Strategist Blog

Keeping NASCAR On Track

2012-05-01T00:30:00.000-04:00

Do you know your customers or clients? Or do you just know about them?

When it comes to understanding customers, or fans, maybe something can be learned from NASCAR (National Association for Stock Car Racing), even if you haven't been to the track for awhile.

According to news reports, "NASCAR's popularity has stalled." In addition to dealing with phase 3 of a product lifecycle (starting, growing, maturing, declining, and dying),
NASCAR was severely impacted by the recent recession as fans pulled back from spending money to attend its races, including the signature Daytona 500 held each February.

To try and get out in front of this problem and keep itself on the right track, NASCAR commissioned a $5 million study to find out what's going on inside the minds and lifestyles of a generation it does not know, but must in order to have a future.

What did NASCAR discover?

In a meeting held in Charlotte, North Carolina in 2011, which included Roger Penske, Jack Roush and other racing team owners, NASCAR chairman, Brian France, presented a wake-up call, not just bullet points. The comprehensive research found that:

Drivers, the lifeblood of the sport, were too predictable
Race teams and NASCAR were slow to embrace social media
Track owners were not doing enough to make attending races easier
Not enough was being done to attract Hispanics and urban youths to offset decline of older fans

A break in the pattern

As commentator Frank Deford, wrote, "A whole cohort of our young boys--and girls--have been growing up without any interest in messing around--tinkering--with cars."   What NASCAR discovered, Deford added, is that "nobody wants to do that anymore."

It's hard to believe young adults would give up their parents and grandparents historic love affair with the automobile in exchange for the latest mobile phone app, yet evidently this is the case.

"Things that can't go on forever don't," said the late Nobel Laureate, Herbert Stein.  Does this include having a dependable customer base?

Taking action

Out of this year-long exhaustive research, which included 64 hours of focus groups, and observing how fans navigate racetracks, came a decision to hire Kim Brink from General Motors as head of the NASCAR brand and consumer marketing group. Brink was part of a team involved in the turnaround of Chevrolet and Cadillac, increasing retail sales in the U.S. by 40% over the past several years.

NASCAR is already acting on a five-year strategic plan from the Taylor Strategy study focusing on:

Growing the youth and Hispanic fan base
Reaching the next generation of NASCAR fans
Developing a wide-reaching digital and social media strategy
Building driver star power
Improving the at-track experience for fans

Maybe establishing customer loyalty is implied in this list but should it be explicit?

What about your business?

NASCAR does not face an uncertain future alone.

Changing demographics, aging customers, dissimilar values, poor service, and technology are upending businesses as diverse as retailing, dining, medical, legal, and financial services.

How people make their purchases is also part of the drama. Just ask Best Buy whose big box design is being undone by the Internet.

While the 55+ crowd is financially worth pursuing, isn't this the time to be thinking about new market opportunities?

Where to begin?

The "skein of thread" or clue for working through a digital labyrinth is first knowing your core values which provide an inner sense of direction. What is it you believe? What is it you stand for? What is it you're all about?

In assessing this new external environment, begin with the marketplace, not technology. Here are some questions from the Peter Drucker Assessment Tool to help get you started. It was Drucker who once defined the essence of marketing as "knowing what is value to the consumer:"

Who is our customer?

How will our customers change?

What does the customer value?

What knowledge do we need to gain from our customers?

How will I participate in gaining this knowledge?

How do we go about this process?

Something to think about

In a highly competitive marketplace, how does a company or nonprofit find new households whose values are a close match with theirs--without a seven-figure NASCAR research
budget to inform the process?

To stay on the right track in an electronic world, how will new customers find you?

www.strategist.com

(C) Bredholt & Co.

Becoming An Inquiring Leader

2012-04-01T00:30:00.000-04:00

Those who succeed in top management do so in part by knowing how to ask the right questions.  This discipline is often associated with strategy development, problem-solving, product launches, and competitive analysis.

Asking probing questions, with purpose, is a habit acquired through practice, and the formulation of questions is more art than science.

Getting started

Inquiries begin with a two-part question: What is it we need to know, and why?

A basis for engaging in this form of communication comes from a curious mind--which may explain why so few initiate these types of discussions. It's easier to "tell" than to "ask," even though at certain times telling or explaining a point of view is the appropriate thing to do.

In going through our library recently, I came across the book, Leadership Is An Art, by Max DePree. Mr. DePree, a son of the founder of office furniture company, Herman Miller, D. J. DePree, is also a former CEO of the company and served as a board member until 1995.

I heard Mr. DePree speak at a conference years ago.  His skillful approach in mentoring direct reports, teaching them how to learn, grow, and change is simple yet profound. What's his secret? Some of it has to do with asking thoughtful questions on a consistent basis.

His best-selling book is the source of the oft quoted line, "The first responsibility of a leader is to define reality."  To complete the thought, here is the rest of DePree's thesis: "The last is to say thank you. In between the two, the leader must become a servant and a debtor. That sums up the progress of an artful leader."

Like most who find their way to the top of an organization, Max DePree, discovered early on that communication was essential to the task of leadership.   Toward the end of his signature book, DePree underscores the idea of two-way communication by listing questions asked of Herman Miller's senior managers.

I took the liberty of clustering his "need to know" in the following outline:

Opening

Who are you? How do you see yourself personally, professionally, and organizationally?

Personal

What do you want to do (to be)? What are you planning to do about it?
What have you abandoned?
What significant areas are there in the company where you feel you can make a difference but feel you cannot get a hearing?
Do you have any feelings of failure in any particular area?
What will you do in the coming year to develop your three highest-potential persons (and who are they)?
In the past year, what, from the perspective of integrity, most affected you personally, professionally, and organizationally?

Corporate

What are a few of the things that you expect most and need most from the CEO?
What two things should we do to work toward becoming a great company?
What significant areas are there in the company where you feel you can make a difference but feel you cannot get a hearing?
Does Herman Miller (insert your company) need you?
Do you need Herman Miller (insert your company)?
If you were "in my shoes (CEO)," what would you focus on?

Future

What are three signals of impending entropy (disorder in the system) you see at Herman Miller? What are you doing about it?
What are three examples of budding synergy in your area and how can we capitalize on them?

Is inquiry a part of your team-building efforts? Do you know your people and what they're thinking?

Perhaps we could add to the Ancient Greek aphorism, "know thyself," the importance of making time to know others as Max DePree did during his successful career. After all results depend on who your associates are as well as what they do.

www.strategist.com

The Feedback Dilemma

2012-03-01T00:30:00.000-05:00

"Planes are safer when the least experienced pilot is flying, because it means the second pilot isn't going to be afraid to speak up."   --Malcolm Gladwell in Outliers

Does your organization emphasize the importance of clear and open communication (which includes listening) as much as it does being on a "team?"  Probably not. And yet clarity in ideas, conversations, and interactions are sources of oxygen allowing systems to breathe properly--which is a sign of a healthy team.

Problems at the office or factory are often rooted in a lack of mutual understanding about expectations, goals, deadlines, procedures, and who the customer really is.  A readily available tool of management to address this situation is the right use of feedback--or "feedforward" as our friend, Marshall Goldsmith, likes to say.

How Is Feedback Used?

Some examples:

Employees need to know what their supervisors are thinking in terms of job performance, and not just during formal reviews
Management is helped by getting real-time information from those around them--even if it's something they don't want to hear
Workers require candid conversations from colleagues for instruction, to gauge how things are going, and to achieve mutual goals
Businesses should hear from customers in order to know how they are doing, what not to change and where improvements should be made

Holding Back

Why are associates reluctant to explain how they feel about something? It could be from past experience.  Speaking up may have been taken the wrong way so employees learn to be silent.  Unfortunately this means valuable information remains hidden from those who might need it most.  Thus the dilemma.

According to organizational psychologist, Dr. Michael Woodward, two factors that influence how individuals communicate in group settings, such as staff meetings, are "personality and position."

