Not All Research Is Meaningful

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.

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

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

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?

Leadership & Changing Your Mind

By Mike Myatt, Chief Strategy Officer, N2growth

How difficult is it for you to change your mind? When was the last time you changed your mind? Do you consistently challenge your own thinking, or do you wait for others to bring the challenge to you? When your thinking is confronted, how do you react? I’ve often said the rigidity of a closed mind is the first step in limiting opportunity. I can think of no better definition for a closed mind than someone unwilling to change their opinions. In today’s post I’ll share my thoughts on why it’s much more valuable to step across mental lines in the sand rather than draw them.

Let me begin by suggesting that changing one’s mind isn’t necessarily the same thing as being wishy-washy. The difference is found in the motivation underpinning the change. If your opinions change with the wind based on little more than the court of public opinion, you’re not a leader but just someone else trying to fit-in with the cool kids. There is a big difference between taking a principled stand and trying to be liked. There’s also a big difference between standing on conviction vs. just wanting to win an argument. When evaluating your position on any given topic are you trying to learn something, or are you just trying to justify your opinion? Having strong convictions is a healthy thing so long as you’re convicted by the truth and not your pride or your ego.

Here’s the thing – no one has all the answers, so why even attempt to pretend that you do? Show me a person that never changes their mind and I’ll show you a static thinker who has sentenced their mind to a prison of mediocrity and wasted potential. If the world is constantly changing, if the marketplace is always evolving, if the minds of others are continuously developing, how can you attempt to be unchanging and still be relevant? The smartest people I know are the most willing to change their mind. They don’t want to be right, they want the right outcome – they want to learn, grow, develop, and mature. Think about it like this – it takes no effort to cling to your current thinking, however to change your mind requires you to challenge your mind. I’ve believed for quite sometime the most profound and commonly overlooked aspect of learning is recognizing the necessity of unlearning.

Smart leaders don’t tell people what they should think, they surround themselves with great thinkers and then consistently seek their insights, observations, and opinions. Subjecting yourself to dissenting opinion allows you to refine your good ideas, weed-out the bad ideas, and acquire new ideas.  Moreover, it’s the ability to evolve and nuance thinking that leads to the change and innovation your organization needs to survive.

A leader’s ability to change their mind demonstrates humility, confidence, and maturity. It makes them approachable, and it makes them human. People are looking for authentic, transparent leaders willing to sacrifice their ego in favor of right thinking. Bottom line – when you fear being wrong more than being proven wrong you have arrived as a leader.

Now it’s your turn – I’m interested in ways you’ve found to become more open-minded, examples of how changing your mind improved your circumstances, and yes, even those dissenting opinions on why you’re not buying the thinking espoused above…Thoughts?

Related Post: The Benefit of Dissenting Opinion

M&A Without Buying the Company

By Mike Myatt, Chief Strategy Officer, N2growth

Most people tend to look at acquisitions from a rather myopic and traditional M&A perspective: making a strategic or synergistic purchase of an operating entity on an accretive basis. However restricting your view of acquisitions to operating companies is like playing a football game with only one play in your playbook. The truth is that acquisitions aren’t just about buying companies, they’re about value creation. In the text that follows I’ll share 8 ways to acquire value without having to also buy the brain damage that comes along with purchasing the entire enterprise.  

Understand the Play
With the right perspective, combined with knowing where to look, acquisitions can be extremely profitable while not being all that complicated.  There’s an old saying that “one man’s garbage is another man’s treasure” and nowhere is this more applicable than in the world of acquisitions. Here’s the thing – the best acquisitions are made when the buyer sees value where the seller doesn’t. If your value-added acquisition targets can be found in things the seller has little interest in, there is a spectacular acquisition in the making. Want to see a transaction come together quickly? Allow someone to monetize on something they either view as an asset of little value, or better yet, something they view as a liability.

Acquiring Value Not Companies
I want you to think about acquisitions from this perspective – anything that has been well engineered or properly developed has also been heavily invested in. This often creates both tangible & intangible worth, even if someone else doesn’t currently recognize it or benefit from it. The simple truth is that it’s often much easier to acquire an asset than create one from scratch. This can occur because you’re leveraging the investments of time, money and efforts made by someone else who now doesn’t value them in the same fashion they once did. By stripping the target out as a stand alone asset you acquire the leverage of sunk investments which will often include significant good will, mindshare, marketshare and any number of other benefits in a much less complicated transaction. 

