Boosting Personal Productivity

By Mike Myatt, Chief Strategy Officer, N2growth

Boosting ProductivityHas the speed at which business is transacted in the 21st Century completely overwhelmed you? Now that we’re approaching the end of the year, have you been as productive as you’d hoped for? Do you find yourself flirting with disaster by constantly brushing up against deadlines? Are your work hours increasing without a corresponding increase in income or satisfaction? Do you wish you had more time in a day? Boosting personal productivity is virtually the only way for professionals to meet their earnings expectations, keep their sanity by maintaining a balanced life, and meet the ever increasing level of customer expectations. In today’s post I’ll provide some tips for how to manage your day instead of having your day manage you.

Let’s face it, productivity is the standard by which most of us are judged in the business world. Whether you like it or not, in most business environments your destiny is likely to come down to a “what have you done for me lately” type of evaluation. My question to you is this: Are you as productive as you think you are, or even as productive as you used to be, and would your co-workers agree with your assessment? In the text that follows I’ll share my thoughts about the things that adversely affect your ability to produce, as well as some of the key items that can leverage your ability to optimize productivity. 

Even though entrepreneurs and executives are typically bright, talented and motivated people known for being highly productive, studies have shown that most professionals, when objectively assessed, are found to view themselves as being more productive than they really are. This is even true with the classic over-achieving type “A” personalities. So, what separates the productive from the non-productive? In working with countless executives and entrepreneurs it has been my experience that those professionals who like to cover a lot of ground and consider themselves masters of multi-tasking are not nearly as productive as those who have an ability to focus (see previous post entitled “The Power of Focus“).

Okay, let’s examine an all too common scenario: A senior executive has 30 minutes before the beginning of a strategy meeting which he/she is facilitating, and as the executive begins to prepare his/her final thoughts they receive an e-mail from legal asking them to review the latest version of an important contract before they go into the meeting. As they begin to redline the contract the executive receives an IM from the CEO asking for their immediate attention on a key issue. As they start to respond to the CEO their assistant informs them that an important client is on the phone and needs to speak with them immediately. As the executive begins to take the phone call they glance out their window only to see a small line forming outside their office door, and just then their Blackberry goes-off with a 911 from their spouse…

The sad part about the aforementioned illustration is that for many executives this is standard operating procedure. The pressure to become a multi-tasking phenom is in my opinion at the root of a decline in executive productivity. Multi-tasking is choosing to deal with perceived “urgent” matters rather than focusing on truly “important” matters. My father once told me that “part-time efforts yield part-time results” and I have found that with rare exception his premise is correct.

Inbound telephone calls, voicemails, e-mails, instant messages, meetings, drive-bys (unscheduled interruptions), cell phones, social media interruptions, faxes, and any number of other items that compete for your attention will consume your day leaving you wondering where the time went. The reality is that more executives and entrepreneurs are overwhelmed by technology than actually demonstrate an understanding of how to leverage technology to their advantage. The key to boosting productivity can be found by taking the following four steps:

  1. Have a clearly articulated vision: It is absolutely critical to understand what you’re playing for…If you don’t have a well defined vision, then you won’t understand the mission. If you don’t understand the mission then you won’t develop a well conceived strategy. Without a strategy it is unlikely that you’ll set the proper goals, and without accurate goals your tactical execution will be flawed and inefficient. It is the constant alignment and realignment of your actions to your vision that allows you to focus efforts based upon the right prioritization. I often counsel clients that the first step toward failure is ambiguity, while clarity of vision is the first step toward success.
  2. Leverage Down: While you can be lucky, you cannot create sustainable success without understanding the principle of “highest and best use”. Your efforts should be focused on those activities that maximize the leveraging of your time and skill sets leading to the attainment of your goals. Any activities that don’t meet that definition should be delegated to management, staff or outsourced to contractors.
  3. Focus: I have written before on the power of focus. No other single trait leads to a certainty of execution like focus. Those of you who know me have probably personally experienced my “gut-check” strategy which I highly recommend to all my clients. For those of you not familiar this concept it is one of my key pillars of success and it goes like this…Every hour on the hour (no exceptions) I ask myself “Am I doing the most productive thing possible at this point in time pertaining to the achievement of my objectives?” I have been known to terminate meetings, conversations, phone calls etc. based upon conducting this gut check. It keeps me from losing focus and being distracted unless I choose to do so. When in doubt FOCUS!
  4. Order your world: In today’s business world it is impossible to be productive without a well thought out workflow process. You must take yourself out of reaction mode wherever and whenever possible, and focus (there’s that word again) on proactively addressing workflow. The following list is a high level overview of a suggested workflow process:
  •  
    • I am a huge believer in quality administrative support…If you are a senior executive operating without admin, or not effectively using admin, you are cheating yourself and your stakeholders. If you don’t value your time why should anyone else? Leverage Down!
    • Where possible strive for a paperless environment…Paper is little more than inefficient, costly, clutter that is distracting. Virtually anything you can do in hard copy you can accomplish digitally with greater speed and efficiency while lowering your cost and decreasing distractions. Copy, paste, redline and forward is much more preferable than print, photocopy, highlight, and FedEx…
    • Understand how and when to use the right communication channels. Don’t travel when a web conference can accomplish the same or better results. Don’t use the phone if e-mail is more appropriate, and don’t use e-mail if IM is a better solution. I prefer to drive communication rather than respond to it, and when I respond it is based on priorities and not based upon impulse. I tend to use e-mail as my first line of communication using macros and e-mail filtering to reduce the number of incoming e-mails to an acceptable level. I have created a standard file/folder structure and naming conventions and integrate my e-mail with my calendar and task list.

Bottom line…If you’ll adhere to the principles described above you’ll actually have time to get your work done and have a life. With virtually nothing to lose and everything to gain, why not give it a try?

Search Engine Marketing

By Mike Myatt, Chief Strategy Officer, N2growth

Search Engine MarketingSearch Engine Marketing has always played a critical role in managing the visibility of a company’s online brand. However with the Internet becoming what is arguably today’s dominant medium, Search Engine Marketing has also risen to become a key driver in a company’s overall brand strategy. Regrettably the maturity of the products and services that comprise search engine related disciplines come at a time when the industry has never been more complicated and difficult to navigate for the uninitiated. Even though businesses today have many more options with regard to how they execute their search engine initiatives, I find that many marketing executives struggle more today with their online marketing strategies than they did a few years ago. In today’s blog post I’ll share my opinions on the current state of the Search Engine Marketing Industry.

My experience with Search Engine Marketing predates many in the field. I have been active online since the days of ARPANET, co-founded what was at the time the largest web development company in the Pacific Northwest region of the United States, served as Director of Internet Strategy for the world’s largest web-enablement, founded one of the top 50 Interactive Advertising Agencies in the United States prior to its sale, and our fastest growing practice area at N2growth is our social media practice. My purpose in providing the resume excerpt is not to self-promote, but simply to make the point that I have been actively involved in the industry from its conception, watched it struggle through its adolescence of the dot.com boom and bust, and am now watching it thrive again with a rapid proliferation of technology and marketing advances. While the Internet as a medium is far from being mature, it has most certainly evolved, and so have the methods for marketing your brand online.

This last year alone I attended a number of SEO/SEM/SMM conferences, and while the messages communicated at these events made it clear that the industry has shown remarkable growth, made tremendous advances in sophistication, and has increased in the diversity of product/service offerings currently available, I question whether things are getting better or worse for the lay person which accounts for the majority of consumers.

In talking regularly with many senior executives, marketing professionals and entrepreneurs one thing is clear…they are clearly not fluent in the area of search engine marketing. While these professionals understand the potential that search engine marketing affords for their businesses, they do not understand how to capitalize on it. In fact, many of the people I have spoken with are extremely frustrated at the amount of money they have invested in search initiatives without being able to develop an understanding of the medium, such that they have not yet been able to develop a consistent winning strategy in this space. 

