Intel alone, makes 10 billion transistors every second. Time marches on. “I am afraid that there will be little tangible left in a later age,” Pierce wrote of his world at Bell Labs, “to remind our heirs that we were men, rather than cogs in a machine.”

Quote 
While the Bell Labs story is a fascinating read on its own, Gertner’s The Idea Machine has much for leaders about designing a innovative environment and the management of creative people. Great read for the summer.

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Posted by Michael McKinney at 04:54 PM
| Comments (0) | TrackBacks (1) | Creativity & Innovation , General Business , Management , Problem Solving

05.08.12

What Matters Now

What Matters Now

What Matters Now by Gary Hamel is probably one of the most important books you could read this year. It is an invitation to rethink the fundamental assumptions we have about capitalism, management, institutions, and life at work. It is, as Hamel describes it, “a blueprint for creating organizations that are fit for the future and fit for human beings.”

What Matters Now
The book is divided into five fundamental, make-or-break issues that will determine whether your organization thrives or dives in the years ahead: values, innovation, adaptability, passion and ideology. Here are some of his thoughts that become more powerful as they sink in:

Values Matter Now.

• What matters now is that managers embrace the responsibilities of stewardship.

• Every institution rests on moral footings, and there is no force that can erode those foundations more rapidly than a cataract of self-interest.

• I think corporate life is so manifestly profane, so mechanical, mundane, and materialistic, that any attempt to inject a spiritual note feels wildly out of place—the workplace equivalent of reading the Bible in a brothel.

Innovation Matters Now.

• Post these simple questions on your company’s idea wiki: First, what are the thoughtless little ways we irritate customers and what can we do to change that? And second, what are the small, unexpected delights we could deliver to our customers at virtually no additional cost?

• Whenever you identify a convergent belief, ask, does this rest on some inviolable law of physics, or is it simply an artifact of our devotion to precedent? By working systematically to surface these invisible dogmas, you can turn reactionaries into rebels.

• To innovate, you need to see your organization and the world around it as a portfolio of skills and assets than can be endlessly recombined into new products and businesses.

Adaptability Matters Now.

• To thrive in turbulent times, organizations must become a bit more disorganized and unmanaged—less structured, less hierarchical, and less routinized.

• There are only two things, I think, that can throw our habits into sharp relief: a crisis that brutally exposes our collective myopia, or a mission so compelling and preposterous that it forces us to rethink our time-worn practices.

• To put it bluntly, the conversation about “where we go next” should be dominated by individuals who have their emotional equity invested in the future rather than the past. It needs to be led by individuals who don’t feel the need to defend decisions that were taken ten or twenty years ago.

Passion Matters Now.

• It’s impossible to unleash human capabilities without first expanding the scope of employee autonomy. People need the freedom to challenge precedent, to “waste” time, to go outside of channels, to experiment, to take risks, and to follow their passions.

How, many policies in your company exist only to preserve that fiction that the higher-ups really are in control? How many rules enforce standardization at the expense of initiative and passion, while delivering few if any performance benefits?

Ideology Matters Now.

• The creed of control reigns supreme. If you doubt this, ask yourself: Is your organization any less rules-driven than it was ten or twenty years ago? Do people on the front lines feel any less controlled? Are their freedoms any less abridged? And are little cogs any less obsesses with becoming big cogs?

• Give someone monarch-like authority, and sooner or later there will be a royal screw-up.

• We don’t have to content ourselves with an organizational model that was designed to serve the interests of ancient military commanders and smokestack-era CEOs.

It’s time to re-invent our leadership. This book will help in that process.

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Posted by Michael McKinney at 09:54 PM
| Comments (0) | General Business , Leadership , Management

04.20.12

Restoring Your Ability to Choose

We all like to think we are in charge of our choices. But the fact is that most of the time we are reacting, not choosing. Most of what we label choice is habit. We’re really on automatic. It can even lead us to think that we have no choice. Only when we pause—slow-down to think and reflect—are we exercising our ability to choose.

Leadership
Nance Guilmartin writes in The Power of Pause that a pause is “any space between an action and your reaction.” And it’s vitally important:
Today you need the ability to discern what lies beneath people’s words, their reactions, or their silence. If you don’t build the neuropathways in your brain to pause, to momentarily disengage your automatic reactions, you can trigger a chain reaction that derails your best intentions and strategies.
Guilmartin lists seven cues that a pause is in your best interest. It’s time to pause if you are thinking, feeling, or saying:
  1. I have no choice.
  2. This doesn’t make sense. How could he-she-they do that (to me)?
  3. I have to act now or else “they” will beat me to it.
  4. I can’t believe this is happening again.
  5. We’re not on the same page.
  6. This isn’t what I expected.
  7. I know the answer, and I’m not interested in what someone else thinks.
The Power of Pause Method is based on a three-step Effectiveness Equation and twelve Power of Pause practices. The equation:

Pause (Presence of Mind) + Curiosity + Humility =
Professional Effectiveness and Personal Fulfillment


Not surprisingly, the equation references an all-important addend, humility. Humility should fuel your curiosity and drive the need to pause. Guilmartin explains that “in situations where you think you know enough, pausing to wonder what you don’t know is a vital, even game-changing leadership skill.”

The twelve practices are:
  1. Drive your choices instead of being driven. Apply the Power of Pause to take back self-control and recognize you always have a choice.
  2. Be aware of your filters (and theirs). Remember that filters can lead to unconscious misinterpretations.
  3. Give the benefit of the doubt. Check your assumptions. Meaning isn’t in the words: it’s in the interpretation of them—by you and others. When in doubt, ask, “Can you help me see what you see?”
  4. Stop putting deposits in your resentment bank account. Resist jumping to premature conclusions or depositing frustrations based on your perception of “the facts.”
  5. Use rephrasing as a Twenty-First-Century risk management tool. Stick your neck out: rephrase what you think someone meant by what he said; it builds trust.
  6. Use the Get Curious Not Furious approach. “Missed understandings” happen—a lot! They're normal. Try not to take them personally.
  7. Ask: What’s on your plate? Understand someone else’s priorities while you also acknowledge your own. Remember to ask yourself, “What’s on my plate?”
  8. Ask: What don’t I know I don’t know? In order to drive success with an extra measure of humility, ask, What don’t I know I don’t know? About what’s driving me or them in the situation?
  9. Take responsibility for being understood: reverse rephrase. Reverse rephrase to confirm that you were understood; welcome the chance to clear up any “missed understandings.”
  10. Make withdrawals from your resentment bank account. Withdraw earlier deposits to prevent them from building up negative energy in your account.
  11. Know your trigger points (and theirs). Prevent yourself or others from being caught in self-defeating patterns. Become aware of who or what triggers you so that you can respond instead of react.
  12. Strengthen relationships: offer timely, specific appreciation. Put the Power of Pause in action with timely, specific recognition of what works and why. Help people also know what they can do to be even more effective and how you can support them in being their best.

Quote 
“It’s a paradox,” writes Guilmartin, “to move forward, you gain time and options if you momentarily ease off the accelerator, suspend your initial reactions, and consider your immediate assumptions.”

Of Related Interest:
  Consider: Harnessing the Power of Reflective Thinking in Your Organization

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Posted by Michael McKinney at 04:36 PM
| Comments (0) | General Business , Human Resources , Learning , Management , Thinking

04.09.12

All In: It’s Culture that Drives Results

All In

IN THE New York Times, Stephen I. Sadove, chairman and chief executive of Saks Inc., explains that it is culture that drives results:

It starts with leadership at the top, which drives a culture. Culture drives innovation and whatever else you’re trying to drive within a company — innovation, execution, whatever it’s going to be. And that then drives results.

When I talk to Wall Street, people really want to know your results, what are your strategies, what are the issues, what it is that you’re doing to drive your business. They’re focused on the bottom line. Never do you get people asking about the culture, about leadership, about the people in the organization. Yet, it’s the reverse, because it’s the people, the leadership, the culture and the ideas that are ultimately driving the numbers and the results.

While we know that our most important resource is our people, it’s not so easy to get people “all in”—convincing people to “truly buy into their ideas and the strategy they’ve put forward, to give that extra push that leads to outstanding results.”