While the text above discusses acquisition from the buy-side perspective, the logic should not be lost upon potential sell-side players. Those companies that have developed assets that they no longer value, or companies who are maintain unwanted liabilities should look into a valuation and consider a possible divestiture of said assets and liabilities that don’t fit into the company’s operating strategy going forward (where it makes economic sense to do so).

The following list contains eight representative examples of acquisitions that can be made without having to purchase the entire enterprise: 

  1. Talent: It is not at all uncommon for a company to undervalue, under compensate, or otherwise take its people for granted. An “at risk” employee for the current employer is an opportunity for the prospective employer. Even when a company highly values its talent there is no assurance that said talent feels the same way about its employer. The right talent acquisition can have a rather substantial and immediate impact on things like revenue, culture, positioning, brand, etc. Smart employers are always on the lookout for great talent. They also go to great lengths to guard against the unnecessary loss of their own talent. There is also a great opportunity for adding talent leverage via outsourcing, crowdsourcing, and other contract opportunities that provide cost savings and scale.
  2. Intellectual Property: Whether it be formal IP such as patents, trademarks, copyrights, etc., or informal efforts produced via someone else’s R&D or innovation efforts, companies often start projects that they don’t finish. This can create an opportunity for the astute buyer. I have personally witnessed companies who have hundreds of pieces of intellectual property just sitting around collecting dust. I have also observed numerous transactions over the years that have been good for both buyer and seller. This occurred in instances where the seller was able to monetize on theoretical value, and the buyer was able to convert the acquired IP into real value.  
  3. Cash Flow: Many companies are in need of generating cash and simply cannot afford to wait for payments over time, and are therefore willing to sell contracts, notes, deeds, loans, leases, etc. In today’s market you can buy anything from a single note to an entire portfolio of debt (both performing and non-performing) at deep discounts. While this is not a market that everyone should dive into, there is substantial opportunity for exceptional returns for the right buyer.   
  4. Markets: Whether you purchase distribution, licensing, or other contractual rights, you can enter into market segments, verticals, or geographies via intelligent acquisitions. Often times these acquisitions can provide you some form of exclusivity or other form of competitive advantage.
  5. Customers: Some of the most interesting acquisitions I’ve been a part of have resulted in the purchase of customer contracts. A contract is a commodity that has both tangible and intangible value (for the right buyer). Contracts can often times be purchased, assigned or otherwise transferred. All companies have contracts they don’t value at the level they once did. Many companies face changes in circumstances that make it difficult for them to continue to fulfill on their contractual obligations. Other companies are in need of cash and are willing to sell certain contracts as a financing vehicle. In other circumstances, you’ll find business that you can fulfill better, faster, and more cost effectively than the current provider creating an opportunity for arbitrage or even subcontracting.
  6. Equipment: An unwanted piece of equipment owned by someone else can result in allowing you to enter a new market, increase your production capacity, or provide you the ability to win business from a potential customer whom you could not previously serve. Whether you purchase equipment directly from the owner, via auction, from a bank, receiver, trustee or other custodian, you can add significant value to your business through the intelligent purchase of equipment.
  7. Brands: Real brands have real value…in fact recent studies confirm what many of us have known for quite some time, which is that brand equity can become one of the largest assets on a companies balance sheet and ultimately lead to increased valuations. That said, many companies have made substantial investments into brands that no longer fit into their operating strategy, or that for other reasons they no longer value to the extent they once did. It’s much easier to enter a market, or expand marketshare by acquiring a brand than creating one from scratch. Just because the current brand owner doesn’t value their brand equity, doesn’t mean that you shouldn’t.
  8. Real Estate:  While there are certainly exceptions to every rule, we are in the midst of the worst global real estate market in recent history. Valuations are down worldwide, so if you’re looking to expand manufacturing or distribution facilities now is the right time to acquire real estate. If you want to expand sales operations, but don’t want to acquire a building, fantastic sub-lease opportunities are available in virtually every market at deep discounts. Many companies are upside-down in their real estate holdings and are looking for someone to stop the bleeding for them. Likewise, the special assets and real estate owned groups within banks and financial institutions have a dearth of property that they are trying to liquidate. It is not uncommon to be able to purchase a property for less than the face value of the current debt owed.  

