Alignment, Consistancy, Focus, Nerve

“When Growth Stalls”

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I recently had the opportunity to listen to Steve McKee, the author of the book “When Growth Stalls” speak at a conference. He studied the phenomenon of how some small companies on a very good growth trajectory seemed to stall out and plateau as they became medium sized and larger companies. I think the 4 basic topics that he covered are applicable across the market in general today, not just for smaller growing companies.

 

1.      Lack of Alignment: Steve spoke about the fact that as management teams grew with the company, their alignment tended to vary more. I think that this is the case today with various issues such as when “revenue growth at all costs” groups do battle with “profitability at all costs” groups within company leadership teams. It is easy to say you want both, but it is a very precarious balancing act to try and implement.

 

2.      Loss of Focus: Similar to lack of alignment, loss of focus deals with a decline in the passion and commitment to success that drove the company’s earlier success.  It seems to have become a “job”, not an avocation or career. Good enough has in fact become good enough.

 

3.      Loss of Nerve: When issues arise it now seems that the first (and sometimes only approach) is to scale back. We now scale back on R&D investment. We scale back on Marketing. We scale back on what we need for future success. It is here that he asked the best question I have heard in a long time:

 

“What do we need to do to remember that this economic crisis is a gift?”

 

Or in other words, what can we do with respect to our relative positioning to our competitors in the market to be more successful than them. Times of instability can be times of market opportunity if properly approached.

 

We seemed to have forgotten this concept across the board in the market lately.

 

4.      Finally he spoke about business and marketing inconsistency and how “stuck” companies seem to change these items more / too quickly. As every business struggles to move forward they continue to try “new” things. New organizational structures. New marketing campaigns. What they fail to notice is that change also starts everything over. You must give each new structure or campaign time to be successful. It is a failure to stay with a bad structure or campaign too long, but it is also a failure to not give them enough time to be successful.

 

Steve McKee struck a chord with me and I will try to use and apply some of the comments and approaches he mentioned. Hopefully we will all be able to get the system“unstuck”, and moving forward in a more healthy market in the near future.

Decisions, Implementation, Objectives

Drivers Wanted

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An opportunity is recognized in the market place. An issue has occurred in supporting a customer. An idea has generated a new product or solution. What do we do now?

 

It seems more often than not we call a meeting. Then we call another meeting to make sure that we understood what we heard. Then we call a meeting to plan our next steps. Then we start the process of looking for “Buy In” from everyone else. Pretty soon the focus on what could have been a “game changer” has been swallowed up by the safety and security of the process.

 

There is a difference between “Driving” the process and “Working” the process. Driving is when as a leader you have the conviction that what you are doing is right. You have looked at the issue, worked with the team and have made the commitment to move. There is a process in place for situations like this but it generates its own resistance and impedance. When you are driving you will take input but you will not accept delay.

 

Businesses today seem to be more content to work the process. This is a situation where we seem to be more content to accept delay and modification to the decision or solution. While the conviction may still be strong, the risk of being wrong seems to outweigh the benefits of being right. We allow the delays and changes in order to get a “Consensus” as to what should be done. This consensus enables the risk associated with the action to be mitigated across all those that participate. The idea seems to be that if it succeeds everyone can take a bow, but if it does not, no one individual will take a fall.

 

There is value to getting buy-in. It helps the team internalize an external goal. The problems with consensus are that it can take a while to achieve, can water down the solution, and requires everyone to say “yes” and can be stopped when anyone says “no”.

 

Great leaders know how to drive the process, while they work it. They set the goal, provide the resources and do not allow any reasons or excuses. A key here is making sure that the resources are made available. President John F. Kennedy set the goal of sending a man to the moon and back, and drove NASA to do it. He also made sure that NASA had the people and money to accomplish the task.

 

He drove the process (he made sure the goal, objective and measurement were known – get a man to the moon and back before 1970) and he worked the process (he made sure that the funding was provided and the responsibilities were clear), and it worked. If it had failed NASA may have taken some of the blame, but by and large it would have been Kennedy’s failure.

