Avoid Horrible Meetings

A client asked me to observe his weekly leadership team meeting and it was one of the worst meetings I had attended in a long time. Every leader in the room should have been upset because they essentially wasted 90 minutes. More concerning was the fact that leadership rated it a great meeting.

Might you and your leaders unconsciously fall into the same traps as my client? After all, the agenda and process for the meeting is common practice and is prescribed by EOS (Entrepreneurial Operating System) Implementers all around the world. The problem was not the process or EOS, it was the way it was being implemented. Let’s dissect what happened and then discuss what should happen in every weekly meeting.

Form Over Substance

The overriding problem was form over substance. The team followed a proven process and yielded the wrong outcomes. The meeting involved a standard agenda, covered the topics, engaged everyone, started on time, and finished on time. From a theoretical standpoint it appeared to be a well-run meeting. And my client rated it so!

Here are the primary reasons I would rate the meeting horrible:
1. Clarity of Purpose
2. Undervaluing time
3. Little (if any) conflict
4. Lack of accountability
5. Failed to address serious problems

Clarity of Purpose

Are your meetings more focused on purpose or process? Purpose focuses on intended outcomes and process focuses agendas, start and end time, checking the boxes, and having the meeting in the first place. The problem with process is that you can follow it flawlessly and not accomplish your purpose. The challenge with standard operating procedures is the presumption that conditions don’t change. When it comes to leadership meetings, we are always operating in turbulent conditions, so we need to have flexible standard operating procedures that adjust the process to accomplish our purpose.

The purpose of the weekly leadership meeting is to:
• Share key information across the team
• Break silos
• Keep focus on the top priorities
• Hold people accountable when they are off track
• Solve big issue(s) together

Agendas are typically designed to identify the key information that needs to be shared. Personal update, business update, customer feedback, employee feedback, priority status, to-do status, metrics update, and key company and department challenges. After providing this information the team identifies topics, prioritize, and discuss key topics, and agree on solutions. This is precisely what my client did. So, you are probably thinking, this sounds like they should have had a great meeting. What’s the problem?

Information was shared and after 45 minutes none of the key issues in the company were raised. Yes, they identified issues, but it was all small issues. This company had major issues and none of them were brought to the table. When issues were addressed, half the room would check out when it was not their issue. Leaders had opinions and observations that should be raised, and they did not. Worse, most of the issues discussed was a quick conversation between two people that should have happened and could have been resolved before the meeting. These people are all in the same building, are steps away from each other and clearly have not been talking.

Had this meeting addressed its purpose, the leadership team would have spent a lot of time discussing their number 1 issue, people. Certain vacant positions were causing the company to miss opportunities. Keeping the wrong people was costing them money. And, there was no confidence in how this would be resolved. Every leader has a hand in this obstacle and failure to address was costing this company over $1 Million in profit. This discussion should happen every week until results prove that the plan is in place that is showing the progress necessary to capture the $1 Million.

Key Observation: Focus on making major improvement to your business every week. Leadership meetings should limit the small stuff.

Undervaluing Time

If your week is like most leaders, time is always an issue. Time is finite and if we don’t use it wisely the company and performance suffers. When we have meetings, we are investing time just like we would money. When you allow for a bad meeting, one that fails to speed up taking advantage of big opportunities and eliminating your bottlenecks, it is costing you dearly. In the case of the people issue (identified above), it is costing the company $20K in profit each week.

Have you ever wondered why time is being squandered? I have given this significant thought and find two reasons to be the main culprit. First, we tend to avoid the elephants in the room. The elephants are the big problems. To resolve them is difficult, it can take considerable thought, requires conflict, and takes significant steps and time to address. As a result, we go after the small stuff. Second, it feels good to check items off the task list. As problem solvers by nature, we feel good when we solve a volume of problems. However, most of the problems would go away or be different if you addressed the elephants.

