Paul Gillin’s recent post about the purpose and value of editing inspired me to share six core principles I’ve discovered that drive creation of content that CEOs will read.
1. Keep the ROI high.
More than other audiences, CEOs focus intently on using their time profitably. Content must provide a high return on investment. If you waste a CEO’s time, he/she stops reading. Even a minute away from the promise of ideas that promote growth will risk losing their attention.
2. Assume your audience is up to speed.
Don’t give lengthy explanations of terms you understand and are afraid your audience won’t. CEOs already have to keep up with current issues, so if they need more background, they know how to find it on their own.
3. Make every word count.
Every paragraph, even every word, must deliver value and encourage the reader to continue. To transfer a concept that helps readers become more successful may require ten or more edit passes. Emulate what Paul Gillin calls the Wall Street Journal’s “obsessive culture… with packing more information into less space.”
4. Watch your language.
It’s imperative to be candid and use direct, active language. TexasCEO publisher Pat Niekamp points out that “pieces ghost written for a CEO by someone who’s never had the experience of having to meet a payroll or pay the rent or determine a long term strategy, or deal with killer competition may contain words like they might, could, consider… CEOs use active words like do, are, will.”
5. Get to the point.
Getting high ROI content read requires getting to the point quickly. Someone thankfully taught me early on not to make the audience wait too long for the punch line. If a CEO doesn’t get it by the second slide in a prez, for example, he/she will page ahead if they have paper copies, or they’ll get impatient and completely lose interest. Apply the same principle to your writing.
6. Get in and get out.
Similarly, keep your posts short and give some idea up front of the value and outcome, i.e. what’s in this for me if I read it. Short means blog posts that are about 500-1000 words, with the average closer to 500.
Respect is due anyone who’s willing to take on the CEO role. While I’m happy that the “open rate” for my monthly newsletter hovers at 35-40%, it’s a constant struggle to create higher ROI content for them. Hopefully these principles will help you do the same.
Please leave a comment below or drop a line to email@example.com to share your thoughts.
[For a deeper understanding of social media, follow Paul Gillin's blog.]
The title of a popular business book years ago was All You Can Do Is All You Can Do. And it’s true, but sometimes choosing the right thing to do is all-important.
The dilemma for many CEOs is that they stay so busy running the business that they end up with too little time spent thinking about how to accelerate its growth. The old saying often applies: “It’s hard to remember that the original objective was to drain the swamp when you’re up to your ass in alligators.”
Speaking recently with a highly successful CEO who’s grown and sold several companies, he speculated on what determines how open a CEO is to coaching. His experience and mine perfectly aligned: a serially successful CEO will seek input and help from friends far more often than a first-time CEO and founder. Highly successful people learn how to choose advisors they trust in order to achieve the success they desire.
The stumbling block for many a founder and CEO of an established small company is that he or she comes to believe in his/her own abilities so much that they’re unable to accept the help that would take them to the next level. No matter how passionate they may be about accelerating growth, their complete reliance upon their own judgment closes their minds to innovative ideas, even if the source is someone they trust.
If you run an established business, test yourself with these questions:
- If an experienced CEO took a deep look at my company and told me I had to make big changes in order to grow, would I be open to changing?
- If a partnering expert offered to develop an alliance strategy that could double the growth rate of my company, would I listen to learn how?
If the answer to either of these questions is no, your company may already be decelerating or it’s about to hit a bump in the road. Once that happens, it will become even harder to carve out time to consider innovative ways to grow.
Are you focused on maintaining your role as chief problem-solver in your company, or are you passionate enough about growing your company to seek help trusted friends? Sometimes all you can do, by yourself, is not enough.
The Oxford Dictionary defines opportunity as “a set of circumstances that makes it possible to do something.” Although opportunities are generally thought of as spontaneous, serendipitous, and not amenable to process, is it possible to find them systematically?
In general, an opportunity is a chance to move from state A to state B; a business opportunity requires an interaction with another person or organization to create a desired outcome. Since a business opportunity implies a relationship, a thorough understanding of how and why relationships are created is the foundation of systematic opportunity discovery. Although some opportunities arise through original creative thought, even those are based on an understanding of relationships.
