Should I Use A Recruiter?

By Mike Myatt, Chief Strategy Officer, N2growth

I recently received an email from a CEO asking the following question: “My HR department isn’t producing the quality of applicants we need. Should I use outside recruiting firms?” Since N2growth has a talent management practice which includes a practice group that provides retained search services, in order to be transparent I must disclose my bias before answering today’s question. While I clearly have a strong bias favoring an outsourced recruiting model, the question merits a bit of exploration in order to provide a fair answer. In the text that follows I’ll do my best to manage my bias and provide a transparent and authentic answer to a question I’m sure most of our readers have asked themselves at some point in time.

Let me begin by providing some historical background on organizational behavior which might serve as a useful backdrop for today’s post. While I could go as far back as Aristotle’s lectures on the topic of persuasive communication and self-awareness, to Plato’s writings on the essence of leadership, or even refer to Machiavelli’s work on organizational power and politics, for the sake of brevity and relevancy I’ll fast forward the late 1800′s in America. It was during this period of time we can find the roots of modern HR. It was during the late 1800′s industry recognized people problems were a very real and rapidly growing concern in the workplace. It was also during this time the US Government stepped-in to provide the first real legislative protections for the workforce.

As time has continued to march forward America has moved from the concept of “personnel administration” to “human resources administration” to “human resources management” and now we are moving on to “talent management.”  Nomenclature aside, the biggest challenge that HR departments face today is that of multiple and often competing agendas, which in turn tends to cause staffing inefficiencies often resulting in lackluster performance. As with the evolution of most functional departments in the corporate world, with the passing of time has also come some empire building and title inflation. The HR department is no exception to this regrettable state of dysfunction.

Let me ask you to think about your HR department for a moment – How large is it, how big of a budget does it command, and most importantly how productive is it? Upon reflection you’ll find that much of your HR department is likely charged with defensive posturing associated with managing compliance and litigation risk. Other staff members are likely charged with training and administration activities, some have fallen into IT roles developing applicant tracking systems and other support infrastructure, while others perform marketing and research activities surrounding candidate development. How much of your staff is actually charged with recruiting, and how senior are these people?

It is not that HR departments are incapable of making high volumes of consistently great hires, it’s just that most or not organized to do so. If your executive level recruiting is being handled by staff level HR shame on you (see “Who Should Do The Hiring“). Following are just a few reasons why I believe in most cases a company is better off leveraging the services of an outside recruiting firm:

1. Outsourcing allows companies to focus on core business while leveraging a broader, deeper and more senior recruiting talent pool than they normally can manage organically. The real issue isn’t internal vs. external, but internal and external. Talent organizations which collaboratively partner with executive search firms produce better results than those who don’t’. It simply doesn’t matter who makes the hire – what matters is the right hire is made.

2. When payroll costs, ad budgets, job posting fees, research costs, IT costs, lost opportunity costs, etc. are considered it is more affordable to leverage search firms. Why dilute your internal budgets on redundant efforts when you can leverage the budget of a search firm?

3. There are many benefits associated with using an outside recruiting firm including realizing the benefits of a confidentiality buffer which keeps the employer in relative anonymity until they are ready to engage with a candidate. Managing the noise of a high profile search is better handled externally leading to fewer conflicts, political hi-jinks, and the potential for leaks.

4. Recruiting firms have existing  long-term relationships with passive job seekers not readily known to most HR departments. A broader talent pool simply results in better talent being acquired. 
Recruiting firms also have broader access to a wider range of candidates who may not have ever considered working in a particular industry or for a specific employer.

5. No charge replacement guarantees makes using an outside recruiter a very low risk proposition.

6. Recruiting firms normally have access to a broader array of tools and information which can often be useful to employers in terms of efficiency, benchmarking and analytics.

Bottom line – the best results come from combining the knowledge and skill possessed internally with the competencies of external resources. Think collaboration – not isolation. Good luck and good hiring!

