Climbing the Right Mountain

Like many leaders I can be described as driven, relentless, aggressive, determined, focused, and other common traits of “type A” personalities.  Have you ever considered how these traits may be causing you to be less productive? As an executive coach, I have found many well-intention “Type A” people are actually causing themselves and their organizations to be less productive.  Often, we self-deceive ourselves into believing that we are productive most of the time and downplay the impact when we are not.  The justification is our success track record. We see this success a result of making quick decisions, moving fast, pursuing excellence, and using our drive to move things forward. While these traits are valuable, when overextended it works against us.

Could you unconsciously cause yourself and others to climb the wrong mountains? You are doing it far more often than you realize. Many leaders enjoy and love to solve problems.  When they see them, they want to solve them.  The more problems solved the more accomplished one may feel.  However, what if the problems you solved are the wrong ones? Or worse, they are really speed bumps taking you away from the climbing the right mountains.

I COULD HAVE STOPPED AND DID NOT BECAUSE OF A RELENTLESS PURSUIT TO RIGHT A WRONG.

I was inspired to write this article after a recent experience where I ruined a Saturday. This all happened because I felt compelled to fix a wrong. On the surface, it seemed like the right thing to do. However, my relentless pursuit to right a wrong led to an odyssey that I could have stopped at any time and did not.

I had purchased some headphones (an Apple product) from Verizon. They were shipped to me because a lack of inventory.  When they arrived one of the headphones had a button that was stuck. While they worked well-enough, it bothered me that one of the earpieces was damaged. I could not use the button to accept calls, pause and start music, and so on.  I felt entitled to have a product that worked properly and was perturbed that $200+ headphones did not work as they should.

Long story short, I spent 5 hours in-store and on the phone trying to get Apple to repair or replace the headphones.  After all of this effort, they agreed to repair them. In the end, they were returned to me still broken and with out the earpieces that accompanied them.  Yes, the situation was now worse. I submit!

The real issue was me! Once I had momentum to fix my perceived situation, there was no stopping me.  After all, I take pride in making things happen. If I was not so focused and determined I should have aborted? Yes, I received damaged goods.  But they worked fine…just not perfect.  And, in my defense, if you told me in advance, I could get them fixed but it would take 5 hours of my time, I would never have left well enough alone. $200 is not a big deal for me and I could have easily tossed them without a sweat. After all, I have tons of headphones sitting in a drawer because I disliked them for one reason or another. The real issue was me. In the end my time was more valuable then righting this wrong.

IT IS FAIR TO ASSUME THAT THE AVERAGE PERSON WASTES AT LEAST 20% OF THEIR TIME EVERY WEEK CLIMBING THE WRONG MOUNTAINS OR TAKING THE WRONG PATHS.

You are probably asking yourself, what does this have to do with you as a leader and how does this affect your organization.  The fact is, all day long we have people doing the equivalent. They spend time on $200 headphones when there are much better uses of their time.  Worse, when they start down the path of solving a very important issue and don’t pull back when it is obvious they are headed down the wrong path. It is fair to assume that the average person wastes at least 20% of their time every week climbing the wrong mountains or taking the wrong paths. We need a process to see when we need to consider aborting.  Most “Type A” people miss these moments and take others with them.

USE THE SYMPTOMS TO FIND THE MOUNTAIN!

In Your Business is A Leaky Bucket, I opened with a story about a client who was nine months away from the end of an earn-out period from the sale of their company. They had a lot of money at stake and were not sure how they were going to maximize their return.

They brought me in to help figure-out how to close the gap.  After meeting with their executive team, there were a few factors that were apparent:

 – The existing team seemed overworked.

 – It appeared that had to fill too many open positions and did not believe they could fill them in time to take advantage of the earn-out period.

 – They were afraid if they pushed people any harder more people will quit required them to fill more positions.

 – Most importantly, their sales team was spending far too much time working on administrative issues rather than selling.

So which issue do you address: recruiting, retention, workload, or sales team productivity? Most leaders would say we have to address all of them.  They would push everyone to work on the symptoms.  The symptoms would have been the wrong focus.

We found the mountain, that when solved, would make the other mountains go away.  The mountain was “waste.” They had 175 employees, most of which were the right people in the right seats.  When I asked, “was it possible that, on average, everyone wasted 10 percent of their time doing things that did not help them add customers, serve existing customers, or improve the profitability of the organization?”  I got a hearty laugh from everyone in the room.  Everyone believed they spent over 20% of their time in unproductive meetings, developing unnecessary reports, creating redundant procedures, and so on.  In the end, it was agreed that a 10% organization-wide waste goal was conservative. To put this into perspective that represent approximately forty-five thousand hours of work.  The equivalent of 21 people.

Without going into a lot of detail we climbed the forty-five-thousand-hour mountain. They engaged every employee in the company to help identify the waste. They challenged everyone to double the amount of time salespeople spent selling without adding any employees.

It was a big success! The employees submitted far more than 45,000 hours worth of suggestions, many of which were addressed in 60 days.  The result:

 – Record growth rate – sales people far more productive

 – Record net profit margins – Driven by higher growth and eliminating the need for headcount.

 – Record employee engagement scores – Aligning and enrolling all employees to eliminate workload lead to employee engagement scores that have never been replicated.

 – Everyone was working similar hours and felt less burnout.

TAKE A GOOD LOOK… ARE YOU AND YOUR ORGANIZATION CLIMBING THE RIGHT MOUNTAIN?

Can you be guilty of chasing too many issues rather than fixing the one big one?  One way to know is to look at the list of company priorities.  If there are more than 3 it is likely that you are not focusing and failing to properly prioritize.  Look at the usual symptoms: 

 – Difficulty filling positions

 – Higher turnover

 – Failure to grow faster than the market

 – Net profit margins are not in the top 10% for your industry peer group.

 – Time is controlling you

 

Howard M. Shore, Founder and CEO of Activate Group Inc., is a bestselling author and serial entrepreneur specializing in liberating leadership teams from the barriers holding them back personally and professionally. Howard has helped create over $1 Billion of value and authored two best-selling books, The Leader Launchpad and Your Business is a Leaky Bucket.

Use Metrics to Propel Business

Several years back, I was the Business Coach for a mid-sized company in the healthcare industry.  When I first started working with the leadership team, the company grew rapidly and was on the path to insolvency. In nine short months, we were not only able to accelerate their growth but turn them into a highly profitable company with plenty of cash in the bank. The company did so well that it sold for a high multiple only 18 months after our initial meeting.  The secret to the turnaround was found in how we used metrics to propel the business. The turnaround happened so quickly and easily that one of the senior leaders insisted that I had played with numbers.  He could not comprehend how we so quickly turned the company around. I want to share with you how you can use the same steps to ignite the growth and profitability of your company.

In Your Business is a Leaky Bucket, I identified how small improvements could lead to huge improvements in the bottom line. I identified 15 ways (I refer to as leaks) to improve your financial results in the book. I provided an example whereby improving revenue, cost of sales, and overhead each by 1%, a client could improve profit by 42%.  That client made three seemingly small moves that increased their bottom line from 3% to 20% of revenue in one year. Proving that small moves good lead to big results.

HOW WELL DO YOU UNDERSTAND YOUR FINANCIAL STATEMENTS?

One of the keys to achieving higher results is understanding your financial statements better. Most accountants produce financial statements and fail to help you determine how to propel your business forward. This is a big weakness among the leadership team. And you don’t have to be a Certified Public Accountant to learn how to understand them in a highly impactful way for your organization.

One fact that does not get talked about often is that those financial statements, while important, are missing some of the most critical information for you to build a better business. Your financial statements are not wrong. They are just limited because they only capture financial transactions. They don’t capture the metrics needed to help understand the cost of the organizational missteps. In most organizations, the costs of these missteps usually can triple your net profit.

Generally accepted accounting principles don’t help you measure the business leaks happening in plain sight. For example, there is no financial statement line item measuring the costs of keeping poor performers, deals that you lost because of inept salespeople, margin lost because of poor pricing, and so on. It would be best if you used the metrics to propel your business.

BUSINESS METRICS DEFINED

Before I take you through the thought process that will help propel your business, I want to clarify some terminology. There are several terms used in business that represent different types of metrics. Metrics include goals, targets, critical numbers, and key performance indicators. Business metrics allow you to determine how well each employee and the company perform. Metrics help measure whether you are on track to achieve annual and quarterly priorities. There are many metrics (profit/loss, balance sheet, departmental, people, process). It takes discipline and skill to find the smaller number of metrics that make the most significant difference to your organization.”

While we recognize all metrics as important, the “critical number” designation means this metric is the main priority for the company. We must not have more than two. We need two for balance—if we are too focused on performance indicators, we may damage our relationships, and vice-versa. This metric(s) should help you focus on the biggest obstacle(s) to achieving your goals.

What is a key performance indicator (“KPI”)?  KPIs are either leading or lagging metrics identifying activity, inactivity, and effects of accumulated decisions.

  • Lagging indicators are metrics that portray the performance of the past.  Examples of lagging indicators include revenue, gross margin, net profit, cash in the bank, and turnover.
  • Leading indicators are those metrics that help us forecast and predict future results. Leading indicators are those measures that focus on today’s actions that impact the lagging indicators.  For example, all businesses have revenue goals.  The starting point to generate revenue is interacting with a potential customer. Leading indicators for revenue include the number of qualified leads, number of appointments, dollars in the pipeline, etc.