In the client example, it was considered important to finish and end on time. Because this occurred, the meeting was rated well. Based on the content and discussion, this meeting should have been completed in 60, not 90 minutes. Most weekly meetings, when focused, can be completed in 30 minutes. In my client’s case, the extra time was caused by taking 45 minutes for ideation and updates. Not only did they spend time focusing on minor issues, but they also spent too much doing it. I plan 60-minute meetings with a 30-minute buffer. While I expect to get done in 60 minutes, there are times when the issue is big and important. It is crucial that you finished discussing and prescribing a solution before leaving the meeting. Failure to do so adds a week delay in addressing important issues. In addition, it causes more time to solve the same problem because you lose momentum in the discussion.

Key Observation – Get better at increasing the value from holding meetings and have the discipline to get done in shorter periods of time. Reward the team with unscheduled time when this happens, and they will go back and get more ROI from their time. A key measure of a successful meeting is identifying and measuring the value of the decisions and actions from the meeting.

Break Silos and Encourage Conflict

I have participated in thousands of meetings. The difference between great and ordinary leadership team meetings is how leaders engage in meetings. In great meetings, everyone in the room is playing to win and there are no sacred cows. Everyone demands excellence, want to contribute value, and cannot stand for bulls#@t. If you get through a meeting and there is little conflict, your meeting suffered one of the following:

1. You are discussing insignificant items.
2. There is a lack of trust

Healthy conflict needs to be mandatory. If you are discussing a difficult issue, there should be varying opinions as to the definition of the issue, multiple ways to solve the problem, and rarely consensus on actions to take. It takes vigorous debate, challenging each other’s assumptions, questions about sources of information, and so on. While I am certain there are moments where this happens in your meetings, how often? What percentage of your meeting involves conflict?

In my experience, a lack of conflict occurs because of the highest-ranking person in the room. For conflict to happen, this person must be more curious, and listening rather than talking too much. After all, they already know their opinion. The job is to access everyone else’s brains. It is important to understand everyone’s perspective on a subject. Even when it is not in their area of expertise. Some of the best ideas and perspectives come from those people that seem the least qualified to contribute. In every meeting everyone should expect to share and contribute ideas. They should truly be part of the decisions. Our job in meetings is to co-create.

We also need to be vigilant about three types of circumstances:

1. Politics
2. Low Contributors
3. Negative Influencers

You can identify politics when people are not speaking their mind. Their body language, tone and past discussions on a subject indicate whether they are speaking up. When people are saying what others want to hear or staying quiet because they are avoiding going against the grain, this is politics.

Key Observation: By making people speak up you help them grow as leaders. You get more and better ideas and break siloed thinking. We want to not only hear everyone, but we also want to understand why they have come to their conclusions.

Lack of Accountability

We must hold the team accountable for achieving company and department priorities and goals. While this is obvious, it is not happening in most organizations and execution suffers. While my client presented the status of priorities and goals, it was a farce, and no one spoke up but me.

First, when leaders presented their metrics, almost everyone one of them was red. Red should be an indicator of poor performance. In an accountable organization when this goes on for too long someone should be fired. When I saw how many metrics were red, I asked “how long they had been red.” The team answered “forever.” Essentially their targets were not real expectations and did not represent reasonable expectations. Targets for the week, month, and quarter for every metrics must represent present conditions. Failure to adjust them accordingly leads to an environment where it becomes impossible to be accountable.

Secondly, this team recently set new priorities and had concluded that the old priorities were too shallow and would not drive needed results. Instead of updating their scorecards they reported on old priorities. Worse, since there were no clear milestones and due date for action steps it was impossible to know whether leaders were on track to complete their priorities. Thus, the priority status update was bogus.

Key Observation: When metrics and priorities are not properly developed it is impossible to hold someone accountable until it is too late.

In conclusion, by having meetings that achieve their purpose, you will be able to grow your organization faster and with less effort. You must properly use time when you hold weekly leadership team meetings. Time is best used solving “big” rather than small issues. Your company would be better off solving one big issue rather than lots of small ones. The big issues relate to quarterly priorities and show up when metrics are below meeting a reasonably high standard. You know that you have hit gold, when you are having constructive conflict and rigorous debate.