Bottom line - you don’t have to buy an entire operating entity to incorporate an acquistions plan into your overarching business strategy. While the value of a component may not be as great as the overall value of the entity, this doesn’t mean that a component still doesn’t have significant value.

Thoughts?

Leadership & Courage

By Mike Myatt, Chief Strategy Officer, N2growth

Courage is a trait possessed by all great leaders. So much so, that leadership absent courage is nothing short of a farce. Let me be very clear – I’m not advocating for bravado, arrogance, or an overabundance of hubris, but the courage necessary to stay the course and to do the right things. Standing behind decisions that everyone supports doesn’t particularly require a lot of chutzpa. On the other hand, standing behind what one believes is the right decision in the face of tremendous controversy is the stuff great leaders are made of. I believe it was Aristotle who referred to courage as the first virtue, because it makes all of the other virtues possible.

It takes courage to break from the norm, challenge the status quo, seek new opportunities, cut your losses, make the tough decision, listen rather than speak, admit your faults, forgive the faults of others, not allow failure to dampen your spirit, stand for those not capable of standing for themselves, and to remain true to your core values. You can do none of these things without courage. Courage is having the strength of conviction to do the right thing when it would just be easier to do things right.

The best thing about courage is that a lack thereof can be overcome. Courage is teachable and therefore it is learnable – proof of this can be found in every instance of overcoming a fear. Courage should not be defined as the absence of fear – that’s ignorance. Courage is finding the strength to move ahead in the presence of fear. In short, courage isn’t a skill, it is a decision. Here’s the thing – we’ll all be remembered for the decisions we make or don’t make, and the courage we display or we fail to exercise. Leaders who consistently demonstrate courage will stand apart from the masses, and earn the trust and loyalty of those whom they lead. As a general rule, most people can be characterized by their courage or their lack thereof:

  • In the corporate world those who demonstrate courage stand apart as innovators and opinion leaders, those who display a lack of courage are viewed as  “yes men” who are the politically correct defenders of status quo.
  • In the military great courage is often referred to as heroism, while a lack of courage will brand you a coward.
  • On the stage of world affairs those who display courage are statesmen, and those who don’t are politicians.
  • In relationships courage will show you to be a trusted friend, whereas the absence of courage will reveal you as a gossip, adversary, or even enemy.

Each day brings with it a new set of challenges, and the best any of us can hope for is that we will have the courage and character to stand behind our personal beliefs and convictions regardless of public opinion or outcome. Courage will make you faithful, where a lack thereof will cause you to be fearful. Whether you look back on your personal experience or a greater historical reference, you’ll find it is always better to stand for courage than regret failing to do so.

Thoughts?

Social Media for CEOs

By Mike Myatt, Chief Strategy Officer, N2growth

Nary a week passes where I don’t hear from a CEO who’s grappling with this social media conundrum: should I, or shouldn’t I? The inquiry usually goes something like this: “I’m interested in learning more about social media, but my board thinks it’s a bad idea, I don’t have any additional bandwidth, and I’m not even sure where to start…is social media really effective for CEOs?”  The discussion about whether or not CEOs should become more digitally accessible  is certainly not a new one, but in my humble opinion, it’s a tired one that should have ended long, long ago. In today’s post I’ll share my thoughts on why it’s time to put a fork in the social media debate…

Background/Disclaimer
We have a social media practice at N2growth, I use social media, and all of the CEOs I coach are participating at some level in social media. That said, my feelings are not prejudiced, just biased- there is a difference. Experience matters in this debate, and frankly, most of those who opine in dissent don’t have much experience to draw from…In an effort to be balanced, I have nonetheless attempted to represent both affirmative and dissenting opinions below:   

The Dissenting Position:
The stance of the risk adverse is there is little to be gained, but the potential for much to be lost in social media initiatives involving C-level executives. The fear of exposing executives and the corporate brand to public criticism, along with disclosure concerns with regard to forward looking statements, and other confidential information have caused concern for boards and legal departments. They are risk managers who believe in protecting what was rather than embracing what is, and what will be.    

The Affirmative Position:
Proponents of C-level social media participation believe the digital universe provides the CEO with the ultimate platform to evangelize the corporate brand, and to effectively communicate across multiple constituencies. They are opportunity managers who believe engagement to be more valuable than silence, they believe in dialog not monologue, they believe in change and innovation – not in status quo.   

