“It’s Hard to Understand If You Haven’t Lived Here”

When I was recently interviewed for a Wall Street Journal article, answering questions about doing business in Texas came remarkably easy. The interview was nominally about Rick Perry, but almost all our time was spent discussing the state’s relatively healthy job scene.

When asked why Texas is special, I told Dan Henninger about a Brooklyn native and friend named John who worked for me in Dallas in the late 80’s. After having lived in half a dozen cities across the country during his career, he deliberately targeted moving to Dallas when he and his wife were ready to start a family. What inspired him was the attitude of businesspeople in Texas when they lived there once before in the early 80’s.

At that time, the energy sector was spiraling downward at a record pace, but he remembered that, instead of bemoaning their situation, the Texans around him were talking about what they were going to do next. In some cases it meant starting over in new areas of the energy sector, while others were planning how to start anew in other markets. No one spent time crying about their dire situation. The optimism he saw in Texas was like nothing he’d seen elsewhere, so he and his wife deliberately returned a few years later.

My friend Ed Trevis (also quoted in the article) provides another perspective from a non-native Texan. As the long-time CEO of a high tech embedded computing business in Silicon Valley, Ed finally became fed up with California’s overbearing tax and regulatory environment, so he surveyed locations in many other states, looking for the best place to relocate. His criteria included a strong, well-educated labor force, less government interference, and an attractive cost of doing business. Texas came out far ahead in his analysis, and the city of Cedar Park outside Austin provided the perfect place to move his business, which has thrived there since the move two-and-a-half years ago.

To be fair, there are great people everywhere, there are thriving businesses in other states, and there are spots that beat out Texas in one way or another. What is unique about Texas, though, is not only its labor force, its supportive governmental policies, and its low cost structure, but the optimism and collaborative attitude so prevalent among its people. As David Booth, who moved Dimensional Fund Advisors’s headquarters to Austin from California, said, “It’s hard to understand if you haven’t lived here.”

 

Elephant in the Room

The Elephant in the Room

Ever been in a conference room with multiple people where the dialog circles around without coming to closure? It eventually dawns on you that the one big issue blocking a decision isn’t being discussed.  Then you realize why. Now hold that thought.

In Getting Naked, Patrick Lencioni says willing to be vulnerable is a virtue for those of us who advise CEOs and their teams. Calling out the elephant in the room is a prime example. He suggests sharing what your intuition tells you, even at the risk of being blazingly wrong. While you might experience occasional embarrassment, overcoming your fear enables you to provide far higher value over the course of your client engagement.

So, let’s pop back into that meeting where everyone is circling… the reason for lack of progress is obvious – it’s an issue that could humiliate someone or at least cause some discomfort, right? In this case, let’s say it’s a boss with an intimidating presence who has directly or indirectly made clear his or her desired outcome. Everyone else in the group knows the solution is impractical, yet they fear the CEO’s wrath or lowered respect if they point it out.

For a trusted adviser, this is a defining moment. We clearly have a moral obligation to do what’s in the best interest of our client, regardless of personal consequences. While it may be tempting to focus on staying in the CEO’s good graces, being willing and able to directly address the issue openly while maintaining and even growing rapport requires business acumen and emotional intelligence that distinguishes advisers from consultants.

Stuck? 5 “Non-Urgent” Paths to Growth

In companies who have plateaued, the leader may be absorbed with urgent matters like managing finances and addressing operational issues, while neglecting less urgent but critically important issues. In our work advising CEOs, five common “non-urgent” factors repeatedly arise that can hinder or accelerate growth.

Take a few minutes to think about where your company stands on these 5 issues:

  1. Clarify (who are we, and what sets us apart?)   A shared understanding of purpose and unique assets increases efficiency. With a crystal-clear picture of who the company targets, what problems the company uniquely addresses, and other elements of strategic positioning, managers and employees can act faster while reducing the number of meetings and emails; in short, more gets accomplished.
  2. Comprehend (what direction will lead to increased value?)  Finding the right direction in a complex and competitive market accelerates growth. By comprehending the needs of potential acquirers, acquisitions, and partners, you can identify and target those market segments with the highest growth potential.  
  3. Communicate (what key messages will attract prospects?)  In an interconnected world filled with noise, every business needs a brand that associates the company with its unique qualities. Identifying key messages that flow from the strategic positioning and repeating them frequently will reinforce existing customer relationships and open new ones.
  4. Connect (which relationships will help increase our reach?)  Too often CEOs have been burned by partnerships that fail due to poor planning, unrealistic expectations, and unmonitored execution. Self-fueling partnerships with potential acquirers and industry leaders drive new revenue through access to new markets, extended geographies, enhanced product and service offerings, and staff augmentation.
  5. Convince (how can we improve sales execution?)  Too often significant time is wasted on non-buyers. Eliminating them early through rigorous qualifying saves time and money. Based on clear positioning, high potential markets, strong messaging, and self-fueling partnerships, the right qualifying questions lead to rapid elimination of “no’s” and enable a focus on “maybes” – real prospects.

Obviously, other important factors (e.g., operational excellence, product and service strategy, customer relationship management) impact success, but less obvious, non-urgent issues are often the root cause of stagnation.  Dealing with them may be the shortest path to getting your company unstuck.

Poke the Box – Now

Seth Godin’s latest little book (little in size, not in ideas) called Poke the Box takes its name from a “buzzer box” an MIT Ph.D. uncle built for a cousin decades ago. “The box had two switches, some lights, and a few other controls on it. Flip one switch and a light goes on. Flip both switches and a buzzer sounds… A kid sees the buzzer box and starts poking it. If I do this, that happens!

As the CEO of a business, it’s easy to get trapped in a comfort zone that provides a false sense of security (“I have this all under control”). While you’re “running the business” (translation: working on operational issues and managing finance), your competitors are finding ways to deliver better, faster, and cheaper products and services. You can delegate much of  running the business, but the buck stops with you when it comes to guiding the company through the constant change needed first to hold your position and then to grow.

One way to poke the box is to partner with a company that has related interests. Consider a list of companies that (a) could acquire your company someday or (b) would grow your value through an alliance or acquisition. Take the initiative to determine what mutual or complementary interests exist:

  • Expand geographical reach?
  • Extend product life through new capabilities?
  • Enter currently underserved industries?
  • Increase product deployment and service resources?

Once you’re in the swim with a partner, market feedback will flow in and lead you to your next move. If you act, you have no guarantee of success, but if you fail to act, you’re almost guaranteed to fail in the end.

Regardless of what you need to do to grow your business, Godin’s point is that life is a buzzer box, and if we don’t poke it, we don’t learn. All actions in business have risks, but with competitors constantly pressing ahead in a globally connected world, sitting still doesn’t decrease risk – it increases it! Doing nothing cuts us off from feedback that can guide us to value.

Get into the flow now, and adjust as you learn. And read Seth’s book for inspiration.

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