Jack Palance and Billy Crystal in the movie “City Slickers” spent no more than 30 seconds on-screen to provide the best advice you could ever receive about your personal or business life. Here is that exchange.
Jack Palance: “Do you know what the secret of life is?”
Billy Crystal: “No, what?”
Jack with one finger raised: “This!”
Billy: “Your finger?”
Jack: “One thing. Just one thing. You stick to that and everything else don’t mean shit.”
Billy: “That’s great but what’s the one thing?”
Jack: “That’s what you’ve got to figure out.”
Absolutely brilliant! I would have altered the question slightly. “What’s your one thing?” It is the simplest, most difficult question in the world to answer…for yourself or your business. Why? Because it takes about a nano-second to start adding new things - all the while thinking we are adding value. The concept is far from new. Literature abounds with advice on sticking to one thing and the inherent benefit of focus. “Differentiate or Die”; “Blue Ocean Strategy”; “Made to Stick” and almost any book on branding and marketing extols its’ virtue. Personal branding and the concept of the “Elevator Pitch” also have roots in the question.
In my former position as VP marketing for one of the largest Consumer Packaged Goods companies, I had occasion to get advice and counsel from some of advertising’s best and brightest creatives (the people writing the ad copy). In advance of setting out to create an advertising campaign, the client and agency would detail a Creative strategy. The core of that document was to answer the “one thing” question. “What is the problem our product or service is solving for our target group?” Then, what are three “reasons” why or points of proof we can provide to the consumer/customer that will help convince them of that brand benefit.
It was in one of those meetings that I was first taught about the “one thing”. The head creative was seated beside me and was listening to both of our teams discuss the creative strategy. Finally he let a small groan of frustration out and leaned over. Under his breath he said, “Oh to have the freedom of a tightly written strategy.”
“What do you mean?” His answer helped me understand the power of one thing.
“It sounds easy when we all sit here in this room pontificating about the benefits of the product, the customers and the tremendous insight we’ve got about them. However, when we turn off the lights and my team and I are back at the office we just get confused if the brief isn’t focused. Think about it. WE have to figure out what’s important and what’s not? What takes priority? How much time and energy should we dedicate to communicating the messaging? What messaging? The list goes on. More means less.”
is that more evident than in the people I meet often (and unfortunately) going through what’s politely called “Transition”. A change in career that’s usually not of one’s choosing. Virtually all suffer from the fatal flaw of not communicating clearly their “one thing”. Truth be told, I’m just as guilty. Meet someone for the first time and I find myself spitting out a paragraph when asked what I do. Ideally, the answer should be mind-numbingly simple and arresting. It’s the lightning bolt.
One of the CEOs with whom I work, gave me one of the best examples of a “lightning bolt” the other day. Having survived the hallowed halls of corporate life, he was now the head of a smaller organization trying to grow. They definitely needed a plan so he sat down and did the natural thing. Being from a larger company, he outlined the Vision, Mission and Values of the company and proceeded to share those for input with his staff. After two hours it was clear he wasn’t hitting the ball out of the park. Thankfully, one of his hourly workers provided the lightning bolt.
“I don’t know about you” said he, “but all I want to do is get big enough to move out of this place!” To his credit, my CEO ran with this input and the focus of the “Vision” was “Big enough to move!” Now, everyone got it and they then spent the time talking about what needed to happen and where to focus to be “Big enough to move.” Simple. Motivating.
Finding your “one thing.
Most people feel that the discovery process starts with self-reflection. I disagree. It starts with an outside-in perspective from those who know you. Perception is reality.
those trying to understand their personal “one thing” ask your closest friends and family. Get them to answer a couple of questions on your behalf.
“If you had to sum me up in one word, what would that word be and why?”
“What do you value most about me?”
“What’s my strongest quality?”
At minimum, you’re going to get some great and sometimes surprising feedback. On the other side, the feedback is going to help focus you on what your “market” believes you do best.
For those of you that are trying to answer the question for your business, the questions work virtually the same way.
A Jack Palance said it so eloquently, “One thing. Just one thing. Stick to that and everything else is just shit.” So what’s your “one thing”?
