February 28, 2014
For many of you, the last recession put you into survival mode. This is especially true if you are in banking, financial services, construction, retail or automotive. Those industries were hit so hard, all growth plans had to take a back seat.
Shrinking expenses was the order of the day.
As long as we continue to watch cable news (CNBC, etc.) or let the doomsdayers continue to beat the drums of double dip or next-bubble, we'll stay in neutral, letting our competitors pass us by.
Here's my analogy: A downturn is like a car crash during a NASCAR race. The yellow caution flag comes out, we all coast in the same position. At some point the green flag is waved and everyone scrambles for the lead.
Here's where business turns out differently: The "game on" flag is invisible, just like the hand of the market that Adam Smith wrote about. Some leaders see it early and others see it too late. In 2009, a New Yorker article (Hanging Tough) isolated some of the great leaps in history that were made by companies that got back to growth, innovation and employee development before their competitors. When they saw the green flag, just as the worst of the crash was over, they hit the gas. Kraft, Kellogg's, Hyundai and Apple are all examples of this phenomenon.
Here's a news flash for you: The recession is over. The run up is on. If you wait for any more of a clear sign, the next downturn may be upon you and there's nothing left in your tank. It's time for you to think about growing your business, buying companies and investing heavily in your talent.
As one leader recently told me, "By the time you realize you should have been focusing on growth, it's too late. Your competitors have been doing it long enough to build up not only a lead, but barriers to you being able to draft on their success."Tweet
February 12, 2014
Recently, I was booked to give the closing keynote at an annual corporate meeting for an industry leader. Their CEO had a vision for the meeting: Create A Mindset Where Winning Is the Only Acceptable Outcome. She picked me because I'd worked at a company (Yahoo) that famously developed this outlook, then lost it over time.
I was intrigued by this assignment, and immediately thought of lessons learned from studying Paul Galvin of Motorola (video clip from one of my talks about him). Researching post-Galvin case studies led me to A.G. Lafley's days at Procter and Gamble and ultimately his book, Playing To Win: How Strategy Really Works.
Lafley believes that strategy is "an integrated set of choices about how to win in the marketplace." In other words, strategy is not about accomplishing a certain task or reaching a certain goal. Those are tactics. Being strategic is about making the hard choices to achieve a sustainable competitive advantage in the eyes of customers.
He's got an attitude about leaders that see it any other way. He picks on companies like Saturn, a GM division, that was 'Playing for the sake of playing.' They never intended on beating the Japanese at their game. They just wanted to sell cars in 'the low end of the market,' so Saturn was created. They were not resourced to outperform Toyota, Honda, Nissan, Kia or Hyundai, and eventually, the division was shuttered.
He's even harder on leaders that Play To Survive. In his view, "a company must seek to win in a particular place and in a particular way. If it doesn't seek to win, it is wasting the time of its and the investments of its capital providers." He's right too. Around 2003, I witnessed the Yahoo culture shift from winning to "hanging in there". This was the beginning of the sideways years for the company. We watched competitors like Google leapfrog us with moonshots (Google Earth), while we played it safe by incrementally improving products (Click To Print Map).
Over and over again, Lafley stresses the choices leaders must make in their strategy. The first choice is 'What is our winning aspiration?' which leads to a cascade of choices which build on each other.
I like this cascade (based on the work of Michael Porter, one of Lafley's mentors). It starts with our aspiration or purpose, which according to Jim Collins, should be audacious. Lafley points out that "too many companies eventually die a death of modest aspirations." They made modest choices that the beginning of the strategy cascade, which then led to market-mediocrity.
Then, the second strategic choice is location - where are we going to win? This narrows the market, sometimes to a specific niche where a true winning opportunity lies. Narrowing the market is a hard choice for many, making it even more strategic. But to narrow the market is to narrow the scope of competition as well - making it easier to win.
