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.
In many ways, our business environment is no less a jungle than our general existence was 5,000 years ago. In the places of dangerous beasts, treacherous terrain, disease, and enemy tribes, we have highly competitive markets, rapidly changing economies, unethical business people, and torrential downpours of complex and confusing data. In each case, the result is uncertainty, confusion, trepidation, and great overall risk.
Technology and all its accoutrements, in particular, are a major cause of our new jungle environment. Technology is not a bad thing. In fact, I happen to believe it is a very good thing. It represents a meaningful part of the human potential. But we have to recognize all of its dimensions and deal with them. We have to recognize that all these technologies have conspired to overwhelm us with increasing amounts of increasingly complex data, downloaded at faster and faster rates. As a collective practice, business leadership has simply fallen behind the pace of everything else in the world that has been accelerated and complicated by technology. Often we are unable to distinguish useful from useless data. Even if we can, we don’t have time to understand what to do with the useful before it quickly becomes useless. We’re trying to “drink out of a fire hose.” As a result, fear, stress, resistance, lapses in integrity, inability to focus, lack of personal responsibility, absence of creativity, and most importantly, a lack of positive results are the hallmarks of business leadership today.
Just as it was in the jungle 5,000 years ago, every day presents myriad risks. As a leader of a tribe back then, in the absence of the right tools to manage those risks, you would have found yourself in constant crises. And that is where we are today in all sectors – government, political, corporate, religious, social, and even the family.
In the business world, which is where I work, just look – at the mild end of the spectrum – at the number of companies that under-perform and miss their earnings estimates. Their chief executives are not able to grasp what is really going on all around them. Many err in product development and release a product that is either defective or incompatible with what the consumer wants. Many miss what is happening in the competitive landscape and learn too late that a competitor has trumped them. Look at the complete mismanagement of risk that led to the subprime mortgage disaster. Looking at the more extreme end of the spectrum, CEOs are resorting to crime. We know all about Enron, Tyco, WorldCom, Adelphia, and the many scandals relating to the back-dating of stock options. Faced with this high velocity, highly complex world – this jungle – too many CEOs lack the right tools to manage in this environment and are failing – everything from just doing a poor job to committing crimes.
So, what’s the solution? Same one used in the jungle 5,000 years ago. It’s called intuition. Intuition is a powerful tool for acquiring knowledge without the process of rational thought. What is the source of this knowledge? Simply put, the universe. It is everything you have ever experienced or known. In fact, it is everything humankind has experienced or known. Carl Jung, the famous Swiss psychiatrist, conducted extensive studies and concluded that there is a “collective unconscious” that is common to every person. This collective unconscious is essentially a library of human experience into which any of us can tap at any time.
At some point in the millions of years of human evolution, the human brain developed a capacity for intuition. This capacity is in the right side of the brain and inward-focused, whereas our rational, logical capabilities reside in the left side and are outward-focused. Until the last two centuries, we humans relied upon intuition as heavily as we relied upon our other five senses. We were “balanced-brain beings.”
During the past two hundred years, however, most people became primarily left-brain beings. As the velocity and complexity of life accelerated, we focused outward. This change was not due to a conscious choice; we were simply been overwhelmed by the external world. With very little time to ground ourselves amid the onslaught of external data, we lost confidence in intuition and came to rely disproportionately on rational thinking.
Ironically, the primary cause of intuition’s fall—technology and the resulting flood of data pouring into our left brains—is fueling its revival. We are overwhelmed with data. We are not making better decisions than we used to. We are not behaving better. We need to find an anchor in the storm—an anchor that will help us manage the data better and with less stress, an anchor that will make the data more relevant and thus help us make better decisions and behave better, an anchor that will bring us closer to reality, that will ground us and rejuvenate us. That anchor is intuition.