Financial Market Update

By Mike Myatt, Chief Strategy Officer, N2growth

With this week’s negative market activity I have had several inquiries asking for my opinion on the direction of the stock market. Let me begin by saying that I’m not a stock picker or market prognosticator, but rather I tend to look at macro and micro economic drivers to make general observations which some have found of benefit over the years. In today’s post I’ll note some of my recent observations which I hope will be of some use. That being said, it is my strongest recommendation that before making any changes in your portfolio that you seek the counsel of a qualified financial advisor. On with my thoughts…

It should be noted that US financial markets have seen a very robust run over the past few years. Just this last week, the Dow reached all time high’s breaking the 14,000 mark. Now this week things appear to have reversed themselves as we have seen a fairly strong regression with back-to-back-to-back market losses, and what could easily be a week in which the Dow falls in excess of 600 points (let’s see what happens tomorrow). So the question I’m getting is this; what is going on and what should I make of this? The answers to this question are varied and complex, and to do the topic justice would require more attention than I normally give in the space of a blog post. So rather than provide a long narrative commentary, or an incomplete analysis, I have chosen to highlight the following 6 observations for your consideration:

  1. A Sign of the Times: Many may want to debate and argue about the overall direction of the market, but one thing I’m fairly certain of is that the markets will be very choppy in the coming weeks and months. My personal opinion is that the market may have topped for now, and that we may in fact be moving into a strong bear trend. Given the worsening economy, it wouldn’t shock me to see a sub 7000 Dow in the coming year. Several economic reports are due out next week as well as a number of major companies announcing performance. It wouldn’t shock me in the slightest that we see foreclosure numbers come in in excess of 50% above where they were last year at this time. If you don’t have the stomach to ride out what is certain to be a period heavy volitility then you may want to consider rethinking your investment strategies…
  2. Market Makeup: Stock indexes are made up of a number of different issues across sectors, and as such, are heavily influenced by industry performance. As an example, while the NASDAQ is off sharply today breaking a key technical barrier by dipping below its 50 day moving average, the news may not be as bad as it looks if you dig a bit deeper. If you view NASDAQ performance by contrasting various industry trends you’ll see that the financial, transportation, and energy sectors are weak while technology stocks are actually doing well. If you look at the NASDAQ 100 it is not even close to falling below its 50 day moving average. This is because it is being underpinned by the strong performance of the technology market and their independence from credit markets. Pay attention to industry and sector analysis more than individual performance if you are investing in funds or indexes. That being said, take note of the caution expressed above about the overall direction I believe we’re moving in. With what I believe lies ahead, it will be difficult to hold any major support levels over the mid to long term.
  3. Trouble Spots: Amid ongoing concerns in the Mid-East, increasing oil and petroleum pricing (I believe the last few weeks price decline at the pumps is a temporary reprieve), increased commodity (materials) costs, poor transportation earnings, and a number of other key indicators, I am not particularly bullish on transportation or construction sectors over the short run. While there is still tremendous liquidity in financial markets, I have growing concerns that we are in the very early stages of a credit crisis that when all is said and done may make the credit crunch of the late 80′s look like a cake walk (does anyone remember the RTC?). With aggressive lending and investment policies over recent years now coming back to haunt financial institutions (and I’m not just talking about the sub-prime market) we may see a strong risk re-pricing. It is likely that rating agencies will strongly adjust lending guidelines in the coming months which will affect the makeup of pools and liquidity in secondary markets. We may also well see the pace of LBOs (at least at the top end) slow and the frothy pace at which hedge funds and private equity firms have been investing may taper-off as well. With the dollar still being crushed globally, resting against all time lows against the Euro and the poor performance in financials described above, I’m worried about consumer confidence and its trickle down on retail spending such that I also have short-term concerns about consumer stocks. Many of the same metrics tend to give me pause on manufacturing plays as well. 
  4. Think Quality: Today is definitely reflective of a sellers market as we are seeing a strong rotation based upon a flight to quality. Money is moving into Technology, Pharmaceuticals, Bonds, and other issues perceived to be more stable investments. Don’t get me wrong; volatile markets can be great opportunities for speculators not adverse to risk, but for those that don’t fall into that category I would suggest taking safe harbor over the short-term.
  5. Think Long-Term: I’m not a day-trader, and I don’t view the stock market as a short-term play. If you are a long-term investor sufficiently diversified you will eventually ride-out the ebbs and flows of market volatility and see better days again in the future. If you’re attempting to pick short-term stock or market movement in today’s environment you will likely find yourself getting whipsawed by unexpected rapid moves that may seem to defy conventional technical or fundamental analysis. That being said, why sit and watch your portfolio take hits if you don’t have to…My personal belief is that playing the down-side or a move to cash would be the best thing for investors at this time. 
  6. Think Globally: US financial markets are not what they used to be. The US economic impact on the global economy is shrinking on an annual basis. If you want to maximize portfolio returns, both stronger markets and emerging markets must be incorporated into your investment philosophy.

