Wayne Wilson on Companies in Transition

Business is based on relationships, not referrals

My best leads and assignments come from people who already know me and my work. Sound familiar? That's because people want to do business with people they know or who are referred to them by people whom they know and trust.

Why is that?

There are probably numerous reasons, but these three come to mind:

1. Separating the wheat from the chafe -

The world is full of lots of people selling lots of things - some good, some not so good, and some really bad. Figuring out which one you're dealing with often takes a lot of work. Trusted introductions reduce the time and effort required. If you make it too hard for customers to assess the quality of your product or service, many of them will simply pass you by in favor of someone else.

2. Quality assurance -

Trusted introductions also tend to raise the average quality of the work received. No one wants to look bad to their current clients, colleagues, or friends. As a result, professionals who rely on trusted introductions will more likely go the extra mile to ensure that you, the prospect or customer, come away with a positive experience from the encounter regardless of whether you choose to purchase their product or service.

3. Life is too short to put up with stuff you don't want to, if you don't have to, for very long^TM -

Gatekeepers and spam filters are designed to winnow the hordes of those seeking your attention to those you choose. And that's before consideration of all the people lining up to sell you something through social media! Trust is so important. When I finally develop that relationship of trust with someone, I am loath to make a change to someone I don't yet know, let alone trust. Your clients and customers are the same way.

The best of times; the worst of times

        "It was the best of times, it was the worst of times,

         it was the age of wisdom, it was the age of foolishness..."

            - Charles Dickens

In many ways, our own times mimic those described by Charles Dickens in A Tale of Two Cities.

Technological, medical, and other advances accelerate all around us while economies, financial markets and governments rise and fall, and weave and dodge with increasing volatility.

Some of our present angst likely results from our tendency for selective memory - we tend to remember the good things or times, while conveniently forgetting the bad. 

Lest we forget, paraphrasing the title of Robert Heinlein's famous novel, the world is a harsh mistress.

While we often cannot control our destiny, we can control how we respond to that destiny. We are responsible for our own actions.

David Petraeus on strategic leadership

A new book about General David Petraeus’ year as commander of NATO forces in Afghanistan [1] describes at one point four tasks which all strategic leaders - be they military, political, or business - must undertake if they are to be successful.

• First, “get the big ideas right”
• Second, communicate “those big ideas”
• Third, oversee “the implementation of those big ideas”, and
• Fourth, capture the “best practices and lessons” and use them to refine the ideas and process.

There is no magic here, but rather a virtuous circle of continuous improvement if the process is implemented correctly.

“Big ideas” are really about key themes - vision, mission, goals - and the strategies that the leader must develop and employ to move his/her thematic agenda forward. In business turnaround situations, these ideas usually involve an assessment of an organization’s capabilities and the market opportunities available to it coupled with a short list of carefully thought out strategies for actually making something out of the combination.

“Communicating the big ideas” often must begin even before the strategies have been formulated because the leader needs the insights, skills, and efforts of others in the organization to ensure that the hoped-for “big ideas” will actually work (a virtuous circle within a virtuous circle if you will).

None of this matters if the "big ideas" are not implemented. Choosing the right lieutenants, communicating with and through them constantly, setting a proper example, demonstrating your commitment to the “big ideas” through  the decisions you make - all of these are important to laying the groundwork for other associates down the line to actually carry out the work of transformation which they will only undertake once they are convinced that the leader is serious about his/her agenda.

And finally, capturing, distilling, communicating and re-enforcing “lessons learned” enables this process to repeat itself with increasing levels of productivity and effectiveness because successful turnarounds invariably require multiple cycles through this process to generate truly successful performance improvement.

If it were easy, organizations wouldn't need strategic leaders.

____________

[1] Paula Broadwell and Vernon Loeb. All In: The Education of General David Petraeus at amazon.com.

Defining entrepreneurs

According to a new book [1] by John Byrne, successful entrepreneurs have three defining characteristics:

• First – Entrepreneurs see opportunities where others see problems. Great examples include Reed Hastings at Netflix and Jeff Bezos at Amazon.com. Their experience suggests that your reality (and therefore your opportunity for success) is a function of how you view the world, not just some objective reality uninfluenced by the people in it.

• Second – Entrepreneurs understand and live with risk and failure. Success often comes only after multiple risk taking and failures. But all risks are not created equal: successful entrepreneurs have an uncanny ability to size up the risks they are taking in a way that affords them a greater than normal opportunity for reward. They take on calculated risks with outsized opportunities for success. Yes, they often fail, but when they win, they win BIG.

• Third – Entrepreneurs want to control their own destiny. They do not particularly like working in teams, and they rarely like taking orders from others. They are independent, rebels. They see the world differently, and they readily take on high stakes efforts to literally change the world. Think Steve Jobs, Larry Ellison, Bill Gates.

In many ways, true entrepreneurs self-select. They are born with certain characteristics and pre-dispositions that drive them to strike out on their own when confronted with difficulty and adversity. But all entrepreneurs are not created equal, and there are varying degrees of entrepreneurial drive.

Owner/CEOs have a wonderful opportunity to mentor the next generation of entrepreneurs, as well as grow their own businesses, by vigilantly seeking out young entrepreneurial associates and giving them room to grow and show what they can do.

---

[1] World Changers: 25 Entrepreneurs Who Changed Business As We Knew It. By John Byrne. Portfolio; at  Amazon.com.

Leadership is about “followship”

Sally Jenkins column in the Washington Post about the Denver Broncos’ Tim Tebow calls out some critical elements of true leadership. According to psychologist Robert Hogan, leadership is really about the qualities of the would-be leader that will cause would-be followers to want to follow them.