Many metrics can be leading or lagging indicators.  For example, I had a Business Coaching Client that recently missed their revenue goals for the last two months.  When evaluating why the goals were missed, they concluded that they failed to use their marketing budget fully or misallocated what was spent. While the marketing costs were a lagging indicator on their financial statements, how and how much was spent on marketing led to insufficient leads and fewer sales.

Business goals describe what a company expects to accomplish over a specific period. Goals might pertain to the company as a whole, departments, employees, customers, or any other business area. Goals are metrics and key performance indicators. Targets are the long-range metrics we aim to achieve. Targets are a little more difficult to forecast than 90-day and 1-year goals and metrics.

Goals and targets are the terminology used in business planning and priority setting. While you could use these terms interchangeably, I consider goals well-developed metrics that we feel confident in achieving. You should not call something a goal unless you are committed to achieving it.  Not reaching a goal is a failure in performance.  On the other hand, targets are typically lofty goals with much lower certainty, and we have not determined how to achieve them.  Targets are helpful because they stretch us to develop new strategies and tactics to improve our business model.  Falling short on targets is not necessarily a failure.

There are three primary ways we use metrics to propel a business:

  • Goal Setting
  • Perspective
  • Momentum

IS YOUR GOALSETTING PROCESS BROKEN?

My first objective with many business coaching clients is to shift them from arbitrary to well-thought-out goals.  An arbitrary goal has little basis. Just because you grew 30 percent last year does not mean you will continue to grow at that rate.

Learning how to develop goals does not require a Ph.D. in quantum physics.  It requires the leadership team to identify key metrics, the assumptions that need to be considered and establish metrics expectations.

A key sign that you will likely miss your goal, or achieve it for the wrong reason, is when there is little debate.  I often find the goals could be set much higher, but the leadership team is too focused on how they have been doing things rather than how things could be done. The secret is in debating the assumptions and asking questions like what must happen and be true to achieve the goal.

Let’s use my client that failed to achieve their goals for two months. To develop their revenue goal, they need to make assumptions about the following metrics:

  • # sales people
  • Dollars spent in marketing
  • # leads generated
  • # of leads converted to appointments
  • $ of appointment converted to clients
  • Average $ earned on each client

Each of the metrics has a range of potential outcomes. For example, how many of the salespeople will meet their quota?  How many will leave or be fired?  How many do we have to hire and by when?  Can we hire that many people at one time? And so on?  How can we influence each of these assumptions? Where do we like confidence? How can we mitigate risk?

I agree that this seems like a lot of hard work, but it is necessary. All of the issues will be faced during the year.  You will have a higher success rate if you plan to improve the right steps in the process rather than wing it and hope that you will make the right moves.  Hope is not a strategy. Through discussing these assumptions, you will find the key success factors that need to be addressed in your business plan.  You will have established the foundation to propel your business by prioritizing and addressing success factors.

IT IS NOT THE BUSINESS METRIC…IT IS WHAT YOU CAN LEARN FROM IT

Consider evaluating the effectiveness of you are using metrics to propel your business.  I often find that leaders are using metrics but from the wrong perspective. If you are one of our business coaching clients, you evaluate metrics when creating your budgets and forecasts. The metrics used to create them are based on what you have learned from daily, weekly, and monthly reviews of leading and lagging metrics.  It is not only possible but probable that you are going through these rituals and missing the majority of the value of the process.  When done properly, you drive continuous improvement, debunk flawed assumptions, and increase momentum in your business. This all happens through continuous improvement, not a once-a-year budgeting process. By debating and discussing your metrics, you can make more of the right moves to improve your results faster.

It starts with budgets and forecasts.  A common mistake is not to include the entire leadership in their development.  Your financial function can lead the process and construct the financial model, but the functional leaders own the inputs.  We want a leader to own and know their numbers.  When taken seriously, developing functional contributions to your forecasts causes the leader to consider improving their metrics in the coming periods.  And, you want the leaders developing their targets considering and company-wide view.  You need to bust siloed thinking. Doing this helps leaders understand how they and their functions contribute to the overall numbers. When done well, the forecasting process leads to continuous improvement.

You must use a widget-based approach to budgeting and forecasting.  A widget is a primary input that drives your business model. The widgets are leading indicators to success, such as # of Leads, # of Clients, # Jobs, and so on. Why widgets? The lagging results, such as sales, are important, but you cannot manage sales. A key to optimal success is driving the inputs that cause sales. A widget-based forecasting approach allows the leadership team, not just the CFO, to own the forecast. Using widgets as inputs, you can improve forecasting accuracy and easier forecast cash.

Depending on the nature of your business, many widgets should be developed and tracked weekly.  You might be thinking, what is in it for you? We have found that prioritization and focus get much stronger. One of our software-as-a-service business coaching clients focused all their energy on building better software.  While this was important, looking at metrics from a holistic standpoint, the leadership team recognized that their marketing and sales functions were performing poorly.  This was perplexing because they had built one of the best platforms in their industry segment. Using the key marketing and sales metrics, we focused on why the metrics were below expectations.  This led to a deep discussion that you can learn more about by reading my blog post Trying to Sell and Apple to Someone Looking for Chocolate.  That discussion led to substantial changes to their go-to-market strategy, and I am proud to say that momentum changed almost immediately.

IS YOUR BUSINESS GAINING MOMENTUM?

One of my all-time favorite books is Good to Great by Jim Collins.  In that book, Jim discusses the Flywheel effect. The following is an excerpt that can be found on his website.

No matter how dramatic the result, good-to-great transformations never happen in one fell swoop. There is no single defining action, grand program, killer innovation, solitary lucky break, and miracle moment in building a great company. Rather, the process resembles relentlessly pushing a giant, heavy flywheel, turn upon turn, building momentum until a point of breakthrough and beyond.

Picture a huge, heavy flywheel—a massive metal disk mounted horizontally on an axle, about 30 feet in diameter, 2 feet thick, and weighing about 5,000 pounds. Imagine that your task is to get the flywheel rotating on the axle as fast and long as possible. Pushing with great effort, you get the flywheel to inch forward, moving almost imperceptibly at first. You keep pushing and, after two or three hours of persistent effort, you get the flywheel to complete one entire turn. You keep pushing, and the flywheel begins to move a bit faster, and with continued great effort, you move it around a second rotation. You keep pushing in a consistent direction. Three turns … four … five … six … the flywheel builds up speed … seven … eight … you keep pushing … nine … ten … it builds momentum … eleven … twelve … moving faster with each turn … twenty … thirty … fifty … a hundred.

Then, at some point—breakthrough! The momentum of the thing kicks in in your favor, hurling the flywheel forward, turn after turn … whoosh! … its heavyweight working for you. You’re pushing no harder than during the first rotation, but the flywheel goes faster and faster. Each flywheel turn builds upon work done earlier, compounding your investment of effort—a thousand times faster, then ten thousand, then a hundred thousand. The huge heavy disk flies forward with almost unstoppable momentum.

Now suppose someone came along and asked, “What was the one big push that caused this thing to go so fast?” You wouldn’t be able to answer; it’s just a nonsensical question. Was it the first push? The second? The fifth? The hundredth? No! All of them were added together in an overall accumulation of effort applied in a consistent direction. Some pushes may have been bigger than others, but any single heave—no matter how large—reflects a small fraction of the entire cumulative effect upon the flywheel. Here’s what’s important. We’ve allowed the way transitions look from the outside to drive our perception of what they must feel like to those going through them on the inside. From the outside, they look like dramatic, almost revolutionary breakthroughs. But from the inside, they feel completely different, more like an organic development process.

As a business coach, I have witnessed companies that can show you excellence in their processes but have little to no momentum.  I recommend you develop your flywheel and measure momentum.  Using metrics in conjunction will help the leadership better understand creating momentum. There is a direct correlation between developing and analyzing metrics and the flywheel effect.  When constructing your metrics and priorities, you need to consider how this will help momentum in your flywheel faster.

CONCLUSION

When leveraged properly, metrics lead to propelling your business forward. Metric development and review is a critical skill that all leaders must master. It takes practice, practice, and more practice like any other essential skill. You can only get better at forecasting and using metrics with commitment, discipline, and continuous improvement. And the Finance department is not solely accountable for forecasting. Instead, it is a process that requires input from everyone. All leaders need to help develop the metric targets related to their departments. It is also helpful to run the standards by the employees that must deliver on them. The feedback is where the gold lies.

The review and discussion process as results are occurring is crucial to having a predictable business gaining momentum. By critically reviewing actual versus planned results, you help everyone see where the critical leaks are in the budget. Not only do you need to identify the leaks, but you must also address them.  You must identify the few big leaks that are slowing momentum. Once identified, discover the problem that is causing the metric.  Be relentless in truly addressing the issue by ensuring that you have company initiatives that will remove the bottleneck.

With practice, I believe every leadership team can produce highly predictable results. Each time you evolve a new forecast, you will learn new ways to improve performance and strengthen accountability in your organization.

Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm, please visit contact Howard Shore at (305) 722-7216.