The above commentary may sound a bit bearish in nature because it is…It is a wake-up call for caution and prudence. My personal opinion is that we are headed for a recession, and as I noted above, a massive retraction in the equity markets, and a capital and credit crisis the likes of which this country has not experienced. Remember that what goes up, must also come down. All investments contain risk, and the trick therefore is to not only understand the risks, but to align your investments with your risk tolerance relative to the returns you’re willing to accept. While the above commentary is a somewhat high-level and rudimentary analysis consisting of little more than a top of mind brain dump of current market conditions, I nonetheless hope that it will provide some value when formulating your thoughts. Remember to seek the counsel of a savvy investment professional prior to making any extreme changes in your portfolio and best wishes for continued investment success.

How’s Your Product Mix?

By Mike Myatt, Chief Strategy Officer, N2growth 

One of the most critical choices that an executive or entrepreneur can make is to determine which sales/revenue opportunities to pursue vs. which ones to pass on. How do you determine where you will allocate your time, your resources and your talent? Do you use a rational decisioning process to arrive at the right conclusion or are you the person that is often second guessed or proved wrong because your decision was made irrationally and you arrived at your conclusion by default, osmosis or some other unknown process?

For purposes of this posting I will exclude the greener pastures of decisioning new sales opportunities and focus on the most overlooked area of opportunity assessment which is prioritizing decisions surrounding sales of your existing products and/or services.

It has been my observation that many sales plans simply evolve for no quantifiable, qualifiable or tangible reason other than just because Following are the top 10 reasons not to pursue a particular sales opportunity:

#10: Because a strong sales or product manager flexed his/her muscles and pushed their bias;

#9: To seek static gains in a vacuum buy just looking for increases in quarter over   quarter sequential revenue growth;

#8: To buy business in order to gain market share;

#7: Because more marketing budget exists for Product A vs. Product B;

#6: Because the sales force can’t seem to get traction with Product X;

#5: Because the sales force is getting traction with Product X;

#4: Because the ad agency made a good pitch;

#3: Because the market research said you had a competitive advantage;

#2: Because your competition does it, and;

#1: Because it’s always been done that way.

Some of the aforementioned reasons if encapsulated in an overarching strategy may not in and of themselves be bad reasons to pursue a sales opportunity. However in the absence of a plan and standing alone in a vacuum they will result in wrong choices being made more often than not. To avoid the common mistakes outlined above conduct a thorough comparative analysis of all product and service lines assessing the following key metrics:

€¢ Cost of sales and profit margins;

€¢ Length of selling cycle;

€¢ Sales/revenue obstacles;

€¢ Competitive analysis;

€¢ Current market demand;

€¢ Potential for future market growth;

€¢ Ability to further brand recognition/growth;

€¢ Quality and quantity of available talent and resources supporting a particular product or service line;

€¢ Execution and delivery capabilities;

€¢ Post sale costs of service;

€¢ Ability to add to lifecycle value;

€¢ Recurring revenue vs. one time revenue, and;

€¢ Creation of additional revenue opportunities.    

Take the above metrics and plug them into a grid ranking each category from highest to lowest for each product or service line. In addition to individual rankings also create a weighted rank based on the metrics that are most important to your business. Lastly create a blended score for each product or service line. Conducting this type of analysis will help you determine where you should be placing your emphasis for the purpose of moving you toward a best practices approach when creating a well engineered sales plan.