The next difficult choice has to do with our weapons in the market, the sources of our competitive advantage. In Lafley's view, they need to relate to the perceived value the company delivers to its most important customers. Then, the next choice is about which resources need to be marshaled to deliver that competitive advantage over time. Finally, choices about management systems are made to ensure a high degree of operating excellence. This is a great exercise for any business leader or entrepreneur thinking through their strategy. Each choice is limiting, and serves to give the company a true sense of focus.
One of his stinging points is that "Too many leaders define strategy as the optimization of the status quo." In his view, this leads to sameness, which is not a strategy but "a recipe for mediocrity."
To Lafley's cascade, I added a six element: How Do We Close Value Gaps? This is based on the work of Sandra Vandermerwe in her book Customer Capitalism. Stanley Marcus Jr. told me about this book back in 1999 when he was sharing a case study about the Mercedes Smart Car launch in Europe.
The idea is that you can't lock in a customer anymore with contracts or proprietary technology. Your efforts to do so have decreasing returns over time. The key to winning over time is to get the customer to lock on to your company that solving all their problems in the activity space. For Mercedes' Smart car launch, the activity space they focused on was short haul mobility. The car was designed for trips up to about 100 kilometers at most. For such a specific activity focus, there are obviously value gaps that they need to close: Repair, Renting a bigger car, Insurance, Maintenance and so on.
Here's the idea: Each value gap is an opportunity for a competitor to enter your customer's life and steal them. If you've rented a car at Avis, for example, you likely drove a GM product such as a Malibu or an Impala. If you drive another brand, that's an example of a value gap they didn't close, which might lead you to switch later. Mercedes anticipated this in their strategy, so they provided rental car services to close that gap.
For my keynote, I used a more contemporary example from the medical care industry. For Baxter Healthcare's Renal Bag product line, they built a strategy around the activity space of maintaining kidney health. As they built a wining strategy, they realized that the customer has pre-during-post needs. Up until then, they only played in the 'during' phase, where their bags were part of treatment.
From pre-treatment advice to post-treatment therapy, Baxter had value gaps a competitor could drive a truck through - dropping off samples of a competitive core product. So the team built or partnered their way into an airtight approach to the market, which served the activity space with their product serving as a piece of the puzzle and not a commodity.
My audience was intrigued and provoked into action at the same time. Several focused on choice #2 (where do we win?) and #6 (how do we close value gaps?) as key questions to answer quickly in order to protect their winning hand.
My closing words echoed Lafley's perspective: If you are not playing to win, at best case, you are losing a little more each day. It's a matter of tough choices about the things that matter ... to the customer.
November 15, 2013
Fear is often cast as a bad thing, never to be fed or encouraged. But that is an oversimplification. Fear comes in many flavors, driven by its source. Some sources are healthy, some are illusionary and others are destructive. That’s right, some fears are quite healthy for your sense of balance.
Fear is the acknowledgement of a formidable threat and substantial stakes. If you don’t really think it can hurt you, you aren’t afraid. If it doesn’t matter, you can sluff it off as a casual concern. If you lack ANY fear, in many situations, you aren’t dealing with reality or you are overconfident. By recognizing the constructive fears, you’ll find proper direction.
For example, when consultants or journalists asked former Yahoo CEO Tim Koogle ‘what kept him up at night’ in 1999, he would reply, ‘two college kids in an apartment, tapping out code that will disrupt the industry.’ In other words, he feared irrelevance. It was a legitimate fear too, as Google was being hatched on the Stanford campus at that exact time.
On the other hand, I’ve worked for several CEOs that put more of their energy against the fear of failure. They worried that the proposed product might not sell well, giving them a black eye to investors. They worried that shifting to the new technology platform might lead to downtime, alienating legacy customers. Were these fears legit? In all situations, the greatest risk wasn’t a botched release or a short outage in services. It was competitive innovation.
The best way to manage fear in your life is to prioritize them by their legitimacy and urgency. The healthiest fear for a modern day business leader is obsolescence. As Koogle pointed out to me, “for every company that goes down due to a few bad product SKUs or sloppy accounting, there are nineteen that die a sudden death because their customers flee to the new-new thing.”