All In
All In by Adrian Gostick and Chester Elton explains why some managers are able to get their employees to commit wholeheartedly to their culture and give that extra push that leads to outstanding results and how managers at any level, can build and sustain a profitable, vibrant work-group culture of their own. All In takes the principles found in their previous books—The Orange Revolution and The Carrot Principle—and expands on them and places them in a wider context.

They begin by explaining that it all rests on the “belief factor.” People want to believe, but given the fact that “failure could cost them their future security why shouldn’t they be at least a little dubious about your initiatives?” But belief is key. “As leaders we must first allow people on our teams to feel like valuable individuals, respecting their views and opening up to their ideas and inputs, even while sharing a better way forward. It’s a balancing act that requires some wisdom.”

To have a culture of belief employees must feel not only engaged, but enabled and energized. What’s more, “each element of E+E+E can be held hostage by an imbalance in the other two.”

The authors have created a 7 step guide to develop a culture where people buy-in:

Define your burning platform. “Your ability to identify and define the key “burning” issue you face and separate it from the routine challenges of the day is the first step in galvanizing your employees to believe in you and in your vision and strategy.”

Create a customer focus. “Your organization must evolve into one that not only rewards employees who spot customer trends or problems, but one that finds such challenges invigorating, one that empowers people at all levels to respond with alacrity and creativity.”

Develop agility. “Employees are more insistent than ever that their managers see into the future and do a decent job of addressing the coming challenges and capitalizing on new opportunities.”

Share everything. “When we aren’t sure what’s happening around us, we become distrustful….In a dark work environment, where information is withheld or not communicated properly, employees tend to suspect the worst and rumors take the place of facts. It is openness that drives out the gray and helps employees regain trust in culture.”

Partner with your talent. “Your people have more energy and creativity to give. There are employees now in your organization walking around with brilliant ideas in their pocket. Some will never share them because they don’t have the platform to launch those ideas on their own. Most, however, will never reveal them because they don’t feel like a partner in the organization.”

Root for each other. “Our research shows incontrovertible evidence that employees respond best when they are recognized for things they are good at and for those actions where they had to stretch. It is this reinforcement that makes people want to grow to their full shape and stature.”

Establish clear accountability. “To grow a great culture, you need to cultivate a place where people have to do more than show up and fog a mirror; they have to fulfill promises—not only collectively but individually.” And this has to be a positive idea.

Gostick and Elton explain that the “modern leader provides the why, keeps an ear close to those they serve, is agile and open, treats their people with deference, and creates a place where every step forward is noted and applauded.”

The authors skillfully examine high-performing cultures and present the elements that produce them. A leader at any level can implement these ideas to drive results. A great learning tool.

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To succeed, you need everyone on your team all in; you need a culture of belief. A high performing culture is characterized by people that are engaged, enabled and energized.

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Talent Magnet Talent Wins



Posted by Michael McKinney at 11:46 PM
| Comments (0) | General Business , Human Resources , Management , Motivation

03.30.12

The Power of Habit

Habits will always be with us. Some good. Some bad. But how do you replace bad habits with good habits? More importantly, how often do we ask ourselves if what we are doing is really just a habit? We are less intentional than we think we are.

The Power of Habit
Charles Duhigg has written a book for all of us: The Power of Habit. After reading it you will understand how habits are formed and what you can do about it. You will also look at habits in a new way. Habits infiltrate our organizations and become invisible forces to contend with that we never realized were there. Learning to spot them is key to our success. Consider the following story:

As a newspaper reporter in Baghdad, Duhigg heard about an officer conducting an impromptu habit modification program in Kufa, a small city ninety miles south of the capital.
He was an army major who had analyzed videotapes of recent riots and had identified a pattern: Violence was usually preceded by a crowd of Iraqis gathering in a plaza or other open space and, over the course of several hours, growing in size. Food vendors would show up, as well as spectators. Then, someone would throw a rock or bottle and all hell would break loose.

When the major met with Kufa’s mayor, he made an odd request: Could they keep the food vendors out of the plazas? Sure, the mayor said. A few weeks later, a small crowd gathered near the Masjid al-Kufa, or Great Mosque of Kufa. Throughout the afternoon, it grew in size. Some people started chanting angry slogans….At dusk, the crowd started getting restless and hungry. People looked for the kebab sellers normally filling the plaza, but there were none to be found. The spectators left. The chanters became dispirited. By 8PM, everyone was gone.
In a sense, a community—your organization—is a giant collection of habits. Later, when Duhigg talked to the major, he said, “Understanding habits is the most important thing I’ve learned in the army.” “Once you see everything as a bunch of habits,” says Duhigg, “it’s like someone gave you a flashlight and a crowbar and you can get to work.

Habit LoopA habit is the brain’s way of saving effort. Duhigg has broken the formation of habits into a three-step loop: the cue (“a trigger that tells your brain to go into automatic mode and which habit to use), the routine (“which can be physical, or mental or emotional”), and finally there is the reward (which helps your brain figure out if this particular loop is worth remembering for the future).

The key to remember here says Duhigg is that “When a habit emerges, the brain stops fully participating in decision making. It stops working so hard, or diverts focus to other tasks. So unless you deliberately fight a habit—unless you find new routines—the pattern will unfold automatically.”

Breaking habits down in this way makes them easier to deal with. If we can learn to identify the cues and rewards, we can change the routines. We can live life a bit more intentionally.

Duhigg shows how habits played a part in the success of Olympic swimmer Michael Phelps, Starbucks CEO Howard Schultz, and civil-rights hero Martin Luther King, Jr. He goes behind the scenes at Procter & Gamble, Target superstores, Rick Warren’s Saddleback Church, and NFL locker rooms. He explains how improving a single habit rippled out to improve an entire organization—Alcoa. Fascinating material to think about on many levels.

How much of what you do is on autopilot?

How much of what your organization does is on autopilot?

Of Related Interest:
  Breaking Old Habits

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Habits are not destiny. They can be changed if we understand how they work. Habits cannot be eliminated, but they can be replaced.

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Posted by Michael McKinney at 07:08 PM
| Comments (0) | General Business , Human Resources , Management , Personal Development

03.26.12

YESability: Driving Growth with Yes

Business at the Speed of Now
In a world that is moving from a global economy driven by mass production to one driven by mass customization—a now economy—the demand for mass ingenuity, mass engagement, and mass action, has never been greater.

In Business at the Speed of Now, author John Bernard says that there must also be a shift in the way we manage our organizations. “Centralized innovation and decision-making, the mainstays of the Mass Production era, simply cannot get results in a world where unlimited choice demands real-time response.” What is required is leadership at all levels—“one that enables employees at all levels to solve problems and seize opportunities autonomously and instantaneously.”

To navigate this shift from mass production to mass customization people need the freedom to sieve every opportunity to solve problems quickly and efficiently. This requires a move from what Bernard calls “then” thinking to “now” thinking. “Then relies heavily on centralized control and specialization, whereas now relies heavily on decentralized autonomous action.” It requires a YES mindset. It means “ensuring that the people who first encounter customer problems possess the tools, skills, information, and authority they need to say yes now—YESability.

YESability doesn’t mean anarchy. Bernard explains, “Replacing no with yes does not mean that from now on you give everyone permission to do whatever they want. You draw clear boundaries to establish order, and you provide language and methods people can use to solve problems. You become an enabler of action rather than an unwitting obstacle to performance.

Every employee must be provided with five crucial elements:
  1. Context (“Where are we going?”)
  2. Accountability (“What role do I play?”)
  3. Skills (“What abilities do I possess?”)
  4. Facts (“What data must I access to make decisions?”)
  5. Authority (“Do I enjoy the freedom to act without fear of reprisal?”)
YESability is important for developing leaders at all levels. While Bernard’s focus is on customer relations, it is important to think of his approach in terms of interactions within the organization.

