23 Jul 2013
Are you interested in selling your company? No? How about raising capital from an outside investor? No? That’s fine. But are you operating your business as if you were interested? If you aren’t, you should. Why?
First, things can change and change rapidly. You can’t say for certain that you will not need outside capital or that you – or your heirs – will not need or want to sell. Second, if you don’t operate as if you were in the market to raise capital or sell, you are at great risk of losing your customers. Because there are competitors, both ones known to you and unknown ones lurking in the shadow, that are operating their businesses as if they were in the market. And those competitors are likely offering – or about to offer – a better product at a better price.
How do you operate as if you were courting capital? You operate to maximize the value of your enterprise. And how do you do that? Make sure you have you have your 4 Elements, 3 Disciplines, 2 Glues, and 1 High-Impact Leader in place and firing on all cylinders. Click TCA_Library_Leadership_The Golden Formula for Building Enterprise Value for The Golden Formula for Building Enterprise Value.
19 Jun 2013
The one sustainable competitive advantage that is largely untapped in American business is teamwork. When executive groups function as a team, all kinds of good results occur. Morale of the team members improves, which leads to better morale cascading down through the organization, which leads to higher levels of performance and higher retention. Innovation, the Holy Grail of business today, is enhanced greatly by teamwork. Accountability, that ever-elusive objective that the overwhelming majority of businesses struggle with, becomes much easier because the team assumes the majority of the burden of enforcement. Communication is greatly enhanced. Finally, better results are achieved. Organizational goals, which by definition are collective in nature, are far more easily achieved when pursued by collective team efforts. More revenue, higher margins, more profit, higher enterprise value, happier employees, and lower turnover.
Why, then, is executive team building not pursued by more companies. First, it’s hard to measure. Second, it’s hard to achieve. It can’t be bought. It has to be earned through courage, discipline, and emotional investment.
But the power of teamwork is indisputable. When people set aside their own individual needs for the collective good, they can accomplish what seemed impossible, and all other things in less time and at a lower cost.
Team building, though, must be done in context. The Chicago Bulls in their heyday did not learn teamwork in an executive board room. They learned it in the context of where they had to succeed – the basketball court. Similarly, executive teams can’t learn effective team work hanging from ropes or playing softball. They have to learn it in the context of their arena – the executive offices.
Our firm offers an extraordinarily powerful team building program for executive teams. It culminates in a day-and-a-half workshop where the team comes together and learns about the structure of, and begins to establish, powerful teamwork that operates very quickly to bring about a lasting competitive advantage. Give us a call at (800) 689-7941 to learn more about our program.
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!
02 Apr 2013
Bruce W. Tuckman is a respected educational psychologist who, in a 1965 paper, first described the four stages of group development in 1965. While looking at the behavior of small groups in a variety of environments, he recognized the distinct phases they go through. He also suggested that they need to experience all four stages before they achieve maximum effectiveness. He refined and developed the model in 1977 with the addition of a fifth stage. We have found this very insightful in our leadership and executive team building work.
His five stages are as follows:
Forming. Team members meet, get to know each other, learn about the opportunity and challenges, and then agree on goals and begin to tackle the tasks. They tend to behave quite independently. They may be motivated but are usually relatively uninformed of the issues and objectives of the team. Team members are usually on their best behavior but very focused on themselves. Mature team members begin to model appropriate behavior even at this early phase. Team leaders tend to need to be directive at this stage.
Storming. In this stage, different ideas compete for consideration. Team members address issues such as what problems they are really supposed to solve, how they will function independently and together, and what leadership model they will accept. They open up to each other and confront each other’s ideas and perspectives. In some cases, the team moves through this stage quickly. In others, the team never leaves this stage. The maturity of some team members usually determines whether the team will ever move out of this stage. Immature team members will begin acting out to demonstrate how much they know and convince others that their ideas are correct. Some team members will focus on minutiae to evade real issues. Team leaders are still somewhat directive, but tending toward supportive in this stage.
Norming. Team members adjust their behavior to each other as they develop work habits that make teamwork seem more natural and fluid. Team members often work through this stage by agreeing on rules, values, professional behavior, shared methods, working tools, and even taboos. During this phase, team members begin to trust each other. Motivation increases as the team gets more acquainted with the project. Teams in this phase may lose their creativity if the norming behaviors become too strong and begin to stifle healthy dissent and the team begins to exhibit “group think.” Team leaders tend to be participative.
