Three Steps Will Recharge Your Business

Washington Post, July 2, 2012: “Outlook for U.S. economy dims as manufacturing shrinks for the first time in nearly 3 years… ‘Our forecast that the U.S. will grow by around 2 percent this year is now looking a bit optimistic,’  said Paul Dales, an economist at Capital Economics.”

Being the CEO requires committing to a “no excuses” life. Others may offer plausible reasons for non-performance, but if your company plateaus, CEO excuses aren’t an option – you must take action:

  • Softening economy? Find a way to take advantage of a changing business landscape.
  • Lengthening sales cycles? Determine how to identify highly motivated prospects.
  • Shrinking margins? Examine whether your company is leveraging its strengths.

Changing your business to address these and similar challenges incurs risk, but the risk of doing nothing is greater. How can you adopt an effective breakout strategy that will recharge you and your executive team?

Here’s a rational, three-step process guaranteed to provide direction: (1) reexamine your company’s true value and what sets it apart; (2) in light of market conditions and competition, determine an altered direction that will maximize value; and (3) identify new business relationships that will open doors to new business. In other words, you need to clarify, comprehend, and connect:

Clarify – Who are you as a company and what sets you apart? What truly separates companies like Apple, Southwest, Berkshire Hathaway, and the NE Patriots from the rest, year after year, is a sense of purpose. Clarifying the organization’s purpose and unique assets beyond a simple mission statement actually increases efficiency. It’s imperative to get this right.

Highly successful companies perform at a high level because they focus on a clearly identifiable market with a differentiated solution. Even successful companies eventually let pressure to increase revenue force acceptance of business outside their primary focus. Since profitability grows by exploiting core competencies, losing focus erodes margins. Having a crystal-clear shared vision of who your company targets and what customer problems it uniquely addresses enables employees to make decisions more rapidly (fewer meetings and emails needed) so more gets accomplished faster and margins increase.

Comprehend – Once you understand your company better, update your understanding of your immediate market. What change in direction will maximize value? Finding the right direction in a complex and competitive market accelerates growth. How do you define who’s in it and who isn’t? What is your relationship to other companies in your space?

One proven method is to pretend you’re selling your company and identify a number of companies that could acquire you and another set that you might acquire or partner with.  By comprehending the needs of potential acquirers, acquisition targets, and partners, you will develop a value framework that identifies high value opportunities.

Connect – Which relationships will increase business the most? Whether your company is B2B or B2C, strong relationships with other companies can help it grow faster. That said, many CEOs have been burned by partnerships that failed due to poor planning, unrealistic expectations, and unmonitored execution.

The solution? Design self-fueling partnerships that continually reinforce each partner’s objectives. Partnering with potential acquirers and industry leaders will drive new revenue by providing access to new markets, extended geographies, enhanced product and service offerings, better branding, and staff augmentation.

By following this three-step process, breaking out of flat growth may be easier than you think.

Thanks for Two

Today is the second anniversary of 20/20 Outlook LLC. Helping visionary CEOs create breakout strategies is enjoyable beyond all expectation. Before the launch in February 2010, experienced consulting friends advised that it would take a year for people to remember what 20/20 Outlook is, then another year for the business to hit full stride. They were spot on.

Nine months into it in December, 2010, opportunities started arriving on their own. I remember getting a call from a California friend asking for help in opening up U.S. operations for a European company, then days later came a request to write an article for TexasCEO magazine. The juxtaposition of two unanticipated invitations was encouraging.

My goal remains to provide cycles to busy CEOs immersed in urgent issues so they can accomplish their important but non-urgent ones. While the original 20/20 Outlook process remains an essential weapon, the scope has evolved into the role of trusted advisor to CEOs, bringing clarity and direction to the dreams those CEOs have for their enterprises.

This post is written to thank the numerous friends who have given continual guidance over the past two years, including CEO clients and other long-time friends across multiple disciplines. You make it fun to learn new ways to think about and address the challenges CEO face. From an A- guy blessed with a multitude of A+ friends, thank you!

2012 CEO Resolution: Disciplined Dreaming!

During the holidays I focused far less on business and far more on family and friends. Pushing back from normal activities gave extra time for some creative thinking. High on my list was reading one of 2011’s top business books, Disciplined Dreaming.

