The Fundamentals of Start-Up Business Success--Part 4

Though the road to sustained success is paved by consistent execution it is lit by the leader's clear vision.  As a fundamental, vision is not some starry-eyed sound bite intended to inspire but more often than not, confuses.  

Clear vision is a necessary fundamental because it allows leaders to see things as the are so they can chart the right kind of action. 

1.  Separate Activities from Actions. 

I am always most wary of any employee with an unchallenged reputation for being a hard worker.  More often than not these employees actually create their own hard working urban legend and then propel it by "being too busy" for pretty much anything thrown at them during the business day. I've seen too many managers mishandle these extremely busy hard workers to the point they do serious damage to a business. In the most extreme cases, mismanaged hard workers become their own renegade operation within a greater company.

Hard work and staying busy are, at best, means to an end and not objectives. When properly channeled, they are activities that certainly contribute to any company's success and are also positive cultural attributes.  The only useful measurements are (a) activities that make money, and/or (b) activities that save a company money.   Unless activities can be tied to these tangible actions they are counterproductive. Activities that correlate to positive actions then must be further measured by Time + Expense/Return analysis. The lessons of confusing activities with actions tend to be the costliest and in many instances are the most difficult to undo. 

2.  Manage By The Decision-Making Tree.

At all levels, as it relates internally or externally, a disciplined approach to processing and making decisions is necessary for successfully managing to meaningful business plans.  Emerging businesses do not have an abundance of time or resources; decision-making proficiency is essential. 

I've adopted "The Decision Making Tree" as my best method for mastering the process:

• The lowest, sturdiest, and easiest to reach branch is mindshare--taking time to evaluate information.
  
• A stretch, but within reach for a fit climber who sees the potential, the next branch is priority.
  
  When presented with something that makes sense and has the potential, grab that priority branch and pull yourself up.
  
• The view from priority is usually rather spectacular, but also a bit scary so before going any further you want to make sure it's a worthwhile climb. Research, consider, take input, and just to be sure you are not setting yourself up for a great big fall as the branches get thinner and harder to grab, make proper resource allocation.
  
  This could come in the form of a pilot program, trial, or some other controlled study that will validate whether you should keep climbing or shimmy down this tree.
  
• Like any tree, the highest branch is the most perilous to reach.  Because it is also the weakest and thinnest, you must give it proper support before perching yourself on it. However, when you are there, the view is as sublime as the achievement is great!
  
  The highest branch is commitment and in this decision making tree, commitment means an absolute, unyielding come-hell-or-high-water commitment to seeing the endeavor through to success. 

This orderly process allows one to make go/no-go decisions at natural break points, while obligating participants to drive an initiative to goal once that final decision has been made. In far too many tragic instances I get called into companies that had the right ideas, but lacked the resolve to see good decisions through. Rarely does anything even happen in one natural straight line, there will always be challenges and setbacks to anything new.  

The Decision-Making Tree allows us to move forward through confidence based on each prior step so that when we get to the top we have the confidence to conquer.

Yes, I use this method to also evaluate sales funnels for the purposes of improving close ratios and sales cycle times.  Using The Decision-Making Tree criteria analyze where you stand with each of your prospects.  Chances are you will find many of the prospects you think "look good" have never progressed past mindshare. 

3.  Growth is a Leading Indicator.

Most management tools and even perspectives follow lagging indicators. We all know why historical data is important, but an over-reliance on history and obsessive reviews of last month and last quarter makes absolutely no sense unless you possess the power to change history.  Since we do not possess these superhuman qualities, let's out our mortal capabilities to best use.

What we learn from last month or last quarter is important, but how we apply it to meet our objectives is everything. Therefore, the leading indicators smart growth businesses run the business by put the greater emphasis on setting realistic yet aggressive short and longer range objectives and then recognizing/rewarding employees based on performance.  

When combined with the other easy-to-implement and highly integrated fundamentals outlined in this series your business will have a record 2013.

Happy New Year and best wishes for a successful 2013 to all!

Continue to let Kirk Grow Into His Role ----How Does That Kind of Decision Impact Any Company's Growth?

For several weeks now I've had opportunity to work closely with a mid/high level manager we'll call Kirk. He's a sincere guy with a work ethic anyone would respect and seemed reasonably competent. However, it's often difficult to know this about Kirk because he fell into the nasty habit of rarely thinking before he spoke. If this self and organizational destructive behavior was limited to Kirk I wouldn't bother writing about it. However, we've all encountered any number of Kirk's so discussing how he is progressing can be quite useful.