To give credit where credit is due, I borrowed this from an excellent book by David C. Baker which focuses on and is titled, “The Business of Expertise”. While written primarily for those in the service business, his thoughts apply to virtually all businesses.
Focusing on execution rather than strategy invites challenges.
1. Implementation-only focus invites demon customers who put their emphasis on price and is usually lower margin business.
Implementation is more easily copied, inviting more competition.
Financial risk may be more heavily concentrated in execution. (HR & working capital requirements are higher).
4. Deadline pressure can be more concentrated. Often, drop dead dates are problematic because of client-initiated changes or lack of adherence to process.
5. Winning financially in implementation requires high efficiency and low cost – a difficult model in perpetuity.
Baker’s advice to focus on selling strategy mirrors my own research conducted for a Fortune 100 firm. The research was designed to help the firm understand what their clients valued most from a customer relationship. I completed approximately 30 C-level interviews which provided a very consistent response. The answer was simple. The greater the number of ideas brought forward to consider in service of their business, the more they valued my client. The currency they most respected and rewarded was ideas. Execution, while important, was not a differentiator for them. It was table stakes.
idea of selling your thinking, not your doing has broad implications for your company’s brand and how to position yourself through all of your out-bound marketing elements. As homework, review your Web Site, Social Media content and the other customer touchpoints including employee communication. Do they focus on thinking or doing? Baker describes the customer touchpoint as a two roomed home with one entry point. door through which your customer should pass is the thinking/strategy door. y will see your excellence in execution once into the house but you will have elevated your offering by starting the conversation in a higher place.
An article in Toronto’s Globe and Mail this morning caught my eye. It was a piece reviewing a book by David Burkus entitled “Under New Management” which espoused some contrarian thinking about leadership and management. While there were some interesting ideas proposed, it was the concept of listing management techniques that run counter to today’s workplace axioms that intrigued me. So, with no further ado, here are a couple that I’ve come up with from my experience as both Executive and Coach. I’ll bet you have a few to add to the list yourself or at least have some commentary on those I’ve outlined in this note.
1. Ditch the “Vision” exercise for your business. Think Destination.
About a million years ago I was responsible for leading the process of building the strategy of a very large organization. The prevailing academic view was to start with the creation of a Vision for the organization and thereafter to engage the organization in its pursuit. While laudable as an overall exercise to create dialogue, the unfortunate outcome was a tremendous amount of navel gazing, time and lofty words that meant little to people who had been outside the process of creating it. Since those days, my preferred route is to talk about a destination in combination with a defined timeline. One great example of this came from a worker on a production line for a mid-sized manufacturing client of mine. “I just want to be big enough to move to a new location!” he offered after sitting through a navel - gazing Visioning exercise at a planning meeting. To credit the management, “Big enough to move” became the destination. Credible, believable, simple and desirable. Much more effective than self-absorbed fancy words on a page.
2. Fire Your Worst Customers.
The cost of having these soul suckers hang around goes well beyond merely the margin hit you’re probably taking because of their focus on price. These same customers also require an inordinate amount of your focus, resources and management time. Find a way to rebalance the resource/effort equation and if that doesn’t work, get rid of them. Of course this doesn’t mean that it’s necessary to confront, simply changing the pricing relationship at your next contract renewal will suffice. They’ll either put up or shut up by going away. In either case it will be a much better thing for your organization than extending the status quo.
3. Show it, don’t say it.
Somewhat akin to Vision, the definition of the values of an organization has received a fair amount of airplay in planning circles. The Plexiglas list of Values hung reverently in the office foyer for all to see has been ridiculed by a few of late. It’s not that this is wasted discussion. The issue is that the whole exercise loses power when reduced to a laundry list of superlatives posted on a wall. Having been through a countless number of these exercises, my experience is that the end product of 1000 of these processes yield 999 with largely identical words. Words like: Leadership, Empowerment, Teamwork, Innovation. The exercise should really be about the personality and DNA of the organization. What makes us unique? What makes some people right for this place and what does not? Some of the most powerful insights come from people outside of the organization. Use them to both help define and test whether you’ve captured the company DNA accurately.