Positioning Your Business for Sale

By Mike Myatt, Chief Strategy Officer, N2growth

While the M&A space is very frothy with transactional volumes at record levels and premium valuations abounding, the risk associated with getting deals done might just also be at an all time high. Ideally selling a business should really be about taking what the CEO believes is the best deal, however lately it has become more about doing the deal that the CEO perceives as the most defensible transaction when evaluating the impact of the sale on a variety of constituencies. In today’s post I’ll share my thoughts on getting the right deal done with the least amount of litigation risk

Okay, so you’ve received board approval to put your company it play, but now what? How do you cover all your bases in an attempt to mitigate the risk of regulatory scrutiny and shareholder litigation? Taking the following steps will not only help you maximize transaction value, but will likely insure that the transaction sticks with the least amount of post transaction risk:

  1. Pre-sell the deal internally: State your case early on by clearly articulating the business logic for the disposition. Make it known why selling benefits various constituencies and lay-out your game plan to the board, key executives, major shareholders, etc. If you are pursuing a strategic deal that you believe may be in the best long-term interests of shareholders, but may not maximize current valuation you should definitely trial balloon your thinking very early on and build key support for such a decision. By assuaging potential concerns prior to going to market you will minimize the potential for trouble down the road. 
  2. Hire the right sell-side advisors: Retain reputable legal, tax and transactional counsel to insure all the “T’s” are crossed and the “I’s” are dotted. Your investment banker should conduct a comprehensive search for potential suitors that reaches across all genres including strategic buyers, private equity firms, hedge funds etc. A comprehensive marketing approach shows a good faith effort in attempting to solicit the best offer. Good legal and tax counsel can make sure that the appropriate concerns and proper protections/disclosures (i.e. indemnifications, legal and tax opinions, full disclosure provisions, Revlon concerns, SOA provisions etc.) are addressed and included in the documentation.
  3. Shop the deal: Make sure that a “Go-Shop” provision is included in any agreement with a potential suitor. Stand-Still provisions are becoming a thing of the past as they set-up the seller for third party allegations that the seller failed to fulfill their fiduciary responsibilities by agreeing to sell the company at a “low-ball’ price, and/or by signing off on measures designed to dissuade competing bidders. The offset for buyers to induce them into agreeing to a go-shop provision is the provision to pay a break-up fee should the seller unwind the deal due to a better competing offer. Just last Thursday, Peter Huntsman, president and CEO of chemical company Huntsman, terminated a $5.6 billion deal with Basell AF, paying almost $200 million to break the deal with the Dutch manufacturer. Instead, Apollo Management LP will pay $6.51 billion to purchase the company. Apollo agreed to reimburse Huntsman for half the breakup fee resulting in a substantial net gain to Huntsman.
  4. Seek a third-party valuation: In addition to being a good management tool, by having your company valued on a regular basis you establish a third party baseline for what your company is worth and have something to benchmark any potential offers against. For many companies having your valuation updated annually is standard operating procedure. I suggest that when you order your valuation and subsequent updates that the transaction be ordered by your law firm such that it becomes privileged information and therefore mitigating the risk of a bad valuation surfacing to haunt you at an inopportune time.

Business Cards…

By Mike Myatt, Chief Strategy Officer, N2growth

Okay, what’s so special about a business card? Much more than you might think In fact, I would be doing you a disservice if I didn’t tell you that a great business card is one of the most powerful pieces in your corporate identity arsenal. In today’s post I’ll share why I believe many professionals miss the opportunity to make a great first impression… 

I know that in today’s digital world many executives and entrepreneurs feel that business cards are passe and ineffective and only carry them out of habit. In fact, I can’t tell you how many times I’ve asked someone for a business card in the last couple of years only to watch them search their pockets finding themselves unable to produce one. As I see it you basically have three choices when it comes to business cards: 1) Carry a great one; 2) Carry one that does no good whatsoever, or; 3) Don’t carry one at all…Why would you do anything other than carry an awesome business card?