The major problems that exist within the search industry are tied to the fact that this is still an embryonic, yet quickly evolving medium. There are only so many ways to promote your brand in more mature mediums like radio, print or television. Contrast this with the numerous options available with digital marketing, and you’ll quickly see the conundum that most businesses face. We regularly have clients ask if they should be on Facebook, Twitter, Lindedin or other social media networks, buy banner ads, purchase sponsorships, work on organic search engine optimization, use pay-per-click ads, focus on online PR, launch a blog, produce articles and/or white papers, create a Podcast, work on link building, start a video marketing campaign, promote webcasts, and the list could go on and on…You can see why so many organizations struggle online. 

The reality is that communication mediums in the early stages of their lifecycle spit out new opportunities faster than you can shake a stick at, and worse yet, this happens with a plethora of inexperienced vendors lined-up to cut their teeth on the advertiser’s nickel. There is rarely a week that passes when I don’t speak to a company who has a horror story to tell about a search marketing company who over-promised and under-delivered and by the time the advertiser figured out what was going-on they had spent thousands of dollars with little to show for it.

Another problem with the search industry is that Google currently controls most of the traffic. Combine Google’s dominant position with the fact that they will share little if any data with advertisers and that they can change the rules of the game at any time and it brings new meaning to the term “Flying Blind.” However the issue of transparency within the search industry is not limited to Google. Most of the search engines play their cards very close to the chest as they try and establish a leg up in the market. Until there is significant competitive pressure brought to bear on Google the odds are stacked against the advertiser. I met with a client last week that was spending 50% of their Pay-Per-Click budget on Yahoo and Bing because it was recommended to them by their search marketing firm. The problem was that given the advertiser’s product line and target market, Yahoo and Bing would produce virtually no return for them…This is a big problem.

The fact is that the Internet is the medium that can deliver the most velocity and biggest return on your marketing dollar. I also believe that this will continue to be the case as the dominance of the Internet medium will only continue to widen the gap over alternate mediums. Companies cannot afford not to allocate a substantial part of their advertising budget to online advertising, but until the medium matures it will behoove of them to make sure that they work with the best vendors who can keep up with the rapid pace of change in the industry.

Good Money After Bad…

By Mike Myatt, Chief Strategy Officer, N2growth

Good Money After Bad...Good money after bad…this is perhaps the most apropos description of the current proposal to bailout the  big three US auto makers. Have we learned nothing? Are we again going to let fear mongering subject us to more flawed decisioning? The lack of management and accountability for the trillion dollar government bailout of the mortgage and finance industry has been nothing short of amazing to me. Do you sincerely believe the appointment of an “auto czar” and the submission of business plans is going to make a difference? I don’t; it’s simply more political gamesmanship, more of the same, and will result in nothing more than throwing good money after bad. In today’s post I’ll share my thoughts on the auto bailout…

Here’s a news flash…when a business becomes insolvent there is already a provision within our legal system that affords a mechanism for protection. It’s called a Chapter 11 Bankruptcy, which oddly enough is often referred to as a “reorganization,” “restructuring,” or “workout.” I don’t know about you, but a workout or restructuring certainly has more appeal to me than another “bailout.” Filing for protection under Chapter 11, a corporation can seek temporary protection from its creditors by submitting a business plan to the court for approval, which if approved, will grant the company sufficient time to restructure itself and work it’s way out of a financial crisis. This is the Bankruptcy Court’s job and falls squarely within the realm of the Judicial Branch of the government. It has nothing to do with the Legislative Branch of government, and Congress should flat out abstain from such an over-reaching and improper use of their authority.

But Mike, what happens if the reorganization doesn’t work? Then the business fails and its assets are liquidated to offset the outstanding debt owed to creditors. This is how business works and the automakers should have no special rights or privileges. If they fail they fail…period end of sentence. 

