Mandela Story Offers Key Business Principle

In reading and listening to stories of Nelson Mandela’s life, one in particular jumped out at me. F. W. de Clerk told of Mandela’s focus on ensuring that Afrikaner desires were reflected in the agreement they negotiated to break up apartheid. Mandela apparently insisted that forming a successful partnership required adequately addressing the opposition’s needs, so he probed de Klerk to learn what they were.

Hearing this while driving away from consulting with a CEO and his leadership team about how to create partnerships, I found it fascinating that a political leader embraced a powerful principle that many business leaders miss. Strategic partnerships are often underutilized as a path to faster growth, and making them work requires the kind of transparency and active listening suggested by this story.

Leveraging another company’s resources (e.g., technology, branding, geographic presence) can accelerate growth (e.g., product development, market visibility, revenue), but three obstacles face any brave CEO who decides to drive a truly productive partnership:

  1. Stories of unsuccessful partnerships abound.
  2. Doing it right requires a high level of transparency.
  3. Deciding when to partner requires deliberate thought.

Stories of failed partnerships leads many CEOs to see diverting resources from organic growth to partnerships as overly risky. In fact, without adequate planning and process, they’re right. On the other hand, consider the huge payoff from a wisely crafted partnership like the one Apple consummated with AT&T to launch the iPhone. Apple got accelerated distribution into a large and growing customer base, while AT&T used the hottest product on the market to accelerate the growth of its base for several years before its competitors gained access to the iPhone. (By all accounts, Apple approached Verizon first but the two didn’t come to terms.)

The second issue of transparency is all-important in the partnership process. When do you play your cards? How many should you show? While controlling information is important in all negotiating, successfully initiating a partnership discussion requires a level of openness beyond the norm that doesn’t come naturally to many CEOs. Minimizing the risk requires investing the effort it takes to identify who best to partner with and how best to advance a compelling offer to them. That knowledge provides the confidence to move more openly toward a growth-enhancing relationship.

Timing a partnership can be tricky, but when two factors are simultaneously present, then it’s time to consider partnering: (1) a high-impact threat or opportunity has arisen, and (2) your company’s ability to respond is weak. In this dual circumstance, gaining access to the resources needed to respond faster becomes a matter of defining your organization’s needs very clearly, identifying and prioritizing a list of candidates with the right resources, and most importantly, being intentional about creating a highly compelling proposition before talking to anyone.

When you finally open the conversation, listen ala the Mandela story to confirm and refine your understanding of their needs in order to uncover where your resources can best help them in their areas of weakness.

Content is King: 3 Steps to Enhance Your Narrative

The recent release of CocaCola’s new corporate site pivots from pushing products to delivering quality content. At first glance, it looked like a cross between CNN and a gaming site.

 

 

 

 

 

 

 

In “The corporate Web site is dead, long live the new corporate Web site,” Buzz Builders’ Michelle Mehl uses Coke’s site to assess the impact of richer web content on corporate messaging. “[The] Web site template of — ‘About Us, In the News, Services, Products, Contact Us, FAQ, a Search Box, Blog, Shopping Cart’ — will no longer work… we all have to start thinking more like publishers, reporters, bloggers, reviewers and authors.”

An all-time favorite book title is Seth Godin’s All Marketers are Liars. Seth’s bottom line? Companies need to create a clear, consistent narrative that others relate to. What CocaCola is trying to do with the new site is to aggregate and present engaging content that forms a narrative reinforcing the image they want to project.

Our immediate impulse to redo our business web site to emulate Coke’s cool presence “cools” once we realize the level of effort it takes, not just to create such a site, but to maintain it. Those responsible for most sites, even corporate ones, can’t afford to invest like Coke does to feed their big engine. However, what emerges is an imperative for smaller enterprises (i.e., almost all of us) to enrich our web site narrative.