I have always made it a point to be armed with a “show stopper” of a business card (e-mail me and I’ll send you one). Over the years I can’t even begin to count the number of times my business card (digital or traditional) has started a conversation, which by the way is the goal you should be shooting for. Yet I’m always amazed when I see an executive carrying a traditional, one-sided, square business card it’s like throwing opportunities out the window. If your business card doesn’t start a conversation, isn’t memorable, or doesn’t further your personal or corporate brand why have one?

While a business card is certainly no substitute for talent and ability, it will speak to your professionalism and approach to doing business, as well as distinguish you from your competition. Take out your business card and look at it while you review the following questions:

  1. Does it have a “wow” factor? Does it really “pop” such that it will cause somebody to stop and really take note to the extent it starts a conversation?
  2. Does it tell a story, extend your brand and communicate your value proposition?
  3. Does it contain all your pertinent contact information? 
  4. Does it make use of both sides of the card? Better yet, does it make use of four sides?
  5. Is it digital?
  6. If it isn’t digital, does it take advantage of a unique shape, multiple colors, unique stock, embossing, foiling, graphics and other distinguishing characteristics?

If you can’t answer yes to most of the questions above then it is time to throw away your card and get a new one One other thing…If you don’t use your business card it can’t do you any good. As a rule of thumb you should not only attempt to hand out between 500 & 1,000 cards a year, but make sure that you hand them out to the right people…  

Is Business Formulaic?

By Mike Myatt, Chief Strategy Officer, N2growth

You can either engineer your business by design or let it evolve by default. While the choice is clearly up to you I would strongly suggest the former over the latter. Creating a formulaic approach to business is not only logical, but it is without question the right approach to implement when desiring to create a thriving, sustainable enterprise.

Some would argue that business is very fluid and that too much structure stifles creativity and entrepreneurialism. While the previous theory makes for a good sound-bite, it has been my experience that those executives who use it as their mantra don’t foster creativity, they create chaos and disruption (of the negative type). It is never a question of whether structure and process work, but a question of whether it was designed, implemented and managed properly. Moreover a well engineered formulaic approach to business does not exclude creativity, it stresses innovation as a key component. A structure built with sound underlying business logic not only enhances creativity and an entrepreneurial spirit, it accelerates it. I have always subscribed to creating a formulaic approach to business.

I developed the following conceptual formula for corporate success almost 20 years ago. And while it’s clearly theoretical in nature,  I found that whenever I have been able to apply it good things have happened:

Vision (Integrity + Quality + Innovation + Focus)
Great Talent (Process + Accountability)

If you attempt to solve the aforementioned equation you will find that the answer equals sustainable, profitable growth. You will also note that the variables contained in the equation strongly mirror the topics that I most frequently write about. This is no coincidence, but rather a strong indication of how important I believe these key success metrics to be. Success doesn’t just happen by osmosis and it doesn’t just happen because you work hard. Rather success is created through a combination of planned, purpose driven, consistent and intelligent efforts.

The formula referenced above will allow you to create brand equity, recruit and retain talented employees, create a positive and productive corporate culture, maintain a competitive edge, increase customer lifecycle value and generate sustainable revenue and margin growth. Don’t sacrifice what could be by settling for a haphazard approach to business And remember; Don’t engineer your business process through best practices design, rather innovate beyond best practices and be disruptive (the positive kind) in your approach.

View From The Top

By Mike Myatt, Chief Strategy Officer, N2growth

How many times have you watched a CEO give a favorable assessment of expected company performance to the board of directors, the bank, shareholders, analysts, employees, or the media only to be proven woefully incorrect? I’m always amazed at the number of CEOs who are out of touch with the operating realities of their company. In today’s post I’ll share why the view isn’t always better from the top…

So the question is this…how does a CEO get to the point of being so disconnected from operations that he or she just doesn’t have a clue? The reality is that there are any number of reasons why this can happen, a few of which I’ve noted below:

  • The Optimistic CEO: I have met a number of CEOs that simply choose to view the world through rose colored glasses. They will believe what they want to believe regardless of what they hear or what they observe. Even in the worst of times they believe nothing to be insurmountable. While optimism is generally a great quality for a CEO to possess, there is a point at which unbridled optimism can disconnect a person from reality.
  • The Arrogant CEO: These CEOs believe they can will their view into reality in spite of circumstances, situations, or events. The arrogant CEO doesn’t value the input of line and staff management. These CEOs see management opinions as inconsequential, unless of course, they happen to be in alignment with their own beliefs and opinions.  
  • The Unaware CEO: These CEO’s will take any report or piece of information at face value. These CEOs are overly trusting, and often politically naive. They fail to seek clarification, validation, or proof supporting the information they have been fed. This is a very unhealthy state of mind for a CEO hoping to create any degree of tenure.
  • The Disconnected CEO: Unlike CEOs who understand how to leverage time and resources via delegation while remaining connected to management and staff, the disconnected CEO does just the opposite. They have reclusive tendencies which cause them to often completely abdicate responsibility and remain disconnected from management by sequestering themselves in the corner office. Sticking one’s head in the sand will not make the circumstances of a particular situation go away, rather that type of thinking will likely on exacerbate the issue.

If you’re a CEO with clouded vision and desire to change the view from the top it is critical that you maintain open lines of communication through a variety of channels and feedback loops. You must maintain a connection and rapport with both line and staff. Furthermore you must refine your intuitive senses. A good CEO demands accountability and transparency. They challenge everything of consequence as gross optimism. Acceptance of general statements and ambiguity, or blindness to hidden agendas will only contribute to limiting your vision…

Interview: Sydney Finkelstein

By Mike Myatt, Chief Strategy Officer, N2growth

Interview - Sydney FinkelsteinThere is nary a week that passes where I don’t receive at least one inquiry asking for my opinion as to the value of an MBA in the business world. Now if you’ve been in business for any length of time I’m sure you have heard more than a few humorous stories recounting the trials of young MBAs attempting to prove their value and failing miserably in their effort to do so. However the stereotypes about MBAs chronicled in these tales of corporate folklore don’t give justice to the majority of MBAs who make frequent and truly significant contributions to everything they touch. In today’s post I have the privilege of interviewing Sydney Finkelstein who without question is better positioned to provide expert commentary on the value of an MBA than anyone I know…

For those of you not familiar with Sydney Finkelstein you’re in for a real treat. Aside from being one of the most highly regarded business minds in America, Sydney is a Steven Roth Professor of Management at the Tuck School of Business at Dartmouth.  He has written two must read books, “Why Smart Executives Fail” and “Breakout Strategy” and is also the author of numerous published papers and studies on the topics of business and management. Dr. Finkelstein received his BComm from Concordia University, his MSc from the London School of Economics and his PhD from Columbia University Now that you’ve had a brief introduction on with the interview

Mike Myatt: All business schools are not created equal…Having employed a few Tuck graduates over the years I have a particularly high regard for Dartmouth MBAs as they have been some of the best and brightest employees I’ve worked with. What makes Tuck so special?

Sydney Finkelstein: Tuck focuses on three things that make a difference – Individual responsibility for making things happen, teamwork, and trying to make a big difference in life. Our tight knit community, high degree of interaction between faculty and students, and rigorous program help students develop these capabilities.  

Mike Myatt: You have spent a great portion of your career studying why executives fail…In your observation what is the biggest reason executives fail to achieve their objectives?

Sydney Finkelstein: There are many, but near the top of the list is the inability and unwillingness to learn anything new. Failing executives continue to rely on the same formulas and ideas that brought them success, even when there is clear evidence that the world has changed.

Mike Myatt: What do you believe is the most necessary skill set for an executive to possess in order to succeed in the business world today?

Sydney Finkelstein: I really think that a combination of intense curiosity and managerial discipline is essential for success. Executives must be open to new ideas and opportunities, while at the same time being grounded in tight financial and managerial controls.

Mike Myatt: Who do you respect most in the world of business? 

Sydney Finkelstein: AJ Lafley at P&G has been a terrific leader for a number of years. This company has changed dramatically under his tenure, and for the better in a number of ways that are not easy to attain. I have been particularly impressed with how Lafley has helped transform the P&G culture to be more outward looking.