Thoughts are eventually shared because employees have to talk--often with a trusted peer or spouse.   Some of the more useful internal focus groups take place at lunch.

Studies also show the hesitancy to candidly convey how we feel has cultural roots as described in the Outliers chapter about air safety and the "theory of ethnicity."

Improvements in Aviation

Recent news stories confirm a reversal of deadly crashes in the airline industry over the past several years. The conclusion: Air travel in the U.S., at least, has never been safer. It has been a decade since passengers have died in a crash involving more than 100 people.

This is a dramatic turnaround from the 1990s when, as someone observed, "planes were falling out of the sky."

One of several reasons for this improvement in safety has to do with pilot training.  The history of aviation has shown a strong, if not dictatorial role for the captain, causing co-pilots to not speak when necessary or speak but not be heard--often with deadly results. An example of this is the 1982 Air Florida crash in Washington, D. C.

Captains are now trained to solicit input from all members of the flight crew.

For their own health and safety, businesses and nonprofits could learn something about improving the free flow of information from changes in aviation practices.

A Definition Of Terms

How do we begin improving this essential part of our professional relationships?   In addition to cultural issues, we can start by understanding the different kinds of feedback and improving the quality of our exchanges.

In his practical book, Getting It Done (Harper), author Roger Fisher offers enlightenment on a largely undefined process. In addition to aviation-type "warnings" mentioned above, corporate feedback, says Fisher, has three key parts:

Appreciation

To encourage and improve morale. This is an expression of gratitude or approval of another’s effort. It is an expression of emotion, designed to meet an emotional need.

Advice

To help individuals improve their skills. Advice consists of suggestions about particular behavior that should be repeated or changed. It focuses on the performance, rather than on judging the person.

Evaluation

This relates to making wise decisions about personnel and their assignments. An effective way to do this is by ranking the subject’s performance in relation to that of others or against an explicit or implicit set of standards.

Why does feedback go awry:

We fail to understand there are different types of feedback
We co-mingle the types (doing two things at one time—sending mixed signals)
We use one type (appreciation) when we should have used another (evaluation)

Think for a moment about the last time you gave or received feedback. Was it clear? Appropriate for the circumstances? Or did you get (or give) appreciation when you should have received (or given) advice?

In a future post I will share "tips" on giving feedback from the book, Helping, by Dr. Edgar Schein.

Properly used feedback has the potential to be a positive force for your organization.

www.strategist.com

Eleven Minutes of Football

2012-02-01T01:00:00.000-05:00

During the tenure of then CEO Jack Welch, Business Week did a piece entitled, "How Welch Manages GE." It highlighted leadership "rhythms and rituals" over a 12-month period showing in detail how one man dealt with an enormous task--that of managing a company whose 1998 revenue (the year the article appeared) was $90.8 billion, with $8 billion in profits, and 276,000 employees worldwide.

The story is a case study in personal and time management--and points up the importance of having a top notch executive assistant like Rosanne Badowski who managed Mr. Welch as he was managing GE.

The article gives an inside look at Welch's leadership agenda, focusing on those things belonging to a CEO which cannot be delegated to anyone else.   It's also a reminder how a calendar can be a steering mechanism for any organization.

Playing the Game

Is Super Bowl XLVI (46) a teachable moment for executives? What could be learned about managing the corporate clock from the American version of football?

Two years ago "The Wall Street Journal" commissioned a study of the National Football League to see how much time was actually spent playing the game during a typical broadcast.

The results:

"According to the Journal's study of four recent broadcasts, and similar estimates by researchers, the average amount of time the ball is in play on the field during an NFL game is about 11 minutes."

The writer of the story, David Biderman, concludes, "if you tally up everything that happens between the time the ball is snapped and the play is whistled dead by the officials, there's barely enough time to prepare a hard-boiled egg."

The balance of the broadcast, excluding commercials, goes to the following:

Three seconds of cheerleaders

Seventeen minutes of replays
Sixty-seven minutes of everyone standing around

Allocation of Time

If you did a study of your business or nonprofit, what would it find?

-How much time is given to cheerleading?

-How much time is given to replaying the past?

-How much time is given to standing around?

-How much time is given to the few things that are likely to make the biggest difference?

Your Calendar

As the leader what is it only you can do? In the coming year what could you get rid of and never miss?

But old habits die hard. As Mark Twain once observed:

"Habit is habit and not to be flung out the window by any man, but coaxed downstairs a step at a time."

It could be the most important thing to do in 2012 is carefully examine your calendar and goals to see if there is a good match between the two.

What should be the relationships between time for thinking; time for rest; time for self-renewal; time for family; and time for business? Finding the right combination among these competing, yet complementary values, is in everyone's best interests.

What are the "rhythms and rituals" of your schedule? Are they moving the business closer to its goals? Do the old rituals need modifying or are new ones in order?

As it was with Jack Welch, and his successor at GE, Jeff Immelt, there are only 24 hours in a day.

In your leadership role, where should you be spending time?

www.strategist.com

(C) Bredholt & Co.

Predicting the Future

2012-01-01T00:01:00.566-05:00

"If you predict for a living you have to predict often."

--Danish Physicist and Nobel Prize Winner, Niels Bohr

Have you ever thought of yourself as a futurist?

Predicting the future is a lucrative profession even though the track record for peering beyond tomorrow is inconsistent at best. Does anyone ever follow-up on predictions anyway?

PREDICTING IS HARD

Someone once asked futurist Alvin Toffler (of Future Shock and The Third Wave fame) why several of his predictions failed to materialize. Toffler's response was direct: "I often underestimated the power of the status quo."

You could count on one hand the number of individuals who credibly predicted the recent "great recession."

"It is a globally accepted fact that top world governments, central banks, economists, investment bankers and financial journalists were caught off guard by the financial crisis and the ensuing economic crisis of 2008-2009," according to the Economic Predictions website.

THE IBM LIST

IBM recently issued its annual list of five predictions about the future of technology. Bernie Meyerson, who does the technology forecast, said something worth noting when releasing the list. "To predict the next five years you have to have a deep understand of the last 50." (This principle may hold true even for start-ups who are seeking to introduce innovative products and services).

One IBM prediction in particular caught our attention:

There will be no more passwords as increasingly powerful phones and sensors will store your personal biometric information enabling machines to automatically know who you say you are

We can only hope.

SEIZING THE DAY

What about your organization?

1. The best way to predict the future is invent it.

This insight comes from Alan Kay, a scientist at Apple, Inc., whose charter is to pursue far-out ideas. "This is a century in which you can be pro-active, not reactive about the future."   While the future is not risk free it's possible to calculate risks and minimize the downside of new ventures.

Why not start with the "what if" question?

2. Learn to connect the dots.

Take time to look around to see what's already underway. The old idea of predicting from extrapolation, or the creation of new data points, is filled with uncertainty.

New realities are likely in some stage of formation for most industries but are overlooked in the press of time. Leadership tends to become aware of disruptions or opportunities when it's too late to take advantage of them.

3. Pay cautious attention to feedback.

Listening to employees, customers, and prospective customers is important when thinking about the future.  Be mindful that individuals sometimes want to be heard more than heeded.  Knowing the difference comes with experience, judgment, and being a good listener.

Steve Jobs didn't do focus groups because participants were not likely to have any frame of reference for the products Apple was thinking about developing.

Nonetheless feedback is important. But filtering what is heard through the company's mission, values, and capabilities is a reliable way of reaching decisions on what to do with new information and insights.

4. Avoid the hype.

This may be the hardest thing on the list to do. There is a lot of "noise" coming from different directions requiring a fairly disciplined leader or manager to know what's worth pursuing and what's best left alone.

5. Stay flexible.

"Flexibility" could be a core value of every one's company.  Being able to adapt along the way is essential for an enduring future.