 

I don’t know if it is a reflection of the times, be they economic, political, or other, but we seem to have lost this “Driver” type attitude in doing business. I think we need to get back to it if we want to see the types of growth and performance that are wanted and needed to move forward. Its at times like this that I think of that car commercial – the one with the catch phase “Drivers Wanted”.

Employees, Incentives, Management

Culture of Entitlement

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In my last article I discussed the concept where employees have asked for some sort of incentive or reward for their participation in the generation of new ideas that would help the company. It was my view that incentives and rewards should be based on the value that is produced and results generated by the implementation of an idea (revenue, earnings, etc.), not the subjective value of the idea itself. It did get me thinking though….

What has occurred in business that has caused this sort of request to even be made?

 

Do we need to put incentives, or better put, more incentives in place to encourage each specific or incremental request or behavior? Have we reached a point where we all believe that our salary or wage is an entitlement?

 

This is tricky ground. I believe that there are numerous issues that have and do contribute to this evolving situation. Knowledge worker allegiance has shifted from the company to themselves. There are many reasons for this but I believe its roots are in the market boom of the 1990’s when employees changed companies with almost great regularity in order to receive ever higher compensation. They focused on their own best interest.

 

Company allegiance to it employees has been changed under the combined pressures of cost reduction (including both true staff reduction and the drive to outsource functions to low cost labor locations), the demands of stockholders for improved stock value, and the prolonged downturn in the general economic conditions. The company too is focusing (maybe more so now than in the past) on its own best interest.

 

It seems that what was a somewhat mutually supportive relationship between the company and its employees may have become somewhat more mutually adversarial. That could explain why companies only want to pay for what they quantifiably get, and employees only want to do what they are quantifiably paid to do. This could explain the employee requests for incremental incentives for every company incremental work/output request. I am not entirely sure, and I will think about it some more.

Incentives, Management, New Ideas

What are You Paid For?

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I am a big believer in the alignment of objectives, goals and incentives for a business to achieve its maximum potential. If everyone is working toward the same goals and is compensated on those items that bring the most value to the business then you should have a structure that is both efficient and focused. Is that enough?

 

I was on an organizational wide call where there was a general discussion regarding the business structure and potential new opportunities in the market, and how to most effectively and efficiently pursue them. The group conducting the call was asking for input and ideas from the team based on the fact that the team members were the ones closest to the markets and issues and should therefore have some of the best ideas how to deal with them. This made sense to me.

 

It then took a strange turn. Members of the team then asked “would there be any incentives put in place based on their generation of ideas?”

 

Now I understand that incentives are designed to try and generate desired behavior, but where do we cross the line and start asking for incentives for people to “think”?

 

My logic here is that if you can come up with a better or more efficient way to do your job, you should implement it. If it truly is better, you should be able to exceed your existing objectives and then be compensated better based on the current incentives associated with your role. This is what you are paid for.

 

We are all essentially knowledge workers. We should try to generate the maximum value for our businesses possible. We do this by applying our knowledge to the best of our abilities. Incentives should be based on the output generated from the application of knowledge and ability, not the application of knowledge and ability itself.

Management, Responsibility, Task Completion

Don’t Send an Email

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Technology is a good thing. We have all come to depend on it to get our jobs done. It has helped remove both time and space from our work and has enabled us to do things in minutes that used to take days or longer. It can however become a crutch. It does not alleviate the responsibility you have for seeing to it that the job is completed.

 
There was a recent situation where an assignment was given to a staff member. He was the owner of the assignment and had the responsibility to get the assignment completed. Some time later the deadline came and went. When queried about the topic his response was the ever more common:

“I sent out emails requesting help, and I am still waiting for the responses…”

Sending out an email is not the same as completing the task. It does not transfer the responsibility for completing the task to the person you are sending the email to. In short, in today’s busy, high stress, under staffed business world, emails are easy to “miss”, especially when you are requesting time and effort that we all feel we have little enough available to do our own work.

