Execution Challenge

THE SEVEN MOST POWERFUL WORDS FOR ANY LEADER

Many years ago, a boss of mine coached me to use seven words that would in the future have significant impact on my success as a leader. He believed it is all too easy for emerging leaders to try and answer all the questions that their subordinates pose to them, thinking such Olympian wisdom will somehow enhance their credibility and image. Actually, great leaders know that their role is not to be the “Wizard of Oz”, who in an all-knowing manner has all the answers.

I’m sure if you could track down the executive teams at the three public companies I had the privilege to lead, one of the things they would say about me was that “He never seemed to know anything.” This conclusion comes as a direct result of many of these executives, who were being paid handsomely, walking into my office and posing questions like “Jim, what do you think I should do about _____?” Over time, I learned that, for the good of those executives and the company, my best response was to never answer their question – but rather to respond “I don’t know; what do you think?”

As leaders, we all know that people will incessantly try to delegate things upward to us that they are accountable for. Asking for solutions to problems that they should be dealing with is typical, and if we allow it to happen, we are weakening them and the organization. Executives are hired and paid to identify problems and opportunities, weigh various alternatives, complete ROI evaluations and make recommendations regarding the best actions to take. When we provide answers in the misguided attempt to help, we remove critical accountability and growth opportunities for our subordinates.

It was amazing to watch what happened when they understood what their jobs really were about, and that my expectation was that they would bring recommendations and solutions – to watch how subordinates grew and became better leaders themselves. And when they did bring well thought out recommendations, I would always be willing to listen. It wasn’t easy to learn to bite my tongue and play dumb, and I’m sure some of them never did figure out that there was a strategy behind my response. However, even in those cases, they became better and stronger leaders, who understood that their real role was to be strategic thinkers who took accountability for solving issues and developing plans to take advantage of opportunities.

So where should you start you might ask? I don’t know; what do you think?

Have you ever read MacGregor, the outstanding story by Arthur Elliott Carlisle about one of the best leaders I have ever read about? Click on the link below and enjoy!

Arthur Elliott Carlisle’s article “MacGregor”

HEDGEHOGS AND PREPARING FOR A REBOUND IN THE ECONOMY

I have just finished an annual two-day strategic planning meeting with a company executive team; the third such meeting I have facilitated for them in the past three years. They are a several hundred million dollar, privately-held company that sells its products through various small to very large retailers around the U.S.

For the last two years they have pretty much continued down a path of filling in a very broad product offering (“an inch deep and a mile wide”) so they could be known for a rather complete brand in a specific segment of their market. As one would expect, some categories and products had relatively minor volume and impact, contributed little and were a distraction from the several core products that they are known for and best at. So as usual, it was a case of thinking that they had to dominate by breadth. The resulting workload, however, caused too many priorities, “widow-maker” executive roles and unacceptable quality at times.

In their strategic planning meeting, they really got into the strategic direction issues and alternatives to “an inch deep and a mile wide”. The team did a great job probing their direction from a number of different perspectives – with the full support of the CEO, who encouraged the vigorous debate and potential changes in direction. He had developed a product roadmap that showed for the first time the wide proliferation of products, and how that complexity could become a barrier to their profitable growth.

To their great credit, the team acknowledged that they could not be everything they were trying to be and generate the profitable growth and quality they were all committed to. They set a new path to segment their categories into two parts. Firstly, a few core ones that will be an “inch wide and a mile deep” and will get intense focus, investment and management. Secondly, those that will be maintained but not invested in, and may help fund the core group. This decision will have significant implications on the organization chart of the future, the manufacturing and systems capabilities and capacities required, and how the executive team will lead the company. But what a breath of fresh air and excitement, stepping up to the plate and realizing they had to say no to certain things in order to be really good at the most important ones. It was great watching a group of very talented leaders deal with the toughest issues and decide they wanted to be more like hedgehogs than foxes. I will enjoy watching them become a great company in future years.

The real takeaway for me was wondering how many CEOs are truly preparing their companies for the economic rebound that will certainly come. Asking those tough questions that no one else does is the key; even while things are still challenging, volumes are down and margins are under pressure, great CEOs are already preparing for the turn. They challenge strategy, upgrade bench strength, and rationalize locations and non-performing products – all with an eye on how to best position the company to take unfair advantage of the upturn. To not just ride the economic wave upward, but gain market share at the expense of weaker competitors and gain business without having to buy any other companies.

Great CEOs constantly mine the talent pool, courting and subtly wooing the best executive and managerial talent long before there are any openings at their company. As David Packard and Bill Hewlett often said when they started HP, when you find an “A” player executive, hire him or her! You can never have enough “A” player executives, and fortunately these caliber people can often lead many different functions in a company.

