May 2011

Memorial Day Leadership Lessons

May 29, 2011

By Mike Myatt, Chief Strategy Officer, N2growth

Memorial Day Leadership LessonsAlthough a year has past since I originally posted this piece on Memorial Day and Leadership,  I thought is was worth re-posting this year. Even if you read this post last year, I would encourage you to read it again. Moreover, at the end of the post I’d ask you to leave a comment and thank our active duty military, veterans, and their families for the sacrifices they make for all of us. There is nothing more special than someone who gives of themselves for others, and nowhere is this more evident than with those who serve in the military. There is also no better example of leadership than what you witness taking place as a matter of routine on military installations and in theatres of operation around the globe… 

Originally authored May 26th, 2010 – - -
Is Memorial Day weekend just another holiday, or does it mean something more to you? While this coming weekend simply signifies a long awaited prelude to summer for some, it is much more than that for me. As a veteran and lifelong student of leadership I have always found Memorial Day weekend to be one of the most meaningful and significant of all holidays. In today’s post I’ll share two events which occurred over the past week that inspired me to write about why I believe all business executives can learn valuable leadership lessons from those in uniform.

Memorial Day not only provides great opportunity for introspective reflection, but the stories of what constitutes great leadership surrounding this holiday are frankly too numerous to count.  As many of you know, my son is an active duty officer in the US Air Force. This weekend I had the honor of attending his graduation from EOD school where he was recognized as the Honor Graduate in his class (see above picture). As I listened to the commencement speeches, gazed at the Memorial Wall, thought about my experiences and what the EOD graduates are about to encounter, the more I pondered the heroism of our military (past and present), the more it became clear that the same characteristics that are present in the heart of a warrior are nothing short of a blueprint for success with respect to the leadership traits that should also be present in our business leaders.

While it is clearly not necessary for an executive to have military experience to be an effective leader, I would submit that today’s business leaders would do well to possess the characteristics of a warrior in their pursuit to become better leaders and to build better organizations. Commitment, passion, attention to detail, discipline, service above self, honor, integrity, perseverance, compassion, the ability to both lead and follow, to execute with precision, and the ability to adapt, improvise, and overcome are representative traits possessed by successful military leaders. From personal experience I can absolutely guarantee you that these same traits will serve you well as a business 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 possess a warrior’s heart. 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. 

While the following may not be politically correct, I believe it nonetheless represents the truth - it also takes guts to be a leader.  Watching the EOD graduates stand at attention in front of the Memorial Wall there was no doubt that these were motivated, committed, passionate, honorable individuals with a clear sense of duty, and who hold in high regard the principle of service above self. Let’s face it, it takes a unique individual to knowingly and willingly walk toward a live explosive placing his life at risk in order that other lives may be saved. Examine the most successful business leaders and you’ll find they possess this same zeal – they don’t see their leadership role as just a job, but rather they view it as a passion; a calling if you will. Moreover, it is those leaders who receive the negative press, those leaders who just can’t seem to get the job done that universally seem to be void in some or all of the aforementioned traits. 

I left my son’s graduation in Florida on Sunday evening headed for Dallas and then traveling on to San Antonio. On the heels of being inspired by watching the character and quality of the individuals who graduated with my son, yesterday my wife and I had the opportunity to visit The Alamo. Standing on the grounds where less than 200 men, mostly volunteers, gave their lives in sacrifice to protect the freedom and liberty they so cherished just built upon the observations made while attending my son’s graduation. The men and women who remained at The Alamo had the opportunity to leave, and yet they chose to stay. They embodied the character, the sense of duty, the commitment, and the values that our nation was built upon. How many of you would choose to make an uncompromising stand on your principles and values if you knew the outcome would result in certain death? 

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 they don’t display a proper amount of empathy and compassion. They could not be more wrong - I’m here to tell you that strength and compassion are not mutually exclusive terms. The strongest leaders are in fact the most compassionate leaders. Examine any great military leader and their troops slept before they do, eat before they do, and they are cared for before they are. 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 them.