The Truth (as I see it)
A main point of consideration for CEOs is that social media transforms you from an enigma (the stereotype of the uncaring corporate executive) into a human being that people can relate to…social media personalizes you in a way that few other mediums can.  Whether you Tweet, Blog, Facebook, YouTube, etc.,  these communities allow you to be known for the whole of who you are as an individual, not just as a bio on the corporate website. The following list is comprised of  a few representative examples of reasons why all CEOs should be actively engaged in social media:

  1. Leadership Benefits: As CEO, you’re not supposed to be the relic, but the visionary. This may hit a little close to home for some, but the message needs to be heard. Great leaders lead by example. How can you ask members of your team to be innovative, engaged, proactive, creative, authentic, transparent, and communicative if you are none of those things? You cannot be an effective leader if you don’t model the behavior you seek in others. Be a leader or be a disingenuous hypocrite – the choice is yours.  
  2. Learning Benefits: Social media is not just a tool for pushing out corporate propaganda – use it as such and you’ll pay a steep price. What it is, is open access to people, relationships, communities, and constituencies. Put simply, it’s a chance to observe, listen, process and learn. A CEOs needs to understand that in addition to affording them with the benefit of directly engaging consumers of their goods and services, social media also provides a window into the insights or their employees and allows them to monitor the pulse of their culture. Social media also allows you access to business, market, and competitive intelligence in real time. 
  3. Business Benefits: Yes, I know, you’re the CEO and you have to pay attention to business. Well, social media does have significant ability to drive revenue, increase personal and corporate brand equity, open markets, create relationships, drive innovation, improve morale, build partnerships, attract & retain talent, and to generate communications leverage. Not only does social media work, but it works even better when the participant has a bit of cache. The truth is the farther up the org chart one resides, the more influence one possesses, the more leverage one creates, and the more one can accomplish via social media. You can do none of these things effectively by sticking your head in the sand and pretending social media doesn’t matter.
  4. Communications Benefits: I hesitate to mention this becasue it’s been so overused, but becuase it’s true, here goes: “The conversation is already taking place, so you might as well be a part of it.” Social media gives you the ability to be proactive in your communications, or if needed, provide a rapid response to crisis. Unfortunate things happen in business, and sadly, they’ll likely happen to you at some point. Having strong relationships, supporters, and fans created through social media is invaluable – so is having a channel to quickly and credibly communicate with those who are not.
  5. Legacy Benefits: I’ve often said the best legacy is one that can be lived before you’re gone. A legacy is shaped by the sum total of your personal and professional contributions, and most significantly by those contributions which have been the most beneficial to others. Social media takes your personal interests and your professional body of work and gives them access to a larger community. Social media can enhance the value of existing relationships and create new ones, it can help you evangelize your passions, recruit people to your causes, and to help others with their causes. Social media can help you and those you care about make significant contributions.     

To those of you reading today’s post who still haven’t seen the light, and believe that social media is either insignificant, or that the window of opportunity has passed you by, I put forth the following demographics as proof of the power of the social media as a medium:

  • There are nearly 150 million social media users in the U.S. alone, which is more than 60% of the U.S. internet population.
  • According to eMarketer, the average time spent per user on social networks as of late 2010 exceeded 5 hours per month. Remember this is an average number, many users eclipse this number by a significant amount. As an example, according to clickZ, Blog readers average 23 hours online each week. 
  • Nielsen data  shows a 2x lift in brand metrics around social ads vs. non-social ads. 
  • GroupM’s research reports a significant lift in search behavior from users exposed to a brand on social networks. 
  • Over 12 million American adults currently maintain a blog.
  • I have clients who have tens of thousands of Facebook Fans, oodles and oodles of Twitter followers, popular blogs, have driven huge increases in revenue, and have quite literally changed the dynamics of their businesses, brands and cultures via social media. 

If I haven’t convinced you yet, let’s look at what some other CEOs said just in reference to Blogging in a recent issue of Inc. Magazine:

  • “More effective than any marketing budget for getting our name out there.”
  • “Within 60 days of launching our blog, it is our top referral source.”
  • “Results have been great – we had more than 100,000 visits in May alone.”
  • “Our clients love it, and lots of people in our industry pay attention to it.”
  • “The blogs are 50 percent of website traffic. Great participation.”

So, do I think CEOs should be actively engaged in social media? In a word; YES. If you’re a CEO who hasn’t taken that first step, or if you’re struggling with strategy or execution, give me a call and I’ll help. If I can’t help I’ll refer you to someone who can… 

Thoughts?