4. Treat employees like the adults they are…give them the straight goods.
One of the most devastating and yet oddly motivational career discussions I’ve had ended in me losing out on a promotion to someone else. I was called to the President’s office for a career discussion. I had been a key leader in a merger between two large packaged goods companies and with it came an opportunity to run one of the new divisions. The President sat me down and got right to the point. “We’ve been very impressed with your work with the merger” he began. “So much so that I want you to know that we have been considering you for the new role as Division lead. I also want you to know that some days your name was the top of the list, some days not. At the time I made the decision, it was not. That doesn’t mean that your name won’t come up in future. Just not this time. I also want you to know that your name may never come up down the road. I can’t predict the future.”
Wow! He had let me down gently by praising the work but also been brutally honest with me about the road ahead. I came away feeling impressed. He had some tough news to share and did so with integrity but didn’t sugar coat or make promises. Give them the straight goods!
5. Share the numbers.
Many of the business owners I meet have an aversion to sharing the numbers with their employees. There may be a few select inner circle folks in the know but the list is very small. There are lots of reasons given for keeping the stopper on the financials. Competition. Compensation. Confidentiality. (Sometimes embarrassment given small returns). Armed with the truth, your employee base can become a vast resource of cost, revenue and process improvement! Stephen Covey said, “What gets measured, gets done.” If you aren’t giving some financial transparency to your employees, they can’t help. And in that case the real loser is you!
A.G Lafley, the former CEO of Procter and Gamble wrote a seminal piece entitled “What only the CEO Can Do.” published first in 2009 by the Harvard Business Review. In it he outlined the unique role the business leader has in preparing and guiding the organization into the future.
“The CEO alone experiences the meaningful outside at an enterprise level and is responsible for understanding it, interpreting it, advocating for it and presenting it to enable the company to respond in a way that enables sustainable sales, profit and total shareholder return growth. That sustained growth is the CEO’s responsibility and legacy with inward focus the enemy of growth.” In my words, the business leader needs to understand their role as being the high beams for their organization. The following outlines five critical questions to ask and answer to help position your organization for sustained growth.
1. What would an outsider do?
The clearest view of you or your business comes through the eyes of others. An exercise I employ with some regularity with my clients is to ask them to role play as potential purchaser of their company. They are charged with the task of identifying a brief summary report on the company – the towering strengths which argue for acquiring the company and also the key challenges and concerns which could be either deal breakers or which would markedly reduce the attractiveness of the deal. The exercise helps to create a view of the organization which markedly reduces the amount of internal fog promoting a stronger focus on both strengths and challenges in the development of the forward plan.
2. What does not fit?
Look at your business products, services and customer base. Each may be attractive individually (Note! If you haven’t a good understanding of your returns by product, service or customer…you must. I’ve seen profits double and margin triple in businesses merely through better understanding and acting on where the money is made or lost) but do they create value collectively? Do they make sense together and create value beyond the individual pieces?
3. Where’s the money?
There are really only two parts to a planning process. This question is the first. The second relates to execution which of course is “How can we get it?”. Although simple, this question forces a deep inspection of markets, growth trends, competition and regulatory environment to name a few. It also considers the impact of business models past and future. Many a business and leader would have been well served to delve deeply into this question prior to committing to plan and action.
4. Is our organization resourced to deliver the plan?
This answer to this question could well be delivered through the role playing exercise I noted earlier. It is one thing to dream of a new or altered path to the future. It is quite another to recognize that you may not have the internal wherewithal to get there. One of the most difficult discussions I have with business owners is focused around the capabilities (or lack thereof) of their infrastructure and people. Often, it takes an outside view to put the microscope on the organization and to identify the changes needed or skills added to deliver a different future. Larger firms also struggle to see their internal challenges clearly. Many in search of growth, fight the bureaucracy and strength of inertia protecting the status quo. One way to deal with this is to ask a corollary question. Ask yourself what your business would look like if you could design it from scratch.
