Archive

Home
2013
Archive for: April

Once you’ve been around business a little while, you learn that cash is everything.  Given that, revenue is critical.  Given that, the customers that send the revenue your way are critical.  They gotta love you, or your days are numbered.  In our executive advisory practice, we look at a lot of things related to the customer.  Here is a good start.  

Simply put, the most successful leaders have an open and candid dialogue – on a daily basis – with three critical constituents: their employees, their vendors, and their customers.  In my executive coaching  and leadership development practice, I am still blown away by how many leaders lack both a culture and systems of communicating with each of these three groups.  And then they are blown away when key employees leave or under-perform, key vendors disappoint, and key customers move on.  These groups are the heart of a leader’s business and he or she has to be taking their pulses daily.  No way around it.

As one who has run a number companies and engaged investment bankers to assist in raising capital, buying companies, selling companies, and strategic planning, and one who has also been an investment banker for many years of my career, I have a pretty strong opinion about what they should be delivering to their clients in exchange for the healthy fees they receive. Here it is: TCA_Library_Capital Markets_Client Bill of Rights 

The competency-based leadership model still employed by the largest companies simply doesn’t work.  Here is a fuller explanation.  Simply put, leadership success in today’s high velocity, highly complex environment today doesn’t turn on technical competency.  It turns on leadership talent and skills.

I love the simplicity of this summary of the 5 critical team members for business success: the leader, the expert, the financial guru, the strategist, and  the executer.  The best leadership is always about simplifying!

According to this, most serial entrepreneurs display persuasion, leadership, personal accountability, goal orientation, and interpersonal skills.  But, there are four distinct skills lacking in most serial entrepreneurs: empathy, planning and organizing, self-management, and analytical problem solving.  Given they are critical to success of an organization, it seems advisable for investors to keep an eye open for these leadership deficiencies and have a plan for filling them.

Those in leadership know it’s tough. So tough that only 5 of the 30 CEOs Barrons picked in 2008 as the world’s best showed up on a similar list in 2012.  And as I have shared before, in 1997, average annual turnover for CEOs was 5% and the average CEO duration at  one company was 9 years. By 2009, average annual turnover for was 15% and the average CEO duration at  one company was less than 5 years.  Here’s a chance for you to fight back against this trend.   

Check this out in Inc. magazine: Three Types of Leaders Who Never Succeed.  There are more types in leadership who never succeed, but this is a good start.

Analysts Ivy Zelman and John Burns have been analyzing the U.S. single-family housing market for decades, and they are among the best.  Click here for some excellent insights from them about why the housing market is not overheating.  

I just finished a highly counter-intuitive, tremendously inspiring book by Will Thorndike, a private equity veteran with Housatonic Partners, entitled The Outsiders.  I am telling all my executive coaching clients to read it ASAP.  Thorndike introduces us to eight individualistic CEOs whose firms’ average returns outperformed the S&P 500 by a factor of twenty—in other words, an investment of $10,000 with each of these CEOs, on average, would have been worth over $1.5 million twenty-five years later. You may not know all their names, but you will recognize their companies: General Cinema, Ralston Purina, The Washington Post Company, Berkshire Hathaway, General Dynamics, Capital Cities Broadcasting, TCI, and Teledyne. In The Outsiders, you’ll learn the leadership traits and methods—striking for their consistency and relentless rationality—that helped these unique leaders achieve such exceptional performance.  Humble, unassuming, and often frugal, these “outsiders” shunned Wall Street and the press, and shied away from the hottest new management trends. Instead, they shared specific traits that put them and the companies they led on winning trajectories: a laser-sharp focus on per share value as opposed to earnings or sales growth; an exceptional talent for allocating capital and human resources; and the belief that cash flow, not reported earnings, determines a company’s long-term value.  Drawing on years of research and experience, Thorndike tells eye-opening stories, extracting lessons and revealing a compelling alternative model for anyone interested in leading a company or investing in one—and reaping extraordinary returns.

 

Twitter: TraversiCapital

© 1999-2016. Traversi Capital Advisors, LLC.,