Only the Bold Will Survive

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Playing to win as opposed to playing not to lose. You have heard that phrase before. In fact, you have probably heard it enough to consider it a cliché. But in your business environment it is not a cliché. The organizations that survive for years to come will make this their guiding strategic principle.

The objective is to continuously look for ways to create competitive advantage. For many organizations this requires that they start thinking differently than they ever have before.

For example, I was leading a series of strategic planning sessions with a large company. At a break in one of the sessions the CEO took me aside to express his frustration about the way his team was thinking. He said, “We have to find a way to get us to think like entrepreneurs. Sure, we are talking about important things like cost control, product effectiveness and customer satisfaction. But, we are being way too inwardly focused. We have to broaden our thinking. Nobody is thinking about how to grow. We are not thinking about how to take market share from our closest competitors. And we are certainly not thinking abut how we can move into new geographic or service line markets. If we stay on this track we will get steamrolled by our competitors.”

To think the way this CEO wanted his team to think requires that you recognize that you are in a battle and then take the fight right to your opponent. A great example of this is a hospital whose CEO once described the organization as “a plane flying into the ground.” He recognized that his organization was under attack on three fronts.

Front #1 was an array of money losing ventures. Each of these ventures was started with the best of intentions. However, there was no discipline to the decision-making. If it seemed like an idea that no one could prove was a bad one it was launched. The CEO and his team analyzed each of these ventures. If they determined that it could not be turned around within a few months they shut it down.

He then implemented a disciplined and structured decision-making process to assure that his organization would never again threaten itself with poorly analyzed decisions.

Front #2 was the threat of a very deep-pocketed competitor buying market share all around them. This CEO recognized that while this competitor had lots of money their leadership team was disorganized and very inwardly focused. He saw a window of opportunity to significantly enlarge his market position. He capitalized on the opportunity by quickly acquiring two hospitals and two medical groups before his wealthier competitor got its act together.

He and his team then did the best job I have ever seen integrating these acquisitions into a new and more complex enterprise. But, I'll save that story for a future post!

That brings me to front #3. The largest health plan in the newly enlarged organization’s market was being very open about its intentions to significantly reduce contract rates. If this happened the organization would once again be “a plane flying into the ground.”

Many in the organization were resigned to this fate. They felt that the health plan was too big to fight and without that contract they would not have enough business to survive. But the CEO and some of his top executives saw things differently. They chose to go on the offensive.

They launched a multi-faceted effort that included:

  • Direct negotiations with the health plan demanding increases that would boost net revenue by 10% or they would not contract with that health plan
  • Enlisting political support within the government
  • Direct meetings with business leaders to educate them on the importance of the contract increase.
  • A media campaign to educate the public on the importance of the contract increase.

The CEO and his organization won. They got the full contract increase they were seeking securing their financial success for years to come.

There are two important things to take away from this story. One is to believe you can win. Do not resign yourself to slowly being squeezed out of business. You deserve better than that and so does your community.

Second is to act quickly once you see your opportunities. Fortune favors the bold!

Mindset vs. Toolkit

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I've witnessed many debates between executives on the relative merits of LEAN, Six Sigma, PDCA and scores of other codified problem solving processes. The people are always arguing about which set of problem solving tools is the best. I think they are all missing the point.

What is the point you ask? There is a great story about a Toyota executive attending a LEAN conference as a keynote speaker. After his speech he was asked why no one inside Toyota had ever written a book about LEAN considering that Toyota had pioneered the concept.

He looked a little bemused and said, “Because there is nothing to write about.” His audience asked what he meant by that. “Well, all the book would say is ask the people doing the work if they know what they are supposed to do, do they know how to do it and what stops them from doing it right every time…then ask them the same questions again and again and so forth.”

His point was that the value of any process, whether LEAN, Six Sigma, PDCA, etc. is not the tools advocated by that process. The value is in the mindset that develops in the people over time. A mindset, a culture that is always focused on how to do a better job.

If you go to Amazon.com you will find over 270,000 books on LEAN process. Yet the founders of the concept have not written a single one of them. These experts know that the tools are easy to learn how to use. The important work is establishing the right mindset in an organization.

Many of my clients think I have a codified process with a set of tools that I always use. I really don’t. I make up new tools all of the time.  Sometimes in the middle of a problem solving session! What I have is a mindset that calls me to drive teams to see their circumstances as clearly as possible from as many different angles as possible.  I will use any means I can dream up, borrow or steal to make that happen!

That is my recommendation to you. Hold everyone on your management team accountable for continually improving the processes and results in their areas. Do not get hung up on what specific process they use to accomplish this. Let them create the way that will work best with their people. Establish the mindset for continual improvement by relentlessly following up with them to track their progress.

This three-pronged approach of requiring managers to continually work to improve, allowing them the flexibility to do it their own way, and regularly following up to make sure what they are doing is working will establish a mindset for improvement that will be far more valuable than any tool kit you can buy.

Can You Really Change People Through Leadership Development?

Can you really change people through leadership development? Well, if you think about the leadership qualities of some of the leaders you know who have been through typically ineffective leadership development programs you don’t need me to answer that question for you.

I'm going to share a story within a story today that addresses some of the most fundamental questions in leadership development:

  • Can you change leaders’ behavior?
  • Can really bad leaders change?
  • Can you change a leader’s heart and really make the change stick?
  • How long should leadership development last?

My story begins. I'm sitting in the boardroom of a large healthcare company. The senior leadership team surrounds me. They are looking more than a little skeptical. The CEO, whom I had done some other work for, had asked me to talk to his team about how I could help them create a leadership development program that would teach the right leadership skills to all managers.