7 Keys to Working Smarter and Being Highly Successful

 

After observing thousands of leaders in companies from startups to over $20B in revenue and helping create over $1 Billion in business value, I noticed one superpower in highly successful people. They worked smarter, not harder, and derive much higher results in less time than almost everyone else. These very successful leaders tended to value highly the Management Strategies and Learnings obtained through Business and Executive coaching channels.

For clarity, I deem someone to be successful if they can accomplish three times more than their peers,  have more joy and happiness, and do all of this in less time.  Now, I have to draw a line as many of us are highly ambitious, driven, and are classic workaholics. Most workaholics do not commit to reducing the hours they work and find work exhilarating. Regardless of your view, it would help if you wanted to achieve three times the results and earnings in less time. What you do with the extra time is your business.  But everyone should want to work smarter and not harder.

I am often exposed to CEOs in the same industry and have always been amazed at how varied leader’s approaches are.  To me, the right approach is the one that produces three times the results with a similar effort.  Let’s take the restoration industry.  I have met many CEOs who started their business 20 years before and are stuck at $5M in revenue or less. Also, I have met others that were in the industry for just a few years and had revenue over $5M.   I do not only find revenue disparity. I also find profit and time gaps.  While the average company earns a net profit of 5% of revenue, we have helped companies generate over 20%.  Would you rather be a $10M company that produces $500K of net profit or a $5 Million company that produces $1M in net profit?  That was a trick because you should want to be the $10 Million company generating $2 Million profit, expecting the growth and the profits.

The most successful CEOs build far larger companies, have higher growth rates, have more free time, and have 3x the net profit margin. And, yes, there are other measures of success. I want you to consider that working more hours than everyone else, regardless of what you earn, is a fool’s choice! All I want to do is challenge us to work smarter continually.

Which leads us to the big question: “How can we make it easier to achieve our success goals faster?”  How can a person make far more, achieve their intended impact, and work a lot less? Not only is this possible, but others are already doing it. After watching these leaders, I noticed they were not necessarily smarter, more creative, lack ethics, or privileged.  I have met many highly successful people, some ultra-wealthy, and found that they were formerly homeless, living in trailer parks, had no college degrees, and so on. I am sure all of us are capable of high levels of success.

Achieving success is simpler than you think but not easy. If it were easy, everyone would do it.  The strange part is that we are familiar with the concepts but not living them. Here are the principles you must follow to work smarter and not harder:

(1) Manage Your Thoughts

(2) Have a  Strategy

(3) Be Strategic

(4) Work a Plan

(5) Be Disciplined

(6) Resilience Rituals

(7) Build Wealth

Manage Your Thoughts

There are three dimensions to managing our thoughts: awareness, intention, and perseverance. Our mind is a potent tool. How you think will change your outcomes for better or worse. Thus you need to be aware of what you are thinking. For example, if you make up your mind that someone cannot do their job, your words and actions will differ from those based on the premise they are capable of. Your thoughts need to be congruent with your intentions. If you intend on accomplishing something and focus your thoughts on contrary purposes, you will fail. Imagine you plan to have a good day but your spend most of your day angry about something. 

Once our thoughts and intentions are in unity, we need to have perseverance. When was the last time you set out for something new and challenging, and it worked out exactly as planned? Most often, we find we run into unforeseen difficulties and roadblocks.  If you allow your mind to waiver from the finish line, you may not get there in a practical manner.

Have a Strategy

Too often, I find driven people are in constant motion. They confuse activity with productivity. When they see a problem to solve, they are off to the races.  Often leaders are solving the wrong problems or not taking the best route to solve their problems.  By doing so, you may feel better in the short term, but it could have long-term negative consequences.

I recently witnessed a senior leader get angry with a subordinate because he felt they were taking advantage of the company.  He immediately launched into attack mode and let the employee know how he felt.  While the concern was merited and the employee course-corrected, there were longer-term consequences.  You see, the leader was so busy being right that he lost one of the highest-performing people in the industry. That employee decided to quit his boss.

In the end, the leader was not strategic.  Had he been, he would have waited until he wasn’t angry and would have developed a strategy to course-correct the employee in a manner that was okay for both parties involved. Instead, he may need two people to do the work the one accomplished, and his reputation may cause other competent people not to want to work for him.

While I used a personal situation, the same goes for taking on projects, lofty goals, and conquering the competition. One thing we have all learned is that there are many ways to accomplish an objective. Being strategic requires you to consider achieving the ideal outcomes, choosing what “not” to do, using the least amount of resources, and within the desired time frame. It is usually best to consider expanding your options before choosing a path.

Work A Plan

We are working on a plan ties to being strategic.  However, the critical difference is that the strategy is the vision of where you want to go, and the action plan charts your course from beginning to end—many of us are big picture people. We can see what is possible and have a “can-do” attitude.  The problem with visionaries is they believe everything is simple and underestimate what it takes to achieve the outcome.  Taking the ball down the field is usually someone else’s problem.  To achieve grand visions, I recommend the following project management techniques:

(1) Be specific – The objective has to be clearly stated so that anyone could step in and know what needs to be done.

(2) Make it Measurable – Identify the measurable milestones and deadlines that indicate you are on track.

(3) Action Steps – Identify the action steps necessary to achieve each milestone.

(4) Monitor Progress – There must be processes and systems in place to monitor progress.

(5) Course Correct – When progress is insufficient, it is essential to revisit your plan to get back on track.

Be Disciplined

Whether you are working on getting healthy, achieving your sales goals, accomplishing a major project, it takes disciplined action.  Too often, we like the idea of the outcome but are not disciplined enough to achieve it. Think about dieting. If I eat healthily and eat the right amount of calories for three days a week but overeat unhealthy foods the other 4, it will take a lot longer (if ever) to lose the weight. Where if you ate properly every day, that takes discipline.

My brother Matt is the President of Steven Douglas, one of the fastest-growing recruiting and staffing agencies in the US.  Matt has been a top producer every year since he entered the industry almost 20 years ago.  Most people in his industry only dream of producing his revenue production.  Matt shared with me that he has hundreds of employees, and none of them produce as much as he does. Given that he is President, he spends far less time than full-time salespeople. This caused me to ask his secret. Matt has a list of 300 key contacts he calls every sixty days.  He does this by setting aside one hour daily for outbound calls.  This single disciplined activity has helped him achieve more in 5 hours a week than others can produce in 60 hours.  Successful people are willing to commit to such discipline. I have shared this technique with at least 100 people over the years, and none has had the discipline to implement it.

Resilience Rituals

The airlines taught us a very important less when they told us that we must put our oxygen masks on first before helping others. I have found that highly successful people have a regimen of activities that they use to recharge themselves.  Here are my resilience rituals:

 – 1/2 hour of daily exercise

 – 15 Minute breaks between meetings

 – 15-30 of Meditation

 – 15 Minutes of Quiet reflection

 – Spending time with friends and family

 – Take 4-6 weeks off on vacation throughout the year.

 – Monitor and control my work hours

 – Weekly Massage

It would be best to have the same level of committed discipline to your resilience rituals as your business routines.  For example, if you work out 4 hours in one day, it will not have the same effect as 1/2 hour per day.

Build Wealth

Too many of us are so busy working that we don’t spend the right amount determining how to build wealth. Every very wealthy person I met has at least three streams of significant income.  It is essential that you identify, develop, and give enough attention to your various income streams.  Most people will tell you that the most significant part of wealth came from income streams outside of their day job.  The day gave them the financial start in investing in other activities. Still, many of those activities require learning about and developing strategies and plans to develop each stream. 

In Conclusion

While you can be highly successful without practicing the above activities, it does not invalidate them.  However, by managing your thoughts, being strategic, working a plan, being disciplined, practicing resilience rituals, and building wealth consistently, you will find your path to success with less friction.  Now I challenge you to determine how to use these principles to work smarter and not harder, so you have more time to do the things that are most important to you.

 


 
Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm, please visit his website at Activate Group Inc or contact Howard Shore at (305) 722-7216.

 

Why is your business attracting the wrong clients?

Recently, I facilitated a meeting for one of the most innovative companies I work with. The leadership team is one of the smartest I have ever worked with, and there is a clear vision about solving gaps in their market. Moreover, they arguably have the best SAAS platform to serve their target segment. Yet, they have struggled to grow.

Have you ever wondered why some companies seem to grow with ease while others don’t? I have pondered this question because I have seen far too many organizations struggle to grow. For the SAAS Company, the secret showed up in a strategy session I recently facilitated. The conversation centered around one key question, “Why is this SAAS company finding it so difficult to acquire new customers? The answer was not what you would expect.

Are You Answering the Right Question?

Often, leaders are trying to solve their growth issues by centering on the wrong questions and problems. Typically if you asked the question, “How do we increase sales faster,” you would hear answers like:
• We need more revenue.
• We need more leads.
• We need higher quality leads?
• We need better salespeople.
• Our sales manager is not doing her job.
• We need better marketing.
• We need more marketing.
• We need more salespeople.
• Our customers don’t understand why we are different.
• We have failed to articulate our value proposition well.
• Our salespeople need a better process.
• Our salespeople need better training.

Have You Identified the True Problem?

