Leadership and Competition

By Mike Myatt, Chief Strategy Officer, N2growth

Competition is only to be feared if not understood. If understood, competition is not only healthy, but it can also be very prosperous. If you really want to understand a leader’s perspective on the market, ask them about their competition.  A leader’s view on competition will not only reveal a lot about their beliefs on current and future market trends, but also on innovation, branding, talent management, supply chain issues, constituency management, capital markets, and customer facing. Whether you want to admit it or not, competition is part of your world, and likely a bigger part than you’d care to admit. In today’s post I’ll share my thoughts on how to identify competitive threats as well as competitive opportunities…

Every leader has an approach to dealing with competition. Some leaders completely ignore the topic of competition as if it doesn’t exist, others view competition as a minor nuisance, some executives see the competitive landscape as a battlefield where war is waged on a daily basis, and others view competition as untapped opportunities for collaboration and innovation. Smart leaders are fluid in their approach and understand that competition can breed significant opportunity.

I’m always amazed by those who regard the topic of competition as sophomoric. They tend to dismiss this subject as if it somehow diminishes their business savvy to admit they have competition. These captains of their own destiny share the perspectve that competition is not a significant factor in the execution of their business plan – they’re in control and competition is irrelevant. While this may make for a nice sound bite, I don’t buy it, and if they’re truly honest with themselves, neither do they. In business you can either choose to deal with your competition (even if that means partnering with them), or you can opt to stand idly by and let the competition eat your lunch.

While some companies talk a good game with regard to competitive strategy, in my experience very few businesses actually address the issue in adequate fashion. I suppose much of my perspective on competition was formed during my days as a soldier and athlete. In the military we valued actionable intelligence, studied our enemy’s strengths and weaknesses, developed a battle plan around a solid strategy, and executed our tactical mission as if our lives depended on it – because they did.

Similarly, in my days as an athlete, our game plan each week was refined based upon the strengths and weaknesses of the team we were playing next. If we didn’t study films and scouting reports, develop plays that would exploit match-ups, and execute our game plan we would lose – it was as simple as that. Dealing with competition in the business world is really no different than dealing with enemies on the battlefield or competitors on the athletic field…you either win or lose based upon your state of preparedness, perspective, interpretation and execution. In the following paragraph I share my views on competition so that you can understand how I personally navigate this issue.

There is arguably no more competitive space than what exists in the professional services arena. While I tend to view my competition as peers and colleagues, it is not lost on me that my clients have a choice. The client is in control. Not me, nor my competitor – the client. I know who my competition is, and I know where and when I’m a better choice. I have a very strong understanding of where I can create the most value for my clients. Where I’m not the best fit I refer my peers, or in some cases I partner with them, but I attempt to ensure the client receives the best solution whether or not said solution includes me or my firm. Put simply, I deal with competition by attempting to create the best solution for my clients. Sometimes this includes my colleagues, and sometimes it excludes them. One final thought here…the competition I’m most concerned about is not the competition that I know, but the competition that I don’t. I’m always on the lookout for new practitioners entering the market where we have practice areas, disruptive technology, or changes in the landscape that could disintermediate certain aspects of the market. I worry much more about the unknown than the known…

Now it’s your turn – how well do you know your competition? No really…not how well do you think you know your competition, but how well do you really understand them? I’ve often found executives when asked about their competition tend to talk about the organization that most closely resembles their own. That’s nice, but how much time do you spend evaluating people, entities or technology that might not be competition presently, but that could be down the road? Do you have a business intelligence platform? When was the last time you conducted a formal competitive study? Do your R&D and innovation programs evaluate the competitive landscape? Do your marketing, PR and branding initiatives satisfactorily address the competition? Do you stack-up as well as you think, or have you just adopted a position out of convenience?

The first step in developing a competitive strategy is to identify your current and potential threats, and then to prioritize said threats based upon perceived risk/reward and cost/benefit scenarios. The following list is clearly not exhaustive, but it is representative of the main competitive threats to a business. As the following list indicates, competition can come in the form of any one or combination of the following potential threats:

  1. Existing or potential direct and indirect competitors.
  2. Existing clients or end-users that could either become competition or strengthen your competitors if they have a change in loyalty.
  3. Current or former employees who could become competition.
  4. Vendors, suppliers or distributors that could become competition, or provide an edge to your competition.
  5. Competitive innovations in process, management, talent, pricing, efficiency, etc. that can cause disruption in the market.
  6. Strong changes in brand perception via news, PR, branding, litigation etc. can create changes in the competitive landscape.
  7. Competitive technology innovations that could adversely impact your business.
  8. Competitive mergers, acquisitions and roll-ups that could adversely impact your business.
  9. Political, legislative, regulatory, or compliance actions that could create a competitive imbalance in the market.
  10. Changes in general market dynamics that could create competitive changes in the market.

Once all areas of competitive risk have been identified and prioritized it will be much easier to develop a strategy for stacking the odds in your favor regardless of when, where, or how you encounter the competition. The key to successfully exploiting competition over the long haul is linking your competitive strategy to the discipline of innovation and the mindset of being externally focused with regard to the market. While customer centricity is important, don’t forget to look for new customers/markets as well.  Maintaining your existing revenue base is important, but deepening and expanding relationships is even more important. A sustainable competitive advantage is not found by creating minor advantages in product features. Long-term advantage is created by innovating around the needs of the market with a focus on long-term value creation.

Thoughts?

Memorial Day Leadership Lessons

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

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?

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