Author Josh Linkner is a  successful serial entrepreneur.  Founder of ePrize, a dominant company in the promotions industry, he’s proven the value of tapping into the creativity of the every individual in his business. His book outlines various processes and techniques that encourage and enable innovation among employees.

But what about the CEO? If the CEO doesn’t dream, the business doesn’t grow. Most business leaders find it easier to work in their business than on it, i.e. to handle urgent operational matters than to focus on important growth initiatives. Incorporating more creativity into a CEO’s schedule demands opening space for it.

Linkner suggests deliberately scheduling “heads-up” time for the creative process. He contrasts the differences between heads-up and heads-down operation:

The challenge in switching between heads-down and heads-up thinking is learning to use the analytical and creative sides of your brain simultaneously. Daniel Pink has suggested that the most successful 21st century ventures will be led by those who combine both modes of thinking, enabling them to spot patterns and trends faster than competitors. The result will be superior products, more relevant services, and higher market share.

The CEO who neglects creative thinking and stays in the comfort zone (solving operational issues and managing finances) falls behind competitors. It takes effort to break out of the zone, and it can require reaching outside the organization.  Successfully implementing the discipline to dream may require creating a network of friends who are regularly tapped for advice and who act as a sounding board. It means joining a group of like-minded CEOs (e.g., Vistage), or leveraging a special board member, or hiring a trusted advisor, or a combination.

Resolve that 2012 is going to be different for your business. Despite a challenging economy, it’s time to take it to the next step. Leave your comfort zone and grow your business by unleashing your own creativity and the creativity of your entire organization, and resolve to do it in a disciplined way.

CEOs, Company Culture, and Performance

How often do you get to sit in on a conversation with a room full of CEOs? That’s exactly what I did recently when I moderated a CEO Roundtable for TexasCEO and Somerset Consulting Group at the Hotel ZaZa in Dallas (great venue).

We brought together seven executives who run significant businesses in varied industries: communications, commercial construction, manufacturing, chemicals, health and fitness, franchising, and financial services. Each is a recognized leader in their respective industry, and each contributed a unique perspective on the topic of the day: how does company culture affect employee performance?

Everyone naturally agreed that an organization’s culture is a key determinant of its performance. It’s also clear that a CEO’s actions and performance are major factors in creating and preserving that culture. So, what is it that determines who is a CEO?

Having accumulated a number of accomplished CEO friends over the years, I’ve concluded it’s not something that can be taught – CEO’s are a breed unto themselves. You can gain more knowledge by taking B school classes and by reading about others’ experiences in being a CEO (shameless self-promotion), but the basic attributes that drive a classic CEO start showing up early in life:

  • the need to succeed in a unique way,
  • the willingness to do whatever it takes,
  • a desire to have a hand in deciding what’s going on around them,
  • and the courage to take responsibility for failure.

The reality of being a CEO is that it requires the level of focus, dedication, and sacrifice that most people aren’t equipped to make. If you disagree, please state your case!

[For more, check out the article about the Dallas CEO Roundtable in the May/June issue of TexasCEO magazine.]

Strategy versus Tactics: One or the Other, or Both?

If you have trouble telling whether it’s your strategy or execution that’s lacking, you are not alone. When we don’t get the results we want, it can be challenging to distinguish whether the problem is what we’re doing or how we’re doing it.

In the Imperial Sugar cover story of the just-released issue of TexasCEO magazine, CEO John Sheptor describes how he did both, making tactical changes to stabilize the company before leading it through a more fundamental strategic transformation. For many CEOs, though, the dilemma is choosing one or the other – should I focus on improving execution or should I change the overall strategy?

Marketing expert Seth Godin offers one way to decide:

If you are tired of hammering your head against the wall, if it feels like you never are good enough, or that you’re working way too hard, it doesn’t mean you’re a loser. It means you’ve got the wrong strategy. It takes real guts to abandon a strategy, especially if you’ve gotten super good at the tactics. That’s precisely the reason that switching strategies is often such a good idea. Because your competition is afraid to.

Once you decide to change the strategy, begin by examining your company’s current positioning vis-à-vis the competition. Most businesses initially have a crisp vision of how they are positioned against competitors, but that vision gets fuzzier over time as compromises are made to land new business. Clearly understanding where you stand now by highlighting current strengths and weaknesses makes it easier to create a new vision for growth.

Are You Working On or In Your Business?