The 9 Rules of THENThe 11 Rules of NOW
Follow orders even when they make no sense.Listen to your customer carefully.
Keep your mouth shut and your opinions to yourself.Keep the company goals in mind.
Please your boss because he/she controls your future.Measure your performance.
Do not challenge management or you will be labeled a troublemaker.Access the data you need.
Blame others when things go wrong.Use data to make good and speedy decisions.
Do not waste company time on social media.Understand what your decision costs.
Punch the clock and leave your work at the office.Do not hide problems or they will go unsolved.
Never complain, never explain, except after work.First please the customer, not your boss.
Say no to customers who demand an exception to company policy.Do not be afraid because your boss has your back.
Honor the process not the department.
Strive always to say yes to customers.
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Posted by Michael McKinney at 11:47 PM
| Comments (0) | General Business

03.20.12

The Four Disciplines of Organizational Health

Four Disciplines of Organizational Health

PATRICK LENCIONI believes that the single greatest advantage any company can achieve is organizational health. Unfortunately most leaders prefer to deal with the data-driven world of organizational intelligence. The problem is, without good organizational health, organizational intelligence is attenuated.

In The Advantage, Lencioni explains that “an organization is healthy when it’s whole, consistent and complete, when its management, operations, strategy and culture fit together and make sense. You know you have it when you have minimal politics and confusion, high degrees of morale and productivity, and very low turnover among good employees.” Additionally, the value of a healthy organization has a ripple effect that affects all who come into contact with it or its employees.

What does an organization have to do to become healthy? Creating a healthy organization is a rigorous endeavor. Lencioni has created a four disciplines model:

Discipline 1: Build a Cohesive Leadership Team

Advantage ModelAn organization simply cannot be healthy if the people who are chartered with running it are not behaviorally cohesive. In any kind of organization, from a corporation to a department within that corporation, from a small, entrepreneurial company to a church or a school, dysfunction at the top inevitably leads to a lack of health throughout.

Discipline 2: Create Clarity

In addition to being behaviorally cohesive, the leadership team of a healthy organization must be intellectually aligned and committed to the same answers to six simple by critical questions:

  1. Why do we exist?
  2. How do we behave?
  3. What do we do?
  4. How will we succeed?
  5. What is most important, right now?
  6. Who must do what?

There can be no daylight between leaders around these fundamental issues.

Discipline 3: Over-communicate Clarity

Once a leadership team has established behavioral cohesion and created clarity around the answers to those questions, it must then communicate those answers to employees clearly, repeatedly, enthusiastically and repeatedly (that’s not a typo). When it comes to reinforcing clarity, there is no such thing as too much communication.

As tempting as it may be, leaders must not abdicate or delegate responsibility for community and reinforcement of clarity. Instead, they have to play the tireless role of ensuring that employees throughout the organization are continually and repeatedly reminded about what is important.

Discipline 4: Reinforce Clarity

Finally, in order for an organization to remain healthy over time, its leaders must establish a few critical, non-bureaucratic systems to reinforce clarity in every process—hiring, managing performance, rewards and recognition, employee dismissal—that involves people.

These disciplines may sound idealistic—and they are—but health is a matter of degrees. Any improvement will reap benefits. There will always be those that use "idealism" as an excuse to not make the effort; to find this all too remarkable to actually implement. Not surprisingly, the key is leadership. But it is a sacrifice.

If an organization is to get healthy, it must have the “genuine and active involvement of the person in charge. For a company, that’s the CEO. For a small business, it’s the owner. For the school, it’s the principal. For the church, it’s the pastor. For a department within a company, it’s the department head….The leader must be out front, not as a cheerleader or a figurehead, but as an active, tenacious driver.” Without the leader's commitment, this model will be sabotaged or seen as “career suicide.” The leader must support it and reward it.

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Getting Naked Being Smart is Not Enough

Posted by Michael McKinney at 07:57 AM
| Comments (0) | TrackBacks (1) | General Business , Management

03.19.12

Being Smart is Not Enough

Being Smart is Not Enough

BEING SMART has become a commodity. It's permission to play, says Patrick Lencioni. He writes in The Advantage:

In this world of ubiquitous information and nanosecond technology exchange, it’s harder than it has ever been in history to maintain a competitive advantage based on intelligence or knowledge…..I have become absolutely convinced that the seminal difference between successful companies and mediocre or unsuccessful ones has little to do with what they know or how smart they are; it has everything to do with how healthy they are.

He reasons that healthy organizations can get smart over time as they are quick to learn from experience and each other, but smart organizations don’t necessarily get healthier by virtue of their intelligence. In fact, it often stands in their way as they are not as open to learning. “The key ingredient for improvement and success,” writes Lencioni, “is not access to knowledge or resources, as helpful as those things may be. It’s really about the health of the environment.”

Healthy organizations are able to tap into more of their collective knowledge and use it. “Most organizations exploit only a fraction of the knowledge, experience, and intellectual capital that is available to them. But the healthy ones tap into almost all of it.”

In short, what Lencioni is talking about is a component of humility: teachability. Teachability plays a huge role in determining the health and consequently the success of an organization. Unhealthy organizations are hindered by politics, confusion, and low morale, resulting in low productivity and high turnover.

Next time we’ll look at what an organization has to do to become healthy.

Quote 
Instead of trying to become smarter, organizations need to focus on becoming healthier. Healthier organizations are better able to tap into and utilize the more-than-sufficient intelligence and expertise they already have.

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Getting Naked Four Disciplines of Organizational Health

Posted by Michael McKinney at 12:02 AM
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02.10.12

Grow: Taking Your Purpose to the Next Level

Fusion

Jim Stengel, former global marketing officer for Procter & Gamble, believes that businesses must rethink their purpose to achieve far better results. But not just the most apparent purpose, but a higher-order ideal or purpose. For example, Johnnie Walker exists to make great whiskey, but its higher-order ideal is to celebrate journeys of progress and success.

Starbucks must make great coffee, but it must do more if it is to attract people and innovate in ways that make life better for the people they serve both inside and outside the organization. “It’s necessary,” writes Stengel in Grow, “to want to be the best-performing enterprise around, with the highest standards, the best people, and the most satisfied customers. However, this simply doesn’t aim high enough and look far enough ahead. To hit higher targets and stay out in front of the competition requires an ideal.”To that end, Starbucks also exists to create connections for self-discovery and inspiration. It’s what fuels passion and creates meaningful work.

“A brand ideal of improving people’s lives is the only sustainable way to recruit, unite, and inspire all the people a business touches, from employees to customers.” Stengel believes that a higher-order brand ideal must improve people’s lives in one of five fields of fundamental human values:

Eliciting Joy: Activating experiences of happiness, wonder, and limitless possibility; create moments of happiness that engage our thoughts and emotions as well as our physical senses. (Coca-Cola, Zappos, Lindt)

Enabling Connection: Enhancing the ability of people to connect with one another and the world in meaningful ways. Key concepts in this field are: connect, listen, reach, and community. (Airtel, Fed Ex, Blackberry, Natura)

Inspiring Exploration: Helping people explore new horizons and new experiences. Helps customers learn, gives them powerful tools, and invites them to reinvent themselves and their world. (Apple, Discovery Communications, Pampers, Red Bull)

Evoking Pride: Giving people increased confidence, strength, security, and vitality; supporting self-expression and inspiring passion. (Calvin Klein, Heineken, L’Occitane)

Impacting Society: Affecting society broadly, including by challenging the status quo and redefining categories. (Accenture, IBM, Method, Seventh Generation)

Stengel’s bases his conclusions on a ten-year growth study involving 50,000 brands. The study tracked the connection between financial performance and customer engagement, loyalty, and advocacy. The result was “The Stengel 50.” In the 2000s, an investment in these companies would have been 400 percent more profitable than an investment in the S&P 500. “If you’re willing to embrace the same concept and align your business with a fundamental human ideal, you can achieve extraordinary growth in your own business and your own career. My research shows that your growth rate can triple.”

As a side note, whether or not the study suffers from the Halo Effect is beside the point. Stengel’s point is good psychology. Success is more complex than any one factor. More good decisions than bad (intelligent people make dumb mistakes too), timing, and luck all play a part too. And then great companies get off track, not because they were doing the wrong thing, but because they stop doing them or failed to adapt appropriately. The ideas presented in Grow are what worked for Stengel for the time he was at Procter & Gamble and properly applied may work for you too. Generally, if it is based on sound principles, it’s always worth consideration. And Sengel’s ideas are.