There is always the possibility of unforeseen problems with product launches, competitive forces, or new government regulations being imposed. The ability to adjust to circumstances without having to toss your basic strategy is why success is more of a zig-zag than a straight line.

THINKING AHEAD

What's on your list of personal and corporate predictions for 2012 or beyond?

What merits undivided attention? What can come off the radar?

What's the one thing in the coming year, that if properly understood and successfully implemented, could be your next profitable idea?

As we learned at the beginning of this post it's okay to revise predictions. After all, this is what professional futurists do to stay in business. As the late British philosopher Carveth Read once said, "it is better to be vaguely right, than exactly wrong."

Happy New Year!

www.strategist.com

(C) Bredholt & Co.

More Than A Pollster

2011-12-01T06:00:00.268-05:00

The first time I met George Gallup Jr., who passed away November 21, 2011 at the age of 81, was in February of 1983. I operated a research business at the time and wanted to know if there was any chance of learning from or even working with the Gallup Organization.

It sounds like a stretch but this is how we came to know some of the mentors in our life--by reaching out to people we admire. The lesson I have learned is to let the other person say, "no."

After several attempts to get through by phone, Marie Swirsky, George's executive assistant, suggested an alternative. Marie asked us to put our introduction on a cassette (no CDs in the early 80s), and the purpose for meeting with George, and she would put the tape in his briefcase so he could listen to it over a weekend.

The tape arrived at the Gallup offices in Princeton, New Jersey on a Friday. The following Monday I received a call from Marie to set up a meeting in Princeton at my convenience.

It was the beginning of a 21 year professional relationship with George and a friendship that extended until last week.

Of all the trips to Princeton in the ensuing years the most memorable was the time George took me to meet his mother. It was a warm gesture that became quite an afternoon. As it turns out Mrs. Gallup played the piano, George played the trumpet and I play the drums. All three instruments were in the Gallup house so George suggested we have a "jam" session. Which we did.

How special that time proved to be.

Most of what I learned from George is what I saw in his life. His curiosity. The intellect. Keen insights. Ethics. Compassion for others. A willingness to share what he knew, not keeping it to himself. Making time to invest in someone like myself.

Conversations in his office, over lunch, and in our home are memorable.

Some things worth noting about a man who was more than a pollster:

He paid attention when you were talking. The first thing George did was get out his notepad and start writing things down for future reference. George focused on the points you were trying to make. In an age of permanent distractions and inattention in meetings, his disciplined approach to interpersonal communication was refreshing.

He chose words carefully. George's counsel was inside the conversation requiring one to be a good listener. Like the time he was visiting and getting ready to go to the airport. He said, "You first have to learn to be good. Then learn to be fast." The order was right because George was speaking from experience. Nearly 25 years later I don't remember the context in which this wisdom was passed along but I recall those specific words as though they were spoken this morning.

He knew the relationship between information and ideas. It wasn't just a matter of conducting surveys. Adding to data bases doesn't accomplish much. The real issue was knowing how to act on the findings. As good as the knowledge may be it is secondary in value to taking the right action, whether personal or corporate.

He was a person of great faith. The choices were being an Episcopal priest, which he considered at one time, or a pollster. However the greater calling was living a life of faith. One of George's favorite questions in religious surveys was, "How have you put your faith into action in the past seven days?"

I am grateful for the privilege of knowing George Gallup, Jr.--and I am thankful to Marie Swirsky for putting that cassette tape in his briefcase many years ago.

(C) Bredholt & Co.

Steve Jobs and Buzz Lightyear--BFF

2011-11-01T09:00:00.005-04:00

Our grandsons visited some time ago when the youngest of two brothers, Brody Schriver, had a strong attachment to Buzz Lightyear, one of the characters from the Pixar movie, Toy Story.

We took the boys to lunch one day and upon arriving home, discovered Buzz was missing.

Unable to deal with the heartbreak I went back to the restaurant to see, if by chance, Buzz was still there.  The staff at the restaurant went so far as to move the booth where we had been seated an hour or so earlier just to be sure the toy wasn't lodged between the seat and the wall.  Another search of the car came up empty as well.

Rather than face a tearful grandson with empty hands, I stopped by a store and purchased a second Buzz Lightyear because that's what grandfathers do. (As it turned out the first Buzz was on the back porch all along).

This incident came to mind while reading backstories to the life of Steve Jobs, including successes at critical moments allowing him to keep going with his creative pursuits.

What does this have to do with Buzz Lightyear, Woody, and the other characters in Toy Story? While Apple and NeXT get a lot of attention, Pixar Animation, purchased by Jobs in 1986, put new life into this American icon.

As recounted by Lev Grossman in TIME, Steve Jobs netted almost $260 million when Apple went public in 1980. However, this financial success was followed by nearly 18 years without producing a successful product.

"It was Buzz Lightyear who saved Jobs' career: after eating money for a decade, Pixar finally produced Toy Story in 1995. It took in $30 million on its first weekend, and a week later Pixar went public. Jobs' shares were worth $1.2 billion," according to Grossman.

Almost 60 years earlier Walt Disney was looking to expand beyond short subjects to features. He made a big bet on his company's future taking three years to produce Snow White and the Seven Dwarfs which premiered in 1937.

Sometimes referred to as "Disney's Folly," Snow White cost approximately $1.5 million forcing Walt Disney to mortgage his house to finance the film's production.

In its original release, Snow White grossed $3.5 million in the United States and Canada.  Walt Disney received a full-size Oscar and seven miniature ones presented to him by Shirley Temple at the Academy Awards. This was a huge success making it possible for Disney studios to move into a higher realm of creativity and production.

There are numerous articles comparing Steve Jobs to Thomas Edison and other inventors.  A better comparison may be with Walt Disney.  Both found a way to combine consistent quality with innovation in order to make their products stand out from the competition.

It's fitting that Jobs, upon completion of the $7.4 billion acquisition of Pixar by Walt Disney Company in 2006, would join the company's board of directors and become Disney's largest shareholder.

What are some lessons to take away from the life and career of Steve Jobs?

What does a wider audience learn in his death that it couldn't know, by design, in his life?  I am thinking now about his family; growing into the role of a corporate leader; his mercurial management style; all the people decisions; the failures and rejections; and a sense of mortality.

What could you "Apple-ize" (simplify) about your life and business?

What was the driving force when developing Apple products such as the IPod, IPhone, and IPad?

What is at the heart of Pixar's success? (See link to interview below)

What causes our grandchildren (and yours) to make an emotional connection with a character like Buzz Lightyear?   The answer to this last question is simple. It's because Steve Jobs, like Walt Disney, knew young minds (like older ones) are wired for a good story.

We close with some links to Steve Jobs you may not have seen or read:

Click on this link to watch an interview from 1996 with Charlie Rose that includes John Lasseter, who now runs Pixar and Disney Animation. This archived exchange allows Steve Jobs to speak for himself.
Here is the text of the eulogy given by his sister, novelist Mona Simpson, at the memorial service in the church on the campus of Stanford University.
And finally, this is a video of Apple's tribute to Steve.

Chiseling of a Leader

2011-10-01T15:34:00.058-04:00

Mount Rushmore National Memorial, in the Black Hills of South Dakota, celebrates its 70th anniversary on 31 October 2011. It took the American-born sculptor, Gutzon Borglum, son of Danish immigrants, fourteen years to complete this monumental task.

While he is also responsible for the carving on the side of Stone Mountain, near Atlanta, Georgia, the head of Abraham Lincoln, which sits in the Capitol Rotunda in Washington, D.C., and the North Carolina monument at the Gettysburg battlefield, Borglum's most notable work is Mount Rushmore.

George Washington, Thomas Jefferson, Teddy Roosevelt, and Abraham Lincoln are displayed in 60-foot granite heads carved mostly by dynamite.

When viewing this edifice I wonder if these leaders were born or made? Or, was this select group of Americans chiseled over a lifetime?