Mike Myatt: While most people see business school as a place to educate up and coming talent, I’m fairly certain many executives don’t know about the programs and opportunities that are available for continuing education or corporate partnerships. Could you provide your thoughts on this subject?

Sydney Finkelstein: Most business schools like Tuck spend considerable time developing world-class programs for executives. We do both customized and general management programs that bring our best faculty to a company’s executives. It is not unusual for participants to describe life-changing experiences, especially in the Tuck Executive Program, our flagship program that I direct. We focus on knowledge, but also leadership, personal development as a manager, and wellness. It is a powerful combination.

Mike Myatt: If you listen to the media they would lead you to believe there is a talent shortage in the workplace. What is your opinion of the talent level you currently see in business school, and is it getting better or worse?

Sydney Finkelstein: There is no question that the level of talent in top business schools has been increasing steadily over time. Tuck, for example, now draws from countries all around the world, which was not as common 20 years ago. The number of seats in top business schools has not increased nearly as quickly as the number of applicants, leading naturally to an upgrade in talent.

Mike Myatt: What’s next for Sydney Finkelstein?

Sydney Finkelstein: I am writing a new book on leadership, focused on decision making and why executives sometimes make remarkably poor decisions. A big part of the answer relates to recent research on how our brains work, and how this may be limiting our ability to breakthrough. In this book, we help executives identify the red flags in any key decision making situation, and what they should do to reduce their odds of failure.   

Mike Myatt: Is there anything else you’d like to share with our readers?

Sydney Finkelstein: One of the primary lessons I’ve learned from my research and consulting activities is how often it is the case that executives leave themselves vulnerable to failure by ineffectively tracking the warning signs that provide clues to impending trouble. I now spend a great deal of time helping companies develop early warning systems that give executives an opportunity to track, and address, potential problems before they become life-threatening. The results to date suggest that it is possible to put a warning system in place at a very reasonable cost, and potentially huge savings. 

Conclusion: After reflecting on Sydney’s comments for a while my conclusion to this interview became obvious It has been said that a back to basics focus on fundamentals with a forward looking perspective on innovation and change is the key to success. So I’ll leave you with the following three questions as food for thought:

  1. Are you paying attention to the basics or have you become lulled into a sense of complacency?
  2. Do you value knowledge and learning and are you continuing to refine your existing skills while acquiring new ones?
  3. Are you playing offense by aggressively seeking out innovative solutions to everyday challenges and staying ahead of the change curve or are you playing defense by mistakenly relying on yesterday’s practices to protect your interests?  

Innovation Management…

By Mike Myatt, Chief Strategy Officer, N2growth

Much has been written about the importance of innovation but there is very little information in circulation about how to actually stimulate innovation. While most executives and entrepreneurs have come to accept the concept of innovation management as a legitimate business practice in theory, I have found very few organizations that have effectively integrated innovation as a core discipline and focus area. In today’s blog post I’ll discuss how to actually implement a program to stimulate and manage innovation.

Before I address how to create innovation, if you need a refresher course on the need for innovation you can get a quick review by reading “ROI Reexamined” and “Collaborate, Innovate and Dominate.” While the old saying “if it isn’t broke don’t fix it” makes for a great sound bite it can cause irreparable harm to a company’s ability to remain competitive if adopted as an operating philosophy. It is a businesses ability to use innovation to create, refine, enhance, optimize and advance all areas of the value chain that will catalyze sustainable growth.

While there is always room for a great idea created through spontaneous innovation this random approach to innovation rarely works. Spontaneous innovation (what I like to call innovation by default) is at best a very undisciplined and very expensive path to change. Conversely high velocity innovation (what I like to call innovation by design) occurs when supported by solid process and managed as an asset.

Since the end of the nineteenth century architects have relied on the innovation management process pioneered by the French known as a “design charrette” to create high value, optimized solutions to design problems. Design charrettes consist of a very intense multidisciplinary approach to a brainstorming session in which design issues are assessed, analyzed, debated, conceptualized, enhanced, value engineered and planned. It is through this process that many of the world’s most amazing architectural feats have been accomplished.