To enrich your narrative, consider taking 3 steps that won’t require an increase in marketing staff:

  1.  Add engaging content. “Engaging” means video since that’s the most engaging format available. Instead of writing a 500 word article, make a 3 minute video that is certain to engage many more people.
  2. Change the content regularly. That can be as simple as adding a blog (or vlog) and updating it regularly, whether that’s monthly, weekly, or daily.
  3. Experiment with content. Employ some “disciplined dreaming” to deliberately step outside the usual topics and expand your audience.
Now that you’ve read this far, here’s the same information in a 3 minute video. Even though I’m not experienced with video, it likely has more impact than the written post. You decide.
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Successful M&A Requires a Clear Vision

An astute CEO can often augment organic growth with acquisitions, but a majority of acquisitions fail to deliver expected returns. CEO Carol Koffinke of Beacon Associates says that “60 to 80 percent of all mergers and acquisitions fail to meet their merger goals.” Why do they fail?

Much has been written about acquiring companies’ failure to realize the value they envisioned for their acquisitions and the why’s: a lack of proper due diligence, cultural mismatch, lack of integration planning, unforeseen market factors, etc. However, of all the possible reasons for failure, M&A experts put the lack of a clear vision at the top of the list.

Source: “Creating and Executing a Winning M&A Strategy,” Merrill Data Site and The M&A Advisor, October 2013

While a clear vision can accelerate execution of any growth strategy, successful M&A demands a level of clarity most companies fail to achieve. Why do companies launch into an acquisition without sufficient vision and planning? Here are the most common reasons we’ve encountered in working with top executives:

  • Some CEOs don’t naturally think strategically. A CEO who’s risen through the operational ranks can end up with a “make stuff, sell stuff” philosophy and a view that strategy is merely a set of slides for board and investors, while in fact, a clear strategy drives revenue and profitability.
  • A CEO can be overwhelmed by the daily pressure of running the business. Periodically answering the question “are you working on or in your business?” can prevent the urgency of daily concerns that distract from the CEO’s paramount responsibility –  increasing shareholder value.
  • Pressure to make quarterly goals can diffuse and erode the shared view of a company’s purpose. A process called business entropy (e.g., repeatedly accepting non-core business) can eventually dilute the strength of a company’s brand and slow its ability to generate new business.

How can a CEO be more intentional about growing the company through acquisition?

  1. Find a way to set aside time to think and discuss new directions. In this new social media world, it’s easy to develop a chronic short attention span. Focused thought is required to create breakout strategies.
  2. Take an honest look to make sure you’re not hanging onto more than you should. How to cross the second chasm, i.e. growing a company from small to big, is described in Doug Tatum’s insightful book, No Man’s Land. Pick up a copy and read it this weekend. (If you think you don’t have time, you need to read it.)
  3. Discuss growth challenges with objective trusted advisors. Use CEO peers at Vistage and experienced consultants as soundingboards to call out any “elephants in the room.” They will help you establish the clear vision needed to drive your acquisition initiatives.

Backstory: What’s the Genesis of Self-Fueling Partnerships?

The word “coopetition” has been around much longer than most people think. I first encountered it when my boss Ray Noorda, Novell CEO, brought it back into use in the early 1990s to describe his insight about the then-emerging market for local area networks (LANs).

Novell was one of a number of companies competing to become the LAN market leader. Ray decided to encourage his competitors to focus on “growing the pie”, i.e. the networking market, rather than continuing to fight for a bigger slice of a small market. We created the Networld trade show (later renamed Networld/Interop) and invited every company related to the networking industry to participate, including our closest competitors. The show rapidly grew to become the largest tech gathering of its time, engulfing Las Vegas for a week every year.

Working in and leading a group of a dozen highly talented people who built partnerships with the largest companies in the industry was one of the most exhilarating experiences of my career. During that time, Novell’s partnership efforts helped it hit a billion dollars in revenue faster than any company to that point. In addition to a network of over 20,000 resellers who depended upon us for a significant share of their revenue, we grew partnerships that aligned leading companies (e.g. CA, Compaq, HP, IBM, Lotus, Oracle) behind our network operating system and encouraged them to develop new solutions for our customers.

