Over the past year here in Portland I’ve been talking to a lot of startup leaders trying to make their fledgling businesses fly, and the image that always comes to my mind when I have these conversations is that of a race car traveling at 200 mph, and getting a tune up at the same time.

It’s quite a problem these leaders face, because once the green flag is raised and the business is launched – they can’t pull their business “cars” into the pits, have some work done, and then restart – that’s precious time in the marketplace that could mean the difference between success or failure.

So, changes must be made “on the fly” – and for a start up, there’s seemingly a zillion things that should be changed or modified at any given point, which is a huge prioritization challenge.  They all need to be done, but when, and in what order?  AND, they can’t be done in a way that stops the car.

This can keep startup CEOs up very late at night, pondering their next moves – unless they develop a critical “filtering” process that can make these decisions easier, and more effective.

The filter is a series of 4 questions that should be asked about every contemplated change or modification. Each question begins with “How directly does this change or modification effect”:

1. Net Cash Flow generation
2. Customer retention (and/or repeat business)
   
3. Employee retention
4. Timely and accurate financial and/or operational reporting

These are four elements that represent the moving car – and thus, they are a mechanism to insure that the startup’s limited time and resources will be devoted to the right things, and at the right time.  The more a potential change effects one, several, or all of these filters, the higher it should be on the priority list.

Let’s look at a fictional example to see how this would work (albeit in an truncated way):

Imagine the CEO of startup service company “Acme Service Co.” had these 4 changes to consider:

1. Formalizing the organizational structure and team responsibilities
   
2. Rollout of a revised sales & customer service protocol & process
   
3. New advertising campaign
4. Revamp of the customer management (CRM) system

At first glance, which one of these four do you think effects all of the filters the most?  If you answered (2), you’d match my assessment.     The customer sales & fulfillment process in the service business touches everything – it certainly effects cash flow and customer retention, and if it’s presented and “sold in” correctly, it has a huge effect on employee retention.  Finally, there can’t be a good protocol without steps along the way where proper reporting should occur.

Based on my filters, I’d do (2) first.  What would be next? I’d lean towards (4), because if you can’t bill it, you can’t collect it, and if you don’t have data, you can’t manage it. You can “get by” with a substandard CRM, but a great one can positively effect ALL of the filters significantly (e.g. ever watch an employee get completely frustrated with a CRM – talk about demoralizing!).  On the other hand, there may be an argument for (3),  depending on the cash flow needs at the time.

Lastly, while understanding everyone’s roles and responsibilities through a formal org chart & structure (change number 1) is certainly important, especially to employee retention, in my 200 mph car it would finish fourth on this list, because of its lesser effect on the other 3 filters.

That’s how the process would work.  And the answers in this example could very well be different for a different company in another industry at another point in time.  But it’s very important in any case to establish a rational and considered “filtering” process like the one presented here,  so startup CEOs can keep their “cars” on the road at top speed, AND be able to make the necessary changes at the same time.

Vroom, Vroom!!!

Growing up in the 60′s and 70′s I was utterly fascinated by the US Space Program, and its corps of courageous astronauts.   They were my childhood heroes, and I still vividly remember that night in July of 1969 when I ran outside moments after Neil Armstrong uttered that famous “one small step” line and stared at the moon, utterly captivated by the notion that a man was walking on it at that very moment.

It took a special kind of person to be an astronaut, and those distinct qualities were captured perfectly by Tom Wolfe in his famous book, “The Right Stuff” (it was made into a great movie in 1983 – if you haven’t seen it, it’s well worth your while).

It was the “right stuff” of physical stamina, courage and (a lot) of ego that put those men on top of a rocket, and as I moved forward with my chosen career in the business world, I realized that there was also a blend of “right stuff” necessary to climb to the top of the leadership mountain.

This “stuff” goes beyond the acumen, knowledge and savvy that great leaders possess – this goes deeper, into core personality and temperament.  Things, that if not possessed and practiced, would make everything else moot.

What are they?

I remember them always because of the animals they represent to me – Dog, Turtle, and Cockroach.

“Dog” -  Dogs have this great ability to live in the moment – to let go of any resentment and seemingly “forget” what happened in the past.  Great leaders know how to properly filter past experiences in a similar way,  so they don’t adversely effect their ability to make good decisions at any given time.   There ARE things we should forget, and let go of – and we need the ability to summon this clear and fresh perspective from within.