Takeaway: Your fear of getting lapped in the marketplace should be the one you pay attention to and lose sleep over. If you want to be a modern day innovator, your fear of obsolescence should be greater than your fear of failure.
What do you do with these fears? Face the worst case, and resolve to do better than it. Deploy resources to overcome its source (competitive innovation). Talk about it as a burning platform to your colleagues.
For more, watch this video clip from 2005 where I share Tim Koogle's insights and the Paul Galvin story. "Do not fear mistakes. Wisdom comes from them!"Tweet
September 27, 2013
Earlier this year, I was sitting around a table of successful entrepreneurs, listening to them talk about lessons learned in startup world. One founder would soon sell his company for almost two hundred million dollars and the person sitting across from him had just successfully raised one hundred million bucks from Silicon Valley VCs. These two cats knew their stuff.
"If you could change anything about how you built your business, what would it be?" the recently funded CEO asked.
"I would have built culture from day one," replied the soon-to-be-swimming in dollars CEO. "Just like Tony did at Zappos, start with culture then layer on a strategy. If you wait until 20 people, it's probably too late. If you wait until 100 people, you'll need to clean house unless you've been very lucky in recruiting people that are naturally tuned into your values." Deep.
Last week, I gave a keynote at Foundercon, an annual leadership event for Tech Stars alumns. (If you haven't read Do More Faster, you should grab it right away.) Along with sharing my perspective from Love Is the Killer App, I talked to them about the critical importance of prioritizing the building of culture. My message was that when culture builds itself, the buildings look like silos - not a collaborative web.
I believe that culture is a conversation about "how we do things here." Most culture is centered on how team members relate to each other as well as the outside world. The leaders initiate the conversation, then punctuate it with action. They don't hire people that don't fit the culture and they reward the ones that do in succession planning. It's all done very publicly, often talked about and frequently marketing at a visual level. (Signs of "Done Is Better Than Perfect" were everywhere at young facebook.)
Whether you are starting a company, church or a team, if you want to lead, be on top of the conversation. The value of culture building lies in Henry Chesbrough's definition of the concept: "A set of values, properly expressed and enforced, that creates a system of social control." If the culture is strong, every team member knows exactly what to do, even when the leaders aren't there to tell them. If the culture is about transparency, information is disclosed when asked for. If it's about putting the customer first, then refunds with no questions asked are given by associates, even before it becomes a codified policy.
Here's the three keys to building culture, even with a small group:
1. Choose a few values that define the purpose of your business. Make sure they are based on helping people or solving their problems. Choose values you can get a teenager and a grand parent excited about. HINT: "Maximizing shareholder returns" is a really lame value statement. Sounds like a corporate conglomorate, which is fine for investors...but they are gone after they write the check...you need talent, partners and fans.
2. Adopt rituals to promote your values, and integrate them into the fabric of your group. Not just signs or placards, you need to plan events or choreograph group behavior around values. If you value collaboration, have a Friday beer bust and be mindful of messaging. If you value customer experience, host an annual gathering of them to open your ears and iterate. Saturn automobile used this ritual to build relationships with customers, and at the same time, to cement their values around creating a wow experience for customers.
3. Use these values to make hiring, budgetary, firing and rewards decision. If you are working at an established company, but fear that you need to re-build culture -- you'll likely need to let a few people go that don't fit. Words may resonate, but actions motivate others to buy-in.
What are your organization's values? How are you driving them into the conversation? Would love to hear about it in comments.Tweet
August 28, 2013
Challenge conventional wisdom. There is almost always a better way— Mark Cuban (@mcuban) August 10, 2013
I connected with what he was saying, and how important it is for us to progress past "what's been working so far." Too many leaders (and their manager minions) challenge new ideas, where offering up a new way is like playing whack-a-mole...where the creative thinker is the mole!