One implication of the study is interesting. Stengel reports that the “study challenged P&G’s paradigm of moving people around frequently. The companies that were growing the fastest had a different paradigm. In recruiting and hiring they looked for people whose values fit with their brands and tended to keep people working in the same areas for much longer.”

He categorizes the people that run The Stengel 50 as business artists. “The fastest-growing businesses in the world have a leader whose relationship to the business is not primarily that of an operator, no matter how savvy, but an artist whose primary medium is an ideal.”

The business case for ideals is about playing a role in the lives of both customers and employees at a much more important level than the competition does. It’s about connecting with people holistically: rationally and emotionally, left brain and right brain.

Stengel recommends that you continually ask four questions: How well do we understand the people who are most important to our future? What do we and our brand stand for? What do we want to stand for? How are we bringing the answers to these questions to life?

The power is in the answers and executing against them. What is your primary purpose? What do the people you serve care about beyond what they buy from you? Could you benefit from discovering your higher ideal?

Of Related Interest:
  Lead With Purpose
  Leadership: Artistry Unleashed
  5 Leadership Lessons: Artistry Unleashed

Quote 
A brand ideal of improving people’s lives is the only sustainable way to recruit, unite, and inspire all the people a business touches, from employees to customers.

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Brand-Culture Fusion Ironclad Brand

Posted by Michael McKinney at 05:00 PM
| Comments (0) | General Business , Human Resources , Management , Marketing

02.08.12

Lead With Purpose

Lead with Purpose

WITHOUT A CLEAR SENSE of purpose, organizations become listless. John Baldoni says in Lead With Purpose that it falls to the leader to make certain that organizational purpose is understood and acted upon. Retired Army colonel, George Reed told Baldoni that the importance of this cannot be underestimated:
I don’t think you can hit purpose enough as a senior leader. It is one of those things that can be undercommunicated by an order of magnitude. You cannot oversell, overpronounce “Here’s why we’re here.”
The problem is that leaders think that they have communicated it enough, but the urgencies of the day cause people to forget their original intentions and their passion. It causes leaders to forget too. Repetition is essential. Baldoni states:
How well leaders use purpose to create the vision, mold the mission, and shape the values will serve as a testament to their ability to bring people together for a common cause.
It may begin with an explanation of what the organization does, says Baldoni, but it is vital that it be linked to the organizational culture and values. That means having clear-cut, definite goals, putting people first, and importantly, reducing purpose to a simple and memorable statement.

Leadership
Baldoni has illuminated seven key people-smart things that organizations must do to succeed in the new future:

Make purpose a central focus. Organizations that succeed are those that know where they are headed and why. Leaders of purpose tap into the power of narrative to help employees make sense of adversity and have faith in their organization’s ability to not just survive, but continually adapt and thrive.

Instill purpose in others. Prioritize people. People have to know what they are doing and why they are being asked to do it. To cultivate and leverage high-performing people, emphasize mission, values, creation, collaboration, and execution, establish clear expectations for behavior, and embrace the credo: “Honor the workforce.”

Make employees comfortable with ambiguity. Purpose can provide clarity in unsettled times. Leaders who find clarity in chaos, practice the virtues of pragmatism, and teach critical thinking skills will make living with uncertainty easier for their people—and themselves.

Turn good intentions into great results. Even in a tough world and a people-sensitive company, it’s a bottom-line fact: the work still has to get done. Leaders of purpose balance creativity with practicality; keep a firm eye on efficiency, effectiveness, and accountability; and strive to instill ownership in every individual worker.

Make it safe to fail (as well as prevail). Reasonable risk, daring to try something radical while keeping a grip on what works and what doesn’t, is critical to every breakthrough success. Leaders of purpose explore the impetus for change—reason, urgency, action—before leaping; respect their people’s resourcefulness; and handle setback with grace.

Develop the next generation. Few senior business leaders will be in their current jobs five or ten years from now. Leaders of purpose prepare their people for a future beyond them by hiring with care, developing capable, competent employees who are able to rise to challenges and seize opportunities; and enabling others to lead.

Prepare yourself. Purposeful organizations need leaders who know themselves first; have the inner compass that points them in the right direction. Many leaders never take the time to do so. Take time to reflect on what you want to do, why you want to do it, and how you will do it.

Baldoni says to define purpose, you want to ask three questions:

What is our vision? Vision emerges from the sense of purpose. It forms the why, but it also embraces the future as in “to become” the best, the most noted, the highest quality, or the most trusted.

What is our mission? Your mission is the what of an organization; what it does.

What are our values? Neither vision or mission mean much if they are not reinforced by strong values. Values shape the culture. Values enforce the behaviors that employees cherish.

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Lead with Purpose is an important book on a key concept. As Baldoni says, after identifying their own purpose, putting purpose to work for the organization is the challenge every leader faces. It’s important to remember too, that a leader demonstrates purpose first and foremost through their own behavior. Lead with Purpose was selected a best leadership book of 2011.


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Lead Your Boss Leaders Pocket Guide

Posted by Michael McKinney at 11:38 PM
| Comments (0) | TrackBacks (2) | General Business , Leadership , Management

01.27.12

Managing With a Conscience

We handicap our potential when we think we have to exploit others to get ahead. Succeeding is not a zero-sum game. We don’t look better when everyone else looks worse.

Leadership
Frank Sonnenberg makes the case in Managing with a Conscience, that the only sustainable way to succeed is the right way—not cutting corners—emphasizing the intangibles like trust, creativity, focus, speed, flexibility, relationships, loyalty, and employee commitment. While not readily measureable, they can make or break leaders and organizations. Sonnenberg believes that leaders who have a jaded view of intangible assets will never make the commitment required to reap their full potential.

Sonnenberg discusses at length, nine critical success factors that need to be built into the organization:
  • Passion that develops commitment to the organization’s mission, values, and goals
  • An innovative and creative environment and mindset that reinvents itself every day
  • Effective, focused and consistent internal communication to set priorities that focus the organization’s efforts and people on the resources that provide the greatest potential return.
  • Devotion to service excellence
  • A learning organization that adapts well to change
  • Responds with speed
  • Maintains a flexible structure by collaborating both internally and externally
  • Emphasizes that personal networking is an efficient and effective way to solicit ideas, access new sources of information, increase business development, and attract new hires
  • Understands that trust is foundational; it is what binds us together and makes work possible.
Sonnenberg hits these issues head-on. Managing with a Conscience is both an analysis and a practical how-to book. He demonstrates how to take management platitudes beyond the letter of the law. Asking the right questions helps to take you beyond mere compliance. People often get cynical about the latest initiative because they are not implemented on a meaningful level—and consequently they never really get the results you’re looking for. Sonnenberg helps you get to the intent. From the employee bill of rights:
Employees have the right to approach management. Management should announce an open-door policy. But announcing is not enough. Employees should feel comfortable approaching management. Ask yourself if you’re in your office long enough to be approached. Are you available at convenient times or only at 7:00 a.m.? Has your administrative assistant done everything to screen you from “outsiders” except put barbed wire outside your office? When a concern was brought to your attention, in confidence, did you divulge any part of the information? Do you just go through the motions of listening? It is up to you to take the initiative and get out of your office to meet with employees. Been seen on a regular basis so people don’t think you’re avoiding them.
Sonnenberg writes, “If your organization isn’t focused, someone is probably undoing something you just completed.” How true. As he notes, when people don’t know or understand the organizational purpose, they end up going in different directions, often competing with each other. And this is true in the social media environment, too. It is not unusual to see social media participants undoing an organization’s values and beliefs because they simply don’t understand them or can’t live them. They create conflicting messages that undermine the purpose of the organization.

“The costs to society,” writes Sonnenberg, “of everyone acting like random molecules bouncing off one another is just too great. We have no time to think about what is important. We judge someone’s worth by what we see on the outside rather than their inner worth. We envy someone who has achieved success without thinking about what they did to earn it.” We can change that, if we begin with our own example first.

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This comprehensive book is based on the idea that “what goes around comes around.” If you treat people right, they will treat you right. Sonnenberg believes that when you operate with the highest levels of trust and integrity, it makes you feel good about yourself, the people you work with, and the organization that you represent. It impacts how you view yourself and the way other people view you.