“Turtle” – This reptile has a very thick protective shell, that wards off many predators.   Great leaders need to possess a similar “thick skin”,  because critique, second guessing, and other business slings and arrows will always be coming their way – it’s how they handle it that is critical.      It’s all too easy to get defensive in the face of criticism, or lose faith or confidence.  An ability to ward off these negatives, or better still, absorb and process them without weakening ourselves, is critical to survival at the top.

“Cockroach” – You have to respect a creature that has been around for 300 million years (that was even before the dinosaurs), and has lived through a couple of ice ages – that’s resiliency.  And resiliency is something a great leader needs more than anything else.  Things go wrong, mistakes get made, you stop, you fix, you start again, you rise, you fall, you teeter on the edge of complete and utter failure – and then, finally, BAM – success.    They just keep at it with an unyielding belief that eventually everything will come together.

This is the “right stuff” of leadership.  Remember:  Dog, Turtle, Cockroach.  And lead well!!

Someone once asked me to use a single word to describe a “secret to leadership” – without hesitation, I replied,

“Relentlessness”

If there is one thing I learned in my nearly 25  years in the executive chair, it’s this:   Leaders cannot achieve their grand visions and strategies without a relentless push to execute brilliantly.

The best way to do this is with the right metrics to measure, monitor and manage.  Metrics that are not necessarily the “bottom line” ones – such as Net Profit, Total Revenue, Earnings Per Share, or Total Customers.

No, these are “feeder” metrics – numbers that, if they are managed well, will ensure that the “bottom liners” are stellar.

These metrics, in total, bring you this level of satisfaction: “your company has satisfied and happy employees bringing the right potential customers into the pipeline, converting them in the appropriate numbers and at a good price, and then retaining them with high quality and cost-effective world-class customer service”

That’s operational execution in a nutshell, isn’t it?

But to get to that statement, a leader has to SEE it in the numbers, in the form of a solid metric set (this set is ideally suited for a service business that has recurring customer revenue, but it can easily be modified for any other business):

1. Prospects Brought in the Pipeline (or Sales Funnel, or what ever similar word you’d like to use)
2. Prospects Converted (aka Sales)
3. Sales Conversion Percentage
4. Average Revenue Per Sale (or Monthly Recurring Revenue Per Sale)
5. Customers Lost (that is, had either discontinued service, or stopped being a customer based on some time frame)
6. Customer Retention Rate
7. Average Customer Life
8. Net Promoter Score (For more on this, read here and here)
9. Process Error Rate (or Fault Rate – there should be a way to measure each time a customer reports a problem)
10. Operating Margin
11. Employee Turnover Rate
12. Employee Net Promoter Score (that is, would your own employees recommend your company as an employer to their friends and relatives?)

After reading through these 12 metrics, go back and read the execution statement – these are the best metrics I’ve found to “cover” it, and then prove it to be true.

And…while it’s one thing to create the metrics, it’s a whole other ballgame when it comes to actively measuring, monitoring, and managing them.

That’s where the relentlessness comes in.  These metrics must permeate an organization – in fact, some of them should be generated DAILY.   Employees should be well versed in why they exist and why they are important.   They should be reviewed and discussed regularly.  Targets should be set. The appropriate accountability standards against those targets should also be set, and maintained.

Measure, measure, measure. Monitor, monitor, monitor. Manage, manage, manage.  Relentlessly.

It’s THE best way to push forward with execution – emphasis on the right metrics that conform with your “execution statement”.

Of course, don’t forget that as a leader, you need to make all this number stuff interesting, exciting, and yes, even fun.   That’s another big challenge, but believe me, it can be done.  Who doesn’t have fun winning?

Lead well!

A few weeks ago at Portland State University’s Digital Media Conference, I was challenged to present “9 Ways Social Media Can Make You a Better Leader”, in the “Ignite” format (that’s 20 slides in 5 minutes, each one changing over every 15 seconds, whether you are ready for the change or not).

It was a great experience, and thanks to PSU, I’m happy to share the result (here is the link if you don’t see the embed: http://youtu.be/yi11zeKkeuE)  Lead well!

Success is a beautiful thing.

We all want it, because it’s the undisputed champion in measuring our professional selves.