One editor at a highly prestigious publication responded to Mark, of course, with an edit: "Sometimes." His point, I guess, was that conventional wisdom is usually tried-and-true to the situation since it is, ahem, convention. But his response also echoes the sentiments of leaders everywhere. The Status Quo doesn't have an image problem. It believes that only rarely is "the new way" the best solution.
These are the new battle lines: Almost Always VS Sometimes. The Almost Always leader (a new way is Almost Always better) believes that we should constantly question how things are done and what's worked up until now. They are vigilant when it comes to being ahead of the curve. They like to hire (younger) smart people, who've shown that they can think outside the lines when stuck pursuing a worthy goal. The Almost Always leader creates a culture where innovation is king, and agility is a habit and not just a response to crisis.
The Sometimes leader (a new way is Sometimes better) believes that there should be a presumption against change. They are quick to trot out historical turkeys when faced with a challenge to convention--especially if it comes in the form of a novel idea, which requires a change in the rules. They like to hire people with quotable resumes, a willingness to fit in and a tendency to support the system above all else. The Sometimes leader creates a culture where process is king, and the top goal is to "not blow it" or to "let the cowboys take over."
Guess which company is RIM/Blackberry VS which company is Google? Guess which company is Tesla VS which company is GM? Guess which company is Facebook VS which company is Kodak?
The cycle of disruption is getting tighter every year, where conventional wisdom transmutes into head-in-the-sand thinking. What worked like a charm a few years ago, clunks along in last place today where the consumer is more mobile, agile and hostile to his grandfather's solution.
Even if you have an Almost Always leadership style, that doesn't mean you are creating an anything goes culture. In the case of Google, it's mantra was "Do Epic Shit". There are still many steps that a new way must take to get from the whiteboard to the field. It has to find a tribe. Then it needs legal or the department of comportment to sign off. Then it usually needs money, and often, cannibalization of an existing cash calf (which used to be the cash cow). Those "gates" often shut down new ideas even in the most innovative cultures.
But at least, if the presumption was in favor of a new way, your leadership style just might create a climate where your talents bring their ideas to work, and fight for the company to stay relevant. If you have a Sometimes leadership style, that's one gate too many for almost any new idea to get through. If your presumption is for the Status Quo, your company doesn't have a chance ... barring throwing out its leadership ... to compete for the future.
This jives with what I've learned from author Bill Jensen (Disrupt!): "Your company isn't disrupted. Your eco-system is disrupted by a more agile culture." And when the culture smells stale, that fish stinks from the head!Tweet
August 02, 2013
Show me a ball player who injured most of the time and I'll show you someone either on the trading block or moving towards retirement. When someone develops a reputation for being injury prone, their stock plummets...along with their playing time.
Why? After a few injuries, people begin to wonder whether you really want to play the game for better or for worse. So many injuries are latent, and too often players take their time coming back from them. While they are out, the seaons gruels on and other players covered for the injured reserve. And that doesn't build up trust.
Now apply this to your worklife. If you get your feelings hurt a lot at work, causing you to withdraw from projects or to give up on the task at hand, you'll eventually be the last person picked for a team. If you are too easily exhausted by hard work, having to take off time to recoup, you won't be seen as a finisher that your colleagues can depend on. And when times get tough, they'll only keep the strong.
In my career, I've prided myself on concealing injury and playing on. This was instilled in me by my grandmother Billye, when she talked about succumbing to an emotional or phsycial injury as a public sign of weakness...and one step backwards.
"A winner never quits, and a quitter never wins," she'd quote me, from the pages of Napoleon Hill's Think and Grow Rich. Then she'd apply it to my situation: "If you can't play through pain, how can you ever finish the season of life? Why are are going to let your feelings get in the way of doing your job? Why would you quit on your friends that work by your side? Why does being sensitive make you management material?"
Now, mind you, I'm an echo-boomer and she came from the GI Generation. It's pretty natural that she would give me advice to buck up, never let 'em see me out of breath and play through the pain -- and I'd follow that prescription. For our current generation(s) of workers, that conversation is not as easy. X'rs and Y'rs grew up in a world where they were raised to protect their self-esteem and get out of a bad situation ... even if means quitting.