Observations made during that time led me a few years ago to coin the term “self-fueling” to describe partnerships carefully constructed to last. Like most useful concepts, the definition of a self-fueling partnership is simple:

“a relationship structured so that positive results for the first party drives it to act in ways that increase positive results for the second party, and vice versa.”

The partnership between ATT and Apple is an excellent example. It lasted several years enabled each to them to capture significant market share. We all owe a debt to the late, great Ray Noorda for pointing the way to self-fueling partnerships by selling the idea of coopetition to the industry.

 

CEO Flow v. Multitasking

In a recent article in Small Business Trends, CEO Curt Finch of Journyx contrasts the benefits of “flow” over “multitasking” in achieving optimal employee productivity. Recent studies show that multitasking can be highly unproductive, while flow is much better:

“As defined by author and psychologist Mihaly Csikszentmihalyi, flow occurs when you enter a state of intense and effortless concentration on the task at hand. It is often referred to as ‘being in the zone,’ and employees are far more productive while in this state than at any other time.”

That made me wonder to what extent the same principle applies to CEOs and how they use their time. Most CEOs are paragons of multitasking. Each day comprises formal and informal meetings and calls that address a multitude of topics across multiple domains. A CEO friend once described it this way: “It feels like I’m walking the halls of the office and people are ripping off pieces of flesh as I walk by. At the end of the day, I’m exhausted.”

As with employees, multitasking would seem to be the natural enemy of flow for CEOs. Of course a CEO must necessarily handle more than one issue at a time, but if you continually find yourself without enough time to adequately address important but not urgent issues, multitasking may be slowing your company’s growth.

Finding uninterrupted time to consider how to grow the company is a common CEO challenge. Achieving “CEO flow” may require a level of discipline above what you’ve applied in the past. Delegating more tasks to your executive team, encouraging them to be more mutually accountable, and becoming more protective of open space in your calendar can enable you to become the chief visionary officer that your company needs.

Are you spending time in the zone that’s needed to create the right vision, or are you always multitasking?

What You Think You Know May Blind You To Growth Opportunities

TexasCEO magazine just published my latest thoughts about partnerships. In addition to correcting myths about partnerships in general, it describes major types of self-fueling partnerships and the series of steps you can employ to accelerate the growth of your business.

As always, let’s hear your feedback, either below or the TexasCEO web site.

 

How Infoglide Enhanced Its Acquisition Options

How does a company get acquired? FICO’s acquisition of Infoglide provides an excellent example of applying deliberate steps to increase the odds and accelerate the process.

CEO Mike Shultz graciously allowed us to describe the backstory in a short case study. Read it to discover what you can do to attract potential acquirers. 

 

>> CASE STUDY: How Infoglide Enhanced Its Acquisition Options

 

 

Is Your Company Geared Up for Growth?

“Gear up” means “to prepare for something that you have to do” or “to prepare someone else for something” (source: Cambridge Dictionary). To assess whether your company is prepared to grow, ask whether your management team has clear answers to 4 questions:

1. Does the company offer something special enough to compel customers to spend money?

The instinctive answer is “of course it does.” After all, a customer base exists and the company is stable, even if growth is slow. But can the management team relate a shared, crystal clear vision of the company, its category, and its primary benefit? The kinds of companies it sells to? The roles of people within those companies that are involved in purchasing? Other unique qualities that differentiate you from competitors? Answers to these questions comprise a company’s strategic positioning, and a lack of team alignment on it leads to huge inefficiencies.

2. How does the company fit into the bigger picture of the market served?

Understanding which companies are competitors and which are potential allies is essential for sales success. Companies often assume competition exists when there may be a chance to partner effectively instead. Understanding the needs of other key companies leads to a clearer understanding of current opportunities, where value exists in your market space, and the potential to leverage the success of potential partners to provide better customer solutions.