5. Can we copy someone?
The old saying that there’s nothing new under the sun is true. As Lafley observed, your role as leader is to scour the external environment at an enterprise level for opportunities and trends which your organization can capture for sustained growth. Too often leaders focus on “like” businesses or markets. I see this phenomenon often when discussing the value of peer mentorship. Statements like “They aren’t close enough to my business to help me” turn quickly when they realize in group sessions that all businesses have a common set of challenges. There is tremendous value in understanding business and markets which at first glance seem unrelated. Having a business model to follow trumps going it alone every time. A side benefit is that often, the path is much easier for the organization to follow if there is an example that brings the future to life.
While these questions are by no means, an exhausted list, they should help you and your organization to see more clearly and thereby improve your odds of meeting the ultimate goal of sustainable g
The quote above was my answer to a question from the floor of a seminar I was running on building a successful, valuable and transferable business. Through conversations with over 1000 business owners and their trusted advisors, this one key element has come through qualitatively as the most important bedrock for company success. Get your people right and the likelihood of your success skyrockets. Unfortunately the reverse is also true regardless of the strength of your company position, product or service.
qualities then, should the business owner or executive be looking for and expecting with their employees? I submit for your consideration a compilation of traits drawn from both my experience in my role as both Fortune 500 operating executive and mentor and coach to over 100 privately held businesses. Someone who exhibits these in the majority is a leader and employee to be cherished!
1. I have high confidence that you have the leadership skills & commitment necessary to lead your team to where we want to be in three years.
Gretsky has often been quoted as saying that his job was to pass the puck to where his teammate was going to be, not where they are. Great leaders know both things. They understand where the company is going and can work to get their team there.
2. You understand that leadership development, including your own, is a continuous learning exercise. You are dedicated to development…yours and the others in the organization.
The best role model is someone who shows they care about leadership development and starts with themselves to prove it.
3. I have confidence that you and your team will execute brilliantly. In the end, great strategy doesn’t make for success. It’s about great execution and attention to detail.
4. You come with solutions, not problems. Great leaders take it on themselves and their organizations to deliver when the business turns sideways.
5. You exercise great judgement, and can focus you and your organization on the right things at the right time.
There will always be a myriad of things needing to be accomplished included in which are things less critical. Great leadership requires strict priority is given to those things that are important to the longer term success of the business in favor of the imminent but less critical.
6. You have a sense of urgency that matches the business situation.
7. I’d trust you to meet with our most critical constituencies in my absence.
There are really are no appropriate words for just how spectacularly awful Donald Trump is as a leader. And a person I might add. Starting there, I wondered whether anyone in academia had studied the characteristics of poor leadership. It turns out that Sydney Finkelstein, a professor at Dartmouth’s Tuck School of business has done just that. Summarized below are some of his findings which will come as no surprise. Just think of how Trump leads and you’ll be able to draw any number of parallels. Finkelstein’s work was informed by studying over 50 companies and conducting over 200 interviews to ascertain how and why those companies (think Enron) became complete failures.
From an overall perspective, the work determined four conditions within which business failed. These include new ventures, dealing with innovation and change, managing mergers and acquisitions and addressing new competitive challenges. Not surprising. Further, he found that failure was caused by four patterns of destruction that pre-dated the failure.
· Flawed executive mindset that throws off a company’s perception of reality.
· Delusional attitudes that keep this perception in place.
· Breakdowns in communications systems developed to handle urgent information.
· Leadership qualities that keep a company from correcting a course of action.
Here then are 7 of those qualities. All of the leaders who presided over spectacular failures exhibited at least five. As you read them, think of Trump or your worst boss. It helped me bring them to life!
1. See themselves and their companies as invincible and dominating their environments.
2. Identify so completely with the company that there is no clear boundary between their personal and corporate interests.
3. They have all the answers.
4. They make sure they have 100% support, ruthlessly eliminating anyone who might undermine or challenge their efforts.
5. They are consummate spokespersons for themselves, devoting the largest portion of their effort to managing their image.
6. They belittle and downplay difficult obstacles and environments.
They rely on strategies and tactics that made them and/or their companies successful despite new information and competition.
Finally, Finkelstein offered up one question to ask to determine whether you are facing a spectacularly unsuccessful leader. “Is this Leader so aggressive and confident that I don’t really trust them?” Sounds like Donald to me!