A warrior’s heart, and the spirit of a servant leader have served my family well in both business and life in general. It is the mental agility, a fierce determination, a never say die attitude, and placing other’s interests above our own 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 well, I’m sure you can tell how proud I am of my son’s choice to serve in the Air Force (we get a little smarter with each generation). While not all great business leaders have served in the military, those of you who have worked to develop the leadership traits mentioned above understand the advantages you derive from a having a military leadership state of mind.

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 through service. For those of you who don’t know, 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 – it means you’re willing to suffer greatly to advance your cause. Refusing to surrender, having the ability to make the tough decision, the needed sacrifice, and the focus to place fiduciary obligations above your self interest will allow your company to continue taking ground and will keep the competitive advantage on the side of your enterprise. Remember that the world does not revolve around you, but rather what you can do for others through the privileges afforded to you by nature of your role as a leader…

Please leave a comment below and thank someone for their service or their support of those who have served…

Not All Research Is Meaningful

May 21, 2011

By Mike Myatt, Chief Strategy Officer, N2growth

Just because something gets published doesn’t necessarily mean it has any value. In fact, misleading or wrong information that finds its way into the public domain can be quite harmful. I just finished reading a research study conducted by Harvard Business School that is nothing short of academic hoo-hah, and is a case study with everything that’s wrong with business schools today. The HBS research is laughable, and lends credence to the old axiom “don’t believe everything you read.”  While the study acurately concludes there is value in CEOs spending time with employees and directors (duh),  the conclusion there is no value in CEOs spending time externally makes me cringe.

Where a CEO chooses to spend their time is without doubt an important decision. Furthermore, it would be a gross simplification to create an either/or scenario by suggesting spending time in one arena vs another holds more value. The simple truth is CEOs need to spend time with a wide variety of constituencies (that’s the job), and the best CEOs know how to generate a return on their time regardless of who they’re meeting with. I don’t disagree with Harvard’s point that spending time with employees and directors is valuable, I just disagree that time spent with other individuals and groups has no value.

Having a sample pool of CEOs I’ve worked with which is far larger than the 94 CEOs tracked in the HBS study, I can tell you with great certainty my experience differs from the conclusions drawn by the professors who authored the study. In fact, I’d be willing to bet if I interviewed the 94 CEOs tracked in the study they would agree with my conclusions more than those produced by the study itself. The following statement exposes either an extreme bias or a very healthy naïveté: “the time CEOs spent with outsiders had no measurable correlation with firm performance.” The aforementioned statement is utterly ridiculous and patently false.

To be fair, CEOs who squander their external facing time don’t get much of a return on said time, but then again, they don’t typically remain in the C-suite for very long. However my experience with CEOs is that engagement with external constituencies is highly productive. Following are a few questions for you to ponder – When a CEO meets with a prospective customer and generates a huge contract, does that not impact performance? What about when a CEO favorably negotiates a contract dispute that both saves an existing account and avoids costly litigation – no value here either? How about when a CEO improves credit accommodations which result in substantial reduction in interest carry? I guess that doesn’t count as productive either. While I’m at it, I guess influencing public policy, attending investor conferences, an accretive acquisition, lowering manufacturing costs by making supply chain enhancements, making key external hires, or opening new distribution channels or geographic markets probably didn’t get on the radar screen of the faculty either.

The study had other flaws such as viewing CEOs as predominantly management types as opposed to leaders, inaccurate allocations of how CEOs spend their time, and other fallacies that could only surface in the halls of academia. The point I want to make here is just because research is produced at a business school, shouldn’t automatically qualify it as good research. Bottom line – just because this study found no corollary between CEOs spending time with constituencies outside the company and gains in performance doesn’t mean they don’t exist. It just means that the study was biased, flawed or both.