On the way through life have you ever stopped to think about the importance of strong character and how it develops? Does it happen by being battle-tested in various assignments? From life's experiences? Is a crisis the way in which true character forms? Or is it from a combination of success and failure? What is the role of disappointment or rejection?

And how do you know who anyone is in an age of self-constructed digital images?

Lincoln once observed that giving someone power was the best way to find out who they really are.

How long did it take Washington, Jefferson, Roosevelt, and Lincoln to develop as leaders? Longer than the decade and-a-half it took Gutzon Borglum to finish sculpting their faces on the side of a mountain.

The outsize display of four great men begs another question. Why is so much attention given to formal leadership programs and so little to the nonformal, character-building experiences, where people spend the vast majority of their time?

What are the experiences that contribute to shaping and influencing leaders?

Inside organizational life five are worth noting:

Start something from scratch
Fix or turnaround something
Enlarge your responsibility
Take on special projects
Endure hardships

It's not enough to have these experiences. It's what you take away from them that makes this kind of chiseling worthwhile.

If you are persevering through the economic crisis, what, if anything, will your management team take away from a time of testing and hardship?

We tend to lose our memory as things improve which explains why the mistakes of the past will likely be repeated in the future.

All four presidents on Mount Rushmore probably engaged at some point with the experiences on the above list from the Center for Creative Leadership. It wasn't that they went through difficult times.  Many do.  It was how they did so that made a difference in the outcomes.

Something to be mindful of throughout your career is the value of conversations. Some will be long, more will be brief. Under the right circumstances these exchanges can be a source of insights which are essential to learning, growing and changing.

Our perspective can be limited. Listening to others, and viewing things through a different lens, has the potential to clarify vision and improve our options for taking the next steps.

Coaching is quite popular with many--and it has its place. However, the right mentors coming in and out of your life, along with trusted friendships, may be more important in the longer term.

Does it feel as though you are currently being chiseled, even with what seems like dynamite?

If so, then you are likely enrolled in the same leadership development program as the four who grace Mount Rushmore.

(C) Bredholt & Co.

Building a Team

2011-08-30T21:38:00.010-04:00

The word "team" is becoming a prominent part of the language and culture of many organizations. Buildings that were once home offices are now referred to as "team headquarters." The Team Disney building in Orlando, Florida comes to mind.

Much has been made over the past decade as to the importance of teams and team building and it’s having a noticeable affect on corporate life. Like any management idea that comes along (vision, for example), it’s possible to attach ourselves to a word and miss the core concept.

Or simply take a good idea too far.

With all the talk about "teams" we are reminded of something former British Prime Minister Margaret Thatcher once said on a different subject. She offered that if you had to say you were a "lady" too often, you probably weren't. (This was before being given the title, Lady Thatcher).

We are beginning to think the same thing about leaders who keep talking about getting their people "on the team." In fact, there tends to be more said about the team than the results the team is expected to achieve.

A practical lesson from the book, The Wisdom of Teams, is that leaders foster team performance best by building a strong performance ethic rather than by establishing a "team promoting" environment alone.

"Biases toward individualism exist," says Jon Katzenbach, one of the authors, "but need not get in the way of team performance." He goes on to say that team and individual are two subjects on the opposite ends of a continuum.

It’s essential to provide balance so that the situation is well served by either a person or a group. Believe it or not, sometimes a single person is just what circumstances call for since the task determines the form.

Those who have played on a well-disciplined athletic team know the better coaches use the word "team" carefully. They strive to develop the team by growing individuals focused on a common goal.

Before the era of celebrity athletics, now at practically all levels of participation, it was a great fan experience to watch a well-coached team perform. It still is even as most sports are being overtaken by the driving forces of profit and loss.

As in sports a successfully executed idea or plan in organizational life is a thing to behold.

Our observation is that some, not all, may be using "team" in a disciplinary fashion versus a discipline that is required to achieve a common purpose and set of goals. When referring to employee attitudes and behavior supervisors often refer to work associates as either being a "team player" or not.

Based on whose set of rules? I think most employees know.

Rather than a boss--worker arrangement, Katzenbach notes that teams really come into being when individuals hold themselves mutually accountable.

It might be helpful to review your communication to see how much the "t" word is being used (or overused). And is it possible, through some form of assessment, to determine if you and others are developing individual strengths as well as building a well-balanced team?

Remember, the best teams know they are. If you have to say it too much, you probably aren't.

(C) Bredholt & Co.

Hidden in Plain View

2011-05-15T16:24:00.002-04:00

Nearly every successful business or nonprofit which endures over time begins with a simple yet profound idea.

Such is the case of Charles Edward Merrill, who in 1914, founded what is now known as Merrill Lynch. According to historical sources, Merrill was one of the first New York stockbrokers to realize the importance of selling stocks and bonds to small investors by furnishing for them simple, conservative and sound financial advice.

Looking to grow his brokerage business, he decides to locate offices closer to potential customers west of New York's Hudson River.

Summarizing Merrill's core idea, he took Wall Street to Main Street.

And did so by looking for external opportunities in an expanding country in the early part of the 20th century. A lesson here is that change is what you choose to make of it. What seemed hidden to others in the financial industry, a rising USA middle class, became obvious to Merrill.

His death in 1956 prompted a tribute in the New York Times concerning his "provocative ideas about how to interest the little and often Wall Street-shy man in acquiring a stake in his country's economy. Mr. Merrill was a frequent and firm spokesman for the importance of a free capital market in this nation of free enterprise."

After nearly going out of business during the recent "great recession," Merrill Lynch is now the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage.

In the late 1990's André Briend, a French pediatric nutritionist, walks into the kitchen of his home one morning where the children are eating breakfast. On the table is a jar of the chocolate spread, Nutella.

For some time Briend and an host of others had been looking for practical solutions to the problem of malnutrition, especially in Sub-Saharan Africa.

Milk spoils. Water is often contaminated. A mother leaving her children to find food in other villages poses safety problems for those left behind.

What to do?

For Briend, the answer to these challenges could be in the Nutella sitting on the table, in plain view. From this "aha" moment, watching his kids eat breakfast, would come a product with a funny name, Plumpy’nut.

Plumpy’nut consists of a peanut-based paste, with sugar, vegetable fat and skimmed milk powder, enriched with vitamins and minerals. It is available in 92g foil wrappers which provide 500 calories. The product can be used for up to 24 months after the date of manufacture without refrigeration.

As a ready-to-use food, Plumpy’nut requires no preparation, no dilution in water prior to use, no cooking, and it can be consumed direct from the wrapper. A daily dose cost $1 and is manufactured in several African countries including Niger, Mozambique and Malawi. It is also being produced in Rhode Island under the name, Edesia Global Nutrition Solutions.

From the manufacturer, Nutriset, we learn that the product can be used at home without any preparation, under the supervision of the mother or another member of the family. Plumpy’nut makes it possible to treat the majority of children suffering from severe acute malnutrition without them needing to be hospitalized. More malnourished children can be treated with regularity thereby improving the recovery rate.

In 2005 Doctors Without Borders distributed Plumpy’nut to 60,000 children with severe acute malnutrition during famine in Niger. Ninety-percent completely recovered and only 3 percent died. Unfortunately, according to the United Nations, the product reaches only 10 to 15 percent of those who need it due to logistics and budgets.

Where are you looking for opportunities? Customers? Non-customers? Business networks? Your employees? Are you giving time to new ideas? Or improving current operations? Where could you do good and do well at the same time?

Perhaps the next profitable idea is just over the river or hidden in plain view.

(C) Bredholt & Co., Inc. All rights reserved.

Missing Pieces

2011-04-20T14:48:00.007-04:00

Is it possible that business has fewer of the right kind of leaders today than it did nearly 20 years ago? I am referring to those individuals who exhibit a good balance of experience, personal depth, emotional strength and administrative discipline.

If this may be true, why?

