Building Business Value | Corporate Management Strategies

Three Types of Speeches

This week I had a wonderful opportunity to speak to a group of business people in Pittsburg, PA.  It was a speech I'd given a number of times before, but on this occasion the outcome was a bit different.  I'd made the choice to leave very early in the morning and make the five hour drive to the home of the Steelers rather than head up the night before.  I cut it a bit too close and was let down by my Google map directions (thank God for the Maps App on my iPhone).  I arrived on time, but a bit frazzled.

That leads to the first of three types of speeches ... the one you plan to give.  I'd given this speech plenty of times in the last six months.  It's basically a quick synopsis of my recent book, "Building Business Value."  I normally address the topic for about 90 minutes but for this audience, I had to deliver a similar message in a very tight 20 minute window.  Well, it turns out I was well prepared for a 90 minute presentation, but somewhat unprepared to deliver the content in 20 minutes.

Now we arrive at the second of three types of speeches ... the one you give.  Since I had to squeeze my 90 minutes of content into 20 minutes I missed the mark on my real key points.  Since I toured the bowels of Pittsburg before arriving at the Green Tree Radisson, I wasn't in the right frame of mind to connect to my audience.  And since I followed Pittsburg's version of Tony Robins to the podium, I may have also been trying to be someone I'm not.  Needless to say, I was less than pleased with my delivery.

So what is the third type of speech?  The one you wish you gave!  Most leaders have opportunities to move people to action.  Whether it is a presentation to the board, a company overview to a prospective customer, or a speech during an all-hands meeting, we have our chances to lead change.  When leaders speak, it should be with an objective to not only inform, not just to educate, but to create in your audience, a desire to change.  In my case, the speech I planned to give did not match the speech I gave.

Has it happened to you?  Did you fully understand your audience?  Did you have a specific call to action?  Were you simply trying to inform?  Did you fully prepare?  Where you in the right frame of mind?  Had you had a good night's sleep?  Were you really trying to affect change?

Leaders in the mid market have ample opportunities to communicate their company's direction, private moments where they can align their constituencies and generally public venues when they can motivate and inspire their staff.  The key to delivering speeches that will meet all three of these objectives is to prepare and practice.  The more effort you put into preparation, the better the three types of speeches will merge into one!

Tyranny of the Urgent

I was introduced to this term last week while running a planning offsite for a client.  I can't get it out of my head.

Most of us are familiar with Stephen Covey's concept of the four quadrants.  Covey's tool is great for effectively managing your time and many leaders in the midmarket use some form of the four quadrants.  You know the drill.  Your break down your daily activities into categories based on whether they are urgent (not urgent) or important (not important).

Rule one for the leader who is aiming to build business value is this: stop focusing on anything that doesn't add value.  Sounds simple, even juvenile at times, but it can be oh so hard to do.  But you must find ways to move beyond the "hair on fire" approach to management, the lurching from crisis to crisis that bedevils so many CEOs.

But this term "tyranny of the urgent' reflects how many organizations establish priorities.  So many organizations find themselves going from crisis to crisis.  Even the routine becomes a crisis.

We've done this to ourselves in the business world.  Does your company culture expect an answer to an email question within an hour?  Are deadlines arbitrarily set?  Do you find yourself responding to texts or emails as soon as you receive them?  Do you expect immediate response to your queries?

The problem is not with a workplace culture that is responsive, the problem is a workplace culture that doesn't think, doesn't balance, doesn't have clearly communicated priorities.

If everything is urgent, then nothing is urgent.  And the trivial gets done at the same time as the critical.

Building a Legacy

Midmarket business leaders are not always thinking about their legacy, but it's something to keep in the back of your mind.  When engaging your leadership team on any change initiative, it's best to keep in mind the emotional,  intellectual and spiritual, or legacy aspect of your major change.  Once you've got them open on an emotional level to making the change you wish to pursue, and you have them satisfied from an intellectual perspective that your approach makes rational sense, it's time to convey to your leaders the spiritual or legacy aspect of the work at hand. This concept can be explained using the story of a man who passes three ditch diggers working in the hot sun. He asks the first ditch digger what he's doing.