In a recent post, I mentioned that an article I’d written for TexasCEO magazine would show up soon on their web site. Here’s a link to the article and a picture from the party held at Annie’s in downtown Austin to celebrate publication of the current edition.

What Is It About Texas?

A few nights ago, I attended an event honoring the subject of TexasCEO magazine’s current cover story, Clayton Christopher. I met some other amazing people there and have been thinking since about the experience since then.

(Full disclosure: I have an article the print edition that will also be posted on the TexasCEO web site soon.)

The manner in which our country was born resulted in a population that loves being free to follow their dreams, and for 200+ years, millions of other dreamers have immigrated here. Over a 30-year career in high tech, I traveled the United States meeting wonderful people everywhere I went. Living recently in the Detroit area for several years is a prime example where, despite its exaggeratedly negative reputation, I found incredibly intelligent and highly motivated people building new companies and pursuing their careers with great passion.

If you’re a native Texan or an adoptee of this state, though, you can’t escape what a distinctive place it is. You’re deeply aware of the unique loyalty of its residents and the power of its brand. The shape of the state and its flag are recognizable by people living all over the globe. Many people who grew up in and live in other states have affection for those places, yet nowhere else do you find people who so deeply identify with the state they live in. Why is this true?

When I lived in Dallas during the 90’s, I made a good friend who’d grown up in New York City. By fifteen years into his career, he and his wife had lived in six cities in vastly different regions of the country. When I asked how they came to reside in Dallas, he said they had made a very deliberate decision to move there.

The couple had lived in Texas once before. It was during the 1980’s immediately after a huge downturn in the state’s then-dominant energy industry. The memory of how Texans responded to the economic crisis had stuck with them ever since. Instead of the complaints and despair they might have expected, the universal attitude was optimism. The general attitude was “OK, what can we do now?” and people started planning a new business or a new career. When they started their family, they made a conscious decision to move back to Dallas because they wanted to rear their children among people with a can-do, optimistic outlook on life.

Another anecdote: a CEO friend relocated his company to Austin from Silicon Valley in early 2009 to take advantage of  the large pool of available technical talent and the friendly business climate. While those reasons prompted him to move, what also keeps him here is the love of the state’s optimistic attitude which he mentions often.

Targeted at the state’s business leaders, TexasCEO magazine published its first issue in May 2010. Its articles continually reflect that Texas optimism. The current January/February edition focuses on bootstrapping a business. It’s full of stories about people in different industries and different parts of the state who have successfully created new companies.

So what it is it about Texas? What I’ve encountered upon returning after living out of state several years are people who recognize obstacles yet choose to believe they can overcome them with creativity and hard work. Having grown up around people like that is something I truly appreciate.

So for Texas friends, am I way off base? What is it that you like the most about the state?

For non-Texas friends, does this resonate with you, or are all of us Texans just weird?

What’s New for 2011

The move to share the 20/20 Outlook process is accelerating in 2011!

First, we were asked to develop a sidebar article for the cover feature of the Jan/Feb issue of TexasCEO magazine. Watch for a notification here when it’s available, plus a tweet and a LinkedIn update. (By the way, the twitter name is @2020outlook, and buttons for email, LinkedIn, Skype, RSS, and twitter can be found in the upper right corner of the 20/20 Outlook web site.)

Secondly, chapters of a book in process will soon start showing up on a new blog site that’s under development. Each chapter will feature a dialog between a new CEO and their mentor, with each conversation based on a principle contributed by a different serial CEO friend.

After leading companies to success for years, serial CEOs develop valuable principles that don’t often make it into business school classes. Having repeatedly seen the same situations and outcomes, he/she develops “intuition” in the form of simple rules of thumb for how to handle specific business circumstances.

This new site will help aspiring business leaders manage and grow their businesses by absorbing simple yet profound lessons from successful serial CEOs.  It offers these CEOs a chance to give back by sharing these precious principles  with new and aspiring business leaders. Written in the form of a dialog between a new CEO and their mentor, some are amusing and some are painful, yet each offers a  valuable lesson about managing a business to new levels of success.

Just drop an email to bob@2020outlook.com if you’d like to see new chapters as they emerge every few weeks. If you choose to, you’ll be able to interact with the CEOs and others who will comment on and discuss the chapters.

We ‘ll be sure and let you know when the new blog site is ready.

Happy New Year!

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