One reason could be too much focus on technique and not enough on the deliberate practice of the discipline that leadership really is. Being a leader is meaningful but hard work no matter the situation or size of the organization.

When is the last time you attended a conference on working hard?

Another possible answer to our original question lies in the failure of leaders to learn from their experiences. Someone once said that those who are not open to counsel can’t be helped. Often good development programs are offset when individual responsibility to keep learning disappears.

The person most responsible for development is the leader, not the educator or trainer.

Is there hope for this situation?

Are there other things needing attention when it comes to chiseling one’s character traits as a leader? What’s missing that often undermines well-intended people?

The first missing piece tends to be…

• Credibility

It’s difficult if not impossible for people to follow someone they don’t believe in.

You have to offer reasonable grounds for being believed if you are in your first major assignment or a seasoned executive. Relationships are built on trust. Call it authenticity or transparency if you like. But substance is a must.

Are people sometimes misled by their leaders?

Too often this is a reality. Yet as someone once famously said, “you can’t fool all of the people all of the time.” Weakness in character comes out at some point. This type of behavior can do a great deal of damage until it’s discovered and the person either gets helped or is removed.

Maybe a coach is what you need. Timely interventions by trusted individuals may be more important than formal reviews separated by long intervals. Few, however, change their behavior with coaching alone. It takes feedback, self discipline and practice with colleagues to put changes in place. Even then it is an uphill climb.

One way to understand credibility is to think about what impresses you in a leader. Matching words with deeds is very important no matter where on the planet you happen to be. Why does this type of behavior stand out? Because so few engage in it.

Measure your words. Promise less. Deliver more

The second missing piece is…

• Communication

I am referring here to interpersonal or social communication, not necessarily oratory or elocution. Most of a leader’s communication is one-on-one or small groups. Businesses are social systems. An overlooked tool is conversation.

The writer, Alan Barker, put it this way:

“Conversation is your primary management tool. It’s how you build relationships with colleagues and others. It's how you come to understand what people think and how they feel. Conversation is the way you influence others and are influenced by them. It’s how you solve problems, cooperate with others and create new opportunities.”

This is good advice.

Two-thirds of any conversation is listening and listening is hard work.

Why?

While someone else is talking we often keep our brain in gear waiting for just the right time to speak again. By doing this we hear little the other person has to say. Many gain leadership positions in spite of being poor listeners. How this happens is a mystery. When is the last time you really paid attention to staff? Customers? Board members?

Is two-way communication a missing piece? Then practice the habit of asking good questions. Find out what interests the other person. It’s one thing to know about your people. It’s another to know your people. Understanding this difference improves and strengthens relationships.

The final missing piece is…

• Cooperation

The buzzword is "collaboration" but colleagues value someone who is simply "cooperative" in attitude and behavior.

There are things you can do on your own such as sharpen a pencil or take out the trash. If you want to move a grand piano on a stage Steinway recommends at least one person be assigned to each leg with rollers.

If you are trying to build a great company it’s going to take enough of the right people laboring together to achieve common goals. Even though succeeding generations appear to have a collaborative ethos this does not remove the need for someone to lead, direct and follow-up. It does, however, change the look of the organization from leadership at the top to leadership throughout.

Are you comfortable with an organization filled with strong and gifted leaders?

While the task determines the form of collaboration here is a practical way to begin. Start by asking people what you can do to help them. Learn to cooperate with others, first. Then see if there is a difference when asking for their help in getting something done on your list.

It takes practice and discipline but these missing pieces, and others you might identify, can be placed in your life and work.

There’s hope after all.

(C) 2011 Bredholt & Co. Inc. All rights reserved.

Leadership Agenda: Best Buy Co.

2011-04-15T13:20:00.009-04:00

It seemed liked the best of all worlds for Best Buy stores. There was good news in a slow economy. Circuit City, its chief competitor, was going out of business. The conditions were right for Best Buy to continue expanding, now with its major competitor gone from the scene.

However, if something seems too good to be true, it probably is.

While the competitive retail landscape was changing so was the consumer and their options for purchasing electronics equipment. Households have increasing confidence to purchase big ticket items from their computer screens, I Pads and smart phones.

What happened?

The Internet remains a potentially destructive force for nearly all companies, even those with a strong physical presence. Note the closing of 200 Border's Book Stores. Amazon.com Inc. is getting stronger by offering an increasing number of products while collecting limited sales tax.

Its shipping options are also more attractive.

What was a plus yesterday (large stores nearby) now appears to be a liability (overhead).

It was announced recently that Best Buy will "shrink" its "big-box" strategy.

What will the new design look like? Here is CEO Brian Dunn's revised leadership agenda:

Position Best Buy to aggressively compete against Amazon.com
Rapidly escalate opening smaller stores focusing on smart phones (having 600 to 800 Best Buy Mobile stores in five years)
Close some existing stores thereby reducing square footage costs
Negotiate smaller leases with landlords
Lobby for change in U.S. tax laws forcing online retailers to collect sales taxes

Leadership Agenda: Estée Lauder Companies

2011-04-05T14:50:00.015-04:00

Here is a look at the "leadership agenda" for Fabrizio Freda, President and Chief Executive Officer, The Estée Lauder Companies, a position he assumed on July 1, 2009.

In this role he is responsible for developing and achieving the Company’s overall vision, strategy, financial objectives and investment priorities. Mr. Freda is a member of the Company’s Board of Directors.

The company website says that "Mr. Freda was a key architect of the Company’s long-term strategic plan, which is focused on gaining market share in the global prestige beauty industry and generating sustainable, profitable growth."

Mr. Freda's Leadership Agenda:

Prioritizing resources to the most promising opportunities
Making further investments in consumer knowledge
Driving innovation and creativity through products and services
Expanding the Company’s distribution and geographic penetration
Greater integration across the Company’s brands, regions and functions to create cost efficiencies and leverage scale

Learning to Say "No"

2011-03-08T21:27:00.016-05:00

A note recently came from a friend who is taking on a new assignment. He asked for any advice we might have to help him get off to a good start. Our standard response to this type of inquiry is generally three-fold:

Understand the limitations of the job
Take time to listen
Learn to say "no" most of the time

We were reminded of this last point about saying "no" while reading the 2010 letter to Berkshire Hathaway shareholders from its Chairman and CEO, Warren Buffett. (Mr. Buffett is one of those rare individuals whose persona is greater than any title).

People often think of successful leaders as those who are capable of doing almost anything.  But this is where the publicity gets in the way of reality. In fact, those at the top who achieve something significant in corporate life get there by deciding what their companies will not do.

Early in my management career I learned the hard way that not every opportunity is strategic. I went after things that were not always a good fit for the goals and culture of the businesses in my portfolio. Saying "yes" too often became counter-productive.

Is there a right sequence for good decisions?   If so, where do you start?

It begins with a leader being in touch with themselves, first. Having a sense of purpose and values; being realistic about the situation they face; avoiding any form of self-deception which is the greatest deception of all. This is a person who is best described as a realistic optimist.

Only after this centeredness is in place can a leader take on the unending demands of an organization (large or small) and pursue the right opportunities--especially those having to do with getting the right people in the right place at the right time.

This describes the brilliant, but imperfect allocator of capital, affectionately known as the "Oracle of Omaha."

After finishing "The Snowball," Buffett's authorized biography by Alice Schroeder, I was struck by the fact that Berkshire Hathaway, and its portfolio of diverse investments, is a reflection of how Mr. Buffett sees the world--not just a value investment philosophy taught by Benjamin Graham, one of his professors at Columbia University.

In the shareholder letter Mr. Buffett writes that he has "reloaded his elephant gun" with some of the $38 billion in cash and cash equivalents (he prefers keeping at least $20 billion on hand just in case) and is "itchy" to make some big game acquisitions.

Based on what business criteria?