We know it’s hard to get, and that’s what makes it all the more satisfying.

We cherish it, because we know what it’s like to fail (because we all do).

So, when it happens, there’s the part of us that wants to strut around like a peacock.  I did it! How about that!

Darn I’m good.

Hey, why not celebrate the win?   But there’s a catch to this if you are a leader on the road to greatness.

You shouldn’t take the credit.

Because most of it was actually done by somebody else.    You “showed them the way” (the definition of a leader), and hooray, they got there.

They deserve the credit.  Yes, you played a major role.  Yes, if you weren’t involved it might not have happened at all.

But they still DID it.

It takes a lot of humility to step aside when the accolades come, and deflect them elsewhere.   A selflessness that puts aside a certain fear – the one that thinks that unless you strut your stuff out there, it won’t be noticed by your bosses when raise, bonus or promotion time comes.

I succumbed to that fear a few times earlier in my career, and fortunately, I had some great mentors that pointed it out to me.  I recall writing a self review at at time that I really felt I was being under appreciated, and deserved a promotion.

It was “Peacock Land” – “I did this, I did that, I figured this out, I, I, I, I, I, I …..” – you get the idea.

Thank goodness I was called on it.  But I learned.

The other thing that convinced me once and for all that I shouldn’t take the credit was scientific fact.

Yes, my good man Jim Collins figured it all out in my favorite business book of all time, Good to Great.

The leaders of all the “Great” companies all had this humility – they gave the credit to someone else.  And it was researched, and documented, many times over.

Because they didn’t DO it.  They just showed the way.  Collins calls them “Level 5 Leaders” – they’ve taken leadership up another very important notch.

As Teddy Roosevelt said in his famous speech at the Sorbonne in 1910:

“The credit belongs to the man who is actually in the arena; whose face is marred by dust and sweat and blood; who strives valiantly; who errs and comes short again and again; who knows the great enthusiasms, the great devotions, and spends himself in a worthy cause”

This is a fresh new year.   Keep your peacock in the closet, and honor your “men (and women) in the arena“.    Greatness will await you, for your team will respond to your selflessness with an even greater desire to make you proud, and start the credit cycle all over again.

Lead well!

In September, at SOBCon NW in Portland, I sat down for an interview about Leadership with small biz guru and NY Times bestselling author  Carol Roth. In the interview, Carol asked me:

1) What is Leadership?

2) How do you get everyone on the same page?

3) How do you tie individual values to a common business purpose?

4) What’s the role of simplicity in communicating a consistent message?

5) How does your leadership philosophy translate to the small business person?

6) How does profit get tied to the business purpose?

7) Should solo entrepreneurs find mentors to refine their business purpose?

Check out the entire conversation, and my answers to those questions, here:

There is always a great benefit to the 365-day calendar – the fact that it restarts at January 1, without fail.

It’s an annual window of opportunity for recycling, renewal, rebirth, rejuvenation, rejiggering, retooling, rebooting, and whatever other “re-something” you can think of.

I call it the “January Effect“, and you’re darn right that as a leader, I took full advantage of it – and so should you.

I liken it to the beginning of a football or baseball season, where every team starts over at 0-0, and dreams the big dreams of a Super Bowl or a World Series.

There is a short period of time where there are no deficits, or shortfalls, or catch-ups – the clock is running, but most of the scores aren’t posted until the first week in February (after the books close).

A leader can, and should, take that “rebirth” energy and channel it into the critical momentum that will carry over into the rest of the year.

How can we do this?

If you’re thinking it’s less a matter of numbers and metrics, and more a matter of inspiration and motivation, you’re on the right track.

January is THE month for summoning your best stump speech – that barn burner that you’ve been working on for months – and laying it out there.  With gusto.

Yep, it’s time to BRING IT.

Your team is at their freshest, with the slate wiped relatively clean, and the challenges of the year dead ahead.  What better time to whip them up into a frenzy of execution?

Hit the road, and make that speech “in-person” to as many people as you can.

(I know, for most people it’s going to be Winter  – not a pleasant time to travel, by any means – but at least the fares are lower)

Talk about “the cause“, and how THIS year is going to be THE year for the business – if the team can pull together, and execute the plan.

It’s about creating a keen sense of urgency and excitement, and it just can’t be done with a memo, or an e-mail, or even a video conference.