Thoughts?

Managing Up? Use Caution.

May 19, 2011

By Mike Myatt, Chief Strategy Officer, N2growth

“Managing Up” is a great catch phrase and an interesting concept – it’s also a practice that can get you in deep trouble rather quickly if misunderstood or misapplied. Many people would say the purpose of managing-up is to have the by-product of your efforts enhance the work of those you report to. While I have nothing against this concept (I call it doing your job), I do have a problem with the reality that many practitioners of managing-up miss the point altogether. When the practice of managing up gets confused with promotion of self-interest, brown-nosing, deceit, manipulation, the gymnastics of corporate climbing, or other mind games, a good theory rapidly becomes twisted resulting in a false and dangerous reality.

While the premise of “managing-up” is sound, the reality of how it’s most commonly implemented is representative of everything that’s wrong with business today. It’s human nature to attempt to control circumstances where possible. It’s also quite normal to desire to position yourself well with those you report to. That said, it’s important to understand the realities, rules and boundaries associated with organizational structure. Newsflash – as much as you don’t want to hear this, there is a good reason why you’re reporting to someone else – you’re probably not ready to be the boss yet.  

Here’s the thing – the best way to be looked upon favorably by those you report to is not through various charades and other forms of skulduggery, but by simply doing your job and serving them well. When the emphasis of your efforts shifts away from others and to yourself you have placed yourself on a very slippery slope. If you want to move up in the organization let it be the quality of your work that catapults you upward, not your skill in manipulation. If your timetable for career acceleration isn’t matching up with that of your employer, surface your concerns with them in a straight-forward fashion, don’t revert to amateurish corporate hi-jinks.

If I might be so bold, it’s not your job to manage your boss. Most good leaders love to be challenged, but I don’t know to many who like to think their being managed by subordinates – there’s a subtle but distinct difference. Your responsibility is to do the job the way those above you want it done, not how you want to do it. Granted, in a perfect world there would be alignment between the two, but alas, the world is not perfect. When it comes to enhancing the efforts of those above you, I would encourage you to think about it like this:

  • Engage – Yes
  • Collaborate – Yes
  • Challenge – When needed
  • Advise – Where appropriate and value is added
  • Object – When it’s the right thing to do
  • Loyalty – Until it’s no longer earned (if you can’t be loyal – go work for someone else)
  • Manage – NEVER  

There is little debate that some subordinates are more intelligent and gifted than those above them. In fact, if you’re lucky enough to be considered a high potential in your organization, you might want to give your boss some credit as the best leaders make every attempt at building their organizations with people who are brighter and more talented than they are. This is a laudable practice that should be admired by workers, not resented. If your work doesn’t speak for itself, or if it does and isn’t being recognized, rather than play silly games, move on honorably and look for a better fit.  

Thoughts?

What’s Your Time Worth? Why Pricing Matters

May 6, 2011

By Mike Myatt, Chief Strategy Officer, N2growth

Why Pricing MattersAre you shooting yourself in the foot with your pricing strategy? How much is your time worth? What does your pricing say about your personal or corporate brand? Do you have a pricing strategy, or do you set your prices by some ethereal or arbitrary method? Even though I believe issues surrounding pricing decisions are root level drivers to a successful business strategy, I never cease to be amazed at how many corporations and professionals seem to pull their pricing out of thin air. Moreover, of those that actually go through some form of disciplined process, many of them seem to believe that once they have set the initial pricing their job is finished – nothing could be further from the truth. In today’s post I share my thoughts on how to develop a sound pricing strategy…

While the topic of pricing is certainly not rocket science, it has indeed been a thorn in the side of business people since the dawn of commerce. It has definitely caused its fair share of angst, frustration, and vigorous debate among executives and professional advisors simply for the reason that it is one of the few metrics that touches virtually every aspect of a business. Pricing impacts everything from strategy and tactics, to finance, to branding, to marketing and sales, to vendor selection and supply chain management, to recruiting and compensation, and to customer satisfaction and loyalty. As mission critical as pricing is, it is also one of the most often undervalued and overlooked business disciplines. 