But Mike, what about all the workers who will lose their jobs if the automakers fail…wouldn’t this throw our country into a depression? First of all, there is no guarantee that they will fail by going through the normal channels of filing for bankruptcy. They may actually survive to be better run companies. However, even if they were to fail, it wouldn’t throw our nation into a depression. If you aggregate all the direct employees of the big three, along with all the indirect (dealers, suppliers, etc.) employees associated with the big three, it doesn’t even come close to the numbers of people employed in small businesses across the country. This wouldn’t be as tough for our country to absorb as the bursting of the dot.com bubble, or other sector rotations that have occurred historically.

So what would happen in a worse case scenario? Three companies that failed to innovate and to sustain their competitive advantages would suffer the just consequences of poor leadership. Some people would suffer the hardship of temporary unemployment while they were recycled back into the workforce, and other new businesses would blossom as a result of new ideas and innovation aided by the law of necessity. By way of example, just look at the logging, mining, and shipping industries. They all went through their boom and bust cycle and our nation survived. We took many unskilled workers thrust into the ranks of the unemployed, retrained them, and redeployed them as better skilled workers. This is the natural order of things, and while certainly not pleasant, it is nothing to be feared.

The moral of this story is that the free market economics of capitalism work best if left alone. Those companies that do the right things prosper, and those companies who don’t keep pace with the competitive forces in the market fail. It’s not a bad thing, it is an unfortunate thing, but it is what it is… 

Innovate or Perish

By Mike Myatt, Chief Strategy Officer, N2growth 

Innovate or PerishInnovate or Perish is a battle cry that I have long espoused to my clients. I can’t think of a better example of what can happen to those companies that fail to innovate than the rumors circulating about the Tribune Co. The Tribune Co., owner of the Chicago Tribune, Los Angeles Times, and other once revered trophy brands is hemorrhaging under the burden of huge debt obligations, insufficient cash flow, and is rumored to be filing for bankruptcy as early as this week. The emergence of better alternative news sources has been hurting the newspaper industry for years now, but when you combine the rapid emergence of new media options with the crushing blow of the recession, it may just be too much for an old media lagger to survive…

When was the last time you actually read a print version of a newspaper? Unless I have a few minutes to kill in an airport or a lobby somewhere I’ll never touch a newspaper. By the time you read something in the newspaper it’s simply old news…If you rely upon the newspaper to keep you informed, here’s a hint…you’re out of touch. However the bigger issue here is not how you choose to receive your media, but rather out of touch company leadership that doesn’t understand the importance of innovation as it relates to corporate sustainability. 

If you’re a CEO reading this post ask yourself this question: How disruptive is your business model? Without a focus on disruptive innovation you are merely building your business model on a “me too” platform of mediocrity. Disruptive business models focus on creating, disintermediating, refining, reengineering or optimizing a product/service, role/function/practice, category, market, sector, or industry.

The most successful companies incorporate disruptive thinking into all of their business and management practices to gain distinctive competitive value propositions. “Me Too” companies fight to eek out market share in an attempt to survive while disruptive companies become category dominant brands insuring sustainability. So why do so many established and often well managed companies struggle with disruptive innovation? Many times it is simply because companies have been doing the same things, in the same ways, and for the same reasons for so long that they struggle with the concept of change.

As a CEO Coach many of my engagements with chief executives focus on helping them to embrace change through disruptive innovation. Why didn’t the railroads innovate? Why didn’t Folgers recognize the retail consumer demand for coffee and develop a “Starbucks” type business model? Why didn’t IBM see Dell and Gateway coming? Why have American auto-makers been relegated to inferior brands when contrasted to their European and Asian counterparts? How did the brick and mortar book stores let Amazon get the jump on them? I could go on-and-on with more examples, but the answer to these questions are quite simple…The established companies become focused on making incremental gains through process improvements and were satisfied with their business models and didn’t even see the innovators coming until it was too late. Their focus shifted from managing opportunities to managing risk, which in turn allowed them to manage themselves into brand decline…