Big industrial businesses with near monopoly positions and solid sales growth
At least $75 million in pre-tax income
Market values of about $5 billion to $20 billion

Following Buffett in the press or from the scores of lengthy articles and books written about him will lead you to one conclusion: This three-point filtering mechanism emanates not from a computer or calculator but from his extensive experience with people and business.

Buffett places a premium on owning businesses where he has a high level of comfort or understanding. This helps explain why "technology" is not on Berkshire Hathaway's short list of possible acquisitions.

Stating the obvious:

The criteria for future investments listed in the current shareholder letter leaves out more than it lets in.

In the 2009 shareholder letter, Mr. Buffett wrote about Berkshire Hathaway's philosophy for making decisions and investments. This is what he and Charlie Munger, his long-time business partner, try to live by. It came under the heading, "What We Don't Do:"

Long ago, Charlie laid out his strongest ambition: “All I want to know is where I’m going to die, so I’ll never go there.” That bit of wisdom was inspired by Jacobi, the great Prussian mathematician, who counseled “Invert, always invert” as an aid to solving difficult problems.

Here are a few examples of how we apply Charlie’s thinking at Berkshire...

• Charlie and I avoid businesses whose futures we can’t evaluate, no matter how exciting their products may be.

• We will never become dependent on the kindness of strangers. Too-big-to-fail is not a fallback position at Berkshire.

• We tend to let our many subsidiaries operate on their own, without our supervising and monitoring them to any degree.

• We make no attempt to woo Wall Street. Investors who buy and sell based upon media or analyst commentary are not for us.

This pattern of knowing what to exclude is a key factor in Mr. Buffett's long-term success.

Do you have a list of things the organization won't do? Are they written down? Do others know what they are?

Learning to say "no" most of the time is an overlooked practice of high achieving individuals. It's a behavior worth considering if success is a personal and corporate goal.

(C) 2011 Bredholt & Co. All rights reserved.

Getting a Good Fit

2011-02-19T11:14:00.004-05:00

It was announced recently that Time Warner Inc. had forced out Jack Griffin, chief executive of the media company's Time Inc. publishing unit after less than six months on the job. This according to an article in the Wall Street Journal.

The main reason for this separation coming from inside the company seems to be a lack of "fit" between Mr. Griffin and Time. So Jeff Bewkes, CEO of the parent company, decided to cut his losses and let Mr. Griffin go.

One of the more important things not on any resume' is "chemistry." This partially explains why companies, even those who take their time in succession, often fail to ask the right questions. Will this person fit culturally? Organizationally? Alongside current management? With the board? With our customers?

Is there such a thing as a perfect fit? Once in a great while. Most of the time a more realistic succession goal is a close fit.

Sometimes the situation requires an incoming leader to be different than the current culture, especially in a turnaround situation. I often think of Lou Gerstner going to IBM in the 1990s in the midst of that crisis. He was a one-man "counter-culture."

With the help of a lot of people in the company, Mr. Gerstner led one of the great recoveries in the history of business. The inside story is told with clarity in his book, "Who Says Elephants Can't Dance?" http://www.amazon.com/

From press reports, it sounds as though Mr. Griffin had a mixed bag of things going against him:

He succeeds a long-time executive, Ann Moore, who was there more than 30 years.
His behavior is described as "imperious."
Early meetings were called, some starting at 7:30 a.m.
There was a clash of personalities and styles.
An over-reliance on outside consultants.
A refashioning of sales and marketing to reflect his former company, Meredith Corp.

We look forward to hearing his side of the story, and there are always two sides.

Short-tenures often follow long ones like Ms. Moore. Why?  It is primarily due to a period of transition. Businesses need to work their way through the process of changing leaders. The price for this transition is often paid by the person willing to take on an assignment of this kind. That is why "interims" are appropriate in certain circumstances.

Some of the blame for Mr. Griffin not working out belongs to Time Warner.   What were the expectations? How thorough was the vetting process?   Who signed off on the hire?

The biggest predictor of future behavior is frequent past behavior--so an "imperious" nature should not have been a surprise.

This termination shows how even big corporations with all the right HR resources can come up short.

The take-away is how quickly Time Warner moved to correct the mistake--six months.  Failing to deal directly with problem executives is the number one reason for CEO failure according to best-selling author and consultant, Ram Charan. Mr. Bewkes, the CEO of Time Warner, decided Mr. Griffin was not a good fit, decided not to provide coaching, and acted promptly to change course.

What is the application for your organization?

(C) Bredholt & Co., Inc. All rights reserved.

What Strategy Is

2011-02-09T20:40:00.008-05:00

"...If you are not genuinely pained by the risk involved in your strategic choices, it's not much of a strategy." --Reed Hastings, CEO, Netflix

Strategy is about making choices.

The above quote from Reed Hastings puts an important qualifier on what it requires when it comes time to making strategic decisions inside your organization--you have to feel some "pain" in the process.

If there is little or no pain then maybe the choices being made are not all that strategic.

Two individuals who helped my thinking about this subject over the years are Ram Charan and Michel Robert. Both narrowed strategy down to choices or building blocks--what to be, whom to serve, what to offer, etc. Often led by something that becomes a driving force (customer service), but is complemented by other things (quality products and distribution).

The decision by Apple to focus on design and technology.   Southwest Airlines choosing to fly one type of aircraft--the B 737 (although this is likely to change with the acquisition of Air Tran Airways). McDonalds saying "no" to pizza.  The company buying Donatos Pizza in 1999 and selling it back to the founders in 2003.

So what else is strategy?

It is about choices plus a mixture of other things. It’s a term that, as someone noted, “weaves a complex web of ideas, insights, experiences, goals, expertise, memories, perceptions and expectations all of which provide general guidance to specific actions in pursuit of particular ends.”

An easy way to remember this concept is to think of strategy as what the organization wants to be—a picture of how the organization could look at some point in the future. Therefore communication plays a central role in this process.

Strategy includes the framework (criteria) for making choices that determine the nature and direction of the organization.

The pre-condition of formulating strategy is a clear and widespread understanding of the ends to be obtained. No amount of strategizing or planning compensates for the absence of a clear and widespread understanding of the ends sought. When in doubt, think “results.”

The risk of not being clear includes missed opportunities, fragmented and wasted effort and working at cross purposes.

How an organization gets to where it wants to go is integral to the process. More time should be spent on implementation than in strategy formulation. Strategy is successful execution.

There also needs to be congruence between corporate strategy and the strategies of others within the organization. Congruence does not mean that business units are pre-empted from having their own strategy.   A large organization is too complex, too diversified to be a monolith.

While others within the organization require their own strategies these must complement one another and be supportive of the corporate strategy.

I read once that staffs tend to be the "wild card." Without direction and accountability they can go off on their own direction—and will without clear expectations.   Without this congruence among staff, resources are often misaligned and results postponed or lessened.

The highest arc of strategy belongs to the CEO. Everything flows from this position.

The most overlooked aspects of strategy are people and the allocation of financial resources. Get the right people first and they will identify the right strategy and hopefully make it a reality. The wrong people aren’t likely to do either very well.

Do you feel any pain in the choices being made?

(C) Bredholt & Co. All rights reserved.

Business Person of the Year

2010-12-31T13:35:00.001-05:00

Our vote for "Business Person of the Year" goes to Lola Gonzalez of Ocala, Florida. Ms. Gonzalez owns and operates Accurate Background Check, an employee screening firm.  I first learned about her story while reading the business section of USA Today several weeks ago.

Facing tough times, and not wanting to lay off any of eight employees, Gonzalez laid off herself.  She took a job as a community facilitator and mitigation specialist. Gonzalez researches the background of clients facing the death penalty to find circumstances that might cause a judge to be lenient. This according to Florida Trend magazine who named her a Florida Newsmaker of the Year.

USA Today reported in November 2010 that Ms. Gonzalez stopped taking a six-figure salary and got a job as a social worker at less than half the pay.