While the above may be components of solving your growth issues, it is likely not your problem. I often see companies spend significant money and time addressing all the above. After years of frustration, they find themselves right back where they started from. They find other companies in their industry growing far faster, and some started much later and far larger. Your company has likely developed great products and services, cares about your employees and customers, works very hard, and has many loyal customers. In addition, your company might have implemented best-practice execution processes like EOS and Scaling Up, and yet the growth outcomes are not getting much better. What gives?

The right approach is to change your question. In my client example, we changed the question from “how do we increase revenue” to “why is it so difficult to acquire new clients ?” I asked the leadership to answer the question with a question. We brainstormed for 10 minutes until we complied with enough inquiries related to the initial question. Here are some of the questions they came up with?
• How do we remove sales friction?
• What would we need to do to increase market share dramatically?
• Why can’t we sell product “A” to our target market?
• Why is there so much friction in acquiring new customers?
• Would it be easier to sell a product that is on par with our competition?
• What do we need to shift in sales and marketing?
• Who is our real target customer?
• What is the evolutionary path for customers?

After developing 25 questions, I asked the team to narrow down the list to one critical question that would address almost all of the questions. The answer was, “why can’t we sell product “A” to the masses?”

By using the new question as a focal point, we were able to discover their real problem. The market was desiring a product they were not offering. Worse, they had the perfect product, and it was bundled into their more sophisticated product. In the long run, their product was more complete and would better serve their target market. The problem, most companies were not ready to consider their full suite, and they were trying to force it on them.

While there is a lot more to this story, I was hoping you could recognize that these extremely smart leaders were essentially trying to sell an apple to people looking to buy chocolate. When the prospect did not see the chocolate, they moved on to the competitors. We realized that we had to metaphorically get the customer into the supermarket and sell them chocolate before they were willing to consider the apple. Chocolate was their primary need. Once they loved our chocolate, we could take them down more isles and sell them more of what they needed.

Stop Trying to Convert the Heathens?

Are you guilty of ignoring the market? This is a common mistake. My client was a great example. They had the perfect product but were so enamored with their complete solution causing them to ignore the market expectations. While they are correct, their product can and will solve bigger, more complex problems, there were too few leaders that were aware and ready to solve them. They were getting ahead of themselves. And, like a good priest or rabbi, they were delivering sermons to inspire and convert the heathens. The problem was that the disciples were not listening. When this occurs, the sermon is white noise. Their best approach was to get the easy win, earn the customer’s trust, and use that as a platform to cross-sell later.

Conclusion – Ask Yourself… and Take Action!

If you are like many leaders, you know that your company can and should be growing much faster. Have you found the right question to answer? Do you know the primary problem? Are you spending enough time facing the brutal facts?


 
Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about Howard Shore or the firm, please contact Activate Group or call (305) 722-7216.
 

Three Keys to Maximum Business Performance

While people have been impacted by globalization, technology, and other circumstances, achieving business success has not changed. Over time, you will need to discuss changing conditions and have a robust operating system maneuvering these issues. But I have concluded that while most entrepreneurs pride themselves on their speed in getting things done, I see them running in circles. More creative entrepreneurs may make lots of rapid right turns instead of circles. Still, they find themselves in the same place and with the same problems as the people running in circles, never achieving acceleration.

 

The Difference Between Speed, Velocity, and Acceleration!

Acceleration in performance should be the goal of all leaders. Most people use the words speed, velocity, and acceleration interchangeably. However, these are three different outcomes. Speed defines how much distance has been covered in a particular timeframe. Velocity is the rate of change of distance in a particular direction concerning time. And acceleration is the rate of increase in velocity. Great companies achieve far greater velocity than “good” companies.

 

Every Business Has the Same Fifteen Leaks

As I wrote in my first best-selling book, Your Business is A Leaky Bucket, there are fifteen ways every business is leaking growth and profits. The bigger the business, the bigger the leaks. No business is immune. The odd part is that you likely already know you have the leaks. And, all fifteen leaks had a centering cause…leadership. They result from poor leadership. These leaks individually and collectively slow velocity, and large leaks can cause demise in your business. My book helps you identify and quantify the leaks. More importantly, I prescribed how to address each leak. Average companies achieve speed, good companies achieve velocity, and great companies achieve acceleration. The latter spend specific leadership time narrowing the fifteen leaks.

Leaders I work with are stunned when they realize how easily they can improve a business. But are often surprised by the dollar value in the improvements. However, easy does not equal simple. It takes discipline to work on the business rather than in it. It takes perseverance to stick to your plans and focus on a limited number of objectives while saying “no” to others. It takes rigor to drive excellence.

 


 

The Three Primary Reason Business Leaks Occur

There are three primary reasons why those leaks continue to recur throughout the life of your business:

1. Mediocrity—You know your organization and people are capable of more, but you allow average to become the standard for your business. Sometimes, this happens because you attempted but failed to raise the bar in the past. There is also a tendency to compare your business to industry norms and become comfortable if it’s doing better than the industry average—even if that industry average is a massive bottleneck in your business. Accepting the lower standard may be common in your industry, so you accept it, too. For example, high turnover has become the accepted norm in certain positions in some industries. But excessive turnover is a significant drag on a company’s ability to grow and scale. Ask yourself, how often have you taken too long to replace someone you know is not capable of doing his or her job? These are examples of accepting mediocrity!

2. Mastery—It takes discipline and perseverance to continually improve and address the issues that cause slower growth, lower profitability, and cause leaders to be tied to their work. Let’s be honest; when you started your career, were you thinking, “I am going to be a master craftsman at culture, team cohesiveness, strategy, people, execution, and cash systems?” Each of those areas requires skills and knowledge, continuous learning, and continuously increasing your level of mastery. However, as your business grows, so do the challenges in these areas. The typical leader would prefer to focus on industry knowledge, serving customers, and making better products and services rather than think about, discuss, and address those other, less tangible issues. In reality, culture, team cohesiveness, strategy, people, execution, and cash are the business operating systems that you use to run your business.

3. Invisibility—Financial statements do not capture the substantial costs of the weaknesses in your business operating system. Generally accepted accounting principles are only designed to capture actual transactions, assets, and liabilities. There is not a place in accounting principles to capture the cost of mediocrity and lack of mastery. Like most leaders, you do not go out of your way to quantify these costs. Here are some examples of mediocrity that should be monitored and will not be found in your financial statements:

– The cost of keeping underperformers

– The cost of lost sales because of mistakes in the sales process

– The cost of customers who left because of their disappointment with your quality and bad processes

– The cost of a bad strategy leading to higher customer turnover or slower customer growth

 

There are no financial statement line items for these costs, yet they exist in every business. Such losses are much more significant than you want to face, so you don’t! You are complacent with being good enough, especially if you are growing rapidly and profitably.

To succeed in business, leaders must have a business operating system and toolkit that help them work on the business in a way that allows their team members to make clear decisions and act regardless of the noise. Success is the result of your commitment to that system and how well you use the tools that support it. For the past 100 years and into the next 100, you will find that business challenges are the consequence of how effectively leaders handle these six operating systems:

(1) Culture
(2) Team Cohesiveness
(3) People
(4) Strategy
(5) Execution
(6) Cash

 


 
Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about Howard Shore or the firm, please visit our business coaching page or call (305) 722-7216.

How to Remove OVERWHELMED from your Business Vocabulary

The CEO of one of my Business Coaching clients, let’s call him Joe, was very highly strung when I first met him. He was saddled with both working on the business and working in the business. He felt that his management team was inadequate for the job and had to step in and do the job for them constantly. As a result, he was always tired, impatient, and short-fused. His team members frequently walked on eggshells to avoid the fallout of Joe unloading from feeling overwhelmed and over-worked.

That was a year ago. I recently picked up a new executive coaching client, Mike, who was a referral from Joe. After going through some pleasantries in our first call, I asked him why he wanted to work with me. He told me that he has known Joe for years and has noticed a remarkable change in Joe’s behavior. He now found Joe much more relaxed, Mike continued, and it was fun to hang out again. Additionally, he noticed that Joe now appeared to be more focused and took the time to work on his business expansion, as well as made the time take a long overdue vacation with his family. Mike wanted that for himself, as well! He felt that he was facing burnout and needed to reverse that trend.

Many business owners and CEOs find that they, too, can feel overwhelmed and over-worked. Sometimes, they behave like Joe, and other times they just check out and disappear, trying to hide from the demands and the fatigue. These are all symptoms of burnout, just from different ends of the spectrum. It is always a big red flag when the CEO is the busiest person in the Company.

There is no magic formula for the CEO to change this dynamic. It’s about adopting new habits, both for themselves and their management team, to give them the freedom to spend more time working on the business. Here are the things you can implement to help not feel overwhelmed and burned out:

-1-  Create a Culture of Learning – The entire team was assigned a reading list and we did follow-on discussions and exercises. I curate the reading list to focus on gaps in the desired behaviors the team needed.

-2-  Create a Culture of Accountability – If you’ve read my previous blog, you learned that the lack of accountability typically stems from the lack of clarity. After all, it is hard to commit to something if you don’t fully understand it; and, if you’re not committed, you can’t subscribe to the need to see it through.

-3-  Prioritization – Implement a planning process (Strategic and Operational) that identifies the key priorities and aligns the management team’s members. Use a balanced set of metrics to provide both headlights and taillights so that everyone knows how they are performing.