At one end of the spectrum take a look at the companies receiving investment from venture capital and private equity firms, and on the other end of the spectrum observe virtually any category dominant brand and you’ll find companies with a disruptive focus putting the proverbial squeeze on the “me too” firms occupying space in the middle of the spectrum. With the continued rapid development of technology taking the concept of globalization and turning it into hard reality facing businesses of all sizes, it is time for executives and entrepreneurs to examine their current business models from a disruptive perspective. Ask yourself the following questions:

  1. When was the last time your business embraced change and did something innovative?
  2. When was the last time you rolled-out a new product?
  3. When was the last time you entered a new market?
  4. Are any of your executives thought leaders?
  5. When was the last time you sought out a strategic partner to exploit a market opportunity?
  6. Do you settle for just managing your employees or do you inspire them to become innovators?
  7. Has your business embraced social media?
  8. When was the last time your executive team brought in some new blood by recruiting a rock star?
  9. Does anyone on your executive team have a coach or mentor?
  10. Has anyone on your executive team attended a conference on strategy, innovation or disruption in the last year?

If you’re an executive or entrepreneur and you can’t answer yes to the majority of the questions above then your company is likely a market lagger as opposed to a market leader. If you continue to do the same things that you have always done in today’s current market environment you will see your market share erode, your brand go into decline, your talent and customers jump ship, and your potential never be realized. Remember the definition of insanity is continuing to do the same things while expecting different results. Bottom line…change, innovate, disrupt and prosper.

The Next Collapse…

By Mike Myatt, Chief Strategy Officer, N2growth

The Next CollapseIt seems as if the more layers of the onion we peel back on the chaos in the capital markets the worse the news seems to be. I have long been a believer in the axiom “where there’s smoke, there’s fire,” and trust me when I tell you that the fire is far from being under control, much less extinguished. You see while most of the attention in the mainstream media has been focused on the debacle in the real estate and public markets, the next wave of failure is about to rear its ugly head. In today’s post I’ll share what I believe is the next segment of financial collapse set to rock the investment world…

Riddle me this…What conclusion should you draw from the simultaneous occurrence of a bear market, a recession, the virtual collapse of the investment banking industry as we know it, massive government bailouts, and the capital and credit crisis? The answer: Big trouble in the Private Equity markets.  News Flash…private investments are inexorably linked to public markets, and we’re on the brink of watching private equity firms suffer the same fate of their public counterparts. The problem is this…many private equity firms have yet to write down their investments and are still carrying them at book value, which can mean only one thing…they are significantly overvalued.

Think about it…private equity markets were perhaps even more frothy than the public markets the past few years. Massive amounts of deals were being done at very aggressive valuations that just won’t hold-up in today’s economy. Try this analysis on for size…take a random sampling of PE deals closed in 2005 and 2006 and look at their original valuations. Then revalue those some companies by marking them to current market conditions. The big sucking sound that follows is  the painful realization of equity erosion. Does this sound familiar?

The real shame is that the same short-term greed mongering that affected the public markets is about to rear it’s head on the private side of the table. Remember that PE investments are high risk investments, yet the big players in this market are institutional investors who simply got greedy and took on more risk than they should have. Again, does this sound familiar? It only gets worse…not only has the door been slammed on the public exit for many PE investments changing the landscape dramatically, but PE investors are likely going to be hit with big capital calls that can’t or won’t be met. This simply means a sell-off of PE investments at deep discounts is impending.

Even if you can’t connect the dots based upon recent adjustments in valuations in the real estate and public markets, just roll back the clock and revisit the evisceration of the paper wealth that occurred during the dot.com era when the bubble burst on frivolous valuations at that time. The moral of the story is this…don’t be at all surprised when the bottom falls out of the private equity markets…

The Recession…It’s Official

By Mike Myatt, Chief Strategy Officer, N2growth

The Recession...It's Official“The Recession…It’s official.” I don’t know about you, but I’m less than impressed with the experts just now arriving at the conclusion that we’re in a recession when I’ve been talking about it since last summer. Like we really need a government agency confirming after the fact what astute business people have known for quite some time now. The National Bureau of Economic Research issued the following statement today: “The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months.” Gee thanks for that useful information…Rather than talk about how bad things are going to get (they will get worse before they get better), I’m simply going to refer you to a previous post written in March of this year entitled “Thriving During A Recession.”