Making Lofty Goals Realistic

Many organizations set goals that are not realistic and are in the habit of not meeting their objectives. Others achieve some of their goals by accident, and some could achieve a lot more. The first questions is, “Are your goals mandatory, or are they something you set out to try?” If they are mandatory, then I suggest you make sure that you are planning for success instead of failure. Many organizations set their goals without considering the obvious reasons they may not be achievable. By addressing these reasons up front, an organization can dramatically increase the likelihood of success or know that they must adjust them to something more realistic.

Here is a common list of possible circumstances that cause organizations not to achieve their goals:

  • Has consideration been given to the capacity of the target market (growing-shrinking) and what a realistic share of the market can be?
  • If revenue levels were achieved, considering seasonality effects, what is the ability of the organization to deliver the products and services at the optimum level while keeping its brand promises?
  • Can the company finance growth; should it grow faster than its ability to self-fund?
  • What advertising or marketing support will be needed to support the goals, and are there finances in place to support it?
  • How will competition respond to your strategic moves, and are your marketing and sales forces well prepared to properly differentiate the company?
  • What is the performance track record of the people that need to deliver, and will your new goals require a significant increase in performance?
  • Are there enough sales and sales support people based on: the amount of time to make the appropriate amount of sales calls; the number of meetings it will take to close a deal; how many proposals one has to write; the time it takes to process a deal, given the normal sales cycle, based on the average close ratio, the average size of deals closed, and travel time?
  • Will you need to introduce new products, by when, and how much of your sales volume depends on it?

Lofty goals require a regular regimen of adjusting your resources (time, people and money). As an organization answers the above questions, inevitably they should be considering upgrading some people, increasing some resources, moving some around, refocusing time, etc. Significant goals, those that require growth rates and increases in profit margins that are large improvements over prior years, need refinement on a monthly and quarterly basis. As we are trying things, we will make mistakes and/or see more opportunities for growth. The great leaders are the ones that are making these adjustments.

Howard Shore is a business growth expert that 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 [phone link=”true”] or shoreh@activategroupinc.com.

Conflict Avoidance Hurts Teamwork

A great way to tell whether you have a strong team is by the amount of regular, healthy conflicts that occur in meetings when decisions are being made and if decisions are really being made at all. It is often said that if everyone agrees than someone is not needed. This may be true but the real issue may be that the team dynamics in the organization has been broken. This breakage may be causing key people that can be contributing to stop contributing.

There are many leadership missteps that may be killing and destroying teamwork and cause conflict avoidance. Here are a few examples of when a leader can destroy the team.

  • Stopped being curious and really does not listen to people when issues are raised in meetings.
  • Intimidating or threatening so subordinates have fear of reprisal so they do not want to speak up.
  • History of judging people in the room (and voicing those judgments) when opinions differ from theirs or are not strong and thus people do not want to be vulnerable.
  • Appears to only be self interested.
  • Tendency to interrupt other team members before their idea may be completed.
  • Makes personal attacks when they are not getting their way.

According to Pat Lencioni’s book Five Dysfunction of Team, “fear of conflict” is one of the five dysfunctions that are critical to teamwork.  The leader has to make sure that this behavior is not tolerated, and that topics focus on the issues that need to be resolved. If everyone is not weighing in and openly debating and disagreeing on important ideas at your meetings, look for passive-aggressive behavior behind the scenes or back-channel attacks. What organizations find is that healthy conflict saves them a lot of time and leads to better decisions. The role of the leader is to practice restraint and to allow for conflict and resolution to occur naturally.

Howard Shore is a business growth expert that 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 [phone link=”true”] or shoreh@activategroupinc.com.

Think Before You Communicate

So often verbal communications do not work out the way people want. They cause a completely different outcome from their intended purpose. The challenge is not just the words one uses. It is the tone and body language of the delivery. Research tells us that words make up only 7% of the communication we receive. Body language accounts for 55%, and tone 38%. Meanwhile, people spend the majority of their time thinking about the words they want to use. I would suggest that not enough thought is given to timing and method of delivery.