So how much time are you spending planning for today vs the future, and how have you positioned your company to take advantage of a strengthening economy? Measure your own “today vs future thinking ratio” as a check on whether your focus is in the right place.

 

Who wouldn’t want their company to have a culture of innovation, trying new things, embracing untested solutions, constantly probing to find breakthrough initiatives that will drive revenue and profit? There are some significant barriers to creating an innovative culture in an organization, however.

Barriers to innovation:

• Leaders and employees alike may not naturally bring innovative behavior into the workplace,
• Companies with a culture of tight expense control rarely stimulate innovative behavior,
• Companies seldom have role models for what innovative behavior looks like,
• Companies often confuse product development with research and development.

Some people just don’t bring those “innovation genes” with them, so it is hard for them to feel comfortable and get good at innovation. Assessment tools can readily determine an individual’s proclivity to think and act innovatively. I use a great 360 degree leadership assessment tool that measures a leader on 22 behaviors (one of which is innovative) as observed by the leader’s boss, peers and direct reports. “Innovative” is one of the behaviors that usually shows up as really important, but also one that rates the lowest for leaders individually.

Innovative behavior implies that some things will not succeed, yet in most companies, failures are not recognized as learning experiences. When budgets are tight, people are often criticized or put into the “penalty box” when something goes wrong. If the proper due diligence has been done, business cases have been developed and approved and the implementation plan created and followed, a quick failure probably deserves recognition and treatment as a learning experience that supports an innovative culture. Great leadership teams regularly dissect such failures, both to learn from them and to institutionalize future behaviors to assure a better chance of success.

Companies regularly try to encourage an innovative behavior culture but often don’t have one single leader who naturally acts this way. Who is the role model for leaders to act innovatively? Very often in certain types of companies (engineering, process industry, etc.) people have grown up and been hired precisely because they know how to avoid mistakes that could have real exposure for their company. If a leader’s entire career and job performance is based on minimizing errors, how would they even know what innovative behavior looks like? Team assessments can often be helpful in determining whether innovative behavior is a natural strength in any team member. If it doesn’t show up as a strength, then perhaps the next hire on the leadership team needs to be assessed for this, to ensure they bring that strength.

To me, R&D means throwing ten things against a wall and having one or two “stick”, i.e. become commercial successes. Most companies cannot afford this failure rate, however, so when they talk about having an R&D culture I wonder at their definition. Most companies do PD; product development, rather than true R&D. Driven by customer input, competitor product introductions and/or just incremental product evolution they develop new products with a high chance of success. This is certainly innovation, but usually not at the breakthrough level. Funding some “skunk works” or allowing leaders to try something that has a less clear business case for success but could result in breakthrough revenue and profit growth can make sense – as long as it utilizes intelligent risk.

So assuming that you want and need innovative behavior to grow your organization, have you recognized and addressed the four barriers described above?

An excellent article on Collaborative Leadership appeared in the July-August issue of the Harvard Business Review: Are You a Collaborative Leader?

 

EXCEPTIONAL SALES – WITHOUT MORE REPS, COST OR RISK

What CEO doesn’t want to increase sales? The challenge isn’t usually whether to grow sales or not, but how to do it without adding significant cost and/or risk. All too often growing sales results in making sweeping changes to staffing, commission plans, territory alignment and/or processes. CEOs far too often buy into the need for overhauls rather than tune-ups – either on their own initiative or by acceding to the recommendations of their sales executives. Long before radical steps are required, some simple, basic tweaks can make significant improvement in sales results that can drop profit to the bottom line.

Most sales improvement programs are like high-risk heart surgery – when what is really needed is physical therapy. Continuous small steps, implemented in the right order, enable companies to minimize disruption and grow better – both today and tomorrow.

SALES MYTHS

How often have CEOs heard from their sales executive and/or sales force that the following are either current issues, or required to increase sales:

• We need more sales reps
• We need higher compensation
• 20% of our reps will always generate 80% of our sales
• We need a new commission plan
• We need more leads
• Great sales reps are unique and cannot be managed

The four areas that have both the greatest impact on sales and the ability to be tweaked without radical or risky steps are:

• Balance – not accepting the 80/20 rule
• Performance to Expectations – expecting all reps to meet their quota every month
• Consistency – sales are generated throughout a period, not bunched at the end of a month or quarter
• Forecasting – accurate forecasts are produced for planning by the rest of the organization

There are three focus areas that when addressed together can have significant impact on sales results. Ask yourself the following questions to assess each area:

Sales Process

• Do you have a defined sales process?
• Does the organization maintain sales tools for each step of the sales process?
• Do you monitor each step in the sales process?
• Is the sales process understood by the organization?