"I'm earning twelve bucks an hour," he says.

He turns to the second ditch digger and asks the same question. "I'm digging a foundation," the man replies.

He asks the third man what he's doing. "I'm building a cathedral," the man explains.

Everyone has heard this parable in different versions, and the reason the story is so important is that it illustrates the point that our attitude about what we do dictates our ultimate level of success. As Zig Ziglar says, your attitude determines your altitude.  When you want to achieve this third level of buy-in from your team leaders,  it's time to appeal not to their emotions or their intellect but to their sense of themselves as contributors and to the legacy they are seeking to build for themselves.

Years from now, their grandchildren will ask,  "We were studying the early part of the twenty-first century in school, and we learned that it was an incredible time in American business. How did you contribute?"

The Hand Wringing and Teeth Mashing of Losers

Every Monday morning I make the trip west from Annapolis, Maryland to Columbia for a standing weekly meeting.  I'm either on the phone, listening to music or Morning Edition on the radio or enjoying the peace of a quiet car ride after a hectic weekend. 

Last weekend I happened upon the sports radio stations covering the Washington Redskins and Baltimore Ravens.  Both NFL teams happened to lose last weekend and I thought the tone of the conversation was telling on the health of both organizations.  The tone of the Ravens community was concerned but no sense of panic.  The Redskins have had a rough season to date and the their customer base has become downright suicidal.  Players have been publicly battling and last week ownership brought in the dreaded ‘consultant' to add another pair of eyes to their quickly sinking season.   And in a scathing article, the leadership of the organization was characterized by Sally Jenkins of the Washington Post, as toxic.  Ouch!

Although the dysfunctional Redskins are entertaining to follow, those of us in the midmarket can learn from their mistakes by asking ourselves how we handle winning and loosing.  You see NFL franchises are more like the midmarket than you might think.  Other than being valued by Forbes at close to $1B, the size of the staff, processes, strategies, and operations of NFL teams are very similar to many middle market organizations.

Perhaps the most comparable element of an NFL franchise and midmarket companies is the leadership.  NFL owners might not like hearing this but observing many of these owners and general managers, it seems obvious.  For example, good publicly traded companies have a leadership development program and culture that trains and grooms the best and brightest.  The best midmarket companies have the same.  Many midmarket companies, like poorly run NFL franchises, struggle in this area and as Sally Jenkins points out, in the case of the Redskins, the leadership has become toxic.

Ask yourself how you handle success and failure.  At the first sign of a storm, is your reaction to replace your captain or trust the plans you've made to get you through the stormy seas.  What is your language of success and what is your language of failure?  Does your team know where to turn when times get tough or do they turn on one another?

When Growth Finally Kicks In

Growth is an essential part of the survival of any organization.  Just as any organism will die without growth, organizations will stagnate and eventually suffer if they are not constantly growing.  But growth is the most difficult day-to-day task facing an executive.  How much should you grow and in what direction?  These seem to be life-or-death decisions. There are ways, however, of managing growth that achieve objectives effectively and organically.

The three parts of an organization that must experience growth, or surely they will die, are the mind, body, and soul. For the organization to experience effective growth, all three parts must grow at the same time. A useful way to think about effective organizational growth is by visualizing three rocks held together by a rubber band. Each rock represents the mind, body, and soul, respectively, of an organization. All three must move forward at the same time, or else the rubber band will snap back, stymieing progress. In terms of your company's growth, this uneven movement leaves the company in the same position as when you started the growth initiative.

What exactly are these three aspects of your organization - the mind, body, and soul? The mind is the leadership, defined as those who make decisions, including but not limited to those in charge of the organization. Leaders of an organization are the people who are setting strategy and articulating vision and direction. Every member of an organization should be certain of these leadership qualities. There is leadership, in other words, at all levels of an organization.

The body of an organization consists of the key components of the organization's functioning - the process, structure, and even finances. The body is the guts of an organization.

Informing both the mind and the body is the soul of an organization - the corporate culture or code of ethics.

Any effective growth strategy aims to move all three of these components forward in near unison if it is to be successful.