A recent trend which demonstrates that corporations have recognized the need for specific domain expertise in pricing is the emergence of a bevy of C-level positions charged with direct leadership over strategic pricing. It is no longer uncommon for me to see a chief revenue officer or chief pricing officer joining the ranks of executive teams. Moreover, in absence of a specific headcount assignment tied to pricing, other C-suite officers are starting to take ownership over pricing as a key business driver.   

Think about this – why is it that some attorneys have difficulty justifying $70 dollars an hour, and others can command $900 dollars and hour? Why do some products have a large backlog of orders at premium prices, while others struggle to get any traction at discounted price points? Why will someone pay $30,000 dollars for a Rolex, but feel a Timex isn’t worth more than $50 dollars? Why do some consultants get $50,000 a day for their time, while others have to give their time away? While I could continue by citing other examples of pricing discrepancies my guess is that it is not necessary…not only will the following points provide some insight into answering the aforementioned questions, but they are also the main items that should be considered when evaluating your pricing strategy:

  1. Cost: Any evaluation of pricing should begin by having a firm understanding of what it costs to provide your product or service. If you don’t have a handle on all direct and indirect costs then how can you possibly even begin to understand whether or not your pricing will be profitable? By the way…if you forget to factor in cash flow in your considerations you’ll be very sorry.
  2. Methodology: You do have a choice…Moreover most successful pricing models offer a variety of options. Flat rate pricing, subscription based pricing, cost plus pricing, ala carte or menu based pricing, retainer based pricing, volume pricing, incentive pricing, discount pricing, percentage pricing, performance pricing, value pricing, risk transfer pricing, venture pricing, relationship pricing, bundled pricing, hybrid pricing structures, and any number of other options abound. The use of solid research, segmentation, and sound business logic in the engineering of your pricing model will pay long-term dividends. Avoid arbitrary or static percentage increases in pricing that do not take into account current market dynamics and trends. Where possible all pricing should be subject to nuanced considerations.
  3. Brand: Pricing most certainly plays into brand perception, and the strength of your brand (or lack thereof) will most definitely impact your pricing. Does your brand command a pricing premium, or force you into being a low cost provider? By the way, one strategy isn’t necessarily better than the other. However it is never a good thing to be forced into a low cost position.
  4. Competition: Does your pricing place you at a competitive advantage, or disadvantage in the market? While I always recommend understanding competitive pricing models, it is rarely a good idea to drive your pricing model using this as a sole point of consideration. What is more important than the actual price point in relationship to your competition is whether or not you can justify whatever position you adopt.
  5. Market Demand: Put simply, the market is what the market is. Do you know how big your market is or isn’t? The reality is that there is no limit on the upper-end of pricing until the market places a cap on it. That said, at some point the market will eventually determine the top-end of the pricing scale for any product or service. Supply and demand will perhaps impact pricing as much as any other given market force outside of value creation.
  6. Consumer Emotions: The emotional impact surrounding the delivery of your product or service will have a powerful impact on pricing. The law of scarcity, the principle of exclusivity, the perception of value, or creating a sense of urgency can all create pricing premiums. Catering to the emotions of fear, greed, ego, pride, lust, envy, loneliness, safety and any number of other emotions will impact what can ultimately be charged. 
  7. Value Creation: In my opinion this is the most important consideration of all. It doesn’t matter how low your price is if there is not just perceived value creation, but real value creation. Creating real value is not only incumbent on the corporation or service provider, but it is value creation that creates brand loyalty and determines the sustainability of the product or service offering. Pricing only becomes an issue when you cannot justify it…Better yet, pricing is a non-issue when it justifies itself.