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Posted by Michael McKinney at 04:34 PM
| Comments (0) | General Business , Human Resources , Leadership , Management

12.21.11

Doing More With Less

Leadership
Most companies are asking employees to do more with less. These demands may produce positive results in the short term, but they are not sustainable in the long term. “Organizations can do more with less simply by not leaving so much untapped performance on the table.” The frustration people often face in these conditions is not an engagement problem; it is more often an enablement problem.

Mark Royal and Tom Agnew of the Hay Group, explain that The Enemy of Engagement is frustration caused by a highly engaged employee’s inability to succeed in a role due to organizational barriers or the inability to bring the bulk of his or her talents, skills, and abilities to the job. Ironically, the more engaged they are, the more frustrated they get because they care more.

“Doing more with less doesn’t mean conjuring higher levels of motivation out of thin air, but rather allowing motivated employees to perform at their best. It’s about harnessing and unleashing the full potential of frustrated employees—those who want to give their best but can’t due to organizational barriers and constraints.”

Typically we associate better engagement with leadership, but what drives it is better management. Fixing engagement means dealing with the frustration of thwarted employees. Specific management practices detailed by the authors include:
  • Create specific, measurable goals and clearly lay out what employees need to do—the precise behaviors and activities—to achieve them.
  • Provides employees with regular, concrete, and constructive feedback about their work and its value to delivering business strategy.
  • Empower employees to make the decisions necessary to execute and excel at their jobs—and make sure employees understand which decisions they control.
  • Prioritize investments in resources and staff with an emphasis on providing employees with the tools and support they need to succeed.
  • Assign and coordinate roles with serious consideration of each employee’s strengths, reward and reinforce teamwork and collaboration.
One of the most actionable things to do is to simply ask: “How can we change things around here to help you be more effective?” By doing so “a manager creates an opportunity for an employee to speak honestly and openly about enablement issues.”

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Enablement is what drives engagement and what ultimately frustrates it. Get people what they need to do their jobs and get out of the way. The Enemy of Engagement is focused on employees who are engaged, motivated, and loyal—who aren’t ready to give up—but who are experiencing frustration on the job. Ultimately, it requires that we rethink our notions of what it means to be a leader and what it means to manage. We insert ourselves far more than we should.

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Posted by Michael McKinney at 04:34 PM
| Comments (0) | General Business , Human Resources , Management , Motivation

10.24.11

Great by Choice

Great by Choice

IT IS A defeatist attitude to think that luck or circumstances primarily make you what you are. Luck, both good and bad happen to us all. We cannot control much of what happens around us, but the choices we make, as Jim Collins and Morten Hansen’s research confirms, determine our success.

In Great by Choice, the authors rightfully assert that we have entered an extended period of uncertainty and turbulent disruption that might well characterize the rest of our lives. The question then is, what is required to perform exceptionally well in such a world?.

For their study, the authors chose a set of major companies that achieved spectacular results over 15 or more years while operating in unstable environments. They call these companies "10Xers" for providing shareholder returns at least 10 times greater than their industry. Then the authors compared those companies—Amgen, Biomet, Intel, Microsoft, Progressive Insurance, Southwest Airlines, Stryker—to similar, but less successful, "control" companies: Genentech, Kirschner, AMD, Apple, Safeco, PSA and United States Surgical.

10X LeadershipThese 10Xers didn’t survive on chaos, they survived in chaos. They achieved spectacular results not because they experienced different circumstances, but because they displayed very different behaviors. 10Xers shared a set of behavioral traitsfanatic discipline, empirical creativity, and productive paranoia—all held together by a central motivating force, Level 5 Ambition—the passion for a cause larger than themselves and infused with the will to do whatever it takes to make good on that cause.

Fanatic Discipline: Extreme consistency of action. Don’t overreact to events.
Empirical Creativity: Bold, creative moves from a sound empirical base.
Productive Paranoia: Highly attuned to threats and changes especially when things are going well. Fear and worry is channeled into preparation, contingency plans, buffers and margins of safety.

10X Leadership Behaviors

20-Mile March: This is the discipline to stay the course in both good times and bad. This means maintaining a lower bound and an upper bound, a hurdle that you jump over and a ceiling that you will not rise above, the ambition to achieve and the self-control to hold back. A 20-Mile March provides a tangible point of focus that keeps you moving forward.

Fire Bullets, then Cannonballs: 10Xers increase their luck by firing lots of bullets instead of a big un-calibrated cannonball. The underlying principle is, be creative, but validate your creative ideas with empirical experience.

Leading above the Death Line: 10Xers build in buffers because the only mistakes you can learn from are the ones you survive. They zoom-in and zoom out to manage risk and recognize luck.

SMaC: Specific, Methodical and Consistent. Tactics change from situation to situation, whereas SMaC practices can last for decades and apply across a wide range of circumstances. “Steve Jobs didn’t so much revolutionize the company as he returned it to the principles he’d used to launch the company from garage to greatness two decades earlier.” There is always the struggle to find the balance between continuity and change. I find too many are wedded to one ditch or the other.

Certainly luck plays a part. The authors found that the difference between the 10X companies and the comparison companies wasn’t the good or bad luck they got, but what they did with it. Key comment regarding luck: “If the ratio of head to tails tends to even out over time, we need to be skilled, strong, prepared, and resilient to endure the bad luck long enough to eventually get good luck.” Mountain climber “Malcom Daly had to be lucky enough to survive the fall, but he also had to be strong, skilled, and resilient before the 44 hours of peril after his two-hundred-foot fall.”

The organizations they studied were paranoid about chance events and complex forces out of their control, but they focused on what they could do, seeing themselves as ultimately responsible for their choices and accountable for their performance—no matter what the sequence of coin flips.

A thought provoking book that, like Collin’s other work, takes us back to basics. In conclusion they ask:

When the moment comes—when we’re afraid, exhausted, or tempted—what choice do we make? Do we abandon our values? Do we give in? Do we accept average performance because that’s what most everyone else accepts? Do we capitulate to the pressure of the moment? Do we give up on our dreams when we’ve been slammed by brutal facts?

In the end, we can control only a tiny sliver of what happens to us. But even so, we are free to choose, free to become great by choice.

Quote 
Greatness is not primarily a matter of circumstance. Greatness is first and foremost a matter of conscious choice and discipline. The factors that determine whether or not a company becomes truly great, even in a chaotic and uncertain world, lie largely within the hands of its people. It is not mainly a matter of what happens to them but a matter of what they create, what they do, and how well they do it.

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Confusing Principles and Approaches Finding Your Flywheel



Posted by Michael McKinney at 10:57 AM
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10.14.11

5 Leadership Lessons: EntreLeadership

5 Leadership Lessons

Dave Ramsey defines EntreLeadership as “the process of leading to cause a venture to grow and prosper.” Entreleaders know how to blend their entrepreneurial passion with servant-like leadership that motivates employees through persuasion instead of intimidation. EntreLeadership is a book about how business works from a practitioner. His advice, on nearly every facet of running a business, is based on solid principles. Here are just a few of his thoughts on leadership:

1  The very things you want from a leader are the very things the people you are leading expect from you. You must intentionally become more of each of these every day to grow yourself and your business. And to the extent you’re not doing that, you’re failing as a leader.

2  You want to know what is holding back your dreams from becoming a reality? Go look in your mirror. The good news is, if you’re the problem, you’re also the solution.

3  How do you begin to foster and live out this spirit of serving your team with strength? Avoid executive perks and ivory towers. Eat lunch with your team in the company lunchroom every day. Get your own coffee sometimes. No reserved parking spots. Look for the little actions you can take that say to your team that while you are in charge, and while you lead from strength, you are all in this together.

4  While persuasional leadership takes longer and takes more restraint at the time, it is much more efficient over the long haul. Positional leadership doesn’t take as long in the exchange, but you have to do it over and over and over and over.

5  Too many people in business have abandoned sight of the fact that their team members are humans, they are people. Too many people in business have become so shallow that they are merely transactional, not relational. The people on your payroll are not units of production, they are people. They have dreams, goals, hurts, and crises. If you trample them or don’t bother to engage them relationally you will forever struggle in your operations.

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Posted by Michael McKinney at 05:25 PM
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10.05.11

Are You Up, Down, or Sideways?