Much like the architect’s use of design charrettes, operating executives need to adopt a process to stimulate, manage and implement innovation. The following steps outline a simple process that any business can use to effectively leverage innovation: 

  1. Problem Definition and Opportunity Identification: Using the company’s vision, mission and strategy as the foundation the executive leadership needs to identify key problems, significant barriers or obstacles, critical areas of risk as well as major opportunities for which solutions need to be developed.
  2. Develop High Velocity Innovation Teams: Based upon the assessments and objectives identified during step one outlined above executives need to create innovation teams comprised of the right blend of skill sets, competencies and talent and charge them with development of innovation recommendations. These teams need to be comprised of both left and right brainers, new employees who have not been prejudiced and seasoned veterans as well as introverts and extraverts. Each team must have a designated leader in the form of an innovation champion with all other members of the team being equals regardless of their titles and positions.
  3. Innovation Reports: Each innovation team should be charged with the responsibility of creating a written innovation report on a time period certain. The innovation report should provide the company’s executive team with defined strategic recommendations to accomplish the stated objectives.

Simply following the three steps outlined above will focus your best talent on solving your most critical problems and exploiting your biggest opportunities. Innovation must be driven both from the top-down and the bottom-up. Senior leadership must make innovation a clearly communicated priority and then support the message by creating process, allocating budget, adding headcount, refocusing priorities, making changes to job descriptions and reengineering compensation plans. This type of commitment will show management and staff that the leadership is serious about innovation and will encourage participation at all levels of the enterprise.

A Warrior’s Heart

By Mike Myatt, Chief Strategy Officer, N2growth

Tomb of the Unknown SoldierAs we approach the 4th of July I can’t help but think of our founding fathers and the sacrifices they made when they fought to establish our country’s freedom. Those thoughts of respect and admiration in turn led me to think about of our troops overseas currently fighting to protect our way of life and preserve our freedom. The more I began to ponder the heroism of our military (past and present) the more I began to consider the traits possessed by our nation’s warriors. I believe the same characteristics that are present in the heart of a warrior are also present in the most successful executives and entrepreneurs.

Regardless of whether or not they have served in the military, today’s business leaders would be well served to possess the characteristics of a warrior in their pursuit to achieve sustainable growth and long-term success. Commitment, attention to detail, discipline, service above self, honor, integrity, perseverance, the ability to both lead and follow, to execute with precision, and the ability to adapt, improvise, and overcome are all traits that will serve you well in the boardroom.

There are many so-called management gurus in today’s politically correct world who would take great exception to what I’m putting forth in today’s post. They would tell you that the classic strong leadership traits that define our nation’s best military leaders are outdated, and that they don’t display a proper amount of empathy and compassion. I’m here to tell you that strength and compassion are not mutually exclusive terms…rather the strongest leaders are in fact the most compassionate leaders. When I was in the service my troops slept before I did, they ate before I did, and they were cared for before I was. A leader’s greatest responsibility is not for his/her own glory, but it is for the well being of those whose care has been entrusted to said leader.

The characteristics mentioned above will allow you to inspire and lead with a focus and commitment not present in DNA of those leaders who don’t have the heart, mind, and soul of a warrior. It is the ability to stay mentally focused on achieving the mission at hand, regardless of circumstances, that will help you take your organization to that next level. 

A warrior’s heart has served my family well in both business and life in general. It is the mental agility, a fierce determination, and a never say die attitude that has carried us through the best of times and the worst of times. My father was a Marine before he was an attorney, I served in the Army before I entered the business world and my son is an officer in the US Air Force. While not all great business leaders have served in the military, those of you who possess the heart of a warrior understand the advantages you derive from your military bearing and state of mind. I’ve rarely come across students of military history that don’t have a great command of both strategic thinking and tactical implementation.

I strongly recommend to all business leaders that they learn to develop a command presence, and lead from a committed and passionate position of strength. The word “passion” comes from a Latin root which means quite literally to suffer. If you’re passionate about something it means you care so much that it hurts…Refusing to surrender, and having the ability to make the tough decision or the needed sacrifice, will allow your company to continue taking ground and will keep the competitive advantage on the side of your enterprise.