I recently polled a group of over 100 CEOs and Business Leaders, asking them the questions that keep them up at night. Here are the top seven with very brief commentary. I hope these questions will be an impetus for further growth in your business.
1. Have we enough cash to survive a major economic or business broadside?
cash is important for the larger business, it is critical for the smaller company or start-up. The most common issue I see particularly with younger and fast-growing companies is lack of cash. Err on the high side if seeking funding and ensure you have a tight handle on cash reserves and needs. Nothing can sink a company faster than insufficient cash.
2. Which employee(s) require replacement that we have not addressed?
The blatant misfits are easy to deal with. The tough cases are the employees who no longer fit because they lack new skills required or are inconsistent performers. In larger companies mediocre employees can also hide in plain sight. A quick exercise will help weed them out. List your direct reports. Give them a rating of 1 to 10 with 10 being superb. Sixes and below require action. No company can afford to provide harbour to mediocre employees but especially so the smaller the company.
3. Do we deeply understand our target customer and the one core benefit we provide to them?
are two concepts woven into this question. A target customer and a single, compelling benefit. Too often companies allow themselves to broaden the definition (if they define at all) of their target customers as well as the benefits provided. With breadth comes lack of specificity resulting in whitewash for your action and communication. Broaden at your peril. You will stand for everything and nothing in the end. The tighter you can focus, the more relevant , compelling and defensible your position will be.
4. Is each of our employees crystal clear on where our company is going and their role in helping to get there.
the need for direction, the biggest leadership shortfall is the belief that employees understand. The more effort expended to educate, converse and gain input, the higher the quality of the engagement and action.
5. Which customers do we need to fire?
Each of us has the Pareto rule when it comes to demon customers. It’s likely that 20% of them are causing 80% of our pain. Conduct a regular review to see them and then take action once you’ve identified them.
6. What is the single greatest impediment to our success and what are we doing to deal with it?
It’s a commonly known secret among consultants that usually the answer to a strategic issue or problem is already known within the organization they serve. It’s often the elephant in the room. Ask yourself what issue your organization is avoiding and you may just strike pay dirt.
7. What aren’t we seeing that could maim or kill us?
Most organizations (and individuals for that matter) see the world through their own lens. Real sight comes from the outside-in not the reverse. As Robert Burns declared, “O would some power the gift to give us to see ourselves as others see us.” Practice this and you or your organization will never be blind-sided by market or competition.
February of 2017 Kraft Heinz bid $143 billion for Unilever PLC . The cultural differences between the two entities couldn’t have been more different. On the one side was Unilever. CEO Paul Polman and its Board had shifted course dramatically in 2009 to favor a longer-term view on corporate growth and development which included refusing to post guidance or quarterly results. Warren Buffett and 3G, the primary owners of Kraft Heinz, were focused on action to drive up share prices. Savage cost reduction was the primary and well documented operating procedure . After only two days following the rejection of the offer by Unilever’s board and recognizing significant other headwinds, Kraft Heinz smartly pulled the deal off the table.
stark contrast between the approaches of the two companies was particularly interesting to me as a spectator because of my former employment at Kraft. During a 25 year career I saw the company morph from a fiercely independent and proud entity (General Foods) to a conglomerate which had been financially engineered in the name of maximizing shareholder value. General Foods, Kraft, Nabisco and Cadbury had been merged. company then split to form Mondelez and Kraft with the latter subsequently merged with Heinz to form the most recent corporate iteration Kraft Heinz. A lot of splicing and dicing which no doubt created a lot of money for a select few but which saw a tremendous amount of employee displacement and little to no improvement in performance. Which brings us back to the myth of maximizing shareholder value.
The mantra and focus on maximizing shareholder value has gradually replaced the stakeholder model (which sought to balance the interest of workers, shareholders and the larger community) in the mid 1980’s. This shareholder ideology is now so pervasive that it’s hard to believe that so few years ago it was non-existent. The original theory of a focus on share price as a key corporate metric traces to Milton Friedman in the early 70’s and followed on in a paper by Michael Jenson of Harvard in 1976. In the mid 80’s it was supported by than Jack Welch (first nicknamed Neutron Jack while re-engineering GE by doing away with a quarter of its workforce). The concept was also popularized and then vilified by Michael Milken of junk bond fame. Still, the ideology didn’t die. It grew stronger.