The more prominent a person’s role in an organization and community, the more important it is for them to be a master communicator. Their prominence results in their communications touching and impacting larger audiences of people. For example, let’s look at Dan Gilbert, owner of the Cleveland Cavaliers. His comments after LeBron James announced his decision to go to the Miami Heat will have a profound impact on his organization and his community. In case you missed it, he denounced the player who won MVP in the league for the last 2 seasons and carried his team to the playoffs for the last few seasons, making statements publicly that included the following:

  • Heartless and callous
  • Shocking disloyal
  • Shameful display of selfishness
  • Cowardly betrayal

Mr. Gilbert then went on “to personally guarantee that the Cleveland Cavaliers will win an NBA championship before the self-titled former “King” wins one. You can take it to the bank.”

The consequences of these remarks served little purpose other than to embarrass Dan Gilbert and his organization and to hurt his community. It put the team in a position where LeBron might never consider returning to play in his home town, Cleveland, regardless of what trades they made. Gilbert violated the rule of “never burning bridges.” Had the Miami Heat or Alonzo Mourning done something so foolish back when he had health issues, Alonzo might not have returned to play a critical role in helping the Heat win the NBA title. There are many cases where players have returned to a former team later in their careers and played crucial roles.

In addition, the people in the city also should have thought before they burned their LeBron jerseys. All of these people acted in a shockingly disloyal and selfish manner toward a player who brought them incredible baskeball for the last 6 years and donated a lot of time and money in their community. Many stars continue to support their home towns after leaving for another team. Now these shortsighted people are alienating him. What are the chances that he will want to continue to give back to this community? What purpose is their communication serving?

The lesson here is that one must think before communicating. I would bet that many communications would never happen because they serve no useful purpose. They are often just an outlet for some to free their anger; as above. In the process they hurt themselves and others. There are only two proper purposes for communication: 1) to transfer information, and 2) to encourage others to behave or act a certain way. You know you achieve that goal when the information has been transferred properly or the other people are behaving or acting the way you desired. If this is not the case, you failed in your communications. If your purpose with communication is to hurt someone or to cause anger, it usually acts as a boomerang.

Howard Shore is a business growth expert that 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 [phone link=”true”] or shoreh@activategroupinc.com.

Is Your Decision Based on Knowledge or Belief

In today’s IntelligenceReport on Parade.com they have a quiz to test people on whether you know what Democrats and Republicans stand for http://www.parade.com/news/intelligence-report/quiz/hey-big-spenders.html. They used some the data in the book Presimetrics, by Mike Kimel and journalist Michael E. Kanell where politicians’ claims with the decisions they made from 1952 to 2008 are compared. In the survey you find a few interesting facts, such as:

  • Reagan actually increased the number of Americans working for the federal government while it actually decreased under Carter, Clinton and George W. Bush.
  • The USA’s GDP (the value of goods produced by a nation’s economy has tripled since 1950. So the theory that everything is made overseas should always be a concern but can’t be valid.
  • The national debt grows faster when control of Congress is mixed rather than when one political party has full control, refuting claims that the debt would grow faster if Congress is controlled by the Democrats.

While I have not verified these supposedly validated facts, there is a critical point here. Whenever you are making a decision, one of the key elements is the validity of the information you use to make it. For example, I believe the information in the article I referenced is fact. But I have not verified it, it’s only a belief. I am assuming that Parade understood and interpreted what they were reading correctly, and that Mike Kimal and Michael Kanell did their research well and properly analyzed the data. The point is that “knowledge” is absolute and is either correct or not. There are varying degrees of “belief”, and “belief” can still be wrong or right. I would need to do some more work to validate my belief, which would then create “knowledge”.

Too often we hear or read something and automatically assume it is knowledge based on fact. Our belief is based on the integrity we attribute to the writer or the speaker. However, in today’s world of gathering information through our information sources, which now include Twitter, Facebook and blogs, and the speed at which information is collected, disseminated and decisions are made, there seems to be less emphasis on verifying the facts and validating the information.