I believe there is a middle ground when it comes to the intangible injuries we often face at work. After all, it can be a contact sport as we deal with: Overbearing customers. Relentless managers. Prima Donnas. Bullies. It's how we decide to respond to them that defines our sense of toughness.
If we elect to take them personally, cop to an injury and reduce our engagement level, we are letting them put us on the sideline. We are shrinking to the situation.
While I am a ferverent proponent of standing up for youself, I recommend you do it from a position of strength, not pain. Instead of letting your negative feelings (Sick & Tired Of This!) be expressed by your actions (dialing out), push back, then resume your efforts with an even keel. If you need to, rely on your closest friends and family to hear you out, give you comfort, and keep it behind the firewall.
Leaders are often picked because of their uncanny ability to recognize reality, but maintain hope. Where others melt down or shrink in the face of ignoble treatment and aggressive adversity, they stand tall, if not bruised. Now you know their secret sauce. They are winners.Tweet
July 18, 2013
Last week, I had a chance to catch up with a friend who just moved to LA to work in the music production industry. He's read Love Is the Killer App several times, and put several of the ideas into practice. He's mentored several up and coming engineers as well as lending his network to those seeking a new gig.
"But here I am, still living check to check," he said to me. "Few if any of the people I've helped have done squat for me. How can your system work in the real world?" This is a question I've struggled with while writing the book, touring to promote it and mentoring dozens of people over the last decade. It's very hard for a human to give to a taker, and then be OK with being took.
In my experience, however, I've learned something critical: Nice Smart People Succeed. Note I didn't say Nice People Succeed. The big difference lies in being smart about whom you help out and what to look for before you help out a second time. So here's the advice I gave him:
Only Give To Fellow Givers - Too often, we get sucked into helping out users, because they are very good at conning us out of resources. Screen people first for their generosity by asking them who they've helped out recently, and how it made them feel. If they fumble for an answer, reconsider whether this is a good person to promote or mentor. If you give to a generous person, at the very least, they'll pay it forward. (I know that it sounds harsh for me to say that we should deny selfish people our talents and gifts, but the Takers are well organized and constantly stealing what they can. The Givers need to circle their wagons accordingly.)
Don't Give Away The Scarce Or Non-Replenishable - You have intangible gifts that actually grow when you give them away. Take knowledge sharing. When you give wisdom or advice to others, often you get feedback from them later about how it worked, which only sharpens your saw. When you intelligently share your network of relationships, your total circle usually expands due to reciprocity and goodwill. If you give away too much time, money or permissions (letting others break the rules), you'll run out eventually, and then be VERY senstive to the ROI of giving.
Take The Long View - Don't expect to see results immediately. By suspending your expectation for immediate reciprocity, you send a powerful message to your recipients that empowers them: I expect nothing in return. This usually gives them a feeling that they too should be as generous and helpful as you, and that you truly gave them a gift...and did not look at them as an investment.
Photo/Drawing by Joy Martin
June 14, 2013
This week, I've been tweeting and writing about innovation. We all know it's the prescription for sustainable success in a constantly changing world. But what exactly is innovation? I've played around with several definitions over my consulting and speaking career - and each one is helpful to those trying to harness it's power.
So, I've created a Facebook Page contest, inviting all my friends and followers to submit their definition of innovation. Next week, I'll pick the most helpful submission and mail the winner a nifty Intel titanium removable drive (8 gigs). It's my way of saying "Thanks" for contributing to the conversation.Take a minute to check out the video I made that explains the rules, the prize and my motivation for launching it. Make sure your submissions are in the comments to the video on the Facebook Page and not here.Tweet
June 13, 2013
Do you think you can be the next great innovator? Are you gunning to be an inventor like James Dyson or Thomas Edison? Do you want to disrupt entire industries like Steve Jobs, Jeff Bezos or You Tube's Steve Chen, Chad Hurley and Jawed Karim?