The exchange of money for goods and services is one type of business interaction, but it represents a desired outcome, not an opportunity. While the ultimate measure of success is revenue generation and profitability, value creation must precede it. An opportunity is created by an exchange of resources that enhance value. What classes of value-enhancing resources are there?
Five of the most common are:
1. new products and technology,
2. brand recognition,
3. additional staffing,
4. customer relationships, and
5. new markets and industries.
A majority of business opportunities arise from the recognition that one or more of these resources can be leveraged to add value to existing offerings. How can we intentionally and systematically identify and define opportunities based on this principle?
The process that leverages this knowledge comprises 4 steps:
1. Define your company’s value relative to others.
2. Define other companies’ value relative to yours.
3. Leverage individuals gifted in identifying and defining new opportunities.
4. Discover opportunity in the gaps.
Valuing Your Company
A crystal clear picture of your company’s value is a critical enabler of systematic opportunity discovery. What resources does your company have, and which ones does it need? Well-understood strategic positioning affects the bottom line positively. It minimizes investing in opportunities that deliver little or no return while enhancing the chance of finding richer opportunities.
Valuing Other Companies
The second step depends upon the first. Knowing clearly what your company offers, you can view other companies through this lens: if another company were to acquire mine, what would be the increase or decrease in the value of the combined companies? An exit strategy approach is a proven way to identify value in other companies, and you’ll learn what resources you may have that they need.
Leveraging Gifted Individuals
Some individuals are naturally gifted in identifying and defining opportunities. Harnessing this strength by including the right individuals in your company. If your team lacks this strength, augment your team with advisors who possess vital insight into opportunity discovery.
Opportunity in the Gaps
Opportunity is driven by accurate perceptions of value, so clarifying your understanding of what others find valuable versus what you find valuable leads to discovery. The gaps between companies represent potential opportunities.
To systematically discover opportunities, the CEO must to set the right tone. Leading your company to an opportunistic frame of mind is less tangible but vitally important. Set the right example by staying curious and remaining open to new possibilities, then follow this four-step process!
A frequent and costly pitfall in dealmaking is unconsciously giving away an “elegant negotiable” i.e. something you don’t value that could be of high value to the other party. Identifying and leveraging elegant negotiables will dramatically shift the outcome of dealmaking in your favor.
While recently discussing deal points with a client, I suggested using elegant negotiables to our advantage. The term wasn’t familiar to him, even though he may employ it instinctively. I first encountered it 20 years ago in negotiation training that I’d arranged for my work team, and I’m continually surprised that such a useful concept is not more widely known and used.
Suppose you’re engaged in a discussion with a potential partner to distribute your product with their product suite. Growing incremental revenue from a currently inaccessible set of customers is your goal. One issue is branding: should your product be “white labeled” as part of their suite, or should it clearly carry your logo and be represented as your product?
In this specific case, you don’t care as long as the product gets distributed and generates incremental revenue, so you quickly agree to let your product be shipped without your logo. In doing so, you may have given away a significant bargaining chip that could be used to extract something of high value - for free.
Before defining the distribution agreement, you should have discussed the branding issue to understand how important it is to the other party. Discovering the other side’s strong aversion to having your brand in their suite, you could then “reluctantly” trade your branding in exchange for something of high value to you, e.g., a stronger endorsement from them and online access to their CRM to enable your company to track sales in real time.
Uncovering the other side’s interests is a key starting point. My favorite book on negotiation, 3D Negotiation by Lax and Sebenius, contains a complete treatment of the entire negotiation process. While it doesn’t talk specifically about elegant negotiables, it will increase your understanding of all aspects of the process, and in particular, how to develop a clear picture of the interests of all parties..
Identifying and clarifying interests is critical in spotting elegant negotiables. Stop yielding valuable negotiating power!
“…the availability of information about a threat or opportunity has little influence on who wins and who loses. What makes the difference is what a company does with that information.”
