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Why Are Some CEO’s Lucky, While Others Aren’t?

Have you ever wondered why some people seem so much luckier than others? We all know of the CEO or business owner who always seems to win the big sale, hire the best staff, or make money on deals that others run away from. We talk about how lucky he or she is. We also know CEOs and others who never seem to catch a break. They lose the big sale, their biggest customer cancels a contract, and their best salesperson quits to go to work for his old friend from college. We shake our heads and talk about their bad luck. So we classify people as lucky and unlucky all the time.

General George Patton once said that when waging a war, he would prefer to have a lucky general vs. an unlucky general working for him. Who wouldn’t? But this makes “luck” sound like a skill, i.e., something that can be learned or developed. Wouldn’t it be great if we could increase our luck and that of the people that work for us? Well, we can! How often have you heard someone say: “You make your own luck”?

Max Gunther, the former editor of Time magazine, did a study of the behavior of lucky people and unlucky people, and found that they exhibit distinctly different attitudes and behaviors. He even wrote a book about it, titled: The Luck Factor: Why Some People Are Luckier Than Others and How You Can Become One of Them.

Here are the major five differences that Gunther found between lucky and unlucky people:

  1. Lucky people have large friendly networks of people. The bigger that network, the more opportunities that others can bring to you. If you don’t know a lot of people, the chances of someone tossing an opportunity your way is rather slim. Stay in your office and stop connecting with people, and your opportunities will dry up.
  2. Lucky people act on hunches. When they intuitively see something as a positive opportunity, they act on it, while on the other hand, unlucky people tend to ignore or downplay their hunches, and are reluctant to act on them. It’s not enough for an opportunity to present itself. You have to act on it to take advantage of it. Lucky people do that.
  3. Lucky people are bold. Unlucky people tend to be more passive and afraid to take risk. A lucky person acts boldly (but not rashly) when presented with a good opportunity.
  4. Lucky people know when to walk away. They know when something isn’t working, and they stop wasting time or money on it. Unlucky people tend to keep drilling dry wells and throwing good money after bad, trying to recover sunk costs. Lucky people cut their losses and accept that not everything works all the time.
  5. Lucky people have a healthy sense of pessimism. They know that things can go wrong, and when they do, the lucky person accepts it, and doesn’t anguish over their loss. Unlucky people tend to agonize over losses, and become even more hesitant to try a new venture.

If we study these five traits or behaviors, we can see that people can actually learn to be lucky, or at least improve their luck, provided they have the capacity to change their behaviors.

Look at yourself and your staff. Are you a lucky person? Does your staff exhibit lucky behaviors? If the answer to either of these questions is “no,” you might want to encouraging some attitudinal shifts. Expand your network. Analyze and act on hunches that look like they might pay off. Act boldly and without fear when you sense an opportunity might pay off. If it’s not working, stop doing it and cut your losses. And last, accept that not everything works out the way you planned. But don’t let that stop you from trying again.

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Growing Pains – The Top 4 Challenges Small Businesses Face

Running a business is like rowing a boat upstream. Once you stop rowing, you start to slip backwards. When the company is growing, owners have to be rowing furiously to get the next deal, to sign the next contract, to hire the next A player. If they let go of their focus on the future, the current sweeps them back. There are always things that need to be done in order to keep moving, to ensure growth is healthy and sustainable.
As they begin to grow, small businesses face critical challenges:

#1. Managing cash flow.

Companies can be so successful that they run out of money. As they secure more contracts, make more deals, connect with more customers, they have to produce more of a product. That requires an investment – and then another and another, and those come from your cash. At the same time, they’re not collecting the rewards soon enough.

I was in a situation where I was billing millions of dollars a month for services. Quite a problem, right? But I had to make payroll and pay a lot of expenses, and it was 45-60 days before I collected that money. These are questions that all growth businesses face: How do I pay my people when I haven’t collected my receivables yet? How do I secure a line of credit? How do I run the business so that I not only have profit, I have cash? CEOs need to maintain cashflow projections so they never run out of cash. Managing growth is managing cash.