Followers want four things from their leaders:

• Integrity,
• Confidence,
• Decision-making, and
• Clarity.

Followers don’t want:

• Irritability,
• Moodiness,
• Untrustworthiness,
• Indec­i­sive­­­ness,
• Needless micro-management, and
• Excessive authority.

How do you stack up against this list?

Read the article.

When failure is not failure

“A failure is not always a mistake, it may simply be the best one can do under the circumstances. The real mistake is to stop trying." -- B.F. Skinner, American psychologist, inventor and author

Failure is often the one thing people try to avoid – sometimes to their detriment. But should they? I prefer to think of failures in three varieties:

• “Bet the ranch” failures – generally to be avoided, they should only be undertaken in dire circumstances and with the full knowledge of owners or boards of directors. In the recent financial crisis many financial firms were “betting the ranch” without knowing or explicitly acknowledging the gravity of the business risks being undertaken.

• Costly failures – these business failures occur frequently and systemically have much in common with the first group: all of the risks of a given course of action have often not been properly recognized, evaluated, and/or communicated to the relevant owners or boards. Anticipating risks and planning for their mitigation is an integral part of minimizing costly failures.

• Learning failures – these are or should be the most common and should be encouraged in most organizations. Sometimes, we simply cannot know what will work until we try something. A great example of encouraging “learning failure” risk taking occurs in direct marketing where the mantra is “test, test, test” before rolling out a major marketing campaign. The goal is to incur lots of small failures while working out the campaign details before risking large amounts of money.

Maybe we should change the conversation – instead of “try and fail”, let’s call it “test, test, test.”

Intelligence versus judgment

“Intelligence is nice, but good judgment is better. Beware of smart managers who have limited vision.” – Bill Starling, CEO of Synecor and Managing Director of Synergy Life Science Partners

Bill has it right. Good judgment, like timing, is everything. You can be the smartest person in the world, but if you don’t know what to do with those smarts, you won’t accomplish much for yourself or anyone else.

A recent article in the New York Times about young lawyers makes the case that many law schools have become too academically oriented; they don’t train their students to become practical lawyers who can actually do anything useful for clients.

Effective management also requires smart people who have acquired some base of knowledge and who have developed skill at applying that knowledge to real-world situations. Many large companies have formal management training programs specifically geared to bridging that transition from academic learning to practical application. They are apprenticeships by another name.

How can owner/CEOs of smaller companies bridge this training gap?

Many small/medium-sized companies simply hire experienced people from large companies. This is a time-honored way to gain experienced people.

In the current soft labor market, consider hiring the smartest people you can find and train them on-the-job. Look for energetic self-starters who are attracted to your particular type of business and give them early responsibility in bite-sized chunks.

Keep in mind that people tend to learn more from their mistakes than from their successes. Just don’t let them risk more than you can afford for them to lose.

Moms Rule

Every once in a while I come across a new article, book or blog that jumps out at me with "Hey, I'm different! You might want to take a closer look."

This morning's pleasant surprise was The Mogul Mom, a blog founded by Heather Allard and written by a team of contributors for Moms running a home business while raising kids. Too often, we forget that the world would eventually come to a stop if there weren't some moms raising kids. On the other hand, I'm the father of two professionally trained daughters, and I want them to have every opportunity possible to have everything they want.

The best part about The Mogul Mom is that many of the articles and tips are applicable to any type of business, not just home-based businesses run by stay-at-home moms. Here are two examples with refreshing twists on old topics:

7.5 Tips To A Better Testimonial

5 Steps To A Landing Page That Converts Like Crazy

And this one was the best - 3 Life Lessons I Learned From My 3 Parents

Life is short - take in everything you can!

What world are we living in?

Thomas Friedman's column in Sunday's New York Times (Serious in Singapore) describes the nimbleness of Singapore's people in responding to a changing world. Their mantra: What world are we living in and what do we have to do to thrive?

As a tiny city-state, lacking natural resources, in a volatile part of the world, Singapore has developed a culture and economy based on rapid adaptation.

What are some of the lessons here for owner/CEOs?

1. Focus on the world as it is, not as we would like it to be.

2. The world is large and we are small; learn to move quickly.

3. Success comes from being nimble and hustling.

4. Training and education are the foundation.

5. No amount of wishing is going to make reality different from what it is.

Singapore's success is a great example of figuring out what you have and making the most of it.

The yin and yang of social media

Everyone below the age of xx (pick a number) is raving about some form of social media these days. Twitter is big and facebook is massive, supposedly, and they are going to change the world.

In today's Lost in a digital world, Seth Godin talks about how easy it is to hide. We think we're networking, building relationships, developing business, etc., but if we lose all human contact, all we're doing is hiding.

Owner/CEOs know that businesses are built by building relationships. And building those relationships requires a certain minimum amount of face to face contact. A lot can be accomplished from a distance electronically once you've established that eyeball-to-eyeball substantive contact.

Deal making is a great example. Teams can strategize by conference call and email, but due diligence requires your team to be on the ground touring facilities and talking to people face to face. And while document exchanges and haggling over contract language have been greatly facilitated by email and electronic document rooms, hard negotiations on difficult subjects almost always require physical meetings.

Web-based retail and internet marketing might at first appear to be different. Just look at the success of amazon.com and other online businesses. But amazon's business development officers are likely not meeting with publishers on facebook. They're in New York, or wherever, pitching them in person.

Once all the hype dies down, social media will be like all the great, but now mundane, business tools which came before (think telegraph, telephone, email - you get the idea).

By all means, experiment, test, and incorporate social media tools in your business wherever they make sense. But don't get carried away. You still have to sell stuff and make a profit to create real long-term value.