Up Down Sideways

THERE are no guarantees in life. We can be proactive, but there are some things that are completely outside of our control. So if we can’t be proactive on everything, we can, Mark Sanborn suggests, be interactive. We must learn how to interact with the forces in our life that are bigger than we are to create the outcomes we desire. No matter where we are—up, down, or sideways—there are things we can do to mitigate the downs, take advantage of the ups and maximize the sideways times in our life.

Leadership
Up, Down, or Sideways by Mark Sanborn is a thoughtful book born of experience and based on sound principles. It would be a mistake to think of this as another business book. It is, in fact, a life book that will deeply impact your business.

To be interactive, you first need to define your scorecard for success. Most people don’t live the life they imagined because “they are stuck using a scoring system that doesn’t fit the game they want to play.” Sanborn guides you in developing a scoring system that is meaningful, long-term, and personal.

Besides a clear scoring system, your success also depends on your attitude. You must develop an optimistic attitude. “The way you look at yourself and the world around you affects your success regardless of the circumstances.” We can choose what we focus on.

Another important mindset is that of the lifelong learner. “The more you learn, the more prepared you are for whatever comes your way. And the more you learn, the more you develop behavioral flexibility that provides a distinct advantage over your competition.”

Sanborn offer six methods to succeed when times are Up, Down, or Sideways.

  1. Produce Value. Value keeps you in the game. But value is a moving target, so “if you want to mitigate the downsides and increase the upsides, you need to recognize that value is the currency that gets you a seat at the table....keep your pipeline full of the things people value and the people who value them.” Continue to create value in an ever-changing environment.
  2. Create and Keep Connections. “When we create value and deliver it with service and love, we develop connections that increase our value to others and we multiply their impact on our value.” While creating connections is easier than maintaining them, take special care of the relationships that matter.
  3. Continuously Innovate. Best practices are not enough. Better to work on “better practices and next practices.” Sanborn asserts that the “purpose of innovation is distinction.” But, and this is important, “it’s not enough to be different. Being different without being valued is being weird. Distinction is being different and valued.”
  4. Build Reserves. “You protect what you value by building reserves.” We need to build financial, physical, psychological, and spiritual reserves.
  5. Practice Gratitude. Gratitude is the antidote to negative thinking. In Sanborn’s insightful way, he writes that gratitude is a gift. It is the gift of perspective, energy, guidance, and resilience. Make gratitude something you do and not just feel.
  6. Embrace Discipline. “Success isn’t based on what we know, believe, or intend; it’s a result of what we consistently do.” Consistently act on your intentions until they become habits. Make time for the most important things.

Sanborn gives some final reminders: When you’re Up, you need humility and perspective. So surround yourself with people who keep you grounded. When you’re Sideways, you need a boost. So surround yourself with people who challenge you to keep moving in the right direction. And finally, when you’re Down, you need hope. So surround yourself with people who lift your spirits.

Certainly this is an important book for these times, but this book is meant to help your thrive no matter what life throws your way. You need this book—young people need this book—to prepare for the rest of your life, whether you are Up, Down, or Sideways. Read, reread, and refer.

Up down sideways

Quote 
Rather than trying to predict the future, prepare for it. There are a few things you should do all the time, regardless of circumstances. These are things that set you on a course toward sustainable success—whether times are Up, Down, or Sideways.

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Posted by Michael McKinney at 07:08 AM
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09.22.11

5 Leadership Lessons: Good Strategy, Bad Strategy

Good Strategy Bad Strategy

RICHARD RUMELT has written an insightful book on developing the ability to identify and develop good strategy. Good Strategy, Bad Strategy is obviously the result of decades of practice developing strategy and the many case studies and classroom interactions made it personal and very readable.

We’ve all been there. The big conference room as the lights dim and the PowerPoint slides begin. We sit attentively as the leader steps to the podium to tell us something like: “Going forward we will attain global leadership in our markets, increase revenues and profits ten percent, rationalize our supply chain and eat the competition’s lunch by taking huge chunks of market share—all based on one of the world’s most highly talented workforces for whom success is never quitting until you win.”

Cue the Chariots of Fire soundtrack, roll the reel of the good-looking diverse people of the company, and unleash the balloons.

There’s a lot going on here: This leader is visionary, ambitious, goal-oriented, and motivational. Whether it is putting a man on the moon, fighting a war, launching a new product or responding to changing market dynamics such as the publishing industry’s transition from paper to pixels, what he or she is articulating is NOT a strategy for overcoming obstacles to progress.

When it comes to strategy, we have gotten off-track into thinking that fluffy platitudes, goals, motivational slogans, and wishful thinking are the same thing as strategy. As a result, we don’t get the intended results. “Bad strategy,” says Rumelt, occurs when there is bad doctrine, when hard choices are avoided, and/or when leaders are unwilling or unable to define and explain the nature of the challenge.

Here are some key ideas from this classic on strategy:

1  A great deal of strategy work is trying to figure out what is going on. Not just deciding what to do, but the more fundamental problem of comprehending the situation. A good strategy honestly acknowledges the challenges being faced and provides an approach to overcoming them. Strategy must contain action. Winging it is not a strategy.

2  A talented leader identifies the one or two critical issues in the situation—the pivot points that can multiply the effectiveness of effort—and then focuses and concentrates action and resources on them.

3  Organizations experience significant entropy—the continual drift towards disorganization. Much of the useful work of managers and consultants is maintenance—the constant battle against entropy. Strategists must battle this never-ending drift towards disarray within their own organization. And they must try to exploit the disarray of their rivals.

4  Every organization faces a situation where the full complexity and ambiguity of the situation is daunting. An important duty of any leader is to absorb a large part of that complexity and ambiguity, passing on to the organization a simpler problem—one that is solvable.

5  A good strategy has, at a minimum, three essential components: a diagnosis of the situation, the choice of an overall guiding policy, and the design of coherent action. Many attempts at strategy lack a good diagnosis. As the star of most consulting engagements, the client wants an appraisal of a particular course of action or wants advice on what to do. I almost always back up and try to create a better diagnosis of the situation before getting into recommendations.

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Strategy Book Hallmarks of Bad Strategy

Posted by Michael McKinney at 06:49 PM
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09.21.11

The Four Hallmarks of Bad Strategy

Hallmarks of Bad Strategy

STRATEGY expert and author of Good Strategy, Bad Strategy, Richard Rumelt says that bad strategy “grows out of specific misconceptions and leadership dysfunctions.” In short, it is goals and not action. “It assumes that goals are all you need. It puts forward strategic objectives that are incoherent and, sometimes, totally impracticable. It uses high-sounding words and phrases to hide these failings.”

To detect a bad strategy, Rumelt suggests looking for one or more of its major hallmarks:

Fluff. Fluff is a form of gibberish masquerading as strategic concepts or arguments. It uses “Sunday” words (words that are inflated and unnecessarily abstruse) and apparently esoteric concepts to create the illusion of high-level thinking. Make it simple.

Failure to face the challenge. Bad strategy fails to recognize or define the challenge. When you cannot define the challenge, you cannot evaluate a strategy or improve it. If you fail to identify and analyze the obstacles, you don’t have a strategy. Instead, you have either a stretch goal, a budget, or a list of things you wish would happen.

Mistaking goals for strategy. Many bad strategies are just statements of desire rather than plans for overcoming obstacles. Bad strategy is long on goals and short on policy or action. Strategic objectives should address a specific process or accomplishment, such as halving the time it takes to respond to a customer or getting work from several Fortune 500 corporations. An excerpt from Rumelt’s response to a client that had a “strategy” that was long on goals and short on actions, is instructive:

If you continue down the road you are on you will be counting on motivation to move the company forward. I cannot honestly recommend that as a way forward because competition is not just a battle of wills; it is also a competition over insights and competencies. My judgment is that motivation, by itself, will not give this company enough of an edge to achieve your goals.

He explained that “when a company makes the kind of jump in performance your plan envisions, there is usually a key strength you are building on or a change in the industry that opens up new opportunities.”

Bad strategic objectives. A strategic objective is set by a leader as a means to an end. Strategic objectives are “bad” when they fail to address critical issues or when they are impracticable. The purpose of good strategy is to offer a potentially achievable way of surmounting a key challenge. If the leader’s strategic objectives are just as difficult to accomplish as the original challenge, there has been little value added by the strategy.