Performing. Not all teams reach this stage, but when they do they are high performing, able to function as a unit as they find ways to get the job done smoothly and effectively without inappropriate conflict or the need for external supervision. Team members have become interdependent. By this time they are trusting of each other, motivated, and knowledgeable. The team members are now competent, autonomous, and able to handle the decision-making process without supervision. Dissent is expected and allowed as long as it is channeled through means acceptable to the team. Team leaders are almost always participative.
Adjourning. The team completes the task, or doesn’t, and breaks up or reforms.
For a PDF of Tuckman’s Paper: Developmental Sequence in Small Groups
27 Mar 2013
Marshall Goldsmith, the legendary executive coach and leadership expert, talks about the leader who always has to add a little of his or her own ingenuity or twist to ideas generated by his or her direct reports. The problem is that while the leader may have improved the report’s idea by 5%, he or she has reduced the report’s commitment to executing it by 50% by stripping him or her of ownership of it. He calls it the “fallacy of added value” and it really rings true. I have seen this in operation many, many times…the leader who has to pee on an idea to make it his or her own, just like a dog would do in new territory, only to discover that his or her pee strips the original proprietor of any enthusiasm for playing in the new territory. Leaders, many times, more than you think, it is good to shut up and let your people gallop.
Those of you in leadership, heed this: It says here that ideal results are achieved when your praise-to-criticism ratio is 5.6.
01 Mar 2013
One of my first objectives in writing my book, The Source of Leadership: Eight Drivers of the High-Impact Leader, was to distill down the hundreds of lists contained in hundreds of books describing the traits and functions of a successful leader. And I came up with eleven traits and eight functions that seem to encapsulate the hundreds of each that had been articulated in those myriad books. From there, I described the eight drivers – personal energies – that drive the ability to embody those traits and perform those functions. So, you’d think I would be sick of all those lists of leadership qualities. But I am a sucker for anything that enhances leadership and sometimes things are articulated in a way that hits a note with me. This list is one of them.
In 1997, the average annual CEO turnover was 5%, and the average CEO duration was about 9 years. In 2009, the average annual CEO turnover was 15%, and the average CEO duration was less than 5 years. That is an astounding trend! The primary reason is that as the cycle speeds of everything else – innovation, technology, globalization – have increased, the cycle of leadership has increased in corresponding fashion. Today, a CEO simply has to succeed quickly, or he or she will be replaced. Stakeholders cannot afford to wait. And if the CEO happens to be the primary stakeholder, he or she is not off the hook. While he or she may keep his or her job, the victory may be Pyrrhic in that his or her company will fail in the high velocity, highly complex competitive environment in which it operates.
I coach CEOs across the nation, across industries, and my advice for them is the following:
1. Continuously assess. Build systems for continual information flow from your employees and your customers so that you know precisely – at any given moment – your strengths, weaknesses, opportunities, and threats (“SWOTs)”.
2. Continuously plan. The value is not in the plan anymore, it’s in the planning process that ensures a leader and his or her organization are right on top of their SWOTs at any given moment.
3. Demand accountability. The only organization that survives today is one that (i) clearly articulates expectations down to the last person, (ii) demands that those expectations be met, (iii) accurately measures progress toward meeting those expectations, (iv) fairly rewards those that meet expectations, and (v) quickly addresses situations where an employee is not meeting expectations by, in order, coaching him or her into acceptable performance, transitioning him or her to a position where he or she can meet expectations, or humanely terminating him or her. (The lack of systems and tools to enable this have been lacking historically, but we are aware of at least one system that is phenomenal, and backed by Jack Welch himself.)
4. Manage talent flow intensively. The advice for being “slow to hire and fast to fire” has never been more prescient, but the absolute requirement of firing quickly means there must be much greater emphasis on building an incoming pool of high quality talent. Companies have to use every means possible (e.g., cutting edge culture, highly evolved benefits programs, search firms, social media) to make themselves a magnet for talent.
5. Get the executive team firing on all cylinders immediately. A well functioning executive team is the most powerful competitive advantage an organization can have in the face of a brutal external environment and, yet, it is the one that is most ignored. Don’t do it through non-contextual exercises like ropes courses or softball games, but through a focused, in-context effort. (The Chicago Bulls didn’t build teamwork in an executive board room; executive teams can’t be expected to build it on a basketball court.)
6. Get help. Virtually every successful company is investing in third-party help with executive coaching, strategic planning, strategic execution, executive team building, and talent management. While in generations past, a CEO might feel this this help means he or she is lacking as a leader, today the successful leaders know this is actually their means to success.