In the past, many people have made important decisions based on what turned out to be invalid information. We are now at risk for this to happen more often and rapidly. Before making decisions, it is important to determine the criticality of the decision (its impact on well-being, financial stability, etc.) and what information is mission-critical to that decision. The larger and more critical the decision, the more information you need to gather and greater the importance one should place on verifying that the information is “knowledge” instead of “belief”.

Howard Shore is a business growth expert that 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 [phone link=”true”] or shoreh@activategroupinc.com.

Do you truly add value?

When times were good and money was flowing fast it was easy to generate business without a high level of differentiation or an incredibly strong value proposition.  But now that the economic times have gotten tougher and every business and personal consumer is carefully considering how to spend their dwindling resources, unless  you can clearly show that your business adds real value to the customer… you’re going to have a really hard time finding any customers!

Let me give you a very quick example.  About four years ago my wife and I had a good friend of ours build a custom home for us.  When it was time to choose the lighting for the new house we went to a local “lighting gallery” to sit down with the owner and pick out all of the various lighting fixtures and fans we would be putting throughout our new home.  We spent about two hours going over catalogs with him, as he suggested specific fixtures that would go nicely in our craftsman-style home and match the rest of our decor.  We had made it clear that our budget for purchasing all of the lighting fixtures and fans was between $9,000 and $11,000. Twelve days after we met with him we received an estimate for $21,000!  We quickly realized three important things:

1.  Obviously “budget” did not mean a darn thing to this vendor.  Actually, we ran into this time and time again when building our home, we would tell people exactly what we wanted to spend and then they would come back with a price that was often 60% to 120% higher than what we had stipulated.  When we would comment to them that this was far out of our budget, the common refrain was, “well, then just add some more money in your budget.”  Folks, the days of being able to give your customer that sort of response… are gone.  Even back then I felt this was an awfully arrogant thing to say, today it would be downright stupid.

2.  If you’re going to send me a proposal that is twice what I asked for, it shouldn’t take twelve days to get around to offending me.  At the very least I would expect extremely fast and courteous service if I was being asked to spend double the amount of money I had intended to.  Slow service and outrageous prices… not exactly a winning business formula.

3.  When we got the estimate, and picked our eyeballs back up off the floor, one of my first thoughts was, “Why did he let us pick out the fixtures that were so far out of the price range we wanted to spend?”  I felt that as our “lighting consultant” it would have been his job to help steer us toward the fixtures that were within our budget.  However, when my wife decided to Google a few of the products we had picked (using the exact SKU numbers off of the estimate) we discovered that everything on the list had been marked up by 80 to 150%.  The next day we took a trip down to local Home Depot where we looked at the exact same fan we had picked out at the lighting gallery, which had it priced at $480 on our estimate, and was now sitting in front of us at Home Depot for $245.  We promptly went home and ordered everything off the Internet.  Total bill for all the lighting fixtures (the exact same ones we had chosen out of the catalog at the lighting gallery) was $7,300… which included shipping and tax!

The reason I dragged you through this entire story was to make this point: even though my friends at the lighting gallery had been in business for 22 years, in the new Internet-enabled “watch-every-penny-economy” it only took them about three years to go out of business.  That’s right, I drove past their building the other day and there’s a “for sale” sign out front.

They did not go out of business because they sold a bad product, their lights, fans and fixtures were all of the highest quality.  What drove them out of business was the fact that their old way of doing business is obsolete.  They added no value to the equation.  I could go online and find every single thing I wanted, at half the price or less and have it all delivered to me with absolutely no hassle.  Their building, their displays, their catalogs and even their consultation certainly did not add up to enough value to make me want to spend twice what I could get everything for from the comfort of my home.