-4-  Talent Scorecard – Implement a talent scorecard to determine if you have the right people filling the right seats. The scorecard is used to evaluate everyone in the Company, including the CEO.

-5-  Communications – Create a strong communication culture by implementing proper meeting rhythms and employs active listening.

-6-  Transparency – Fostered organizational alignment and improved operational velocity and effectiveness through clarity and accountability. Everyone in the Company knows what is going on and how you are doing. Everyone must understand the Company’s purpose and values, its priorities (for the quarter, year and beyond), and how success is measured.

By applying these six key principles, Joe’s Company is growing at a healthy clip and year-over-year profitability has improved by 20%. Also, employee turnover has dropped, and most employees think it’s a great place to work. Joe has developed and made his bench of managers stronger and more capable; and the trust in the leadership team is at an all-time high. He now has the freedom to focus on other higher-value initiatives and activities. Most of all, Joe no longer feels overwhelmed. He is working on growing the business and finds the time to spend with his family and hone his golf game. Joe is a happy man, and his team sees that too. He is still busy, but he is now only pursuing strategic business objectives and lives a balanced personal life.

Want to Learn More about Removing that Feeling of Being OVERWHELMED?

Mo Rousso is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving execution. To learn more about him or the firm, please visit our website at www.activategroupinc.com/contact or contact Howard Shore at (305) 722-7216.

Lack of Accountability is an Epidemic – How to Improve Your Business Initiatives

Have you ever been frustrated because a colleague had failed to follow through on a critical priority? You are not alone. I have concluded that lack of accountability is an epidemic in most organizations. The good news, this is solvable.

I recently had a C.E.O., Rocky (not his real name), tell me that he felt his team wasn’t following through on the key priorities. Worse, they agreed to them! Rocky felt that maybe his team thought that what they chose to work on was more important than the agreed-to strategic initiatives. I found this puzzling and needed more context to diagnose and develop an action plan. After all, I knew his team members. All possessed high integrity and the required intelligence, and all worked hard. I doubted that any of them were willfully sabotaging the company, mainly since this was a group issue.

So, I asked if I could sit in on their next weekly meeting as an observer. What I found was eye-opening!

Rocky led the meeting with his entire team present, and they all actively participated. After the meeting concluded, I debriefed his whole team. I complimented them on their high energy and congeniality and asked if this was a typical meeting. They said it was. So, I pointed out that even though they all effectively worked together to solve a business problem, there was one key item missing from their meeting, and probably from their others, as well. All heads turned to me.

Now that I had their attention, I explained that not once did they discuss their key quarterly priorities and the corresponding key measures developed to provide headlights. In other words, Rocky wasn’t holding his team accountable for focusing on achieving their strategic initiatives. And, by extension, if Rocky wasn’t holding them accountable, I asked if maybe they thought that where they chose to begin wasn’t that critical? I saw a couple of heads nod. However, the most common response was that they didn’t fully grasp what they were supposed to do.

My colleagues and I at Activate Group, Inc. have been exposed to thousands of leaders spanning most industries in businesses ranging from start-ups to billions in revenue. We have learned that a lack of accountability typically stems from a lack of clarity. After all, it is hard to commit to something if you don’t fully understand it; and, if you’re not committed, you can’t subscribe to the need to see it through.

In his excellent book The Five Dysfunctions of a Team, Patrick Lencioni talks about how, for a team to get the desired results, it first needs to work its way up through four other levels. It starts with trust. This is the foundation required from which they can effectively engage. Next, a strong team will engage in constructive conflict and dialog to allow everyone to be heard, gain clarity, and consider more alternatives. After everyone is heard, it is crucial that you ask for and gain commitment from all stakeholders. It is at this point that engenders the necessity of accountability to drive results. When you skip any or all of the first three steps, you tend to lose clarity and commitment.

In my client’s case, it turned out they didn’t spend enough time engaging in constructive conflict. While they had developed a solid foundation of trust over the years, they didn’t spend enough time in having that constructive dialog so that everyone clearly understood the initiatives and could commit to supporting them as priorities.

The other mistake I found—and find often—is a lack of a clear accountability system. Within this system must be clear on who is accountable to make sure a particular thing gets done, what must get done, and when. In many cases, that assignment is left ambiguous, and, as a result, no one feels accountable.

I helped my client implement several steps that you can implement in your organization:

1- Leave plenty of time on the agenda to make sure that everyone was clear on the priorities.

2- Ensure that the priorities are specific, measurable, attainable, relevant, and time-bound—the useful acronym S.M.A.R.T.

3- Limit the number of priorities assigned to each executive to make sure you spend enough time in a constructive discussion (Specific, Measurable, and Relevant) and that they aren’t stretched to the point that they might drop some balls (Attainable) during the upcoming fiscal quarter (Time-bound).

4- Assign accountability to only one person. Others can help, so they can delegate responsibility for any number of tasks, but only one executive would be held accountable.

5- Create an Accountability Dashboard so that anyone could review it and understand the status of each priority. The Dashboard has to be updated before each meeting.

6-  Change meeting agendas so that time is allocated to priorities and key measures first, and other topics are addressed as time permits. The Dashboard now becomes a tool to be reviewed.

7-  Create a powerful meeting tempo for each week to allow the team to stay current with all key aspects of the business and get help with their stuck priorities.

The above changes have become ingrained in the company, and the level of team engagement has far exceeded Rocky’s expectations. As a result, by driving clarity and, thus, accountability, the company has managed to grow during the three most recent quarters, all during the pandemic! They grew sales by 20% and increased their profitability by almost 30%!

Want to Learn More about Accountability?

Mo Rousso is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving execution. To learn more about him or the firm, please visit our business coaching page or contact Howard Shore at (305) 722-7216.

Team-Building

STOP…wasting money on team-building exercises and retreats that, in the end, fail to bring about the desired results anyway. A significant reason that team-building initiatives fail is that too much emphasis is placed on the misconception that team-building should be fun. The purpose of team-building is to improve the performance of a work group, thereby creating better outcomes. This requires change, and for most people change is not fun … it is hard work. Team-building can be fun… if the members of the work group enjoy the learning process and relish the opportunities that change will bring. This is where a business coach plays a vital part in successful team building that brings results.

Key Elements For Driving Team Performance

If you want to improve teamwork and performance in your organization you have to look at the four core elements to driving team performance: relationships, goals, roles, and rules. All four of these elements must be executed well for the organization to flourish.

Focus on Improving Relationships LAST

Ironically, improving relationships is probably the last area you should focus on. Yes, the area that most leaders spend most of their time addressing is usually the symptom, not the problem. Almost every organization that has team-building issues will find their root of their problems in goals, roles, and rules. In my experience, when we address goals, roles, and/or rules, many of the relationship problems disappear.

State Your Goals

The first step toward achieving success as a team is to state your goals properly. You know your goal is well stated when anyone who reads it knows exactly what you are trying to accomplish and in what time frame. The better a person states the goal, the easier it is to create the action plan. An acronym commonly used for stating a goal properly is SMART (Specific, Measurable, Attainable, Realistically High, and Time-based).

Understanding Your Roles

In order for a team to function properly it is important that every member of the team understands specifically the actions and/or activities assigned to them. This is not as simple as some make it out to be, which is why this is usually an issue for team. There are two different types of roles: task and maintenance. The “task” roles relate to driving the desired outcome of a team. The “maintenance” roles relate to managing team processes and relationships among people on the team.

Rules Must Apply to Everyone

Rules are a very important component of teamwork. This is one of those areas many leaders, particularly in entrepreneurial and family-owned businesses have the biggest concern with. Everyone is fine with rules as long as they apply to others. You cannot have one set of rules for some people and another set for others.

Contact us if you need team-building ideas.

Howard Shore is a business growth expert and business coach who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please contact Howard Shore at 305-722-7213 or shoreh@activategroupinc.com.

Do You Have a Follow Through Problem With Your Business Work?

Follow Through in Business

If you are like most leaders, you more than likely have a follow-through problem. You may not realize it, and it is costing you revenue growth and profit margin. As a business coach, I have had the benefit of observing business leaders of many high-growth companies. While many of these companies are on Fortune magazine’s list of fastest-growing companies year after year, they could be growing faster and could definitely more profitably. From the long-view, these are highly successful people and organizations. As you begin to look closer, you find that (like all high performers) they have opportunities for improvement. This article discusses the issues that commonly cause follow-through problems in an organization.

The Common Issues that Cause Follow Through Problems in an Organization:

  • The decision-making process
  • Leadership
  • How often final decisions are being changed
  • Leading by consensus
  • Not understanding all aspects of the decision and outcome before making a final decision
  • Not including all decision-makers within the decision-making discussion at the same time
  • Not finishing discussions or making a final decision

Lack of Follow Through in the Workplace

Lack of follow-through in the workplace could be due to how frequently “final” decisions are being changed. When a decision is made, it should be made based on certain assumptions, directed by key questions that were answered using facts. Once you have made a solid business decision, you should only change that decision if new facts invalidate the answer to your original questions or you find that you missed a critical question that could be catastrophic to the final outcome. However, this should be an exception –not the rule. In many organizations, final decision changes are all too common; and not because there was any evidence that the original decision would cause a catastrophic change in outcomes. As a result, the organization loses a lot of time and money failing to follow-through on solid decisions in a timely manner and rethinking the same decisions over and over again.