15 Seconds of Fame…

By Mike Myatt, Chief Strategy Officer, N2growth

15 Seconds of Fame15 Seconds of Fame” – It’s been said that at some point in everyone’s life they’ll have their 15 seconds of fame…Your 15 seconds of fame may come to you in good times or in bad, it may happen as a result of tremendous diligence and hard work on your part, or it may simply occur as a matter of chance. Regardless of the reasons or circumstances surrounding your moment in the sun, my question is this…what will you do to maximize the opportunity when it presents itself? In today’s post I’ll share some thoughts on how to leverage your 15 seconds when it arrives…

When your time comes (and it will) you have a choice to make…You can take it for what it is and just let the opportunity pass you by, or you can leverage it for all it’s worth. There is really no right or wrong choice here as it simply boils down to personal preferences and priorities. That being said, if you’re a person who wants to capitalize on your 15 seconds of fame you need to be prepared. Let me make this as simple as I can…the only way to maximize the opportunity surrounding your 15 seconds of fame is to extend it. If you let the 15 seconds come and go it’s over. However, you can easily extend the clock with a plan.

My favorite example of someone who is maximizing their 15 seconds also happens to be a recent example…His name is Samuel J. Wurzelbacher, aka “Joe the Plumber.” A self-purported “average Joe,” this 34 year-old tradesman jumped all over his 15 seconds by doing something that most people don’t do…He hired a publicity firm to extend the clock by developing his message, and promoting a highly marketable and timely personal brand. “Joe” simply took the opportunity and ran with it…

You Go Joe...So, what does Joe have to show for his efforts? A new website which sells memberships (for only $19.95 you too can join Joe’s cause), a blog, a new book deal, and media appearances galore. All this has come as a result of a great sense of timing…Joe realized he was a hot commodity and decided that he didn’t want to fade away as he so easily could of… The result is that this “Average Joe” isn’t so average anymore…Moreover, his days of fixing toilets and sinks are likely gone forever (assuming his new handlers do their job properly). So what can you do to leverage your opportunity when it comes? The following list contains three items for your consideration: 

  1. Be Aware of Surroundings: Joe could have easily just stood in the rope line and let Barrack Obama pass him by without uttering so much as a sound, but that’s not what he did. Opportunities most often come to those who look for them. You can’t hit the ball if you don’t step-up to the plate and swing the bat…
  2. Assess The Opportunity: When the event happens, take the time to assess the opportunity to determine the potential upside as contrasted with all the potential risks. Seek advice and counsel from friends and family and decide whether or not chasing the opportunity is worth the sacrifice it will take to extend your 15 seconds.
  3. Get Professional Help: Just as Joe did, leverage the advice of professionals who understand what’s involved in branding, promoting, positioning, and messaging in a fashion that will catalyze momentum and public interest. When opportunity knocks, there is no time for a do-it-yourself learning curve.

Employee Retention

By Mike Myatt, Chief Strategy Officer, N2growth

Employee Retention begins with Great LeadershipEmployee retention discussions are often reserved for burgeoning economic times when competition for talent is high. Therefore it holds true that during tough economic times, when unemployment is high, employee retention quite frequently just gets ignored. Today’s Myatt on Monday’s question comes from a CEO who asks: “In a post earlier this month (“Workforce Reduction“) you criticized CEOs who use layoffs as an operating strategy, but could you comment on how to retain employees during tough times?” In today’s post I’ll examine the topic of employee retention…