While business is picking up at Accurate Background Check, Gonzalez has no plans to return to work there until the economy is on more solid footing, perhaps in a year, she says.

Her generosity also showed up at Christmas time with employees receiving bonuses.

Undoubtedly there are other owners or principals who have reduced their income or stopped paying themselves altogether during this great recession.    They are to be commended for doing whatever it takes to save jobs.

Lola Gonzalez took sacrifice to another level and should be recognized as "Business Person of 2010."

(C) 2010 All rights reserved.

Thank You

2010-12-23T17:15:00.012-05:00

Years ago we were watching the Tonight Show with the late Johnny Carson. His sidekick, Ed McMahon, who passed away in 2009, made a comment that was likely offhanded but stuck with me throughout the years. "Take care of the people who take care of you."

McMahon, who fell on tough times in his later years, was saying to Carson that it's important to remember people throughout the year but especially at Christmas. These are the individuals who make life possible. From those who deliver our newspaper in the early hours of the day (we still get the paper each morning) to the mechanics who keep the car running well. To doctors and nurses. To those who repair the A/C and fix the roof. Some you know well. They are part of the family. Others are anonymous. All prove invaluable.

Make a list and see just how many individuals make life possible in a 12 month period. If you are a frequent traveler this might include housekeepers, front desk and bell staff.

In better times McMahon was able to do more than in later years. But his point made long ago on a late-night television program is well-taken. It's hard to make it through a single year, let alone a lifetime, without help from countless others who move in and out of our lives--at just the right time.

I heard this while in college and it took some time for the idea to settle in my own heart and mind.

Finally, I decided an intentional expression of gratitude should be part of the holiday celebrations. To this end I changed my Christmas card list from a perfunctory tradition to a communication of "thanksgiving."

I want to convey appreciation during the year, but especially now.

Thanks for reading our posts.

Merry Christmas!

(C) 2010 Bredholt & Co. Inc.

Succession--A Strategic Decision

2010-04-30T09:43:00.004-04:00

The selection of an organization’s chief executive officer, or CEO, is the most important decision a board makes. Boards carry the ultimate responsibility when it comes to deciding who will serve in this vital role. They need to make sure the CEO and leader will be one in the same.

Beyond the CEO

What is leadership succession?

Succession planning or management is an on-going process that boards, with the help of their chief executives, can use to create an environment for leaders to succeed from the very beginning of their terms until the cycle is repeated with their successors. (BoardSource)

While the board cannot run the process, it can make sure it’s in motion.

The need is for a wider focus than succession at the top. It’s getting the right person in the right place at the right time throughout the organization. Succession is a continuous process—a journey, not a destination.

Planning for the future requires an on-going effort to nurture those who show potential for increased responsibility. The board can ask periodically if this is being done and what are the results.

Succession is strategy. The two are inextricably linked with the organization’s long-term goals and objectives.

Avoiding a Bad Start

According to our studies the four biggest mistakes or misjudgments made by boards in the CEO search process are:

1. Not being ready with a good plan so the search gets a timely start.

2. Not clarifying what kind of leader the organization needs for the next 8 to 10 years.

3. Not understanding the strengths, abilities, personality, leadership style, etc., of the top two or three candidates. This is essential in order for the board to project how this person would fit the culture of the organization and its various constituencies.

4. Not letting go of any operational duties picked up during the transition once the new CEO is in place.

Board Options

Boards have at least two options in the search process:

Option No. 1

Conduct the search from within the board using the policies and procedures in place for this purpose. A “search committee” is the most frequently used term to oversee this work.

The board is responsible for:

1. Communicating to the search committee all input positive or adverse.
2. Considering cultural nuances which influence the selection process of the CEO.

Option No. 2

Retain the services of an executive recruiter or consultant who specializes in this type of search. Even if this option is chosen, the board must retain final say over the process.

For those who wish to engage an executive recruiter, there are several things to keep in mind:

• There is a need for an effective working relationship with the consultant.

• Search is a consulting engagement and not just a recruiting activity.

• Executive search may or may not result in the hiring of a CEO. It’s misleading for anyone to guarantee that a position will be filled as the inevitable conclusion of a search assignment.

• The search is to help the candidates and organization discover whether there is a potential fit between their capability and the need at this time.

Nature of the Leader

What is the key to a successful search?

Finding the one individual who stands out from the rest—whose unique skills make this person central to the organization’s success.

While lists are never long, there may be several qualified persons for the position. However, the goal is to match qualifications with cultural fit. Even in turnaround situations. A record of accomplishment, style and adaptability are all very important. But the real question is what can a candidate immediately contribute?

Things to keep in mind…

• Identification of duties

• Responsibilities

• Qualifications

• Cultural nuances including fit

What’s so important about a person’s fit? A close match with the organization is essential for legitimizing the selection process and internal working relationships.

• Do the candidates have the right kind of experiences?

• Will they live the purpose and mission?

• If a turnaround is needed will the candidates have the emotional strength and discernment for this strenuous task?

• Is there likely to be good chemistry with co-workers? The board? Customers?

Lacking criteria by which to make a decision could lead to almost anyone who strikes the board’s interest being chosen. From a distance nearly any individual can look good. Someone who makes a strong impression can be a terrible choice. Appearance, talent and performance are not the same things.

As studies show, human behavior is highly repetitive.

It’s worth noting that frequent past behavior is the best predictor of future behavior.

The way someone has acted, their past results, emotional responses—all these behaviors will repeat themselves in the new assignment. Leopards don’t change their spots and neither do individuals once they are in a place of authority and responsibility.

In some cases a delay in deciding on a new leader is better than a decision made in haste —even if imposing temporary hardships on the organization. This is why interims are an option for a board.

Final Thought

You don’t just hire a CEO; the organization gets a philosophy of life and world view. These don’t always show up on paper. This personal dimension may not come up in the interviews either unless you are intentional with the questions.

It’s worth taking time to know who the candidates are, not just what they have done in their previous assignments.

Are the individuals the board is considering capable of learning, growing and changing? How they continue developing as individuals, not just executives, weighs heavily on their likelihood for future success. Better to think about this before the final decision rather than after the fact.

(C) 2010 All rights reserved.

Creating the Future--Even in Difficult Times Part 4

2010-04-10T14:23:00.005-04:00

Execution More than Vision

“Everything depends on execution, having just a vision is no solution.” (Stephen Sondheim) Not that vision is unimportant. A sense of direction and a direction that makes sense is foundational, but incomplete.

Too much attention on vision is like spending most of your time on the driving range while neglecting to practice chipping and putting, which is how you lower your golf score. (Harvey Penick)

Execution is people, strategy and operations.

“Execution is the missing link between aspirations and result.” (Larry Bossidy and Ram Charan)

Summary

1. Creating the future is about pursuing the right opportunities which often emerge in times of great change. (“Buy or lease a new car and, if in the next 12 months you lose your job, we will take the car back.”—Hyundai Motors)

2. The importance of managing oneself—having a sense of urgency and a non-anxious presence at the same time. (Captain “Sully” Sullenberger, US Airways Flight 1549 landing on the Hudson River offshore in New York.)

3. Focus on how to solve problems—not how intractable the problems are. (Apollo 13 moon mission.)

4. If you don’t learn to make decisions, time will make them for you. (JPMorgan Chase going into the recession having slashed costs, investing heavily in technology and core businesses—buying Bear Stearns for the bargain price of $10 per share.)

(C) 2010 All rights reserved.

Creating the Future--Even in Difficult Times Part 3

2010-03-29T08:46:00.004-04:00

Where is “Normal?”

History is a reminder that periodically cultures, economies and governments, for different reasons, cross a threshold. Once there they don’t go back. Is this one of those times?

Current examples of restructuring:

• Financial services
• Real estate and construction
• Retail
• Legal profession
• Transportation
• Media and Publishing
• Healthcare
• Jobs (Is 5% unemployment an old idea?)
• The role of government in our lives

Learning to Ask the Right Questions

Here are 6 questions to get you started:

• What is your business?