The Importance of Follow Through in Leadership

Are you trying to lead by consensus? I find that leaders often change their decisions because they want consensus; believing that consensus is necessary in order to have commitment to the decisions that are made. In order to gain commitment, it is necessary to permit everyone to be heard and to allow for healthy debate. Once this is done, you should have the commitment you need. Immediate consensus should be less common than you think, and when you get it, beware. It means that you probably have a bunch of “yes” people in the room, or you have failed to actively engage everyone in the discussion. It is a mark of a strong team when there are diverse opinions on important business topics. The most senior leaders need to be able to elicit these different opinions, listen to everyone’s position, and then make a decision. The rest of the leaders have to be strong enough to accept that their views will not always be accepted as the right way to go. Even if you are right and the team goes in a different direction, that is just how things go.

Understanding The Decision THOROUGHLY Before Making a Commitment

Do you ever find that a decision is made and a few days later everything changes? Worse yet, weeks later things change again. Business leaders will blame this on entrepreneurship and the nature of business. However, when this occurs often and you take a closer look at the issue, it is almost always a leadership decision-making problem. When you watch how decisions are made, you will see that most people-leaders are also problem-solvers. They look for the first problem they can solve, and off they go. This may work with little business issues and problems, but it does not work with the bigger ones that cause the most harm. Before embarking on a new project or deciding to invest in that new system, there are few questions that need to be answered that I find are often overlooked:

  • What factors are the key assumptions that will be used to make our decision?
  • What questions need to be answered in order understand each assumption?
  • Are we going to say yes regardless of what we learn?
  • What information is needed to answer these questions?
  • How fast do we need to make our decision, and what are the consequences of waiting?
  • What is this decision’s priority versus all the other important decisions that need to be made?

Follow Through and Commitment Issues in The Organization

Are you allowing side discussions? This is another follow-through and commitment killer. It is critical that all decision-makers and influencers are in the room at the time of the presentation. Otherwise your project is going to start, stop, and reshape as the others eventually join in on the discussion at hand. Doing things this way will lose a lot of valuable time, and you also run the risk of losing trust within the organization. It is important to have everyone together so that everyone feels heard and can respond to each other’s positions. Some of your team leaders are masters at being passive-aggressive. They have found it advantageous to get you alone because they know that no one else can challenge their positions. They prefer not to be challenged, and they think of themselves as above everyone else. This needs to be stopped.

Improve Follow Through by Finishing Discussions and Making a final decision

There are some leaders that do not let things end. You need to see a discussion through to its end and make a decision. This is a real problem in many organizations. When you have a habit of decisions not being final, it makes it very hard for people to charge ahead with action plans. They have no confidence in you. Once you have shown a tendency to vacillate on decisions, you are branded. Your team is going to wait to see if it really sticks. This means valuable execution time is lost because your people do not trust you.

If you’re having issues with following through in your business or organization, call Howard Shore for a FREE consultation at 305.722.7213 to see how an executive business coach can help you run a more effective business or become a more effective leader.

Is There a Difference Between Innovation and Disruption?

The Technology Leader Awards Committee of the Greater Miami Chamber, of which I am the recurring chair, met the other night. We were establishing the categories for this year’s awards when a great question arose. Is there a difference between innovation and disruption? It stimulated a spirited discussion among the committee members, and I realized that it’s a very important discussion to have when considering the strategy for your business. While we used the terms disruption and innovation in the context of technology, they can be looked at in broader constructs such as your business model. While one could argue that there is a difference between the two, my position is that disruption is a higher form of innovation. The reason is that all disruptors are innovations, but not all innovations are disruptors. The more disruptive the innovation, the higher the stakes and the value you can create in your business.

What Is Innovation?

In simple terms, innovation is just finding a new way of doing something. If you are running a business, it is developing ways to provide a product or service better, faster or cheaper. It is about improving every process with fewer defects, requiring less labor, increasing throughput, etc. It is about changing the usefulness of a product or service. From an even more important standpoint, it is about creating new demand and fulfilling a need that no one else is currently fulfilling. For example, our phones now go everywhere, serve as computers, calendars, watches, and many other things. It is about changing your online experience so that now you can order many products and get them delivered same day. Innovation is about seeing possibilities that others cannot see and making them happen.

Sustaining Innovation versus Disruptive Innovation

When we were discussing categories in my committee, we should not have been asking if there is a difference between innovation or disruption. The real question is “what is the difference between sustaining technologies and disruptive technologies?” While both are innovative, there is a huge difference and advantage to having both.

Sustaining technology improves a product or service in ways that the market does not expect, typically changing designs to address different consumer sets or by allowing a lowering of prices in more mature markets. A disruptive innovation helps create a new market or value chain and eventually disrupts an existing market. Disruption is much more substantial than sustaining innovation because it changes how we think, behave, do business, learn, and go about our day-to-day. Harvard Business School professor and disruption guru, Clayton Christensen, says that a disruption displaces an existing market, industry, or technology and produces something new and more efficient and worthwhile. It is at once destructive and creative.

Not All Disruption is Created Equal

The innovators’ dilemma is that not all innovation is created equal. There has been much innovation that has turned out to be worthless. In 2010, Time Magazine published a list of The 50 Worst Inventions Of All Time, here are few of my favorites:

  • The Segway – Give inventor Dean Kamen this: he’s a master of buzz. A closely guarded secret that was supposed to change the world upon its release in 2001, the Segway never brought about its promised revolution in transportation. Though the technology is pretty cool — very expensive gyroscopes make the thing nearly impossible to tip over (though George W. Bush found a way) — the Segway’s sales far underperformed vs. Kamen’s predictions. It lives on as the vehicle of choice for mall cops and lazy tourists, but the Segway’s best contribution might be as the vehicle of choice for failed.
  • New Coke – Marketers should have known — don’t mess with consumers’ sentimental attachment to a product. Especially when it’s 99-year-old Coca-Cola. The “newer, sweeter” version, introduced April 23, 1985, succeeded in blind taste tests but flopped in the real world. Phone calls, letters and rants from Coke die-hards flooded in and just three months after its debut, New Coke was removed, and the word Classic was added to all Coke cans and bottles to assure consumers they were getting their first love.
  • Airbnb – When disruption goes your way it can be enormous, such as the Airbnb.com story. Airbnb.com has changed the landscape for people that need a place to stay around the world. Airbnb is a website for people to list, find, and rent lodging. It has over 1,500,000 listings in 34,000 cities and 190 countries. Founded in August 2008 and headquartered in San Francisco, California, the company is privately owned and operated and booked more rooms than Hilton last year.
    Airbnb figured out how to enter the vacation rental marketplace without owning any rooms. Unlike traditional hotels, Airbnb scales up not by scaling inventory but by increasing the hosts and travelers and matching them with each other. It has no need for all of those employees and is not held accountable for the customer service problems you find in hotels, such as waiting in long lines for check-in. Its model runs on a marketplace platform where it enables transactions between hosts and travelers, all online. This is definitely an innovation you can categorize as disruption.

Value of Disruption

In today’s fast-paced world, disruption seems to be short-lived. It is critical that you do not go bankrupt trying to create your innovative idea and that you have plenty of capital behind you to take advantage of your position once you have the opportunity. Speed is also essential. Take the Airbnb example. Given that that the primary key to their success was a website to match hosts and travelers, scaling up quickly to have the largest inventory on a global basis with a lot of traveler traffic to their website was essential. Moving early and fast allowed them to build their brand and presence with no marketing budget. They built their entire empire through social media. The value of their innovation and how they approached is the exception and is what all disruptors should seek to accomplish.

Call Howard Shore for a FREE consultation at 305.722.7213 to see how an executive business coach can help you run a more effective business or become a more effective leader.

How Strong Is Your Leadership and Management Team?

When evaluating your company’s ability to grow and to really scale itself, there is one question you must first ask yourself. How strong is your leadership and management team? Depending on your size, you may only have one level of management. As you grow, there will be multiple management levels to monitor. No matter the number of levels in place at this moment, your ability to grow will be dependent on leadership and management strength. Would your competition be jealous of your leadership and management team?

Leadership From the Bottom to the Top

“A fish stinks from head to tail.” Too often I hear the management team complaining that their company would be so much better if they had better people. If this problem is occurring in your company, start scrutinizing leadership. If you have the wrong team, you likely have problems at the top. The problem at the bottom will not be fixed until you fix the problem at the top.

EVALUATING MANAGEMENT

Do you have the right people in the right seats? “The right people” refers to company culture. Does each of your leaders and managers exemplify your company’s core values? If not, they are creating the wrong standard of behavior for the rest of the team and will infect your business culture.

“The right seats” refers to performance. Does the person you have chosen to perform in a leadership or management position produce the outcomes required of that position? In many cases, leadership is not held to the performance standards required of lower-level employees. If I were to ask you which top 2 to 3 key performance indicators are used for each leader on your team as standards for good and bad performance, would I get the same answer from you and each subordinate? If not, how do you know you have the right people in the right seats? How do you know whether any part of your organization is suffering because its leader is underperforming?

Are They A Strong Team?