 
A better solution, if help is needed, is to call. Make contact. Exchange information real time. If the person needed is local, get up and go see them. Once you have the required information, or achieved closure on a topic, then send an email confirming what was discussed, what the solution was and what the steps are moving forward. That email requires no active response from the recipient and enables everyone to get on with their respective jobs.

 
“Sending an email” does not get the job done. Make the call. Get up and make the visit. Take the initiative and get the job done.

Management, Objectives, Recognition

On Time is Now Early

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I have written several times about the changing standards for performance in the business environment. I personally believe in setting reasonable expectations for my own, and other peoples performance, and then monitoring progress to goal completion. Having been on both sides of the equation, I have found it is better to reasonably promise and then try to over deliver.


 


It seems in tough economic times corporate business has changed but the way we view, and review it may have not. It has become more and more difficult to attain, let alone exceed objectives in today’s business climate. As staff numbers are reduced, “reasonable” goals and expectations seem to remain only in the eye of the beholder. Goals and objectives that you were once able to exceed given the “then” staff and budget, are now difficult to attain with the “now” staff and budget.


 


Both management and staff need to be aware of this new status quo. Incentives, rewards, recognition, ratings and reviews need to be prepared to reflect the fact that there are now fewer resources trying to deliver more objectives. Attaining today’s goals in this environment may in fact be more difficult than exceeding yesterday’s goals in that environment. There are always cycles in business. How we manage and treat our teams in tough times will have a significant affect on how they view and treat the business when times improve.

Achievement, Management, Objectives

“Nice to Do” vs. “Have to Do”

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Times have changed. This is a pretty trite statement in business, but it bears repeating. It used to be that your abilities were viewed based on the breadth of your knowledge and capabilities. To a certain extent this view still has credence, however more and more it is your depth of expertise and achievements in a specific field or function, not your breadth of capability that you will be judged on, whether you are in a position, or looking for one.

 

Hence the “nice to do” vs.“have to do” approach to business. Let me illustrate: If you are in sales you are normally responsible for achieving revenue objectives. It is what you are measured on. It is very quantitative. You have a goal to achieve. It is your quota.

 

You may also have the knowledge and capability to perform marketing functions such as the creation of sales programs and presentations.

 

Understand that sales staff are measured on their ability to achieve their quotas. If you can achieve your quota (a “have to do”) and also create useful marketing capabilities (“nice to dos”) then you have demonstrated incremental value above your required tasks.

 

If however you have NOT achieved your quota, but have also created useful marketing capabilities, you have still failed. Incremental “nice to do” work will not compensate for not achieving your goals in your “have to do” job. Remember, there is usually also a Marketing group who has the “have to do” job of creating marketing capabilities.

 

Business today is looking for the best experts in each discipline, whether it is Sales, Marketing, Operations, or anything else. While being adept and capable in multiple disciplines may demonstrate your ability for bigger roles, it will not compensate for failing to meet your objectives in your area of expertise. You must achieve your “have to do” goals before any of your “nice to do” work can be considered value added.

Customer Management, Customer Relationship, Management

Deliver the Bad News

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We have all seen it, and probably even done it at one time or another. A customer wants something. It is a logical request. They are a good customer. We really want to make them happy. The problem is that we are just not able to provide them what they want. It is now somebody’s responsibility to tell them.


 


It may be too expensive to develop the capability or to do. You may not have the resources available. The product or service may just not be technically capable of delivering what has been requested. It may be so far outside the contractual arrangements that you just can’t do it.


 


It is bad news.


 


Our first response is to try and soften the news. We naturally look for some way to get around the issue. We want to leave some feeling that there may be some way around the problem or a potential solution in the future. Don’t defer it, avoid it, or assign it to someone else.


 


This is only digging the hole deeper.