Unfortunately, I am seeing the same scenario played out in company after company.  For years they have motored along picking all the low hanging fruit, delivering good (but not truly fantastic) products and services and enjoying high profit margins for basically low-value offerings.  Now that the economy has made selling even the best products and services challenging, these companies are having an incredibly hard time demonstrating the real value-add they bring to the equation that justifies their high profit margins.  The old equation used to be “high-quality… fast… or cheap… pick any two you want.”  Today customers demand the best quality, delivered immediately, at the lowest possible price, with superior customer service throughout the entire buying and owning process! If you cannot clearly differentiate yourself on all of these aspects… combined, you’ll find it very tough to convince customers to buy from you, or at least to buy from you without totally beating you up on price.

So here are my questions for this blog: How do you truly add real value to your customers?  What is everything that is unique and different about the way you add value that would make your customers be willing to pay a premium price to do business with you and feel absolutely great about the transaction?

Two things to keep in mind as you try to answer these questions:

a) Remember, value is from the customer’s point of view, not what you think.  As Mark Twain once said, “The only critic whose opinion counts is the customer.”

b) If you cannot answer these questions in a clear, honest and very compelling way… you have some serious work to do.

I hope you found this post of value. I look forward to your feedback and questions.

John Spence is an accomplished businessman and a leading authority on strategic thinking, advanced leadership development, and many other building blocks for successful businesses. He ranks highly among the most sought-after executive educators and has conducted workshops for numerous Fortune 500 companies.

Make Goals Mandatory

It is business planning season again, the time when people and companies put together their plans and budgets for next year. Some are very happy because they met their overall goals this year, while others are dissatisfied with their performance. Ironically, most of those that achieved their goals did not achieve them the way they planned. You might go so far as to say they achieved them by accident. Some call it luck or taking advantage of opportunities that suddenly presented themselves. While it is true that we do not have crystal balls in which to foresee all that is coming our way, we should be able to see the primary issues we need to address to maximize our performance. This brings me to the point: if you make the individual goals that build up to your overall goals mandatory and take advantage of unforeseen opportunities, you will be positioning yourself for far greater performance in the future.

Many executives are good at making decisions but not so good at making commitments. They tend to treat most goals/decisions as the equivalent of “I will try,” and that typically spells death to the likelihood of everyone doing whatever it takes to achieve them. This creates a culture that has a mindset that goals are guides but not the rule.

Have you ever noticed that when a person or a group of people has really committed to doing something they always find a way to get it done. The energy is incredible. People brainstorm to find solutions. They work extra hours, find extra resources, and most importantly their mindset is different.

If you were to make every goal in your company mandatory, how would people’s behavior change from the way it is now? How would your decision process change? Make the shift to mandatory, and see how behavior and, more importantly, results change.

Howard Shore is a business growth expert who works with companies and people 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 [phone link=”true”] or shoreh@activategroupinc.com.

The Problem with Most Decisions

There are two issues that I think wreak havoc on decisions. I think some people recognize this, and that is why they are afraid to make decisions. Others make decisions large or small without hesitation. While a lot of time is spent on how people should make decisions, I found that there are two broader issues that have to be addressed first. First, executives are good at making decisions, but not so good at making commitments to those decisions. Second, many executives do not realize what their part is in the decision process or are not treating their role with the proper respect it deserves.

First is that fact that most of today’s decisions are the equivalent of “I will try.” For example, a goal equals a decision. How many organizations have you been to where every goal/decision is mandatory? How would behavior change if they were? How would decision processes change?

Most companies go through planning processes, yet research has shown that on average only 15% of the initiatives in any company’s plans actually happen. That is an 85% failure rate! So, if those companies consistently do that each year, they create a culture of “our plans/decisions” equal “Let’s try” instead of “We must.” In my experience, that typically spells death to the likelihood of everyone doing whatever it takes to carry out the plan. Have you ever noticed in your organization that whenever something must get done, it does get done?