I think of intuitive cues as conduits for reality. They include clairsentience (i.e, feeling something in your body), clairvoyance (i.e., seeing something in your mind’s eye), clairaudience (i.e., hearing something in your head), and just simply knowing something. They are simply how we receive our “signal” of reality. There is a reality, either outside or within us, that is trying to express itself to us. Our responsibility is to ensure that the channels are open and clear so that the reality can be seen, experienced, and utilized in a positive way.
Intuition should not be used in a vacuum. At least I would never use it alone. My intuitive skills are just not advanced enough—and likely never will be—to depend upon to the exclusion of external data and logical thinking. Conversely, the savvy leader will never ignore it. At a minimum, intuition is a tool to be used in conjunction with all other input in the decision-making process. At certain times, however, intuition can be dominant, including the following:
- When relevant facts are scarce or conflicting;
- When you just can’t decide among alternatives;
- When under time pressure; and
- When dealing with human issues (e.g., hiring, firing, staffing, partnering)
Even when not dominant, though, intuition is always powerful fuel for the businessperson of today trying to make positive headway in our high velocity, highly complex existence. In my experience, the best business people are highly intuitive. This intuition enables them to be highly defined as a person, form the optimal vision for the business and organization, and inspire and engage a team to execute that vision.
And what to do if you believe you aren’t intuitive? First, change your belief. Everyone has this sixth sense. It’s just that some can access it better than others. Second, learn how to access it. Chapter Six of my book, The Source of Leadership, has an exercise to assist in the development of intuition. And then go navigate the jungle safely and successfully!
For a PDF of this article: TCA_Library_Leadership_Intuition_The Power Tool of the Business Jungle
In executive leadership, our job is to produce financial results and, hopefully, results that exceed our peer group. As humans, though (and, yes, leaders are human), we often struggle with our personal interest in doing something positive – beyond producing financial results – for our team members, customers, the environment, and humankind in general. And most of the time, those altruistic objectives are crowded out by the extreme pressures to make money and build value. Personally, though, I am inspired by the very real possibility that the first objective can be better accomplished by attainment of the second. Do right and do well. In fact, the statistics show it’s more than a possibility; it’s a fact. Check out this and Conscious Capitalism, the new book by John Mackey, Founder and Co-CEO of Whole Foods.
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.
The shelf lives of strategic plans and unrefrigerated milk, it seems nowadays, are about the same. Our high velocity, highly complex world just plain outdates plans very quickly. Success comes to the best business athletes, those who can adjust to rapidly changing dynamics. Three points about this, though. First, as President Dwight Eisenhower noted in a variant years ago, while strategic plans aren’t worth much, strategic planning is indispensable. Just as the elite athlete constantly plans, prepares, and visualizes to better prepare himself or herself for the reality he or she will confront come game time, the successful company constantly plans, prepares, and visualizes a path to organizational success through a dynamic playing field. The company that dispenses with strategic planning because it doesn’t see the value in plans is missing the point. And it’s going to hurt them. It’s the planning that matters. Second, execution of the plan, short-lived as it is – clearly articulating objectives and action steps and holding team members individually accountable – is perhaps more critical than ever. There simply isn’t time to slack. Finally, companies must realize that staffing is a whole new game. Largely gone are the days of staffing with specialists with long-term track records in a given field. Chances are they don’t have the business athleticism required to adapt to your competitive environment. Look for business athletes with a number of diverse 12-t0-24 month stints where they had quantifiable impact.
Big data are big words these days. But rather than go with the flow – gottta get more and more data out of fear that you’ll miss something and lose ground to the Joneses – take a step back and realize that intuition always trumps big data, provide you have reviewed a reasonably sufficient – as opposed to an insanely large – amount of data. Check out Chapter 6 of my book (available in hard cover and Kindle editions), The Source of Leadership: Eight Drivers of the High-Impact Leader, for a history of intuition and a brief training course for developing your intuition. I guarantee you that the bravest, most secure, and most successful leaders take big data with a grain of salt and always rely primarily on their finely tuned intuition.