Talk about the rewards of success  – not only for the company, but for THEM.   The benefits of happy customers.  The “greased wheel” of superior quality and service.   The pride of being on a cohesive and supportive team.

Get it ALL in there, and BRING IT.

Your teammates will feed off the energy you’re bringing to the table – especially since you’ve connected all the dots for them before the year was even a month old.

That’s what’s at stake here- the difference between a roaring start, or a so-so middling one.   That difference is YOU.

Use this last week of the year to work on your stump speech – it’s a great time to do it. Keep it to about 10-15 minutes, and be sure to rehearse it once or twice.

Then, when the time is right in January, BRING IT.

Don’t let the January Effect pass you by.

(and don’t forget to do these 10 things as well, and there’s no telling what you’ll accomplish!)

Lead Well!

“The days of leading countries or companies via a one-way conversation are over.  The old system of ‘command and control’ — using carrots and sticks — to exert power over people is fast being replaced by ‘connect and collaborate’ — to generate power through people.” - Dov Seidman

When I became an executive for the first time back in 1987, my boss was a classic “command and control” leader.  Everything flowed through him, and the fear he generated with his sticks was legendary, as well as the power of the occasional carrots.

There was no doubt someone was “over” me, and that I was surely “under”.  In a command and control world,  those words got thrown around a lot, and I never ever felt comfortable with them.  I also never liked their visual counterpart, the organization chart., where the overs and unders were in these rigid rectangular boxes, connected with lines that sometimes looked more like tethers.

Those charts implied rigidity, and no doubt, a command and control world.   And more often than not, if the charts became as familiar of a document in the boardrooms as a monthly financial statement, the implication would turn into reality.

There was a day when this “traditional” way of overs and unders would work, and work well.    But it doesn’t any more.    Dov Seidman’s quote very well encapsulates the world that we are in today, as leaders – a world that demands that all voices be heard, no matter what role they play in a business, an organization, or in a citizenship.

“Connecting and Collaborating” are like round holes when it comes to fitting that model into the square pegs of the traditional org chart.   Lines are now blurred, the tethers released in a spirit of trust and respect.

Organizations are wider and “flatter” now, such that an old school 8 1/2 by 11 piece of paper cannot, and should not, ever do it justice.

As a leader, I’ve learned that being “over” someone just doesn’t feel right.  It conjures up those carrots and sticks – and that fear.

In a non-digital world where information could be hoarded, twisted and hidden,  the “over” world of fear could be quite effective – it worked on me for a few years.

But then the doors opened and now information flows freely among anyone with a connection to the Internet – and with that, the ace in the hand of the “command and control” leader began to fade away.  It’s hard to push fear in a transparent world.

And so, whither that old org chart?

Is it fast becoming a relic of the “over and under” age of leadership?   I think so, and that’s fine with me.

I’m sure those boxes and lines can be put to good use on other charts and Power Points.

In the meantime, we have some connecting and collaborating to do.

Lead well!

The other night I thoroughly enjoyed a holiday play at the Portland Repertory Theater, and marveled at the ability of the actors to take on multiple (and quite dissimilar) roles during the course of the production.

There was a cool kind of virtuosity on display, and it made me think about how leaders sometimes need to do the same thing in the workplace; that is, assume different “roles” to keep the team on the path to success.

Some of these roles are obvious  – a teacher, for instance – and some are a bit unorthodox, but certainly necessary.

Here are seven of them you might not have considered:

1. Plumber – What’s a leader have to do with being a plumber, you ask?  Plenty.  Plumbers deal with water pressure all the time, and they know how to use safety valves to make sure that pressure doesn’t cause a disaster.  So it goes for the leader  – their teammates face a lot of pressure, and the leader must function as that safety valve, providing a safe outlet to release all that tension & anxiety.
2. Physicist – I bet you didn’t think the famous equation E=MC²  applies to the workplace, did you?  The energy that a business needs to thrive can only be generated by a critical  “mass” of teammates all pushing forward in the same direction. (My only regret is that I didn’t put on a lab coat when I made this argument to my staff.)
3. Chocolatier – Every leader needs a little Willie Wonka in them, pushing the envelope on the generation of “pure imagination” – the out of the box ideas that really make a business soar.  It also doesn’t hurt to bring in a few morsels of the real thing into the board room now and then….
4. Interior Designer - Decision-making is like picking paint colors, so we all need a little interior design savvy; that is, using the process of elimination to your advantage (i.e. figuring out the “colors” you don’t want before you figure out which ones you want to put on the wall).  This design savvy can also be utilized to pick comfortable chairs for the board room (goodness, I’ve sat in so many bad ones over the years!)
5. Den Mother – It’s not all strategy, process, execution and profits.  Sometimes our teammates just need to be fed, or warmed, or patted on the back.  We need to make sure they’re on time, and appropriately dressed.  It’s just caring for their well-being – that’s the Den Mother side of us that has to come out.  I just regret I never learned how to bake cookies.
6. Wedding Singer – Do NOT underestimate the power of breaking out into song at some, unexpected moment.  I’ve made more breakthroughs after a rousing chorus of “Bennie and the Jets” than after a nuts-and-bolts stump speech about profit margins.    Things like this grab attention – no matter how bad, or good, the performance is.   Although staying in key doesn’t hurt.
7. Pharmacist -  Leaders have to dispense a little medicine every now and then, but like a really good pharmacist, it’s all about the proper dosage.   Take the simple sentence, “You did a good job”, for example.   That’s a wonder drug, if used correctly, but watch out for the overdose.

Here’s a bonus, seasonal favorite:  Santa Claus.   Be good to your teammates and reward them for their hard work this year.  Just be careful with spiking the holiday punch at the office party. 

Lead well!

“To be really great in the little things, to be truly noble and heroic in the insipid details of everyday life, is a virtue so rare as to be worthy of canonization” –Harriet Beecher Stowe

There are leaders, and then there are LEADERS.   The ones that truly inspire, and exemplify the very definition of “lead’ – showing the way.

In studying these extraordinary people one is tempted to look at the grand gestures, the big gambles, the life-altering speeches, or the game-changing ideas that characterize the best of the best, but to really understand the differences between good and great, we need to dig deeper.

We need to look more closely at the “little” things – the things that, more often than not, are rarely acknowledged or discussed – but are certainly remembered.

In my experience, I’ve observed 10 of these little things that have made the biggest difference:

1. Good Manners – Starting with “Please” and “Thank You”,  good manners are a show of respect that set a tone of civility and kindness.
2. Posture –   Nothing sends the message of  “I’m the leader, so follow me” better than standing and sitting with good posture. This may seem trivial, but think about it – what goes through your mind when your boss is slumped in a chair, or is slouching up a hallway?
3. Knowing Names -  This can be such a difference maker in larger organizations – it may seem like an impossible task, but remembering a name sends another subtle caring message.   One of my great mentors, the late Bill Bresnan, set a wonderful example for me that I’ll never forget.
4. Knowing One or Two Personal Details - This is taking name knowing one step further, but it too can be a critical element in strong team building.  I read a great example of this the other day in an article about Green Bay Packers quarterback Aaron Rodgers, and how he “studies up” on new teammates.
5. Positive Attitude – I’ve called it “turning grey into great” – the ability of a leader to be able to look at the literal world in a favorable way.  Great leaders bring that energy into every room they enter, and infuse it into every dialogue they have.
6. Vocal Tones & Inflections – Sometimes you can say the most inspiring thing, but yet it falls flat – why?  Because your tone and inflections didn’t match the words.   The best way to work on this is to record yourself, or practice speeches in the mirror.
7. Smiling (at the right times)  – Joy is infectious, and there’s no better way to spread it than from a bright and sincere smile – one that telegraphs the sense that the work and the effort should be fulfilling AND enjoyable.
8. Repetition – Sounding “like a broken record” is really a complement, because it’s a clear signal that your message has been listened to, and comprehended.   Saying it once or twice just isn’t going to cut it in today’s workplaces.
9. No “Can’t” -  “Can’t” is the most useless word, ever.   If a leader can eliminate it from his or her vocabulary, they’ve taken a major step towards success. (Yep, sometimes it’s that simple)
10. Humility -  “We”, instead of “I”.  Giving credit to others for success, and blaming yourself for failures.  Of all of what I call the “higher level” attitudes of great leaders, this (along with positivity) is also worthy of  “little thing” status, because it can be such a subtle thing (like just the use of the right pronouns, for example).

Lead well!