This takes us to the second issue, which is how someone could be going through a decision process and not treating it with the proper respect it deserves. Let me give you two common examples. First, imagine you are in one of those companies that have an 85% failure rate in following through on the initiatives of their plans. In other words, your company has a history of creating a plan and doing the equivalent of “putting it in a drawer” and doing something else. If anything you do during the year resembles the original plan, it is pure coincidence or something you would have done without planning. Typically, management teams in these companies do not see planning as a decision process. They see it as a company process they must go through, and the faster they get it done with, the better. However, by not following the overall plan, they are in fact making a decision. Our clients that have the proper planning regimen have been able to increase cash flow by two times, profitability by three times, and valuation by ten times.

Another way of not giving the decision process proper respect relates to giving and not giving your word. All day long people are asking for things from us. They ask us to complete a task for them, keep a secret, provide them with some type of information, etc. These are decisions to do or not to do something. Let’s see if you recognize some of these people.

Some people are masters at not responding. You may have sent some of them an e-mail asking for help. For whatever reason, they decided they did not want to get involved. Instead of saying that, they decided just not to reply. You followed up with several more e-mails and maybe a phone-call (which the non-responders let go to voice mail). You finally gave up. If you mention their lack of response when you finally see them, they pretend they never saw your e-mails and do not remember your phone call. Then there are those you ask to do something, and they say “I’ll try.”  This is their code for “forget about it.” They feel okay because they didn’t say “no,” and you get happy ears, thinking you got a commitment. It all changes when they don’t deliver, and you realize you got a “no” disguised as “I’ll try.” All of this is a part of decision-making of the worst kind.

One of the golden rules in business is to “to keep your word.” To keep your word, you have to give it. People who keep their word consistently create power and focus in their lives. Together, power and focus provide the ability to be more effective in shaping events and circumstances. Effectiveness, in turn, enhances our feelings of well-being. The better we feel, the more successful we become. In addition, failure to keep your word has a big effect on other people’s decisions/goals, and typically causes many of them to fail.

While I recommend that people need to have good decision processes, it is critical that they make the shift to mandatory decisions. Otherwise, those wise decisions that are made will be wasted. Additionally, people need to be more aware of when they are making or avoiding decisions. Instances where biases about specific circumstances, formal processes, informal interactions, or certain people may have a bigger impact on overall decisions than people realize.

Howard Shore is a business growth expert that works with companies and people 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 [phone link=”true”] or shoreh@activategroupinc.com.

Decisions By Consensus Can Kill Your Growth

I recently met with the CEO of a multi-divisional business to discuss an issue that was critical to the firm’s future. The company’s number one strategic goal is to drive its growth rate to a never-before-achieved level over the next 3 years. I presented a solution that would almost ensure that he would achieve that goal. CEOs of smaller companies would have asked me where to sign on the spot. He decided that he wanted to get consensus from his division heads before making the commitment. This is exactly the type of “decision-making” that has been killing growth potential in his company all along.

To add a little more background to this, the company’s human resource department conducted an extensive search that took almost 9 months before selecting our firm. We did some pilot work to determine whether our assessments would help improve the talent they bring to the company. While going through the process they learned that it could also be use to analyze the existing talent so they asked us to analyze a small sample of their sales force. Based on this analysis we learned there appears to be a number of hidden weaknesses among their sales managers and sales representatives. These weaknesses were probably costing them a lot of growth because of lost opportunities and slower sales cycles. However, since the sample was not representative of the whole organization it was our recommendation that they do a complete analysis before drawing a final conclusion. Common sense would say, “Let’s take a closer look at this, and quickly, to know for sure.” The price tag to do it was insignificant to the company, and we had over 20 years of research to validate the success rate of our process. Yet here we were, not moving ahead.

The real issue here is when and how to use consensus decision-making. An effective leader knows when and how to engage the others on the leadership team in making a decision. You engage other leaders when they are the appropriate people to give you input to make a proper decision. However, there are times when a leader has to decide alone and rally the troops around the decision after it has been made. Let’s take the situation I’ve described. This is not an appropriate matter for a consensus decision. The company has already decided it needs to grow in a way that it has never done before. It knows it will require tools, strategies and methods that are new if it wants new outcomes.