Kirk's on-the-job behavior fit a very familiar pattern. Pick any subject and he'd instantly tell you he knew all about it, but went no further than that one-liner. Because he was an expert in every field he was extremely busy all day long, "putting out fires" (as he would say) --which is why he just didn't have time for anyone else or anything else especially in-depth dialogue! Of course, high on the list of things he didn't have time to evaluate was why his day was dominated by putting out fires in his areas of responsibility. But more insidiously, Kirk the know-it-all had mastered the art of delegating every decision up the ladder, which then relieved him of any accountability. One thing Kirk always seemed to make time for was to bemoan the fact that his boss made some really dumb decisions, which explained why he had to fight so many fires.

In truth and fairness, though, Kirk's boss and other company executives fed into this nasty cycle because they not only enabled him they created conditions that allowed Kirk to delegate decisions large and small to them while he escaped accountability for anything other than always knowing everything and always being right. Whenever Kirk presented an issue or problem up the chain of company command executive leadership quickly supplied answers, always putting themselves in the middle of the most mundane business matters. Kirk always had time to run into his boss' office throughout the day or send dozens of emails, always asking for instructions never even making any recommendations. Internally, Kirk was held in high regard because he was such an important employee, always incredibly busy, and to anyone's knowledge the single most informed human being on any subject. But I write in the past tense for a reason.

Slowly, the tables have been turned in a way that's benefitting all. due to his obvious brilliance, Kirk was asked to lead a very important company project. Because he had greater knowledge and experience than anyone else could ever imagine he was given full control for developing and implementing an action plan. However, in this case, whenever Kirk tried to delegate his project work up he was met with the same reassuring response: "I really trust your judgment Kirk, what do you think we should do?" Yes, Kirk's prior pattern of behavior was a great cover-up, a defense mechanism, for a managerial incompetent....and now it was getting exposed.

Early in the process Kirk tried to continue his charade by giving his recommendations. In every instance his ideas bordered on the painful or comical...I mean you could have picked someone at random off the street who knew nothing about the company, someone who had never even worked anywhere before, and that person would have come closer to offering a useful idea than Kirk did. Indeed, he went from not thinking before speaking by serving as a router to not thinking before speaking when he was thrust in the role of accountable leader. But credit to Kirk, in remarkably short order he checked his ego at the door and started to work better with others by sincerely talking to them rather than deflecting and talking at others. Over the course of the past week or so Kirk has done some of his most meaningful work because he is actually now thinking through his own solutions, doing his own research to figure things out, and making himself accountable. He even went as far as telling one of his direct report employees that he didn't know something! Interesting, but not surprising, the junior employee first reacted in stunned silence--Kirk had never made such an admission before. But that employee then flashed a small smile...yes, she knew Kirk was not the man he pretended to be all along. The two of them then spent 15 minutes diagnosing the problem and coming up with a solid business solution.

While it's nice to see these small improvements where real progress is being made, it begs a couple of key questions for me...one rather large, and the other as finite as you can get.

The larger issue is how many companies have allowed themselves to similarly get set back, particularly when confronted by the most terrifying business conditions in recent history, how do they quickly recognize and permanently change it?

On the smaller matter, this company's ownership now has to do some serious thinking of their own. They pay and treat Kirk like a senior manager, but he's not even close to being one. Do they continue to let him grow into the role or do they replace him with someone who is actually credentialed?

Toxic CEO Ted Provides a Lesson: How NOT to Run a Business

He said he really needed to speak with me about an urgent matter.

He said he needed at least a couple hours and would buy me lunch if I helped him work through the problem.

He said he had nobody else he could turn to and because we have totally different business philosophies he really needed me even though he knew I had no respect for him.

He said he needed a friend.

Maybe I was more curious than I was motivated to help, but I couldn’t refuse this invitation. So I met with this CEO for a privately-held firm, and for purposes of this post we’ll call him Ted.

Ted is one of naturally brightest people I know and at a very young age he built a formidable company. But Ted used his native intelligence to constantly scheme and find ways to make money by really bending the rules; reneging on agreements, overcharging customers in hopes they wouldn’t notice, and engaging in several other unethical and possibly even illegal tactics.

Ted is a lazy guy, he would much rather use his God-given brainpower to find the easy way rather than pushing himself to really build something. So Ted is probably the dumbest person I know. I will say this though, from time-to-rime, especially when he was caught in one of his schemes, he did try to clean his ethics and practices up. Although I hadn’t been in touch with Ted for a long time I was rather certain that these periodic spasms of operating integrity never lasted very long.