Leadership – What’s Next?

By Mike Myatt, Chief Strategy Officer, N2growth 

There is no shortage of debate surrounding leadership when it comes to philosophy, style, definitional distinctions, nuances, complex theory, etc. That said, I believe most reasonable people would agree leadership is nothing if not personal. Leadership can represent a pursuit, discipline, practice, passion, calling, skill, competency, obligation, duty, compulsion, or even an obsession.  I’ve known those who have worshiped at the alter of leadership as a religion, and a bit of reflection will reveal more than a few leadership revolutions dotting the historical timeline. My goal with today’s post is to challenge your thinking and your perceptions with regard to the state of leadership. So, my question is this - what’s next for leadership? 

Think about this for a moment – with all our experience and all the research, with all the resources and all the focus on leadership, do you find it perplexing, if not altogether disturbing, that our world has never been more lacking for true leaders? Casual observation might lead you to conclude leadership has devolved rather than evolved. If you pay close attention to the media and world events, it would appear those serving themselves greatly outnumber those who place service above self. Here’s the thing - we’ll never all agree on what leadership is, or is not, but I think most reasonable people will concur it’s time for a change.

Why does all this matter? Because leadership matters…Whether through malice or naivete, those who abuse or tolerate the abuse of leadership place us all at risk…Poor leadership cripples businesses, ruins economies, destroys families, loses wars, and can bring the demise of nations. The demand for true leaders has never been greater - when society misunderstands the importance of leadership, and when the world inappropriately labels non-leaders as leaders we are all worse for the wear.

It’s time for less talk and more action. Leadership is not about the power and the accolades bestowed upon the leader, it’s about the betterment of those whom the leader serves. At its essence, leadership is about people. At its core, leadership is about improving the status quo, inspiring positive change, and challenging conventional thinking. As long as positional and philosophical arguments are more important than forward progress, as long as being right is esteemed above being vulnerable and open to new thought, as long as ego is elevated above empathy and compassion, as long as rhetoric holds more value than performance, and as long as we tolerate these things as acceptable behavior we will all suffer at the hands of poor leadership.       

So, back to my original question – what’s next for leadership? I submit it’s time for a leadership movement that values engagement, open dialog, and candid discourse above personal gain. A movement is a cause greater than one’s self – it’s a populist groundswell rather than an elitist academic exercise. A movement is intentional, impassioned and biased toward action. A movement requires a vision that’s inclusive, collaborative, and has an orientation toward service. Most of all, a movement requires people committed to change.

So, where do we start? My belief is that we start by sluaghtering as many sacred cows as we can find. We dispense with the trivial, and we begin majoring in the majors. We bring the best leadership minds together - I’m not talking about like-minded thinkers, but big thinkers open to challenging what is considered “normal” with the goal of shattering outdated thinking. We dialog and debate, but most of all we listen, learn and act. We focus on what’s wrong with leadership and we fix it.   This is where we start:

  • I’m calling for those willing to participate to share what they feel is wrong with leadership in the comment section below. Share with us your insights on flawed principles, practice, theory, doctrine or logic. Be candid – be clear – be bold.
  • I’ll select from the topics put forth in the comments below and create an agenda for a few live public debates that pierce at the heart of status quo with the hope of creating thought provoking discourse that leads to positive change.

If we get enough traction on meaningful topics we might just create a movement…Now’s your chance to express what you’ve been thinking in a venue that could make a difference – you in?

The Leadership Line

By Mike Myatt, Chief Strategy Officer, N2growth

I had an email yesterday from a CEO who described himself as “constantly being sucked down into the weeds.” In helping him walk through the logic of why and where to allocate his time, I used the information in the video above as a baseline illustration for discussion purposes. The constructs of this video compose a visual I developed more than 20 years ago, and the interesting thing is that it’s applicationally as sound today as it was back in 1988. Watch This Video I hope it provides a new perspective on the leadership vs. management argument. As the video progresses, the orange horizontal line that cuts the image in half is what I refer to as the leadership line. When working on top of the line you are working “on the business in a true leadership capacity, and when working below the line you are working “in” the business in more of a management capacity.  While all good leaders spend time on both sides of the line, the most effective leaders spend as much time working north of the line as possible.