Few things in business are as costly and disruptive as workforce churn…whether it occurs knowingly as a result of layoffs, or unknowingly through poor employee retention practices, having the provervial  revolving door for employees to exit from is never a positive sign. While there are many secondary and tertiary items that can influence an employee’s decision to leave, I believe there is one single factor that constitutes the overarching reason which drives a person’s decision to leave their employer…Poor Leadership

Let me begin by stating that no company in the world has a 100% retention factor if measured over any meaningful length of time. It is also important to note that while the least productive component of your workforce might be less tempted to jump ship during tough times, your tier-one talent is always at risk for what I call “opportunity shopping.” Highly skilled and talented executives tend to have a “grass is greener” mindset, whereas while less skilled workers might dream of greener pastures they have fewer options and are more risk adverse. 

The reality is that in good times and bad, there are definitely companies that have created excellent work environments leading to superior employee satisfaction and retention. Organizations that display the healthy, dynamic, and positive culture that fosters a motivated and engaged workforce all have one thing in common…great leadership

There is an old saying that goes; “Employees don’t quit working for companies, they quit working for their bosses.” Regardless of tenure, position, title, etc., employees who voluntarily leave generally do so out of some type of perceived disconnect with leadership. Furthermore, while the accuracy of exit interviews are somewhat debatable, they nonetheless support the conclusion drawn in the previous sentence. The following list contains just five representative samples of the differences between solid company leadership and poor leadership…

  • Hiring Methodology: Great leadership teams use a values based hiring methodology. They hire slowly, carefully, and only to fill a defined need with a specific skill set. Companies with challenged leadership hire quickly, often based on how affordably they can fill a position, and many times in absence of a defined need.
  • Leadership Continuity: Great companies have a clear vision, mission, and strategy, which are evangelized by a cohesive leadership team. A crisply articulated vision, and continuity of leadership creates an engaged workforce that understands the business model and key objectives of the enterprise. Companies that have a fractured leadership team lose the confidence of line and staff. Employees that don’t understand what they’re playing for are very difficult to motivate and as a result are often disengaged and non-productive. 
  • A Planned Transition: Outstanding leadership teams set employees up for success and not for failure. They have an established onboarding process which puts forth an initial road-map for a successful transition by clearly defining key performance indicators, business objectives, and other key metrics. Well honed leadership teams immediately assign an in house mentor to new hires to help insure a successful acclimation. Unsophisticated leadership teams usually have a sink or swim mentality with regard to new hires and have substantial voids in training and management processes in the early days of a new hire. Poor leadership teams have a lack of continuity in their training and development which breeds discontentment and dissatisfaction.  
  • Compensation: Great leadership teams understand the value of tier-one talent, and are not afraid to pay-up in order to attract it and retain it. They create a multi-tiered compensation plan that rewards employees at the top of industry scale when performance objectives are met or exceeded. Moreover they understand the value of non-compensatory recognition and apply it generously and judiciously. Companies with poor leadership often trip over dollars to pick-up pennies when it comes to compensation. Their compensation plans lack sophistication, creativity, and are engineered by default and not be design. People will often cite non-competitive compensation as an issue for leaving a company, but what they are really stating is that the company has an unsophisticated leadership team which is out of touch with both the market, and the needs of its employees.
  • Professional Development: Solid leadership teams challenge their employees by offering them a clear path toward personal and professional growth. Great companies create a career path that offers the successful employee the option of matriculating throughout the company based upon achievements, needs, and qualifications. Great leadership teams understand that in order to create a thriving and sustainable enterprise that a key priority is to develop talent to their greatest potential, and ultimately to create other leaders. Poor leadership teams don’t see the value in training, mentoring, coaching, and other forms of professional development. Their workforces are stagnant and not competitive, which places them a not only a competitive disadvantage, but also at risk for long-term sustainability. 

While today’s post was an extemporaneous highlight of just a few critical acknowledgements, I hope it clearly portrayed the value of leadership in employee retention and development.