Now that I’ve shared my thoughts on pricing, I’m literally going to put my money where my mouth is by slaughtering a sacred cow – I’m going to share what I charge my clients. I’m making this disclosure for no other purpose than to demonstrate there is no reason to fear pricing transparency as a professional. I don’t really care what others charge for their time, and also don’t fear that discussing my rate somehow works against me. I’ve always wondered why so many professionals hesitate to publish their pricing. Do they have something to hide? Are they fearful of providing their competition with a pricing advantage? As I was thinking about why pricing is such a sacred cow, the more questions I aksed myself in regard to pricing, the more I began to realize how large an issue pricing is for many professionals.

Before I get to the specifics of the numbers, I want to share a bit of background as well as some perspective on my thinking. Firstly, we have a number of different practice areas at N2growth and our pricing varies based on the products and services being offered. Therefore the pricing that I’ll be sharing today reflects what I charge for my personal coaching/consulting time. In determining what I charge I tend to take a more subjective approach that considers a broader range of evaluation points. I look at the complexity of the issue I’m addressing within a framework that prices for value creation, and then I adjust my pricing accordingly. That said, I rarely let price be the sole determining factor in whether or not I engage with a company. At this stage of my career I tend to look at the nature of the engagement more than I do my rate schedule. If I find a situation to be of personal interest, or consider the circumstance an intriguing challenge, I’ll normally find a way for a client to afford my services. 

I don’t typcially charge on a hourly basis but prefer to work on a contract basis. In most cases I work on a retained basis with monthly retainers ranging from $7,500 to well in excess of six figures based upon the scope of work and complexity of the assignment.  That said, in some cases I’ve chosen to work for a substantially discounted rate where I found an interesting challenge and the opportunity to grow with a client. I also give a decent amount of my time away in our pro-bono practice. The reality is that I don’t really sell my time as much as I decide where and with whom I want to invest it. 

While some people simply cannot wrap their minds around my pricing, others consider it to be a bargain. Could I charge more? Sure. Could I invest my time for less? Absolutely. Am I worth what my clients pay me? Clearly, or they wouldn’t pay it. Here’s the thing – for those that don’t understand what I do, or the value I create, I could cut my price by 2/3 and they still wouldn’t engage. The important thing is my price works for me, and it works for my clients…I don’t tend to spend too much time thinking about things outside those two measurement points.  

Bottom line…pricing is not a taboo subject to be avoided, but rather a key metric that needs to be well understood as well as proactively measured and managed. Pricing needs to be dealt with in the most embryonic stages of strategic planning and needs to constantly be evaluated based upon changes in market dynamics. 

Now it’s your turn – If you’re a professional services provider I invite you to share your rates, pricing philosophy, and the type of clients you serve below. It will not only be a good experience and a freeing endeavor, but who knows, you might end-up with a new client…

Defining Great Leadership

May 3, 2011

By Mike Myatt, Chief Strategy Officer, N2growth

With all the attention and emphasis given to leadership, I have a few questions for you: Why is it that so many people refer to themselves as leaders, but truly great leaders are so few in number? How do you measure great leadership? And finally, is there a common thread that distinguishes those viewed as great leaders from the masses of those who hold leadership positions? While you can measure many things when assessing a leader, great leaders stand apart from the masses based on the impact of the sum of their accomplishments. It’s not a leader’s traits or characteristics that make them great, it’s how they apply them that matters. Here’s the thing – nobody really cares if you have all the right tools if you don’t know how and when to use them…

Oddly enough, and while there are certainly exceptions to every rule, most great leaders don’t consider themselves as such. I don’t want to burst any bubbles here, okay, yes I do – It is not self-assessments that define great leadership. Here’s the cold, hard truth – if you consider yourself a great leader, yet have never led anyone or anything of significance, you may want to reevaluate your thinking. It’s not what you think that matters. What matters is how those impacted by your leadership think and feel about you. Insignificant leaders, hated leaders, and failed leaders all have one thing in common – they view leadership as a quest for personal glory. Great leaders, on the other hand, have a purpose beyond self – they tend to view leadership as means of accomplishing something of significance for the benefit of others.