Ted has always believed he was able to make a great deal of money by always outsmarting everyone else. This also allowed Ted to not work very hard and because he had found a handful of employees that served as trusted accomplices Ted could enjoy a life of leisure funded by a steady stream of what I can only consider to be ill-gotten income. Ted had always said the reason he wanted to run his own company was it would allow him to “make a lot of money”. Furthermore, Ted created a company culture that was addicted to the same.

Ted’s willing accomplices extended to more than just low-skilled low-talent employees that would do his (literally) dirty work to draw a paycheck; a paycheck that was always far greater than anything any of them could have ever dreamt imaginable. Because Ted’s company routinely posted impressive top-line growth for most of this decade lenders were tripping all over themselves to give him money.

There are many excellent small/mid-sized companies that are being choked to death today because banks aren’t lending; the unemployment rate is indescribably scary because these cash-starved companies can’t financially maintain a workforce. In large part, Ted and others like him are the root cause. In larger part, the bankers who ignored fundamentals are really to blame for the mess. But that’s not what Ted wanted to talk to me about.

As a man who built a business based solely on short-term thinking and taking obnoxious short-cuts, current economic conditions have accelerated and highlighted Ted’s many corporate shortcomings. Dependent on equally short-term thinking bankers who were no longer there for him, some calling in major loans early, his business was being squeezed. Competitors were taking business away from him at eye-popping rates; some customers disappeared quietly, others have litigated. His company was bleeding at such a furious pace he had to significantly cut back on staff and when even that wasn’t enough to cover his growing financial shortfalls he had to impose radical salary reductions for remaining employees. His low-skilled low-talent staff hadn’t developed real professional capability; they were doing what the boss told them and drawing hefty paychecks in return…until now. But that’s not what Ted wanted to talk to me about either.

No, Ted’s urgent matter was that he had just uncovered a ring within his organization, comprised of the most trusted of his inner-circle staff, where his employees were selling his company data to competitors and, of course pocketing these ill-gotten gains themselves. Ted was angry about this but as I listened to him he was clearly more hurt. After all, how could they do this to him!?!? How could they not show Ted the loyalty due him since he had taken such good care of them all these years, especially at a time when he most needed them!?!?!??!

What he initially said he wanted from me was advice on what he should do. Should he prosecute all for industrial espionage? Or should he get some to turn over on others and just make examples of a few (the few would be those he liked the least anyhow)? But as Ted kept talking he then said, “But I can’t really do anything can I? They all know too much and they might get me in trouble.” In truth what he really wanted was a forum to rant and engage in one of his most common practices: self-justification and putting the blame elsewhere.

I gave Ted the couple of hours he requested and I don’t think I said more than 20 words the whole time. Yes, Ted said he wanted my helpful advice but he really didn’t, and if actually asked I wouldn’t have told him anything he wanted to hear. Of course we both knew this going in to that lunch meeting.

Ted was distressed because his employees were disloyal and did despicable things to him. It seems to me that in this case, these despicable employees showed themselves to be totally loyal to Ted: they acted exactly the way they had seen him and conducted themselves as he has. For a brief period of time Ted thought he had it all, thought he had figured it out better than anyone ever could. Forever, Ted will be toxic.

Best to tell the Emperor he has no clothes before it's too late

Leave it to The King Of Pop's ex-wife to put meaningful perspective on this just-completed strange week when she revealed her then-husband confided he'd probably end up like her father, The King Of Rock & Roll.

Of course this makes me wonder if South Carolina Governor Mark Sanford had similar premonitions that he'd wind up like another once-powerful southern politician, Wilbur Mills, whose career was also derailed by a relationship with an Argentinian--Fanne Foxe. Between the onslaught of news about Michael Jackson's tragic death and the unfortunately shrinking coverage of the comical Governor Sanford I had time to read an email from a former employee who was excited about a new career opportunity because he really liked his prospective boss and is certain he'd "learn an awful lot." Nice to see Chris is still committed to learning because when I wasn't doing all this reading, I was once again immersed in meetings at a company that apparently prefers to pretend rather than really make the necessary changes in its business.

Michael Jackson had some of the smartest, most sincere, loyal advisors ever assembled. As far as the public has been concerned, Elvis' 1977 death was a summer stunner, just like his future son-in-law's summer 2009 passing is. But apparently those who were "on the inside" are not overly surprised. Similarly, you can't tell me that a state governor can actually disappear for an extended period of time without anyone knowing it. I wouldn't have believed this before the Internet and I certainly am not buying it in this day and age.