Most studies now conclude that there is no evidence to support that the ideology of maximizing shareholder value has been effective. The opposite is true. Studies point to this ideology as a prime culprit in the decline of U.S. public corporations and the current sad state of the U.S. middle class. From 1997 to 2008 public companies listed on U.S. exchanges dropped by half.
focus on shareholder value and share price as a primary executive compensation metric has created a monster. Bill Lazonick, President of the Academic Industry Research Center, offers some additional startling facts from research involving the top 500 companies listed on the S & P conducted from 2001 to 2010. During that time a full 94% of the profit generated went to fund dividends and stock buy-backs in order to influence stock price. Put another way, only 6% was re-invested in the operations of the companies. No wonder that the backbone of the US industrial base and the middle class has been eroded so substantially.
U.S. companies are going through a process of financialization, a new term for me discovered in the research for this article. It describes a process which increases the focus on the bottom line to drive profit and thus share prices higher. Capital Extraction was another term used to describe the tactics directed to improving share value. Reduction of sustaining expenses, selling off company assets, employee reductions, dividend and stock buy-backs are all examples of tools used by CEOs to influence stock price. Unfortunately the empirical evidence suggests that these actions create longer-term diminution of stock price and company value. It turns out that short term gain really does create longer term pain.
It’s probably not a great leap to lead one to the conclusion that the current U.S. political situation and populist uprising are directly tied to the development and feeding of the share value ideology. What’s concerning is there is evidence that it is expanding to encompass many of developed and developing countries. Japan, India, the UK and China are catching up. For those of you entrusted with your company’s strategic direction or leadership, it’s time to replace your shareholder value metric or suffer the longer term consequences.
"The difference between God and a Narcissist is that God doesn’t believe he’s a Narcissist”
We all know one. Smartest person in the room. Self-promoter. The arrogant know-it-all who requires an inordinate amount of air-time with little to say that isn’t blatantly self-oriented or self-serving. And the biggest problem? There’s a high probability we’ve just described a few of the traits shared by your direct superior. So now what?
In a seminal Harvard Business Review article in January of 2000, Michael Maccoby addressed the subject of the Narcissist leader. He first observed that there are three basic personality types proposed through Freud’s work. The Erotics (those who need to be loved). Teachers, nurses and social workers would be examples. The Obsessives (Inner-directed, reliant and conscientious). They look to create order and make the most effective operational managers. And finally, the Narcissists. (Independent innovators who seek admiration). The most productive are the strongest leaders, able to think big and create followers. Examples of the productive Narcissist would be Steve Jobs, Bill Gates, Jack Welch. Of course the problem occurs when the coin gets flipped and we encounter the dark side of the Narcissist. It turns out that in extreme cases, Narcissism is classified as a Mental Disorder by the psychological community. Here is the “Diagnostic and Statistical Manual of Mental Disorder” or DSM–5 for the Narcissist. Don’t be surprised if more than a few appear to hit home. For self-preservation, we’ve all got some Narcissist in us.
· An exaggerated sense of self-importance.
· Expecting to be recognized as superior even without achievement that would warrant it.
· Exaggerating achievements and talents.
· Being preoccupied with fantasies of success, power, brilliance, beauty or the perfect mate.
· Believing you are superior and can only be understood by equally special people.
· Requiring constant attention.
· Having a sense of entitlement.
· Expecting favours.
· Taking advantage of others to get what you want.
· An inability or unwillingness to recognized the needs and feelings of others.
· Being envious of others and believing others envy you.
Maccoby added to this list, a summary of the weaknesses of the Narcissist leader.
1. Overly sensitive to criticism.
2. Poor listening skills. Not wanting to hear opposing points of view or thoughts.
3. Lack of empathy. This may work in times of extreme change, but otherwise not.
4. Distaste for Mentoring.
5. An intense desire to compete. Games are not games but tests of survival.
something of a tongue in cheek, Maccoby also noted that there was very little in the way of literature about how to deal with the Narcissist leader because few are really interested in looking inward.