— Clayton M. Christensen, Scott D. Anthony, Erik A. Roth in Seeing What’s Next, 2004
Business challenges come dressed as high-impact threats and opportunities, and each demands a response. The strength of your ability to respond is the primary determinant of your next move, whether you opt to: 1. compete (fight), 2.alter direction (flight), or 3. develop an alliance (unite).
The authors of Seeing What’s Next suggest that asymmetries of skills or motivation play a critical role in determining our next moves. “Asymmetries of motivation occur when one firm wants to do something that another firm specifically does not want to do. Asymmetries of skills occur when one firm’s strength is another firm’s weakness.”
In focusing businesses on growth-accelerating strategies, our consistent guidance has been to adopt a three-phase approach: “clarify, comprehend, connect.” Assuming that the CEO has aligned the company around a crisp, clear view of its own skills and weaknesses (i.e. clarify) as a foundation for effective execution, the second step is to evaluate the relative strengths and weaknesses of the competition (i.e. comprehend). When one firm demonstrates strengths in markets in which another firm’s capabilities are weaknesses, and vice versa, a self-fueling partnership (i.e. connect) may be an alternative to fight or flight.
The choices of responding to a significant threat or opportunity are:
Fight (asymmetric analysis highlights your company’s relative strength)
When your company’s processes and offerings are much stronger than competitors, leverage your unique capabilities to increase market share at the expense of competition.
Flight (asymmetric analysis highlights your company’s relative weakness)
When the cost is prohibitive of overcoming a competitor’s strengths that far outweigh your own, refocus on other markets or submarkets where your company can be a dominant player.
Unite (asymmetric analysis identifies complementary strengths and weaknesses)
If it’s clear that combining your resources with those of another company could make both stronger by compensating for weaknesses, the oft-overlooked third option is to create a symbiotic partnership.
The bottom line for any CEO? Develop an eye for asymmetries, then make a rational decision between fight, flight, or unite!
(A more detailed discussion of these alternatives are found in the excerpt ”The Innovator’s Battle Plan” that is drawn from the book.)
In the classic Steve Martin bit from early Saturday Night Live days, he’s a pitch man with a compelling hook: “How to make a MILLION DOLLARS and NEVER PAY TAXES!” After dramatically repeating the offer several times, he pauses to reveal the answer: “First, get a million dollars. Then…”
This post might be called “How to BUILD A VALUABLE COMPANY and SELL IT FOR A FORTUNE!” The first easy step? “Build a valuable company.” Assuming that you’re already doing that and your exit strategy centers on being acquired, four factors will impact success:
- Strategic importance of your product/technology/service
- Intensity of the competitive environment
- Existence and visibility of urgent, unsolved customer problems
- Presence of an insider relationship
Gauging the strategic importance of your offerings to a potential acquirer’s portfolio of capabilities is critical. Imagine all acquisitions resting along a value continuum. On the left end are low value (for the seller!) types of acquisitions like asset sales. Moving toward the right are transactions whose value is based strictly on financial parameters (e.g., discounted cash flow).
At the extreme other end of the continuum are companies whose value is so strategic to the acquirer that revenue and profitability are of little consequence. An example I’ve seen is a small software company with technology that uniquely solved an urgent problem for a multi-billion dollar enterprise. The valuation received was such a high multiple of the acquired company’s revenue that its financials were almost irrelevant to its value.
A common mistake in identifying potential acquirers is casting too narrow a net. Try listing 20 potential acquirers. Listing the first half dozen will be easy, but most of those are likely more financially-driven than strategic. Building out the list of 20 can lead to a discovery of previously unrealized strategic value in adjacent spaces.
A company in a highly competitive environment is motivated to move quickly to close gaps in its offerings. The trick is connecting during the time when the potential acquirer begins to realize it has to act. Wait too long to engage, and they will solve their competitive challenges through internal efforts, or by partnering with or acquiring another company. Getting on their radar at the right time is critical.
Urgent Customer Problems
An acquirer with a strategic competitive need is caught in a situation characterized by two attributes:
- A high-impact opportunity or threat exists.
- The company has a weak ability to respond.
Nothing will drive the acquirer forward faster than demands from customers having problems solvable by the incorporation of your company’s products, technology, or services. An effective way to validate value to the potential acquirer is to engage them in a proof of concept to solve a real problem.