 


Business is about setting expectations and then meeting them. If you can not meet a customer’s request, you need to deliver that position and set the expectation that the request will not be met. It is business. People understand that they will not always be able to get everything they want. If positioned properly and honestly, it will be known that it is your desire and position to provide the best service and capabilities available, but that sometimes you are not able to fulfill every customer request.


 


In the future, if a solution to the customer’s request is found or developed, they will be pleased as their expectations (of no solution) will be exceeded. Whereas if you have positioned for a potential review or solution at sometime in the future to avoid delivering bad news, you have delayed meeting their expectations and created frustration. Customers understand a “yes” or a “no” answer, but a “maybe” will almost always frustrate them.

Change, Management, Performance

The Black Swan

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Have you ever seen a Black Swan? I had to go out and Google it to see if they really exist. They do. All the other swans that I have seen were white. When someone mentions swans I think of white ones. It was a common expression in the early U.K. as a statement that describes an impossibility, from the old world presumption that “all swans must be white”, because all historical records of swans reported that they had white feathers. The Idea of a Black swan was outside my initial perception set. I guess it shouldn’t have been. If we can have white (albino) tigers, why can’t we have Black Swans?


 


So what?


 


A gentleman by the name of Nassim Nicholas Taleb wrote a book in 2007, by the name of The Black Swan. Taleb asserted, “What we call here a Black Swan (and capitalize it) is an event with the following three attributes. First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable. I stop and summarize the triplet: rarity, extreme impact, and retrospective (though not prospective) predictability.” He goes further to state “A small number of Black Swans explain almost everything in our world, from the success of ideas and religions, to the dynamics of historical events, to elements of our own personal lives.”


 


I think we need to apply this theory to business. In looking at the various corporate cultures and methods of business conduct that I have been associated with, I see many, many white swans. When I look back at the various roles I have had throughout my career, I find that I was my most successful when I decided to operate outside what was then the expected norm and go my own new/different way. I had my highest impact on the organization, and I was my most successful.


 

In today’s unpredictable business market it may seem risky to operate outside of the expected norm. After all, the Chinese proverb is “The nail that sticks its head up gets pounded down.” On the other hand, as businesses today strive for cost reduction and profitability improvement they are finding that they don’t need as many white swans in the labor flock. In this day and age I think I would rather be regarded as “High – Impact” and “Rare” than be regarded as just another member of a flock that is being reduced.

Customers, Markets, Sales

Diversify Revenue

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It is very easy to fall into the trap of being very good at one thing. You start with a successful sale. You follow it up with a similarly applied successful sale, then another, and so on. Soon you have what you feel is the “recipe” for your product/service and a market. The key item to be aware of here is “a”, as in singular market.


 


Being very good at one thing is great while that market is good, but no market is good forever. You need to make sure you are diversified in your revenue sources.


 


I am in the communications and technology industry. It has been a rollercoaster ride for over a decade. Companies have flared up very large by taking advantage of the various technologies and needs bubbles, only to almost disappear completely when that particular market bubble bursts.


 


Good rules of thumb are to focus on the needs and uses of the end users of your product or service. This means you must potentially have to “see through” your customer, to their customer, if you are not dealing directly with the final end user of your product or service. As the communications industry learned in a very painful way, it was not the network that drove the end user; it was the end user that drove the network.


 


Examples of revenue diversification can include understanding the various demographics and needs within the market and grouping like ones as targets. This would be an example of vertical market definitions and diversification. Markets such as “Governments”, “Financial Entities”, “Education” and “Manufacturing” are good examples. That way you diversify yourself into specific markets that hopefully do not move fully in coordination with each other.


 


Another methodology is to move into complementary goods and services. If you are an equipment or product provider you may want to look at moving into providing services that are associated with your product. That way when customer capital expenditures are reduced, you can still generate revenue from the service associated with your product.


 


It sounds simple, and it sounds like common sense, but it seems that all too often in the heat of the drive for ever increasing revenues, we end up focusing only on what we have done well before, and not on other potentially unfamiliar markets that we should do well on in the future.