The worst part about the foregoing attributes is that those exhibiting these types of behaviours are blind to their impact on others and surprised when it catches up with them as it most often does. Over time they find themselves alone.
Narcissistic Leadership affects large and small company alike. Entrepreneurial ventures are particularly susceptible because they rely so heavily on the direction of the owner/founder. That individual wields two big sticks: the experience acquired while building the company and the ability to effectively squash dissenting opinion. Too often, the company’s actions are directed toward the preconceived notions of the founder with disastrous results.
Thoughts on Dealing with Narcissist Leadership:
· First and foremost, if you can’t stand it. Leave. You’ll both be much happier.
· Establish a symbiotic relationship. The marriage between the Obsessives and Narcissists can be a very strong and productive bond. Someone needs to stick to the knitting, get stuff done and organized. The Obsessives provide that value and the ability to keep the Narcissist rooted in reality.
· Stick with facts. Whether speaking to new information about the corporate environment or an individual, outside –in information is the most powerful. The objectivity offered by a trusted 3rd party will also increase believability
Don’t go it alone. There is power in “we”. I often counsel leadership teams to step up as a group rather than try to tackle a leader one on one. It’s a lot easier to shoot the messenger if it’s only one person.
· Take the Narcissist out of their comfort zone. Subject experts are a great way to introduce new ideas or infuse knowledge into the mix and start the wheels of change moving. The use of case studies which illuminate similar challenges has the advantage of being both authoritative and non-confrontational
I got a frantic call just the other day from an entrepreneur that had built a new internet start-up from nothing to something. He’d just been given an ultimatum from the VC’s that had been brought into the firm. Relinquish the CEO position in favor of one of their picks (and accept another position) or exit the firm. His question to me? “Should he fight it?” The answer of course was that there was really no fight to be had. He’d already set the wheels in motion when he accepted the resources of the VC in the first place. The only thing he had to decide was whether he should stay with the firm or pursue something else. And that was totally up to him.
What happened here has been a long-time focus for Noam Wasserman of Harvard University starting with a paper entitled “Rich versus King” which was first published in August of 2006 and his most recent work, “The Founder Resource-Dependence Challenge” March 2014. It has also been a key focus in my consulting practice with small and medium sized companies for the last few years and a fundamental take-away from my book, “The Success Cage” launched October of 2013. It’s this. Any business owner has a fundamental question to answer for themselves and their businesses: Do you want to maximize your wealth or control of your business? You can’t have both.
The issue can be gut-wrenching for any business owner. The vast majority have built their businesses from scratch into good companies which provide a decent income for the owner and those associated with the business. To grow beyond the owner/operator-managed company requires different skills and resources than those which brought it success to this point. Two popular sayings come to mind… “What got you here won’t get you there.” “To grow you’ve got to let go.”
The brilliance of Wasserman’s work is that he’s put some hard numbers to support these common refrains. The first work referenced above studied 457 private ventures in technology. Lack of industry sample diversity aside, it came to one major conclusion: The more decision-making control kept by the business owner, the lower the value of the owner’s stake. Wasserman’s more recent study drew from a much larger sample. He used a dataset of 6,130 American start-ups and concluded that retaining full control diminished the organization’s value by an average of up to 58%.
Within the article, he also reprised some important associated observations from others studying the subject. “After the starting difficulties have been overcome, the most likely causes of business failure are the problems encountered in the transition from a one-person, entrepreneurial style of management to a functionally organized, professional management team.” (Hofer & Charan 1984, pg. 2) In order to grow, the needs of the organization move from the specific knowledge needed to build a product or service offering, (in my parlance “high technical” skills) to the more generalized knowledge and processes of managing a more complex firm (“high leadership”).
The key steps along the organizational journey pose a continuous trade-off between attracting the resources (capital & people) required to grow and build company value & being able to control decision-making. The key question for the business owner? In the end it comes to this. What drives you? Is it the need for maximizing wealth or the need for control? The two do not go hand in hand. And without going into a lot more detail…my experience is that most side with the latter. It’s head versus heart and usually the heart wins.