It's entirely possible for you to become a great innovator that changes the world with your creativity, passion and grit determination. But behind these innovations is a simple process that must be followed, otherwise you can end up frustrated and broke.
1. Identify a Big Opportunity - Many innovators created a solution to a problem they've encountered that is common place. Dyson couldn't find a vacuum cleaner that sustained decent suction over time. He did his research, realizing he was not alone. Jeff Bezos discovered that book stores couldn't stock enough books to offer consumers (and himself) the selection they needed. In every case, there's a problem and a big opportunity for whoever solves it. This is key to raising any type of funding too. It's critical that you also have connections, experience or proprietary data to assist you in solving it, otherwise you are at a competitive disadvantage over time.
2. Brainstorm a Solution - Leveraging your experience, data or network, identify novel solutions that completely solve the problem at hand. At this point, be clear on your assumptions (problem, market, requirements, solutions, market reactions to it, etc.). The best solution will likely be simple, yet hard to execute.
3. Prototype the Best Idea - Tom Peters once told me that prototypes are important, because if you have one, someone can point at it and say, "that's not the right solution!" Without it, all you are doing is talking in generalities. Your prototype might be a working product, a minimally viable service or even a visualization (diagram) of the solution. Southwest Airline's Herb Kelleher often talks about the importance of his napkin diagram of regional flight routes as the key to recruiting talent and money to his business concept.
4. Test Your Assumptions and Be Willing To Pivot - Many of your initial assumptions about the solution (design, rules, go-to-market strategy) will be off, because you don't know what you don't know as an innovator. You are looking for a product market fit, not the best looking or sounding solution. Put the product on sale, give demos to prospects and collect feedback. In Nail It Then Scale It, author Nathan Furr suggests that if your idea is has product-market fit, then 50% of your cold calls will be returned. If your early feedback suggests you are on the wrong track, be willing to dump the solution and return to step two. Eric Paley puts it best: "Don't love your business idea. Love the problem you want to solve."
5. Execute On a Validated Idea - By execute I mean finish what you start, obsess over the details and never stop testing your assumptions. Great innovators are first and foremost, exceptional finishers. A few years ago, I made a Skillsoft video explaining my perspective about the innovator's chief requirement: Execute!Tweet
June 05, 2013
We all know that giving attaboys or attgirls to our team is a good thing, right? Not so fast, or should I say, not so general. Research from Bersin indicates that certain types of accolades or recognition works better than others - especially when it comes to Gen Y employees.
What works? Highly specific feedback that identifies exactly what your employee did, the difference it made and how you feel about it. What fails? Vague feedback that doesn't isolate your employee's thoughtful action and its output.
When you tell someone, "you are doing a great job" that is a case of vague feedback. When you say, "I appreciate the detail you put into that client report, especially the metrics you included on opt out. It's one of the the top reasons they've renewed the campaign, and I'm proud of your thoughtfulness" you are being highly specific.
This is important to Gen Y employees that play work like a videogame, seeking to master it and not just suck-up-to-the-suits. General feedback gives them the idea that it's not personal to them or thoughtful on your part, by the way. A recent article in Harvard Business Review pointed out that most companies ranked giving feedback as dead last in competencies, but a top priority to Gen Y employees. So think before you give praise, even if it means you give it less often.
The other reason specific positive feedback works best is because it perpetuates the specific behavior that you want to see happen more often. A generalized, "good job last quarter" doesn't signal to your employee what they should be repeating, other than "doing a good job."
Recently, I gave feedback to my event coordinator at my speaking manager group that was highly specific. She added power point format to an event report (telling me that the event manager wanted me to know that she was using the 16X9 format instead of the default 4X3). That's really important to a speaker that doesn't want to have to reformat a presentation at the last minute...and I use a lot of screen captures that would look stretched otherwise. When I told my event manager that including that type of information was helpful and saved me time and stress, she noted it and told others they should start to include such logistics reporting for all speakers and all events. That's how specific feedback can improve the entire system!