• What is it you can’t afford to lose? (The core)

• What are you doing that needs to continue?

• What are you doing that needs abandoning?

• What are you not doing that needs initiating?

• How do you make a profit?

(C) 2010 All rights reserved.

Creating the Future--Even in Difficult Times Part 2

2010-03-13T06:34:00.003-05:00

"Assessing—Not Predicting"

Creating the future is no longer based on probability.

Old: What is most likely to happen?

New: What has already happened to create the future? What are the facts as we know them to be? What do they mean to our business? What opportunities are created that match up well with us? (Peter Drucker)

Predicting is a difficult undertaking. We still don’t have flying cars, orbiting space cities or endless time. People and social phenomena make it hard to predict. Status quo is slower to change than most realize.

“If you predict for a living, you have to predict often.” (Neils Bohr, the late Danish physicist)

How to assess? By asking good questions.

• Looking externally at current and prospective customers

• Looking at the edges where change often occurs, first

• Looking internally to operations

Some examples of a changing landscape:

• Jobs (how people work and earn a living)

• Frugality linked with value—even among higher income households (consumer is 70% of the economy)

• Smaller—not larger businesses

(C) 2010 All rights reserved.

Creating the Future--Even in Difficult Times Part 1

2010-03-01T11:24:00.005-05:00

This is the first in a series of posts on the global economic situation from a workshop presented in 2009.

How would you describe the past 24 months? A 100-year phenomenon? A “black swan?” “A Great Recession?”

“It was a year when the unpredictable turned into the unimaginable.” (Larry Fink, CEO of Black Rock Investments)

How could so many have misread this financial crisis? What else did we know back then?

What are we missing now?

The way we see things determines our attitude and behavior. We are at all times creating the future whether we realize it or not.

Sometimes success blinds us to new realities—this can be a dangerous thing. Regardless of the circumstances facing us, we can and do have a say in shaping and influencing our future. We need to know the things over which we have some control—work there. What are those things?

“No new idea springs full blown from a void. New ideas emerge from a set of conditions in which the old ideas no longer seem to work.” (Machine that Changed the World)

“Ideas are not created, they escape.” (Lou Gerstner, former CEO of IBM)

In a practical way, how do we go about creating our future?

-Assessing—not predicting
-Finding the new “normal” for your organizattion
-Asking the right questions
-Executing more than envisioning

More in the next post.

Leadership Agenda Now Online

2009-10-18T17:21:00.004-04:00

Our leadership agenda for business and nonprofits is now available at http://www.strategist.com/. Download and begin setting the agenda for your organization.

Setting the Agenda

2009-09-05T19:41:00.009-04:00

In their book, "You’re in Charge—Now What?," Thomas Neff and James Citrin recount the time A. G. Lafley, now the former CEO of Proctor & Gamble, took over following the forced departure of his predecessor, Durk Jager.

Within days of taking the job Lafley announced his priorities. Instead of a radical makeover, he concluded initially that P & G needed to do better what it already did well. “The message was shocking in its simplicity. Everyone down the chain of command could understand it,” Neff and Citrin note.

Mr. Lafley’s priorities for P & G became the first installment of his leadership agenda. Innovation was added later.

Does the new president and CEO of General Motors, Fritz Henderson, have an agenda?

Rick Wagoner, the former Chairman and CEO created a few clear and easily understood performance targets. Wagoner laid out his agenda for North America at GM’s annual meeting some time ago. His four goals were simple and direct:

-Build great cars and trucks
-Revitalize sales and marketing
-Cut costs
-Fix health care

This was in addition to the continual restructuring at GM.

Misplaced bets on SUVs and large trucks, a global economic crisis and government intervention, however, cost Mr. Wagoner his job. This was evidently part of the price for seeking a federal bailout needed to cover huge operating costs until sales turn around.

Although some progress had been made toward these goals, what was missing in the Wagoner agenda was a greater sense of urgency. This is an important lesson for any leader facing a crisis situation.

Henderson’s agenda is to a large extent the making of others.

With GM now in bankruptcy, the new government-appointed CEO must quickly deal with:

-Returning to profitability—selling products consumers want and are willing to pay for

-Managing the political and financial tension of building smaller “green” vehicles with the demand for large (and more profitable) cars, SUVs and trucks

-Continue working with the White House Auto Task Force (cash infusions)

-Getting along with new GM board chairman, Ed Whitacre

-Building confidence in his own leadership abilities

Another vital lesson from GM’s experience: If you don’t learn to make decisions, time will make them for you.

There’s a new agenda at Starbucks. “Back to the bean,” says CEO, Howard Schultz. Mr. Schultz’s agenda, in the midst of a huge fall-off in sales due to the economy and rapidly changing consumer behavior, includes:

-Reasserting Starbucks’ position as the world’s coffee authority
-Reigniting the emotional attachment with customers
-Carving out new areas for growth
-Closing nearly 800 stores—while opening 200 more

Will this be enough to turn around Starbucks? There are some early signs of progress.

What’s an “agenda?” And how does it help leaders accomplish their goals?

A leader's agenda is a personal plan for guiding the organization. It's not a business plan in the traditional sense. An agenda is a set of themes and priorities requiring action and progress in a given period of time. The agenda includes the main message and identifies critical issues needing attention. (Briefing for Leaders Harper Business)

“It’s not a plan or a strategy,” says Jeff Immelt, Chairman and CEO of General Electric. “It’s what you stand for, what you’re focusing on.”

What are the benefits of a leadership agenda (which also apply to nonprofits)?

1. It clarifies the main message. There was no question in the minds of those at P & G what was important to A. G. Lafley—at least initially they were going to find ways to sell more Tide.

2. It provides focus. For GM it comes down to this: Everyone needs to make sure their attention and behavior are focused on the goals determined to be crucial to GM’s future.

One criticism against Carly Fiorina, the former CEO of Hewlett-
Packard, was the globe-hopping and time spent on a long list of issues. The late Peter Drucker observed that effective CEOs pick two tasks and devote their energies there. When those tasks are done they don’t go to #3. They make a new list.

While multi-tasking for executives is a reality, the discipline to focus on a few things is an antidote to “corporate attention deficit disorder.”

3. It’s a filter for allocating scarce resources. Human. Financial. Time. Communication.

4. It improves organizational health. An agenda designed for action and results creates clarity and a positive climate. If people know what’s going on in the CEO’s mind they know where to place their energies. There’s no substitute for a sense of direction and a direction that makes sense.

5. Provides accountability for results. First, for the CEO. Then for everyone else. Call it follow-up, implementation or execution. It’s all the same thing. Getting the right things done.

What does an agenda look like?

A more developed but concise leadership agenda contains the following:

· The preferred future and core idea of the business. It lists the building blocks of that strategy with the concept of the business at the center.

· The main message of leadership. What needs to be said by the leader to the employees? The stakeholders? The investment community? What is the dominant message that should cascade over all these constituencies?

· The top priorities—with a clear no. 1. What should get your attention? A. G. Lafley offered a few priorities—inside a clear and simple theme. It allowed his people to move ahead with purpose.

· The critical issues needing attention. Critical issues are barriers to achieving the goals. Sometimes they are within your influence. Other times they are not—like the weather. They can be financial (as in recession), human resources, competition or government regulations.

It’s essential to have a common understanding of the issues, who is responsible for each, and how to deal with them in a timely manner.

· Operational issues. What, if anything needs changing or reorienting to support your direction? What should be abandoned? What groups need improved communication in the coming months? What rises to the top as the two or three things that must happen in the coming year?

Most people are not mind-readers. What’s inside your head needs to be made known repeatedly and in different venues among a wider audience. A leadership agenda is a simple and practical way to improve the communication process vital to your success and that of the business.