Reflecting back on my experience with leaders I find one thing tends to shine a spot-light on great leadership more than any other – time. How a leader stands the test of time is the only definitive validation of ability and accomplishment. The reality is great leaders are rarely one hit wonders. Anyone can get lucky (I’ve certainly benefited from dumb luck on occasion), but luck alone won’t lead to long-term success. Just as good luck won’t make you  a great leader, a bit of bad luck won’t keep a great leader down. Luck, good or bad, is little more than an occurrence that needs to be managed – it is not something that defines you as a leader. In fact, if you examine the proverbial “overnight success” you’ll find their journey was anything but overnight. In most cases you’ll find the hype reflects a meteoric rise, but the truth reveals an intentional, focused, sustained effort.

Great accomplishments rarely happen quickly – they require the character and discipline necessary to expend the effort, focus, attention to detail, vigilence, and tenacity required to get the job done. Great leaders show consistency, demonstrate endurance, and stay the course  - they never quit. Great leaders may change course by altering strategies, tactics, or methodologies, but they don’t quit. If you want to succeed as a leader, it’s easier than you might think…just don’t quit. Strip away the excuses, rationalizations, and justifications, and the only thing standing between you and the attainment of your objectives is what you see staring back at you when you look in the mirror each morning.

So what separates those leaders who never quit from those that do? It comes down to possessing a state of mind that refuses to lose – think will over skill. Great leaders have a never say die mentality that places the cause ahead of self-interest, passion ahead of pride, humility ahead hubris, and people ahead of process. I’m a big fan of the Die Hard movies, and the one thing you have to admire about the main character, detective John McClain (played by Bruce Willis), is that regardless of the obstacles he encounters, he just won’t quit. Granted, the aforementioned example of determination against all odds comes from a fictional character, but the fact of the matter is that successful leaders play to win. They don’t indulge themselves in half-hearted attempts destined for failure, rather they choose to focus all their efforts and energies on accomplishing their mission.

Much more inspiring than the fictional example above, is the recent accomplishment by U.S. Spec Ops in bringing Osama Bin Laden to justice. This wasn’t the result of a fast, easy fix, but rather the culmination of efforts which spanned three presidents, 10 years, and the sacrifice of many. The commitment and resolve displayed by U.S. leadership, intelligence agencies, and particularly by our military, is a case study in mission focus and endurance. Great outcomes require great efforts, great resolve, great courage, and a great desire to finish what was started.

The real purpose of today’s post is to point out that anyone can become a great leader, but the reality is that most people don’t. They choose to accept defeat, they don’t play to win, they aren’t willing to do what it takes to be successful – they quit. Quitting is a temptation that all of us are consistently confronted with. The reason that so many people become a casualty of giving up, is because they can. Put simply, quitting is one of the easiest things to do in life. If you take your eye off the ball, even if only momentarily, that’s all it takes for most people to throw in the towel is a tinge of anger, humiliation, panic, rejection, stress, frustration, hurt, pain, jealousy, sorrow or anguish. Look back on your live, or the lives of others, and you’ll find numerous instances of people who took the easy way out and just quit.

I could certainly paint a more complex picture of what it takes to be successful by citing esoteric management theories, but the truth of the matter is that successful leaders don’t quit until the job is done. They don’t spend time complaining about the challenges and obstacles, rather they spend their time solving problems and creating solutions. If the objective is to get to the other side of the wall, they don’t really care whether they go over the wall, under the wall, around the wall or through the wall…they just care about getting to the other side. While they might spend a bit of time evaluating the most efficient strategy for getting to the other side of said wall, it will ultimately be their focus and resolve on conquering the challenge that will determine their success. Do you have what it takes to stay the course?

Thoughts?