So....how!??! And why is it that few actually attempt to or even do learn????? I'm truly convinced "History repeats itself" is a true cliche thanks to the stupid, lazy and gutless.

Reinforced by the company I referred to in the 3rd paragraph--one that will die a tragic death which will be greeted with the same shock for its suddenness as Michael Jackson's was last week or Elvis Presley's was 32 years prior--otherwise smart and capable people lack the courage to do their jobs.

Instead of telling executive management about all the company problems and screw-ups they are presenting news executive management wants to hear in a way they want to hear it. They're all convinced the company is perched for a wonderful rebound "when the economy picks up" (which, by golly, they're all certain is happening right now!). Meanwhile they're rotting from within and are unlikely to see Labor Day.

When will serious minded professionals really learn that the embarrassment is not telling the Emperor he has no clothes, but in allowing senseless repeat performances of untimely and unnecessary mistakes?

Hiding Behind Voicemail. An Alarming Trend in Business?

It could be that I’ve been ridiculously slow to make this connection, but I’ve now pulled together enough evidence from a broad enough range of sources where it has finally dawned on even me: the tools designed to facilitate interaction, improve service, and further connect companies and employees to all stakeholders are having quite the opposite effect. Though we’ve all rolled our eyes when yet another of our calls roll to voicemail or have experienced the frustration of an unanswered email, the problem is worsening and my analysis shows it’s costing companies real revenues in a market that’s not particularly inviting.

Most recently one of the absolutely finest professional service providers I know, someone who has a distinguished track record producing instant results for his clients, is a man of uncommon character, and has real solutions for companies that are struggling, reported that the vast majority of his outbound phone calls are disappearing into the black hole of voicemail. He typically deals only with senior executives and his experience is telling him that a growing number of people he’s trying to reach are, in his words, “hiding behind voicemail.” One of his indicators is the timing and volume of calls he gets back, especially when compared to history (this is someone who keeps detailed statistics on everything). It’s closely related to my experiences in other areas.

I’ve spent my entire career in business/professional services, and I get up close and personal looks at many different companies in this broadly defined industry. And while every company’s mission statement and annual report gives passionate lip-service to a commitment to service, what’s happening on the front lines is anything but. Undoubtedly the nervous-wreck of an economy has everyone more on edge and customers are putting more bite into their calls to (vendor) customer service lines, but on a regular basis I am finding “hiding behind voicemail” is routine. Most damaging is that when I dig deeper into situations where a client service/sales/customer service employee dodged a call, I’m finding they are taking cues from more senior management; an alarming trend. At a time when companies can strengthen their relationships by standing up in the face of adversity they are allowing themselves to be more vulnerable to competition because throughout the ranks employees are shrinking away or hiding.

Here’s a contrast:

As a way to fix a business that was fast losing credibility in its market I had to terminate several unsavory sales people, each having questionable business practices and ethics. One of the sales people I terminated responded to losing his high-income position by posting untrue and really demented stuff about the company and me personally on the Internet. Of course this individual used a pseudonym to excoriate me in what amounts to one of the most incredible role reversals of all-time (it’s kind of like Bonnie & Clyde accusing the Texas and Louisiana officers of murder). My way of dealing with it was to reply to this post by using my name, putting my entire contact information out in the public domain and asking anyone who wished to speak with me to please call; I never got one inquiry and the brief moment of stupidity quickly faded away. Now compare that to this scenario.

Senior management at a company I’ve done business with had to communicate a very sensitive message to their end-user customers; something so critical that executives personally spent a great deal of time on this matter. I know these executives extremely well and they have always passionately stated their strong belief that, though theirs might be a national company, it’s as personal and community-based a field as there is. This company happens to be a technology leader, has all the customer data imaginable, and despite all the tools at their disposal, despite their planning for the critical communication, and despite their stated deep commitment to something deeper than “mass customization”, they sent out a letter that was unsigned and opened with a “Dear Sir/Madam” salutation! Needless to say, they have lost control for the situation…but I guess their silver lining is none of the executives involved will have to hide behind voicemail because, other than a general customer service number, recipients wouldn’t even know who to call. Now if you were the customer service rep getting a call from a frustrated/confused/angry customer who got a letter like this, knowing how your executives hid from their responsibilities, how would you handle the flood of calls?