In grasping how to best integrate the disciplines of leadership and management for maximum effectiveness, it’s critical to understand the role of strategy. I tend to get a bit frustrated with all the “strategy bashing” of late – How could sound strategic planning possibly be a bad thing? Strategic issues are clearly a “North of  the line” activity. That said, things have spun so far out of control that I recently had a CEO ask: “Is strategy still relevant in today’s business world, and if so, what role does strategy play in the overall make-up of a CEO’s duties and responsibilities? Let me begin by stating that strategy has never been more relevant than it is today. With all of the current emphasis on tactical execution I guess I understand how a question like this could be posed, but wow, what a sad commentary on the state of executive leadership when a CEO asks whether or not strategy is relevant.

Let me be as blunt as I can – As communicated in the video above, the issue should not be strategy vs tactics, but strategy and tactics – not strategy vs cultue, but strategy and culture. While separate functions and disciplines, one cannot prosper without the other. Strategy is what provides the tactical road-map, and it is tactical execution that validates and delivers strategy. The noise attempting to lift one up above the other is simply more unneeded rhetoric. The best strategy cannot succeed without tactical execution, and tactical execution is much easier to achieve with the clarity provided by a sound strategy. Moreover if culture in not an intentional focus area for leadership, and an actual component of strategy your business will fail.

With all of today’s emphasis on pleasing investors by meeting short-term financial expectations, it is not at all uncommon for many executives to press for better execution when what they really need is a better strategy. Conversely, other executives change strategic direction when what they should do is demand better execution. The truth of the matter is that a sound strategic plan can be executed with a high probability of success, whereas a flawed strategy is almost impossible to execute profitably.

The emphasis for CEOs needs to be on creating long-term sustainable value for shareholders without sacrificing short-term tactical interests. While in most cases a sound strategy will allow a CEO to have his/her cake and eat it too, if you must sacrifice one over the other, you would be well served to place long-term interests above short-term objectives. History has shown us on many occasions that it is quite possible to win the battle and lose the war. CEOs must learn to fight the battles that need to be won, and not just the ones that are easy to win. Put simply, CEOs must learn to both lead and manage.

Please read the following statements very carefully…The CEO is often times the chief architect of corporate strategy, and has the ultimate responsibility for assuring the delivery of a strategy, which is consistent with the corporate values and vision. One of the primary duties of the CEO is to communicate, evangelize, and lead the company in the implementation of the corporate strategy. Absent an over abundance of blind luck, a company’s strategic planning process will be critical in the eventual success or failure of the enterprise. CEOs must view themselves as being completely accountable and responsible for the corporate strategy, regardless of whether they were the original architect.

While executives must learn to view strategy and execution as being inextricably linked, they also must come to understand that strategy should always drive tactics. The tendency for some CEOs to let tactics determine the strategy is the classic example of reactive vs. proactive leadership. It also represents a great illustration of letting the tail wag the dog. A lack of strategic focus in dictating tactical initiatives is a ready-fire-aim approach to leadership and will result in higher costs, a perpetual state of chaos, and places a higher emphasis on activity vs. productivity.

There is so much focus on execution these days that it is not uncommon for me to receive a few e-mails each week with headlines that read: “Screw Strategy” or “Tactics before Strategy.” While I’m all for exploiting trends, and I appreciate a good marketing hook as much as the next person, these e-mails from so-called business experts can be both misleading and dangerous to those readers who don’t possess the savvy to understand that they are just being pitched on a product and not being given sound counsel.

As much as some of my direct marketing friends wish it weren’t so, there are certain inevitable truths that do exist in business. Listen, I have no problem with creating velocity and leverage, but as fluid as business is today, most of the “short-cuts to success” being marketed today constitute form over substance. You see business is much like an algebraic formula, in that while there are certainly formulaic short-cuts that can be taken to solve an equation more quickly, the one thing that will provide an incorrect solution 11 times out of 10 is when the order of operation is skewed.

For those of you familiar with my work, you’ll see that I have consistently espoused that a bias toward action and tactical precision are essential to achieving sustainable success. However, I am also clear in my belief that misguided and ill-timed/advised tactics can also create huge problems for any business. The bottom line is that strategy matters, and that as a CEO, strategy is your responsibility. The challenges associated with leading corporate strategy initiatives are not easy, but neither is the burden of leadership. If you’re not up to task at hand you don’t deserve the title of CEO…it is harsh but true.

Thoughts?

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