Commitment

Why is change so hard for most of us to deal with?  Well, for one reason, it takes a huge commitment on our part to see what needs to be done and then do everything we need to do to make the change successful.  Machiavelli knew it was hard.  He said "there is nothing more difficult to take in hand, more perilous, or more uncertain in its success, than to take the lead in the introduction of a new order of things."  John Kotter,  Harvard Business School's leading thinker on change leadership,  suggests we create little wins and develop a culture of success in our organizations.  In Good to Great,  Jim Collins gives us the concepts of a flywheel, with the idea that we continue to build upon small achievements over time in order to make change stick.

From time to time we also hear about real life stories that are fabulous examples of commitment.  A few years ago during our annual neighborhood golf outing to Ocean City, Maryland, a friend of mine, David Burt, revealed that he was diagnosed with Type 2 diabetes.  We were all floored.  To be fair, Dave wasn't the poster boy for Body For Life, but he also wasn't your typical couch potato.  We were all shocked at Dave's diagnosis but what we've learned since that day, is that Dave is now the poster boy for the word "commitment."

In fact, last week, Dave received the good news that he longer was suffering the symptoms of Type 2 diabetes and that he could come off his medications.  It turns out that Dave made a commitment to beating his diabetes and he did.  He actually ran himself right out of the diagnosis and right into a drug free life.

Dave made the commitment to eating right and running.  His commitment lead him down the path of running and eventually entering a number of local 10k races (in fact Dave and I ran a race together last fall).  This past weekend, Dave competed the ultimate runners challenge finishing the Under Armor Baltimore Marathon in 5 hours and 19 minutes. Now that is impressive!

We hear a lot of stories, mainly from big pharma, about the wonderful outcomes of miracle drugs, but from my sensibilities, this is an even better story.  Think about it for a second.  Going from a sedentary lifestyle with a diagnosis of Type 2 diabetes to eliminating your need for drugs and finishing a full length marathon.  This was an incredibly difficult change and the commitment took years to see the full results.

Dave saw the need for change, made the commitment and literally ran his way to good health.

Take that Machiavelli!

Inspiring.

Sgt. Andy Brown

In his 1996 book "Only The Paranoid Survive", former Intel Chairman Andy Grove introduces us to his concept of  "strategic inflection points."  The inflection points are major shifts in your market or your environment that change everything.  Once your business experiences a strategic inflection point, nothing will ever be the same.


Today is an inflection point for my family.  On October 8^th, 2004, my nephew Sgt. Andy Brown died as a result of injuries suffered when leading his squad on a patrol in Baghdad.  From that point on, everything changed.  Nothing would ever be the same.

If you're old enough, you've had an inflection point in your life.  Families that have lost fallen heroes like Andy, and others that have lost family members, don't really want to forget.  In fact, they would really like it if we remembered.

So if you get the chance between now and Veteran's Day (November 11th), regardless of your position on either war, remember a fallen vet.  Say hello to the young soldier you see in the airport, contribute to one of a thousand great vet causes, reach out to family members of the fallen and offer to help in some way.

Things will never be the same, but remembering those we've lost gives great comfort to those who were closest to them.

Building Value on the Farm in Tough Times

I grew up on a dairy farm in North East Pennsylvania.  Not a large dairy, only about forty milking head out of total herd of sixty or so.  It seems unfathomable to me now that my parents raised eight children on a 130 acre dairy farm.  But during the 1960's, much like now, farmers supplemented their income with other sources of income.  We happened to run a tavern.  An odd combination I know, but it seemed to work.

On a recent visit to Wayne County, PA, I met a family friend running one of the few dairy's still operating in my old stomping grounds.  While engaging in small talk on the prices of gasoline, my friend commented that the price of everything seems to be going up ... except for the price of milk.  She said she sells her milk for $11.50 per hundredweight.  That might sound fine until you realize it costs her $16 to produce that much milk.  And it's been that way for about a year.  It doesn't take an economist to figure out that this is a bad time to be a farmer.