The presence of an insider relationship is often the single most important success factor in getting and staying on the acquirer’s radar. Developing an internal champion who is already convinced that the companies should be working together for mutual competitive reasons optimizes the odds of success.
If you have an insider relationship with a target acquirer, use it; if you don’t, get one. Having already built a strong industry network will pay huge dividends at this point.
When to Prepare
Early in the life of a company, management has to focus on building a strong business. Deep analysis in preparation for an exit can be a distraction at this point.
Waiting too long to apply exit strategy thinking, however, is also a mistake. Once the business starts to prove itself, begin investing for the future by creating a valuation framework for your company. Build and maintain a list of 20 potential acquirers. Understand what clusters of acquirers need in order to grow. Fill gaps in your offerings to fill those needs and increase your value to potential acquirers.
Start building your exit strategy 12 to 24 months in advance of searching for an acquirer. By the time you decide to enlist an investment banker’s help, you’ll understand the universe of potential acquirers, you’ll have moved into a strong position that maximizes your valuation, and you’ll arm your investment banker with maximum ammunition and motivation.
Competing too hard will kill your business. If you see competition everywhere, you may be strangling your company’s growth.
Working with CEOs and management teams to create growth strategies, I watch for existing practices and attitudes that may hinder growth. It’s challenging enough to launch a new venture or a restart a faltering business without creating internal obstacles that weigh it down. An unrealistic view of competition can severely limit or slow the company’s rate of growth.
A famous CEO mentor was fond of telling me, “If you don’t have a competitor, you don’t have a business.” Competition is a great motivator. If you have a company in a market with no competitors, either the market you’re pursuing isn’t really viable, or you lack the constant competitive motivation needed to keep you at the top of your game, or both.
The diagram above illustrates how your perception of competition can affect your company’s rate of growth. Perceiving no competitors suggests that you haven’t yet identified a winnable market worth pursuing. In this situation, a company constantly chases one-off deals, is too inwardly focused, and may be in too weak a position to accelerate revenue by leveraging external assets through partnering.
The converse obstacle, defining competition too broadly and seeing it everywhere, leads to a lack of focus and an obsession with growing market share one percentage point at a time. A “quarter-inch deep, mile wide” market approach precludes finding a repeatable sales model that leads to higher margins and greater working capital. A better path is to pick one or two close competitors to focus all your competitive energy on.
The bottom line is that an unrealistic view of your company, its capabilities, and its relative strengths and weaknesses vis-a-vis other companies will impede growth. The reality deficit can come from many places, but it falls to the CEO to recognize and remove this obstacle whenever it exists, especially when the CEO is the source. Carefully consider whether you are encouraging your team to view the company through rose-colored glasses (no competition) or constantly raising the specter of competitive doom to motivate them (competition everywhere).
How then do top-performing management teams compete effectively?
- They realize that focusing on competing against too many others weakens their company by draining its resources, so they choose instead one or two closest competitors and focus on winning against them.
- They prioritize “growing the pie” over increasing the size of their slice.
- They stay outwardly focused to learn what the market is telling them about customer demand.
- “Know thyself.” They understand their company’s strengths and weaknesses so well that, when a high-impact threat or opportunity arises that can’t be addressed organically, they create self-fueling partnerships that enable them to respond quickly.
The first (annual) Energy Thought Summit (ETS) concluded its initial run last night. Hosted by Compass Management Group (full disclosure: I’m a team member), the two-day first-of-its-kind event brought together many of the world’s top thought leaders on the state and future of the energy industry.
Instead of “death by PowerPoint” ETS featured numerous panel discussions on diverse topics and issues impacting a rapidly changing 150-year-old industry:
- smart grid,
- electric vehicles,
- big data,
- disruptive technologies,
- and a shortage of experienced workers.
Panel members and speakers featured luminaries in the field, and I am fortunate to know or have met many of them. One keynote session featured Steve Wozniak, co-founder of Apple and now with Fusion-io, who proved to be quite down-to-earth and personable. The other was delivered by Jon Wellinghof, former chairman of FERC, who likely knows more about the industry than the rest of us will ever discover.