Furthermore, the division heads have not been engaged throughout the discovery process. The CEO might be able to use 15 minutes at the management meeting to present the proposal. He himself needed 2 hours with me for us to discuss and go over it, and we probably needed more time than that to talk about it. Prior to our meeting, there was a year of research that yielded insight already proven to be useful and profound. However, without the rest of the data they will never know if there is truly a gaping hole in their sales organization. Why would one allow one’s subordinates to say no?

Imagine you are a division president and someone presents this new idea for which they want you to spend your money. You already have vendors and assessments you prefer. You are a strong leader and think you know how to achieve your sales plan without spending that money. Worse, what is being suggested might require significant change in “your” company! It would require you to agree to having your people assessed by someone not of your choosing. You might learn some things about those people that were hidden blind spots. It could mean that you might be encouraged to fire some people that have not been performing but are well-liked and have been trying hard. Some of these people have been with the company for a long time.

The new proposal means that management will have to change the way in which they manage people because they really have not been doing their jobs as well as they should. It means that culture will have to be more accountable; that is not comfortable. It means that employees will have to do things differently, and they will complain. That is not comfortable.  It also means that the company will have to invest money on assessments, recruiting, processes, systems, and training and will have to wait a while to see results.

Or, you could just say no and keep doing what you’ve been doing. What do you think most division presidents would choose?

I said at the beginning of this article that the consensus decision process in this company is killing growth. My firm was selected after extensive research to help this company achieve its goal. We have been working with them for over a year. So far, everything I have brought to the table has had a decision process that looks like the above. We have lost a year of implementation to trying to gain consensus.

For example, we established that their bar for hiring salespeople should be higher. They were going to use our assessments to help hire top-performing salespeople. So far, in filling 5 positions, our assessments have recommended against 4 of the people they hired anyways. Just think of the growth opportunities that lurk in this company if they moved away from consensus.

Howard Shore is a business growth expert that works with companies and people 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 [phone link=”true”] or shoreh@activategroupinc.com.

Today clients will shape the clients you’ll get tomorrow!

When running a business, the decisions you make today can and will affect what your business will look like tomorrow.

A great example of a critical decision you need to make is who you want your clients to be. The natural tendency in the beginning is to not worry about this as cash flow takes precedence. The rationale is that once you get bigger and stronger you will be in a position to be more selective. However, what tends to happen is that the time to change never comes. A business tends to create an identity around its current clients.

Future prospects will judge their buying decisions based on your current and past clients.

In addition, the best and biggest source of new clients tends to be referrals from existing clients. Well, if you’ve built your business around the “wrong” companies, you are going to find that those clients will be referring you to some more of the wrong companies

A business services company that was trying to get itself out of trouble got itself into deeper trouble because of the clients it accepted to defend against the bad economy. In the past, it had been a strong firm with large clients paying good monthly retainers. As the economy turned sour, it started to accept whatever clients it could find. These clients could not afford the same level of fees, and in some cases were more demanding than the old clients. In other words, servicing these second-tier clients was at best less profitable, and in some cases not profitable at all.

As with most businesses, our example company achieved most of its growth from existing-customer referrals. Well, the new customer base tended to be single-project clients that were less appreciative than the old, long-term relationship client base, and therefore brought fewer referrals. Also, the referrals they did bring tended to be more of these smaller, less profitable, and off-strategy customers. After 18 months of accepting anything that came through the door, which they thought was the way to survive, this company found itself facing a quandary. Their customer mix is horrible, not sustainable, and they are are working twice as hard for much less money. They need to decide whether to try to grow with more of the newer kind of client, or to stay the same size, or even cut back, while they redevelop the kind of client base that made them profitable to begin with. Whichever path they choose, they have to work much harder to find new work in a tough economy.

So the key lesson for the example company and for any company wishing to sustain growth in this or economy is to very careful who you accept as customers. That decision will shape your future.

Howard Shore is a business growth expert that works with companies and people 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 [phone link=”true”] or shoreh@activategroupinc.com.