Here is where things are usually the most difficult. Do you find it hard to get people with different personalities, experiences, beliefs, and functional skills sets to work together? Do you find imbalance in how much of the leadership weight is being carried by various leaders? Do you find it strange that people who are supposed to be working together work at cross-purposes? It is frustrating how seemingly smart people can spend so much time putting out fires rather than addressing the issues that would prevent the fires in the first place. When I have met strong leaders this is what I find:

Characteristics of Strong Leaders and Managers:

  • People that never stop learning.
  • Smart and talented people who have humility.
  • Answer-seekers that ask a lot of questions.
  • Knowledge and experience combined to co-create.
  • Balance in contribution from team members in meetings.
  • All team members seek each other’s opinions on various issues.
  • Healthy conflict and debate on key issues.
  • Alignment on the priorities.
  • Decisions made and commitment from all team members.
  • Team members hold each other accountable.
  • They get the most important priorities done and consistently achieve their goals.

How to Improve the Leadership and Management Team

Understanding the necessary qualifications of a strong leader and building a strong management team takes experience and dedication to the employee. Sometimes an executive coach is needed to help increase the effectiveness of leadership and improve management skills. To learn more about how an executive coach can help your leadership and management team, call Howard Shore – one of the top executive coaches in the United States – for a FREE consultation at 305.722.7213 or contact Activate Group Inc. today!

Profit Leak 1 – Are You Losing Productivity to B and C Players?

Lost Productivity in the Workplace From Employee Performance

One of the biggest profit leaks in your company may be related to your philosophy regarding people. The biggest cost in most companies is payroll, and therefore, the biggest asset or investment is “people”. How seriously are you and your company taking this investment?

What Are A Players?

In our experience, A Players bring two to three times the productivity of employees who do not, regardless of their function.

A Players are employees who meet the productivity requirements of their position and your company’s core-values requirements.

When measurement tools are put in place, business leaders are shocked by the high levels of B and C players they have on their teams. The employee performance gap costs companies millions in lost revenue and profit. This gap doesn’t get enough attention because there is no financial statement line item for the lost customers, lost productivity, mistakes, and lost opportunities attributable to these nonperforming B and C players.

How to Measure Employee Performance

Most sharp business owners measure the performance of their business on at least a monthly basis, and fail to properly relate that performance back to individual employee performance. Worse, the lost performance from your poorer performing team members may exceed your annual income.

By not requiring a specific level of employee performance, monitoring that performance, and holding your employees accountable you are allowing your employees to establish their own performance requirements. Common sense tells me they will set lower work standards for themselves than you would.

Maximize Employee Motivation

To maximize employee motivation and raise standards of performance, it is imperative that you establish key performance indicators for every position in your company. A standard should be set for each indicator, and all employees should be expected to consistently live all of your core values.

Once these are benchmarks are established and communicated, you should measure performance against the requirements on at least a quarterly basis. Immediate action must be taken to help employees that are not meeting their requirements, and people that cannot meet your standards must be replaced.

If you are interested in addressing your “profit leaks,” let’s schedule a time to further discuss your business and how we might work together to patch up your leaky bucket. Contact us for a FREE consultation or give us a call at 305.722.7213.

Focusing On The Core

I recently read a white paper entitled “The Focused Company”, produced by Bain and Company. As a business coach, I have found that while most clients understand the importance of prioritization and focusing, they fail to achieve either. Why does this occur?

As an owner of three businesses, I can appreciate the challenge. There are so many things that must be done in order to be successful in business. As a result, it can be hard to see what is crucial. The natural entrepreneur has the “shiny object” syndrome. We are interested in pursuing the “shiny object”, which distracts us from concentrating on the matter at hand.

Why We Fail to Focus

Business executives mainly fail to focus because of the way in which the human mind works. We operate more on a subconscious versus a conscious level. We tend to learn by repeated behaviors and allow those repeated behaviors to take precedence over conscious learning. In other words, our brains have us operating on auto-pilot. We may know consciously that the way we have behaved in the past is not working, but our subconscious knowledge still drives future behavior.

According to the Bain report, “… 80% of CEOs expect high levels of complexity over the next five years. Far fewer feel prepared to cope with it. A truly focused company, one that has cut complexity to the minimum, does not invest to win in every element of its business. It invests primarily in its core, the business in which it can outperform everybody else. A focused company does not try to appeal to every potential customer. It concentrates on the most profitable customers, those who it can serve better than any competitor can.”

Having a Focused Business Strategy

As many of my readers know, I am a certified Gazelles Coach. As such, we take our clients through a process known as the “Four Decisions,” which was derived from a well-read book, “Scaling Up” by Verne Harnish. The power of the “Four Decisions Program™” process is not producing the “one-page business plan.” While that is the output of the process, the true value derives from the discovery that occurs by going through the process.

We recently worked with a multinational public company that operates with several billion in revenue and has little-to-no profit to show for it. By working with their coaches, they found that the secret to achieving greater growth and profitability is predicated upon how well they are able to focus. The leadership team was stunned to realize that they had grown to several billion in revenue, and they were struggling because of their failure to have a focused strategy. Our client discovered that their focus had been on how much supply of product they had versus possible customer requirements. If you wanted to analyze their customer base and go-to-market strategy — there was none. As a result, they had no customer loyalty and were more susceptible to market pricing than if they had focused on a core customer and mastered those variables in their business that were important to the core customer.

Addressing Your Customers Needs

Now that this has been discovered, it will be important that their coach continues to help them focus products and services in a way that best addresses the needs of the customers that they believe have the highest profit potential and will stay loyal as a result of addressing these needs. We concluded that, if they do this well, they will be able to use up 100% of their manufacturing capacity by serving much fewer customers well. Rather than being supply-driven they will become customer-driven. To accomplish this, it will be important to design the organization in a way that supports making critical decisions rather than supporting existing processes. Also, by being customer-driven rather than process-driven will result in integrated process efficiency rather than functional efficiency.

In the end, companies must attack complexity in their business. Focus is a never-ending journey.  Business must focus the majority of organizational emphasis on a very few key areas that are costing too much or causing some type delay in order to best serve core customers. We also recommend that businesses should focus their activity by quarter, treating each quarter as a 13-week race. Race to improve one major area of your business. What you will find is that fixing one area will reveal sizable opportunities for simplification elsewhere for the next quarter.

Improve Your Business Strategy

Howard Shore is an executive leadership coach and founder of Activate Group Inc. based in Miami, Florida. His firm works with companies to deliver transformational management and business coaching to executive leadership. To learn more about executive leadership coaching through Activate Group, please contact us today or give us a call at 305.722.7213.

Customer Service Points You Have to Get Right

A few weeks ago, JD Power released its list of 2012 Customer Service Champions. I found it interesting that there were three airlines on the list. You don’t usually think of the airline industry as customer-focused. Yet three airline companies managed to impress JD Power with their fanatical attention to customer service—so much so that they made it onto this list of just 50 companies that are “champions” of service.

I am not surprised that the three companies are Southwest, Virgin America and JetBlue. These airlines have used customer service as differentiators for some time, each in their own unique way. Their customer service is finely honed and crafted especially for their core customer, which is why they all have such impressive brand loyalty.

The important thing to note is that great customer service is not a one-size-fits-all strategy. The customer service experience is drastically different between all three airlines, and that is by design. The loyal Southwest customer is drastically different from the loyal Virgin America customer. These customers expect different things and demand different experiences, and you could never interchange them. In all likelihood, a loyal Virgin customer would hate the experience of flying with Southwest.

Think like these customer service champions and design your customer service experience around the preferences and demands of your core customer.

Define Customer Service “Moments of Truths”

When I work with a company as a strategic planning consultant, one of the most important company functions we examine is customer service. When we evaluate their service processes, we identify their “Moments of Truths”. These are essentially their most crucial customer touch points—the times and places in their new business acquisition, servicing and retention processes that are so impactful to the customer that if they don’t get them all right, it could cost them that piece of business.

Every company and industry has three to five service “Moments of Truth.” How you touch your customer at these points defines your service experience. Let’s look at the restaurant industry as an example. Every restaurant must meet a certain standard in four key areas: Service, Price, Food Quality and Cleanliness. These are the four Moments of Truths for a 5-star restaurant or a fast food joint. However, how these two very different businesses deliver on these touch points is highly important for their core customers.

The 5-star restaurant customer expects extremely attentive and formal service, gourmet food and impeccable cleanliness, and for that they are willing to pay a premium price. The fast food customer still expects cleanliness, but service should be quick and casual at a low price. Both restaurants can be customer service superstars, but they must understand their core customers and design the service experience around them.

What are the Moments of Truth in your customer service experience? Define them and define the ways that you will use them to differentiate your company in the marketplace.

Howard Shore is a strategic planning consultant and business coach who works with companies that need customer service strategy and coaching. Based in Miami, Florida, Howard’s firm, Activate Group, Inc. provides strategic planning and management coaching to businesses across the country. To learn more about strategic planning consulting through AGI, please visit activategroupinc.com, contact Howard at (305) 722-7216 or email him.

What Are Your Leadership Training Plans in 2012?

I don’t necessarily mean what classes HR is going to mandate for your employees. What are you working towards? How will you improve in 2012?