Kudos to Goldman Sachs…

By Mike Myatt, Chief Strategy Officer, N2growth

Kudos to Goldman SachsKudos to the top 7 C-level executives at Goldman Sachs for agreeing to forego their bonuses this year…Goldman Sachs CEO Lloyd Blankfein, Presidents and co-Chief Operating Officers Jon Winkelried and Gary Cohn, CFO David Viniar, and three vice chairmen: J Michael Evans, Michael Sherwood and John Weinberg all voluntarily refused their annual bonuses. Only 11 days ago I authored a post (“It’s Bonus Time Baby“) severely admonishing Goldman Sachs for planning to dole out nearly $7 Billion dollars in bonuses while accepting $10 Billion dollars of Bailout funding. As critical as I can be at times when I sense something is afoul, I am also quick to tip my hat to those who do the right thing…Congratulations gentlemen.

Is Starbucks an Economic Bellwether?

By Mike Myatt, Chief Strategy Officer, N2growth

Starbucks has seen better days...Is Starbucks and economic bellwether, have they just been mismanaged, or are consumers simply becoming more savvy? Why do I ask, or perhaps more to the point, why do I care? Whenever an industry giant stumbles there are lessons to be learned. If you couple Starbucks recent earnings announcements, with massive store closures and other corporate re-engineering initiatives, there can be little doubt that Starbucks is in trouble. Put candidly, Starbucks has gone from an industry darling to just another turnaround. So, in today’s post I’ll share some insights that all CEOs can apply to their businesses in hopes of avoiding a Starbucks like event…

Let’s start by looking at Starbucks recent earnings announcement:

  • Quarterly Earnings: Starbucks Q4 earnings fell 97%, to $5 million, from $159 million in the year-ago period. To be fair, this figure included a $105 million charge for restructuring, and other costs associated with executing Starbucks re-engineering plan.
  • Annual Earnings: Full-year earnings also fell, 53%, to $316 million, from $673 million last year.
  • Same-Store Sales: U.S. same-store sales also cratered, down 8% from Q4 2007. The company cited decreased store traffic, as well as lower average customer check prices, thanks in part to a reduction in merchandise and in-store music sales.

In all fairness, I believe there’s an element of truth to be found in each of the scenarios posed in the opening question of today’s post. Let’s examine each one:

  • Is Starbucks an economic bellwether: Absolutely…Times are tough, consumer confidence is down, and retail spending is off. While some of us don’t see coffee and pastries as discretionary spending, the majority of Americans still do. Starbucks store traffic is down, their average ticket price is down, and many of those still frequenting Starbucks are literally pinching their pennies. Coffees are now often being purchased on credit or by rounding up change, something that wasn’t as prevalent even a few months ago…
  • Has Starbucks been mismanaged: Yes and no…on the positive side of the equation Starbucks has been an innovator on numerous fronts, and as a result built a category dominant brand. On the negative side, Starbucks grew too fast, spent too loosely, and let quality and customer service take a back seat to expansion hurdles. The reality is that even with all of Starbucks brand power, and the genius of Howard Schultz, their overall business model had intrinsic flaws, and management took too long to recognize this.
  • Are consumers simply becoming more savvy: Look, you don’t have to be a rocket scientist to figure out that you can buy a month’s worth of coffee at the grocery store for just a bit more than what you’d spend on one drink at Starbucks. When something is new and hip, or when the economy is flourishing, consumers will pay a premium. When a trend (see a previous post on trends) begins to run its course, and/or the economy wanes, pricing premiums evaporate in a New York second. Put simply, not too many consumers are interested in paying a 600% mark-up on their coffee even though the lines are shorter these days… 

Bottom line…Starbucks fell asleep at the wheel and took their good fortune for granted. If you can believe it, Starbucks ran their first TV ad this year…They should have been plowing money into advertising to expand their dominant brand equity in good times creating a competitive gap that would have been tough to overcome. Instead, they waited to launch their first TV commercial as a Hail-Mary desperation pass when the game had already been lost. Will Starbucks live to play another day? Sure they will, but it will be a long, tough climb back-up to the top of the mountain…

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