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Strategy Book Good Strategy Bad Strategy

Posted by Michael McKinney at 01:52 PM
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09.20.11

Why Are You on Twitter?

Twitter
For those looking to do more with Twitter than just using it to exchange information, Claire Diaz Ortiz, who leads social innovation, philanthropy, and causes at Twitter, has written Twitter for Good: Change the World, One Tweet at a Time to do just that.

Claire says that Twitter is effective as a tool to coalesce your message, make a difference and create a movement. She has developed a framework—not surprisingly called T.W.E.E.T.—to help you build and effectively promote cause-based campaigns.

Target. Why are you on Twitter? The three most common targets or goals are:, information accounts, personalized accounts, and fundraising accounts. Which one you choose sets the tone of your tweets. Claire recommends choosing a personalized account if “you do not have a dedicated staff member who can devote a set amount of time to finding and culling important information about your cause.”

Write. The important thing is to get going without over editing. Fail fast. Who should write the Tweets? “The audience is savvy, and users who are not authentic are drowned out and their audience stops listening.” How often should I Tweet? Claire says that’s a highly contested answer. She offers a host of answers from Twitter “experts.” You’re sure to find an answer and rational that you can be comfortable with.

Engage. Connect with others so you’re not tweeting in a bubble or you won’t get your organization where you need it to be. “Connecting your Tweets with existing relevant information that people are already viewing on Twitter—or making your own Tweets the relevant information that others are looking for—should be your goal.” Use #hashtags to identify your Tweets as part of a group of like-minded Tweets. Use lists to follow the relevant Tweets of others—even if you are not following them. Retweet but fill your timeline with them. She notes, “If one follower retweets every Tweet your organization writes, their recommendation for you holds less weight.”

Explore. Find new people. Twitter is about relationships.

Track. See how it’s working by tracking your progress. Claire offers a list of over 30 potential points to measure to see if you are getting noticed.

Claire writes, “Learning to use Twitter well is not a science, but an ongoing lesson.” Fail fast and explore.

More information can be found on the web at: hope140.org and Twitter4Good You can find Claire at ClaireDiazOrtiz.com or via @claired on Twitter.

And yes, you can find us (me) on Twitter via @leadershipnow.

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Posted by Michael McKinney at 10:18 PM
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09.13.11

Ownership Thinking

Ownership Thinking

Ownership Thinking is about developing leaders at all levels. “Fundamentally,” writes author Brad Hams, “Ownership Thinking is about moving employees away from the ‘me’ way of thinking and towards concerns of the business and its financial performance.” This is leadership thinking in a business setting.

When people understand the business, their role in it, and are informed of what is going on and take responsibility for the outcomes, then they become better stewards of the company’s resources and help to create wealth. Hams has found that the vast majority of people “want to engage and contribute, and feel much better about themselves when they have the opportunity to do so … and they have the capacity to do so.”

We often frustrate that effort and create cultures of entitlement because, in the words of Judith Bardwick author of Danger in the Comfort Zone, “managers are unwilling to do the work of requiring work.” Hams says his mission in life is to eradicate habits of entitlement in organizations.

People who actually produce things do so primarily for two reasons: (1) They have a strong work ethic. In other words, they have to believe that rewards come only with hard work, and (2) They enjoy producing. It is exciting for them, and the reward for producing is not only the things they are able to afford as a result of it, but the personal growth and sense of worth that come from producing: that is, true self-esteem.

A workforce that is helping to create wealth should be able to participate in the wealth they are creating. However, incentive plans should be self-funding, and “it is the obligation of ownership and leadership to teach them how to do that and to provide them with the tools and training necessary to accomplish the task.”

Simply put, your employees need to know what’s going on. In a chapter entitled, Your Employees Think You Make Wheelbarrows of Money, Hams relates that when he asks the question: “Your company had 12 million in sales last year, what do you think the profit was?” it is not uncommon to hear 50% from employees of companies where financial information is not shared or business acumen taught. “In the absence of information, people make stuff up.”

Generally speaking, the people with the greatest understanding and expertise in any given area are the people who are actually doing the work, and these people are not necessarily management. For an organization to achieve excellence, it must engage all of its organization members.

Ownership Thinking is a how-to book. Hams explains how to create incentive plans that work (plans that clearly align employees’ behavior to the organization’s business and financial objectives), how to teach financial skills (how the company makes money and how they add - or take away – value), creating the right performance indicators, rapid improvement plans and how to implement Ownership Thinking for the long-term. “Practicing Ownership Thinking will allow you, as an owner or leader, to rest easier knowing that your employees are making decisions and taking actions that are aligned with what you would do yourself.”

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Posted by Michael McKinney at 10:40 AM
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07.20.11

Information Overload and What You Can Do About It

Knowledge workers think for a living to varying extents, depending on the job and situation, but there is little time for thought and reflection in the course of a typical day. Instead, information—often in the form of e-mail messages, reports, news, Web sites, RSS feeds, blogs, wikis, instant messages, text messages, Twitter, and video conferencing walls—bombards and dulls our senses.
Consider this: A 30-second interruption can result in as much as 5 minutes of recovery time. In total, interruptions plus recovery time consume as much as 28% of the knowledge worker’s day.

Overload
The volume of information we have today “throttles productivity, reduces our capability to absorb and learn, puts our physical and mental health at risk, and interferes with personal and business relationships.” Jonathan Spira, CEO of Basex, a research firm focusing on issues companies face in the knowledge economy, explains in Overload! why we are in the state we are in and what steps we can begin to take to better manage it.

Even as dry as information tends to be, this is an absorbing book. Spira claims that the changes in how we use and view information that will happen over the next 50 years will not only reshape the globe but turn it inside out. Today, information overload costs the U.S. economy a minimum of $900 billion per year in lowered employee productivity and reduced innovation.

To manage successfully in the knowledge economy, we must recognize key differences in how knowledge workers work. Their tasks can be categorized into six overarching tasks: searching, creating content (sometimes re-creating), thought and reflection, sharing knowledge, and networking. Interestingly, a 2010 Basex study found that of these tasks, knowledge workers only spend only 5% of the day engaged in thought and reflection. The one task that is essential for all the rest we spend so little time performing. We must allow [require] workers more time for thought and reflection if they are to be more productive, efficient, and effective.

Too much information without reflection can stall our productivity. It affects our ability to manage thoughts and ideas, contemplate and even to reason and think. We develop a state of what has been termed, continuous partial attention; to give only partial attention continuously. Science writer Steven Johnson described it this way:
It usually involves skimming the surface of the incoming data, picking out the relevant details, and moving on to the next stream. You’re paying attention, but only partially. That lets you cast a wider net, but it also runs the risk of keeping you from really studying the fish.
Researcher Linda Stone adds this:
It is motivated by a desire to be a LIVE node on the network. Another way of saying this is that we want to connect and be connected. We want to effectively scan for opportunity and optimize for the best opportunities, activities, and contacts, in any given moment….It is an always on, anywhere, anytime, any place behavior that involves an artificial sense of constant crisis. We are always on high alert when we pay continuous partial attention.

Although there are tens of thousands of things we could do says Spiria, he offers ten tips that, when observed, will help lower information overload for everyone:
  • Don’t email someone, and then two seconds later follow up with an Instant Message or phone call.
  • Don’t combine multiple themes or requests in a single email.
  • Make sure the subject of your email clearly reflects both the topic and urgency of the missive.
  • Read your email before sending to make sure it is comprehensible to others.
  • Don’t overburden people with unnecessary e-mail, especially one-word replies such as “Thanks!” or “Great!” and only use “reply to all” only when absolutely necessary.
  • Don’t get impatient when there’s no immediate response to your message.
  • Keep your status up-to-date and visible to others so they know whether you’re busy or away.
  • Recognize that the intended recipient of your communications isn’t a mind reader, and therefore I will supply the necessary details in your messages so nothing is left to the imagination.
  • Recognize that typed words can be misleading in both tone and intent, so strive for simplicity and clarity in your communication.
  • Because you understand the complexity and severity of information overload, do everything you can to facilitate the transfer and sharing of knowledge.
Find more tips at the book's companion website: OverloadStories.com

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Related Interest:
  Consider: Harnessing the Power of Reflective Thinking in Your Organization

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07.15.11

5 Leadership Lessons: What Went Wrong? Car Guys vs. Bean Counters

5 Leadership Lessons
In Car Guys vs. Bean Counters, legendary auto executive Bob Lutz gives an eye-opening account about what went wrong in the U.S. auto industry, with details of behind the scenes activities. He puts “numbers” in perspective. Too often they are used to overrule common sense. “Where,” Lutz asks, “is the business school that preaches, above all, acceptance of the obvious, simplicity, and that uncommon virtue, common sense?” He talks about the things that distracted GM and others from doing what had made them successful and can distract us too.