In my experience, successful leaders are always antsy. They are always looking forward, constantly working towards something, training to become better, more advanced. As a leader, your training is just as important as anyone else’s. So what training could help you become a better leader?

One of my CEO clients used to be deathly afraid of public speaking. As you can imagine, this is not good for the CEO of a public company. Speaking engagements abound when you’re CEO. He decided that if he wanted to be a better leader he needed to become a better speaker. So he took acting lessons. I assure you, standing in front of a group of your peers and doing silly improve exercises really does help you get over the fear of standing—and speaking—on a stage.

What type of training would help you overcome your fears, shortcomings or weaknesses?

Be honest and creative…and have some fun with it.

Howard Shore is a business growth expert who works with companies that want to maximize their growth potential. To learn more about how an executive coach, management consultant, leadership training, or business coach can help your team, please visit his website at activategroupinc.com or contact Howard Shore at (305) 722-7216 or email him.

Delegation Success

Have you ever noticed that great leaders are also excellent delegators? Delegation saves time, develops and motivates people, and makes an organization more productive. Therefore, it is fair to say that this is one of the most critical skills for any leader or manager to acquire. For this reason, I encourage every leader to become a master delegator.

There are Seven Steps in the Delegation Process:

  1. Defining What to Delegate.
    There are really three reasons to delegate work: to better control our use of time, to build our people, or to motivate our people. So the first question you will need to answer is: why are you delegating?
  2. Selecting the Individual or Team.
    While I think we should always give our most important projects to our best players, we need to involve and delegate to the entire team at some point. With each person, consider why you are delegating (motivation, growth, or time management) a task, and match the appropriate tasks to that person’s capabilities.
  3. Assess Appropriate Level of Delegation.
    Typically, leaders delegate using the same style for every person on their team and this is a mistake. The level of delegation should be adjusted based on the task and the person being delegated to.
  4. Communicate Tasks In Specific Terms.
    This is where most delegation fails. If you want something done a specific way, tell them. If you are not clear about what you want, take the time to brainstorm with your colleague before they start working.
  5. State Measurable Results.
    Explain how a task fits into the overall organizational picture, describe the measurable results you are looking for, and let them know how you will rate their performance.
  6. Agree on Deadlines.
    The deadline is the most underappreciated part of delegation. Too many leaders give people tasks without asking what else they have on their “to do” list. This is a motivation killer. When you delegate a task, you must sit with the person you are delegating to and make sure that realistic deadlines are being created
  7. Follow-up and Feedback.
    It is essential that you have a feedback system in place so that you know that things are on track. In the end, you should take the blame for failure and pass on the credit for success.

Delegation is one of the most important tasks as a leader. When done correctly, it develops your succession, increases your personal productivity, and motivates your people.

Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please contact Howard Shore at 305.722.7213 or shoreh@activategroupinc.com.

Finding the Right Employees

Many of the companies we work with and come across define their recruiting criteria incorrectly and some do not even realize they have a problem. The typical initial problem statement is, “We need to fill a position with a qualified candidate.” Defining “qualified” is where they tend to go wrong. Some go on to say, “We will have better results when we hire from the inside than from the outside.” Others insist, “We should only look at people that previously have worked in this particular function for a certain number of years.” Or, “We want someone that has been in our industry before so we won’t have to teach them our business.”  What these criteria and the initial problem statement often overlook is the real problem in the company. There is not an “A Player” in every position, and the company does not make defining, finding, keeping, and growing “A Players” a necessity.

When filling positions in a company, there is one common denominator that gets overlooked consistently in almost every company I come across. If you want to solve a problem, it is important to first define it correctly. Once you have defined it correctly, you can then come up with the questions you need to answer in order to solve your problem. Redefining “We need to fill a position with a qualified candidate” as “We need an “A Player” in every seat” forces you to redefine your expectations for the position and the criteria for the candidates. Many people you might have hired using the old definition should not get past your screening process.

The next time you fill a position in your company, ask the right questions:

  • What are the key performance indicators of “A” performance for this position?
  • What are the key success factors for producing this performance?
  • What qualities does the person need to have to produce this performance?
  • What track record do you want to see for you to trust that they can do this job?
  • What are the cultural aspects of your company that are important to consider when choosing a candidate fit?
  • What values must a candidate have in order to be hired, and what questions will you ask to test whether they’ve demonstrated those values in the past?
  • What early warning indicators will you put in place so that you can tell whether things are working?

We can help you find the “A Players”.

Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please contact Howard Shore at 305.722.7213 or shoreh@activategroupinc.com.

Commitment to Change

Just like the people who work for them, CEOs and leaders come in all different sizes, shapes, styles, and backgrounds. As you can imagine, those variations influence how their people behave, who they hire, the systems and processes they use, and the strength of the team they have around them, etc. Dave Kurlan of Objective Management Group put together a list of 10 ways some CEOs react to recommendations he makes about their sales force. They are exactly the typical answers we’ve heard from the CEOs and seniors regarding unsuccessful projects of all types:

#1 – “Thank you for your advice. I’m not comfortable with that.” Who says that you have to be COMFORTABLE? You have to do the right thing for your company!

#2 – “I’m not quite ready for that. How about if we do that in six months?” This is a less honest version of #1 – at least be straight with me!

#3 – “Whatever you say. You’re the expert.” This tends to work out a lot like #1. Yes, they agree with whatever I say but are no stronger with management than with me and can’t drive change.

#4 – “This is B*ll S*it. They’re just going to have to do what you say, right now, or they’re gone.” That’s the spirit, but it isn’t driving change. You can’t pound people with a sledgehammer to drive change; you have to inspire them to change.

#5 – “Let me see if I can get some consensus for this.” Oh-oh, this isn’t going to work. You never get consensus from people who don’t want change in the first place!

#6 – “OK. Let’s talk about how we’re going to accomplish that, given our challenges.” Much better! At least we’re going to talk about how we can implement…

#7 – “Great – can YOU deliver that message for me?” This is even worse than #5!

#8 – “I’m not going to drive this. One of my senior managers will have to drive this.” OK, how many years are you willing to wait to find a genius who finds value in this AND isn’t threatened by it or me?

#9 – “Why aren’t my people doing what they’re supposed to do?” Because you have to be strong enough to tell them that it’s a condition of continued employment rather than quietly sitting there, not saying a thing, and expecting something to change!

#10 – I don’t want to do it your way. I think it should be done my way instead.” Ah, excuse me, but isn’t that the same way you were doing it for the last 10 years – and it didn’t work then either?

Remember, your people won’t be committed to change if leadership isn’t.

Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please contact Howard Shore at 305.722.7213 or shoreh@activategroupinc.com.

Make a Decision

Decisions, decisions, decisions…who’s making them in your company? Do you have a good decision process and are the right people involved in the decision making? Are they being made in a timely manner? Are they good decisions? If you find yourself mired down in a bog of disappointment by the answers to these questions, the following reasons may be why:

  • There is a lack of good decision-making processes for key decisions.
  • Too much time is being spent on matters that are unimportant.
  • Not enough time is spent on matters that are critical.
  • Companies fail to make decisions regarding critical matters.
  • Senior management involves itself in the wrong issues.
  • Many decisions should be delegated to lower tiers, but senior management does not delegate responsibility.

Does any of this sound familiar? To start pulling yourself out of that bog of disappointment, there is a framework that we have come up with to guide you through the decision-making process:

For all decisions, 12 questions should be asked:

  1. What is the goal in the decision?
  2. What are the consequences/costs of making a bad decision?
  3. Why am I involved in this decision?
  4. What is my role in this decision?
  5. Do I (we) have the expertise to make a proper decision?
  6. What criteria should we use to make a good decision, and how will we rank and weight them?
  7. Are there proven tools to help us make this decision?
  8. Who else should be involved in this decision, and what rile should they play?
  9. How much information is appropriate for this decision?
  10. How much time should I spend on this decision?
  11. How long am I willing to wait to make this decision?
  12. How many alternatives should be considered?

By using this list, one can help avoid making major decisions without taking proper precautions. The list also helps balance risk, time, and cost.

Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please contact Howard Shore at 305.722.7213 or shoreh@activategroupinc.com.

Does Beauty Equal Success?

There was an article written I read that can be found on Economist.com that brings up the argument that better looking people are more successful in just about all aspects of business. The article “The Line of Beauty” mentions that “physically attractive women and men earn more than average-looking ones, and very plain people earn less.” It seems that looks are considered more of an asset than the education you earned to be a success.

We are all told during our educational years, that to enter the professional field we must look the part. The clothes we wear are just the superficial aspect of it though. As humans, we naturally gravitate toward beauty. We would like to think we are above it all, but studies have shown that the majority of us are not. Daniel Hamermesh and Jeff Biddle, both economics professors, held a study that concluded that less attractive people earn 5-10% less in all occupations across the board.

Surely when planning your business and focusing on making your company a success the last thing on your mind was how your looks may affect that success. And that is where those thoughts should stay, in the back of your mind. Your professional appeal is important, but maintaining your business goals and seeing to the growth of your company take precedence over how someone else may perceive your facial structure. The bottom line is just that, the bottom line, and if that’s where your focus lies and you continue to see that bottom line grow, well then isn’t that a measure of your success?

Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please contact Howard Shore at 305.722.7213 or shoreh@activategroupinc.com.