Alignment

• Do your sales reps have a compelling value proposition and target market?
• Do the executive staff and sales organization use the same compelling value proposition and target market?
• Do you monitor selling of your compelling value proposition to your target market?
• Is your compelling value proposition and target market understood by the entire organization?

Accountability

• Are individual sales reps’ expectations defined and communicated?
• Are individual sales reps held accountable for forecast accuracy?
• Do you monitor individual performance against defined expectations?
• Is the entire company held accountable for supporting sales process execution?

WHERE DO YOU START?
If the answers to the above three sets of questions were not a clear and resounding “yes”, then there are some key initiatives that you can begin in your organization:

• Develop and enforce a sales process
• Create clear alignment between company business objectives and sales department objectives
• Define clear expectations for each sales rep, and begin holding them accountable for performance against those expectations
• Initiate monthly insights from sales reps

To instill and start to reinforce the kind of behavior that leads to increased sales on an ongoing basis, have your sales reps answer the following four questions at the beginning of every month – without fail:

• What was my biggest accomplishment for the last month?
• How did I do against last month’s quota?
• How do I look for meeting this month’s quota?
• What is the most significant hurdle I have in meeting this month’s quota?

Download and read the entire whitepaper on Exceptional Sales

I am constantly amazed by people’s mentality – some people seem to have an infinite capacity for work. I don’t know about you, but my productivity tends to decline after about 27 hours per day! As CEOs and executives we are running a marathon, not a 100 yard dash, and we have to pace ourselves to make it to the finish line without collapsing.

We tend to add new tasks and priorities all the time, setting ourselves up for potential failure and burnout. I have written a lot about the criticality of setting and sticking to a finite number of priorities (3 to 5). But it seems that the current economic cycle has caused CEOs and executives to set priorities and then get dragged into all sorts of fire-fighting and crises that put them back into overload mode. We constantly need to have and demonstrate the discipline to realize that we all have finite capacities and that while we can sprint for short periods of time, we cannot continue at that pace forever, since we will do our organizations a disservice if we collapse.

So why don’t executives, and for that matter all employees, develop “stop doing” lists at least annually? Every one of us needs to think not just about all the additional things we need to do and how much more time it will take out of our already overloaded day. We also need to realize that the way to find this additional time is by stopping doing certain things that won’t be missed or that we can do without. Such decisions don’t have to be forever but based on our current set of priorities and other stuff, for the time being that report, that activity, that meeting, that convention will have to be eliminated.

A recent Harvard Business Review article (The Acceleration Trap, April 2010) by Heike Bruch and Jochen I. Menges suggests a great way to start a stop doing list: “Regularly ask yourself, your managers and the whole company: “Which of our current activities would we start now if they weren’t already underway? Then eliminate all the others.”

We all know there are reports and activities that people expend significant time preparing or doing that if stopped, no one would ever miss! And what is the worst that can happen? If someone demonstrates a true need to continue the report or activity, then put it back on the list to continue. But my experience says that few activities will make the cut, and few reports have such significant and material value so killing them makes sense.

I recall one of the companies I led where we were implementing a new, major ERP system, and the IT Director had put out a survey asking users for the reports they would need from the new system. Of course, users chose all the existing reports plus all the new ones they could dream of ever needing requiring hours of coding effort by developers. My answer was to change the focus, and we recrafted the question: what are the three reports each department must have and cannot live without and those will be created for you. It was amazing which critical few reports people chose, and it reduced the programming effort by about 75%!

So what is on your stop doing list?

The absence of one leadership practice more than any other causes companies to get stuck as they try to grow profitability, and that is delegation. I don’t know what #2 is, but it is so far behind delegation that it doesn’t even make the radar screen. The interesting thing is that a leader doesn’t have to be born with this skill, it just takes a process and practice to get really good at it!

Delegation must be a CEO priority

A CEO’s primary job is to think about the direction of the company, develop and maintain his leadership team, remove obstacles and provide resources. It isn’t doing things that should be done by subordinates!

Part of developing subordinates means giving them assignments that help them learn and grow within boundaries that don’t put them or the company at risk. Delegation often feels like a loss of control because it isn’t approached as just another business process that has certain steps to be followed.

In companies where delegation is not a high priority, often executives become “blockers” who cause logjams for others getting things done. And at the same time, the next level of managers are not being prepared for greater responsibility.

CEOs and executives who learn to delegate not only get more important work done, they develop their people at the same time. For more information:

Download whitepaper on Delegation