I was being hit with comments and questions like; “leadership development is a waste of time” “I’ve never seen management development work” “Who cares what leadership style you have, just get the work done”

Then this gruff senior Vice President challenged me with “Do you really think you can change the heart of a leader? I mean you might get them to nod their head “yes” that certain leadership styles are more appropriate than others, but at the end of the day they are going to keep doing the same things they have always done. So, answer my question, do you really think you can change a leader’s heart?”

I looked at him and said; “I don’t know and I don’t care and neither should you. But, let me tell you what I do know. The right kind of management training can change behavior and make it last…well, sort of. Let me tell you a story.”

Turn the calendar back 10 years from the boardroom we were all just in. I was with a brand new client. I was at the beginning of a leadership development program for more than 250 leaders. I had started with the top dozen or so leaders.

I had just received the results of a leadership skills survey and was meeting with each executive to give them the feedback and discuss their management development plan.

One of the senior executives had been there for years.  He loved to put people on the spot in public and make them twist while he blasted them. He had orchestrated the firing of scores of leaders just because he was in a battle with their bosses. He was a tyrant, plain and simple. His survey results included this comment from one of the staff; “He can suck the soul out of a person and enjoys doing it.”

Against all expectations his behavior began to change for the positive. He began to call himself “Good Robert” (name changed to protect the guilty!) and so did other people. In fact, at a social event his wife took me aside and said; “I don’t know what you’re doing with him at work, but keep it up!” And here is the amazing thing, his behavior stayed positive for 6 years!

So there are the answers to the first two questions I posed at the beginning of this article. Can you change leaders’ behavior? Absolutely! Can really bad leaders change? Yes, again!

But what about that next question; Can you change a leader’s heart and really make the change stick? The change stuck for 6 years. But, then the hero of our story left to become a CEO at another company. He called me to say; “I just wanted to tell you that I always hated that management training program and I’m not going to hire you to help me here. I’m going back to being “Bad Robert.” I always like being “Bad Robert” and that’s who I’m going to be!”

Did leadership development ever change Robert’s heart? No, it did not. But it did change his behavior for 6 years. Which leads us to the answer to our last question, how long should leadership development last?

Forever. It is something that every leader needs to do for them and every organization needs to do for all of its leaders. Why? Because, while Robert’s behavior was extreme his tendency to fall back into bad habits is neither extreme nor unusual. We all have that tendency.

But we can avoid that trap by continually focusing on the specific leadership qualities we want to exhibit. Excellent leadership development applied consistently over time will allow you and every leader in your organization to keep that focus.

Seabiscuit, The Father of Venture Capital and You

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A while back the CFO client sent me an email. She was going on vacation and wanted a recommendation of a book on leadership that she could read while she was away.

Without hesitation I recommended unexpected book, Seabiscuit: An American Legend by Laura Hillenbrand. She called me asking why in the world I recommended a book about a racehorse when she asked for a book about leadership.

I told her that the real story was about the tremendous teamwork and belief in each other that developed between the owner, the trainer and the horse. It was that teamwork and affinity for each other that allowed them to succeed against very long odds.

Georges Doriot, considered the father of the venture capital industry, promoted a similar perspective on success. Doriot founded American Research & Development Corporation, which backed one of the first blockbuster technology start-ups, Digital Equipment Corp.

Doriot’s strategy was to invest in talent and great teams, not necessarily great ideas. He was quoted as saying, “An average idea in the hands of an able team is worth more than an outstanding idea in the hands of a team of only average ability.”

I recommend that you spend more time building your executive team than searching for that “next great idea.”

Avoid traditional team building exercises. Instead, spend quality time together as a team. Not in static meetings where department heads report on what they are doing, but in substantive business planning and review sessions where the team is sharing perspectives on solving problems, managing interdependencies between projects and analyzing new opportunities.

Do not rush these sessions. Allow enough time for your team to look at issues from many different vantage points. You may see the right answer quickly. Resist the temptation to point it out. Allow the team to fully engage each others' opinions.

Through this process each team member will broaden their perspective and learn to collaborate in a way that will yield real synergy and develop a team whose ability is far greater than the sum of its parts.

Put Your History To Work For You

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One wall of the conference room was covered with flip charts from floor to ceiling. The senior executive team had spent the last two hours analyzing its past looking for insights about its future.

One of the team members leaned back in his chair and said, “You know, I’ve always known all that, but I never really saw it before.”

What he meant was that by looking deeply at what was happening at various points in the past, the organization’s history went from a disconnected set of anecdotes to a goldmine of lessons about success and failure. Patterns began to emerge that yielded valuable insights.

For example, one key lesson was that whenever they suffered a business downturn it was always associated with the organization being very inwardly focused. The team made sure that as part of their going-forward plan they made a consistent effort to stay connected to their customers and community. They also made a decision to invest more time studying their competitors. These decisions have kept them on a success track for the past several years.

Here is how you can put your history to work for you. Get your team together and do a Turning Points Analysis:

Brainstorm various events from your organization’s past that triggered a turning point. Define a turning point as a point in time when your organization’s fortunes took a significant turn for the better or worse. Some examples from our clients are:

  •  A new competitor emerged
  • A major contract was lost
  • A new service was a big success

Select four or five of the most significant turning points. Try to have a mix of both positive and negative events.

List what was happening in critical areas effecting your organization around the time of each turning point. Some examples include:

  • Competition
  • Profit Drivers
  • Relationship between the organization and customers

Study the chart with your team. Identify the lessons for your future that are buried in the stories from your past.  You may see something that you've always known, but never really saw before.

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