In an October 3^rd New York Times story entitled "The Family Farm, Also Battling the Downturn", Phyllis Korkki writes that farm incomes are down 38% from 2008.  Korkki claims that over 92% of the income earned by family farms will come from non-farm sources.  That's not 92% of their household income from farm related activities like selling milk, that's 8% from farm related income!  In my friends' case, that means selling vegetables and pumpkins at a roadside stand and this year, running a corn maize during the fall.  Others drive school buses, paint homes, sell canned goods or work evenings and weekends wherever they can find employment.  Some farms in this region sit on top of Marcellus Shale, which is now a hotbed for natural gas, so they may have an opportunity to sign a lease for natural gas exploration.

A down economy forces each of us in business to evaluate the best way to leverage our skills, competencies, products, intellectual property and services.  What are your company's core competencies and skills and can you leverage them in another way, in another market, for another product?  This market has been particularly hard on the family dairy farm and they have had to scramble.  My guess is that many of you are doing the same, and leveraging your current skills into new markets may be a way to build enterprise value or just stay afloat in tough economic times.

Are Your Leaders Worth $300M?

In the September 21, 2009 issue of Forbes magazine, Tom Van Riper asks the provocative question of Miami Dolphins' Executive Vice President of Football Operations Bill Parcells.  Can a person like Parcells really have an impact on the business value of an NFL franchise?

Van Riper successfully argues that Parcells adds millions to the enterprise by his presence and competencies.  But is this really such a provocative question?  Should it come as a real surprise to any of you running companies?  The question we all should be asking is whether the current leaders on our team are adding value to our enterprise.

In his seminal work on building great companies, Jim Collins asks the provocative question, "Would you hire your leadership team again?"  We all know leadership is essential for long-term success, but we should intuitively know that leaders do indeed add value to the enterprise.  Earnings, intellectual property, plant and equipment all have a balance sheet value, but their use is minimal without the leadership to leverage such assets.

During the dot com era (I feel like I'm referencing a geologic era of the Phanerozoic eon), a number of business ventures were funded because they had the right leadership team.  Investors were willing to put their money on a management team with a proven track record.  Now those days are long gone, but investors still look for great leadership teams when making the decision to part with their money.

In 2003,  I joined a growing company and when I shared my decision with a colleague familiar with the market, he said "Oh, they have all the good people."   Bill Parcells calls himself a "talent accumulator".  If you want to build the business value of your company, I would suggest you take the "Big Tuna's" advice and begin to accumulate the best leadership talent available.  Become your market's "talent accumulator."

Making the Commitment to Build Value

Nothing gets employees' eyes rolling like a CEO returning on Monday morning from a management seminar with a brilliant new initiative by which the whole company will now be run. If you're going to get your company truly committed to the idea of building enterprise value, you've got to get buy-in from everyone on board. Everyone must share the vision, so you have to find the algorithm for convincing really good people that they want to be part of this process.

How do you, as a C-level executive, create a sense of shared ownership with the entire leadership team?  How do you get heads bobbing over this methodology for building value, so that all the thought and dreams actually come to fruition?

You and your leadership team must commit.

Commitment is actually threefold - it's emotional, intellectual, and spiritual. Most people don't do anything unless they feel emotionally connected to the process. They don't get married, buy a car, take a job, run a marathon, have a child, or do anything of importance without first having an emotional commitment to the process. People may intellectualize and rationalize 'til the cows come home, but they don't do anything unless they have a gut-instinctual, emotional desire for doing it.  And it must impact them directly.

For example, the award winning PBS series Frontline ran the "Poisoned Waters" documentary again this week and in it environmentalists talked about changing their message from "saving the Chesapeake Bay" to controlling traffic, fighting gridlock and improving the local living conditions.  It turns out people will make huge commitments and sacrifices if they personally can see and feel the need for change.  Saving the Bay is a great cause, but it seems so distant for most people in the watershed.  Environmentalists have learned that moving people to control traffic, growth and gridlock will help the bay without ever making that plea.

So before you start marshaling arguments and building compelling intellectual reasons for making changes, concentrate on getting emotional buy-in first. Keep in mind that your staff and fellow executives are emotionally committed to doing things the way they've always been done, and they will use their powers of reasoning to swat away your brilliant new initiatives. What do you reach for first, their hearts or their minds? Without question, you should appeal to their hearts. Otherwise, their minds will be your worst enemy.