It was a treat to meet and make new friends of outstanding leaders at organizations such as GE Energy Management, NIST, Sprint, and esri, as well as smaller groups. Meeting and listening to the thoughts of Dr. Massoud Amin, Chairman of IEEE Smart Grid and a professor at the University of Minnesota, was a very special treat.
Erfan Ibrahim is a widely recognized expert on smart grids, as well as a fellow member of Compass Management Group. His Smart Grid webinar series has a huge following. Hanging out with Erfan for two days was priceless. For example, listening to his discussion with John Scott of NASA on plasma physics was a treat for one who was a would-be rocket scientist at age 12.
Thanks to my charismatic friend and pioneering Smart Grid thought leader, Andres Carvallo, for conceiving and hosting the event. His leadership and broad impact was evident at an event attended by 800 of his closest friends.
And finally, kudos to the team at market research firm Zpryme. They did an amazing job of pulling an excellent event together on very short notice. I don’t know who had the idea to feature live local Austin musicians between sessions, but it was an inspired move that gave a unique flavor to this “not-just-another” conference.
Looking forward to ETS 2015!
Although I’m not a professional futurist, it’s hard not to notice commonalities found within hundreds of conversations with diverse teams and individuals who are busy defining new businesses. Five interrelated trends seem to be rapidly changing the face of business by disrupting existing models:
Deepening Technology Dependence - Such an obvious observation certainly won’t garner me any futurist credentials. This reliance first began decades ago with large enterprises, but now even the smallest incorporate multiple forms of technology to increase their efficiency and effectiveness. As technology consumption increases among small companies, their influence on the evolution of new technologies will continue to increase.
Ubiquity and Mobility Enabling Distributed Operations - This second trend may be having the most profound impact. If you’re seeking an opportunity to form a new business, simply examine businesses that remain highly centralized and ask, “What if we broke this into parts that communicated with each other and were accessible by mobile devices?” You’ll find that opportunities abound in industries as diverse as utilities, healthcare, and manufacturing.
Loosely Coupled Systems - The decades-long conflict over the efficiency of deeply integrated systems versus the flexibility of modular systems is over, and the winner is… both. Distribution of function across reusable modules delivers economies of reuse. Loosely coupled systems employ web-based connection mechanisms that allow rapid communication while avoiding dependencies that often slow development.
Discovering Trusted Vendors - Large enterprises have maintained their dominance for decades because of their reach across diverse geographies and economic domains. Better solutions from smaller companies have eventually been acquired by companies could successfully sell into the huge bases of customers who’d grown to trust them. Finding a trusted vendor now has evolved into searching the world for products and services that match our requirements, and trust can be built based on massive and readily available customer ratings.
Increasing Irrelevance of Centralized IT - While a highly respected friend’s belief that IT groups will disappear may be overstated, The centralized IT group’s impact on business priorities will continue to diminish. Technology has become so central to distributed business units that they risk falling behind competitors if they wait for or look for direction from IT. The issue is too central to their success to delegate it.
These trends and their effects are intertwined, reinforcing, and multiplicative. Awareness of them provides a context for both evaluating new business initiatives and estimating the life expectancy of existing enterprises.
CEOs rarely (never?) google to find a consultant with ideas to accelerate their business. To help a CEO with strategy, you first have to get on his/her radar, then bring credibility to the initial conversation. The relationship always begins when a CEO tells a mutual friend about a particular business challenge, then that friend introduces 20/20 Outlook as a reliable and trusted source of breakout strategies.
Earlier this month, 20/20 Outlook LLC celebrated its fourth anniversary. While it’s hard to believe it’s been four years, it’s easy to understand enables success. In a business that relies 100% on referrals to gain new business, having wonderful friends and associates means everything. Thank you!
NOTE: In December I started sending the Accelerated Vision CEO Digest once a month to about 400 CEOs and a few other friends. It shares valuable articles of interest to CEOs in a rapidly consumable format, along with an inspirational saying or two. If you’re a CEO (or a wannabe) who’d like to be included, send a note to firstname.lastname@example.org.