3. What relationships with other companies can accelerate growth?

Most CEOs are skeptical about partnering with another company because it’s perceived as too difficult to be successful. While most partnerships fail because of poor analysis, poor planning, and poor management, a well-planned partnership can enable a company to leapfrog its competitors.

4. How can the company operate more effectively to bring the CEO’s vision to reality?

Having the right growth strategy is important, but execution ultimately determines success. Once a company reaches a certain size, growth can be limited by having outmoded or inappropriate processes in place. “We’ve always done it this way” is not an acceptable answer. Outside help may be required to drive the strategy into successful execution.

The chart below illustrates three levels of “gearing up” that a company can find itself in: stalled, moving, and accelerating.




 

 

 

 

 

 

 

Learning how to accelerate your vision and take your company from “stalled” to “accelerating” will be the topic of a subsequent post.

20/20 Outlook’s Third Anniversary

It’s been three years since the launch of 20/20 Outlook as an advisory service for CEOs, and I’ve been blessed with wonderfully rewarding and interesting experiences along the way. By acting as a sounding board for creative business leaders and helping them get clarity about their purpose, value, and relationships, each one has accelerated the quest to achieve his/her business vision.

Recently, Brad Young came into the 20/20 fold as another trusted CEO advisor, bringing with him a whole new set of gifts and talents. His major focus is on initiatives that complete strategies with flawless execution.

Our client discussions cover every aspect of each business, and we often discuss areas of personal challenge and growth. Similar to traditional executive coaching, building trusted CEO relationships has enabled discussions of their strengths and weaknesses, passions, and even the personal search for meaning and purpose. A side benefit that clients have cited is more effective communication with board members, leading to more productive relationships.

Along the way, a wonderful network of people has evolved around us. Each one has generously supported 20/20’s steady growth with introductions and recommendations, suggestions for new offerings, adoption of 20/20 processes, and partnering to help clients. Because of this network, LinkedIn recently recognized my profile as among the top 1%  frequently viewed profiles in 2012.

To our friends and colleagues, thank you for your continuing support!

 

 

Five Disciplined Steps to a Successful 2013

If you lead a business and haven’t yet committed to your resolutions for 2013, here are five ways to start the year off right:

  1. Take Time for “Disciplined Dreaming”
  2. Choose the Right Focus
  3. Find Your Breakout Strategy
  4. Avoid Strategy Mistakes
  5. Move Past the Second Chasm

1. Take Time for Disciplined Dreaming: If you ignored our sole suggestion for 2012, you can redeem yourself in 2013. It’s tempting to work “heads down” all the time, but “heads up” thinking moves your company toward growth much faster.

2. Choose the Right Focus: Key factors in opting to narrow or broaden your focus include available market opportunities, strength of brand, and the company’s ability (e.g. capitalization) to execute, including integrating, partnering, and acquiring. Read more to understand where you stand and where you’d like to move.

3. Find Your Breakout Strategy: If you’re unfamiliar with the term, breakout strategies free your business from current growth-limiting constraints. Even the most visionary CEO may need help in translating a vision for growth into clear, actionable strategies that move the company out of the the plateau it’s mired in.

4. Avoid Strategy Mistakes: In a 2012 Harvard Business Review post, Joan Magretta identified five common strategy mistakes that we believe derive from two common antecedents – lack of clarity and lack of focus. Become familiar with these mistakes so you can avoid them.

5. Move Past the Second Chasm: The most delicate yet most important action for a consultant is pointing out the elephant in the room, especially if it involves challenging the CEO to learn how and when to let go. “Crossing the second chasm does not call for securing a second beachhead. Instead, the challenge is personal: the CEO must modify the way the business operates without losing the uniqueness that created its initial successes.”

Start your year off with disciplined thinking and greatly improve your odds of success.

Happy New Year!

 

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