Auto Industry
Lutz devotes a chapter talking about GM’s failed “culture of excellence.” A misunderstood “drive for excellence” bore some really strange fruit says Lutz. In this culture, management had to improve on every detail, no matter how trivial, “focusing their ray guns of unbridled excellence on targets of complete irrelevance.” It was “grindingly negative, detail-focused, and customer-distant.” This is an easy pit to fall into in part due to the inward-focus described in point four below. Lutz described it as typical GM hubris: “if we’re doing it, we do it all the way. We know what’s best, no matter what others are doing.”

1  It really boils down to a matter of focus, priorities, and business philosophy. Leaders who are predominantly motivated by financial reward, who bake that reward into the business plan and then manipulate all other variables to “hit that number,” will usually not hit the number, or, if they do, then only once. But the enterprise that is focused on excellence and on providing superior value will see revenue materialize and grow, and will be rewarded with good profit.

2  A senior executive who needs a quantified list of objectives to know what he or she should be working on should not be a senior executive in the first place.

3  One curious cultural characteristic I encountered at GM was an exaggerated respect for authority, with the acceptance of everything uttered by the CEO and other senior leaders as infallible gospel. It is bred into the system. Senior people are seen as being in possession of some superior wisdom, to be revered if not downright feared. The reality is that the company’s most senior executives are just people who happen to get promoted and who daily face the insecurity of wondering if they are doing the right thing. The good leader deals with that insecurity by putting forth his or her ideas, then letting subordinates dissect and critique them.

4  There were hundreds, maybe thousands of these sacred do’s and don’ts embedded in the engineering culture … a culture that was inwardly focused in pursuit of its own goals, with the customer left out of the equation. [Is there anything that we are doggedly pursuing without regard to the actual impact it is having on our intended audience? If it only makes sense to us, it may not be making sense at all.]

5  The problem lies, as it so often does, in the deliberate intellectualizing of a very simple task: creating and selling a meaningfully superior product or service to the public. It’s not rocket science…. The business schools should be asking themselves how and why it all went wrong. They have produced generations of number-crunching, alternate-scenario-loving, spreadsheet-addicted idiot-savants. They should be ashamed.

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Posted by Michael McKinney at 01:43 PM
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06.21.11

Fixing the Game: What Capitalism Can Learn from the NFL

Fixing the Game

DEAN of the Rotman School of Management, Roger Martin, states in Fixing the Game, "We haven’t looked deeper into blameworthy CEO behavior to understand what really caused it. We haven’t examined the broader theories that underpin our economy and that informed all of those ineffective fixes after the last crash. Instead, we’ve looked for a new scapegoat, chosen to operate from the same fundamental theories, and doubled down on the same fixes."

THE STORY BEGINS

In 1976, Harvard finance professor Michael Jensen and Dean William Meekling of the Simon School of Business at the University of Rochester published a paper entitled Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure [PDF]. They had no way of knowing that it would form the prevailing theory regarding the role of the firm and proper compensation in our society today.

The paper argued that the “way to spur executives to best perform their duties in the real market [the world in which factories are built, products are designed and produced and sold, expenses are paid and real dollars of profit show up on the bottom line] was to make their pay significantly dependent on the performance of the company in the expectations market [the world in which shares in companies are traded between investors].” To do this, executives should be compensated with stock and in effect, make them both shareholders and executives. In 1970, in stark contrast to today, stock-based incentives accounted for less than 1 percent of CEO remuneration.

That theory, says Roger Martin, “had the unfortunate effect of tightly tying together two markets: the real market and the expectations market.” In Fixing the Game, Martin notes that something similar happened in the NFL. In the NFL there is the real market when teams take to the field to play a game. Real touchdowns and real field goals are scored. And there is the expectations market: gambling. “Gamblers try to guess who will win a given game on a given Sunday and place bets based on that expectation.” The bets are balanced on either side through the use of a point spread which is similar to the stock price in business.

WHAT THE NFL DID

“But unlike American capitalism, the NFL looked thoughtfully at the relationship between the real game and the expectations game and identified a serious danger….They clearly saw that the pressures of the expectations game could do serious damage to the real game…it could destroy the sport….[they] have enforced a strict separation between the real market and the expectations market…exactly the opposite of the way we have managed it in business.”

Martin thinks we could take a lesson from the NFL. We need to quit asking executives to do what they cannot do: beat the expectations forever. “Expectations will get ahead of anything you can actually accomplish” and thus encouraging executives to engage in “point shaving” or “tanking” to cover the spread. “Since 1976, the incidence of large-scale accounting fraud by public companies has increased dramatically. Why? Because executives have millions of reasons to do whatever they can to increase expectations of future earnings.”

Fixing the Game
To fix the game, Martin says we have to shift the focus of companies back to the customer and away from shareholder value; eliminate stock-based compensation; fundamentally rethink the role and structure of boards; regulate and manage expectation market players more effectively; and executive need to take on a more expansive and positive view of the role of for profit companies in society.

American capitalism has embraced a persuasive but ultimately flawed theory to construct their understanding of the economy, the model of executive compensation and the role of business. Our single-minded focus on the expectations market is driving us from crisis to crisis with ever-increasing volatility. Martin skillfully defines the problem and points out why and how we might begin to fix it.

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Posted by Michael McKinney at 08:55 AM
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06.13.11

7 Guiding Principles for Developing Leadership Talent

People deliver numbers. If you want the numbers, you need the people. As a leader you need to know how to judge raw human talent. In The Talent Masters, Bill Conaty and Ram Charan explain how to do it.

To develop talent, you need to become intimate with your people; to know the essence of each individual. Talent masters can identify a person’s talent more precisely than most people simply because they excel at observing and listening. And they institutionalize this skill to create their own supply of good judges. It simply must become part of the culture.

Talent development is not an event. It is a process. To make it sustainable it must become part of the culture. And no one needs to understand that more than the CEO. When you have an organization devoted to a person, you have a cult. When you have an organization devoted to a set of principles and values, you have a culture. Developing people simply must be a priority from the top down. That leads us to Conaty and Charan’s first principle of the talent masters:
  1. The leadership team understands that the top priority for the future is developing the talent that will get it there. Talent masters spend at least 25% of their time spotting and developing other leaders; at GE and P&G it’s closer to 40%)
  2. Meritocracy through differentiation. Fill leadership roles based on measured performance rather than just rough judgments and personal considerations. “Memorize this slogan: Differentiation breeds meritocracy; sameness (the failure to differentiate people) breeds mediocrity.” Reward leaders according to their talents, behaviors, and values.
  3. Reinforce working values. These are the values people live by; how work gets done. Talent masters “repeat and repeat and repeat their values, and reinforce them by linking recognition and rewards with them.
  4. Insist on a culture of trust and candor. You can only develop your people if you have accurate information about them. You can only get that information is if you talk candidly. Candor gets the truth out. It enables keener observations, greater insight, and better descriptions.” Conaty and Charan say that this is actually the hardest part of becoming a talent master.
  5. Create rigorous talent assessments. Your talent assessment/development systems should have as much “rigor and repeatability as systems used for finance and operations.” And you should “review people as thoroughly and regularly as you review operations, business performance, strategy, and budgets.”
  6. A business partnership with human resources. The HR function will only be as strong as the CEO wants it to be. Elevate it to the same level as the CFO.
  7. Continuous learning and improvement. The ever-changing business environment means that you need to constantly change and update both the leaders’ skill as well as your own leadership criteria to stay in sync with