#2. Hiring the right people.

As they grow, businesses need to surround themselves with employees who can handle the change, the pace, the pressure, the scope. Finding people is hard; finding A players and attracting them to your company – that’s in a whole different ballpark of hard. Jim Collins wrote, “You absolutely must have the discipline not to hire until you find the right people.”

#3. Letting go of the people they have.

I preach to all of my clients: “Hire slow, fire fast.” No one enjoys firing people, especially if they had been there since the beginning. What happens is businesses bring in people who are good at getting things up and running. Now that the company is 2, 3, 4, or even 5 times the size it was two years ago, those people aren’t growing with the company. They actually hold it back because they have hit their level of competency.
But they’ve been here. They’re loyal. They’re nice. They’re friends. There is any number of excuses, but the bottom line is that business owners are doing themselves a disservice if they don’t let these employees go and hire those who can take them to the next level. And, they’re doing a disservice to the affected employees who know they’re not making the grade but won’t leave on their own. They won’t thank the owner for firing them now – but they may in the future when they find positions that value and utilize their strengths instead of emphasizing their weaknesses.

#4. Staying on top of technology and space.

As companies grow, they need to expand their systems and structures: more computers and equipment, updated software, additional office space. The trick is anticipating growth fairly accurately. I’ve had clients move into new office space, for instance, and within a year, they outgrew it. They were saddled with both a five-year lease and the need to rent or buy more space.

And you thought starting a business was hard! Handling growth in a business can present an even bigger challenge for owners. When a company grows, particularly if it’s growing fast, owners face one problem after another. But I’ve been in companies with growing pains and those with liquidation pains. If I had to choose, I’d take the growth pains over the liquidation pains every time.

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Are You Being Seduced by Tools?

It is easy to be seduced by a tool that will solve your most pressing problems. We convince ourselves that weak sales, shrinking margins, inability to keep up with the competition, and more, can be solved with this software program or that new sales force management tool. “If I have that tool,” the CEO thinks, “I’ll have what I need to improve and gain an advantage.”

Except that such an all-powerful tool doesn’t exist. While you do need to evolve with technology, it is equally important to recognize that a tool is not a solution. Solutions come from people, and the most impressive, sophisticated, feature-rich tool is useless in the hands of someone who won’t leverage it. If I give a monkey a hammer, he’ll destroy my house. If I give a hammer to a master carpenter, he’ll build me a beautiful new home. The tool hasn’t changed, only the hands we put it in.

The main problem with tool seduction is that it means executives or managers are looking outside their organization for answers, rather than to their people. They are abdicating their own role in the problems that have developed, and potentially tolerating incompetence from their team. It is like people who are trying to lose weight, and instead of exercising or eating better, look for that miracle cure in a pill that will magically transform them.

True Solutions Take Work

The truth is, the right tools can help with all of this, but they don’t take the place of solid leadership. SharePoint, for instance, a web-based file-sharing program by Microsoft, offers a tremendous range of features. It allows users throughout an organization to access information, communicate, and manage data efficiently. It’s a tool. It is part of a solution. When leaders train their employees, who then share, edit documents, and publish content, the team can become more productive. But the program isn’t going to make that content any better! Only the workers can do that.

There’s an old saying, “A fool with a tool is still a fool.” You can get all the tools you want; if you don’t have the people to leverage them and make the right decisions about and with those tools, they are as useless as your 1980s Commodore. Too often, we focus on the tool and not the people who will be using them. When that happens, these “solutions” have relieved you of nothing in the end but some time and money.

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8 Characteristics of Great CEOs

Over the years, I have been able to work with, observe, and coach really great CEOs. It has become obvious to me that these great CEOs differentiate themselves by exhibiting certain characteristics that make them successful. My observations have led me to conclude that there are eight characteristics of successful CEOs. Here is what I found:

  1. They work hard to make a positive impact on everyone they meet.
  2. They treat others with respect, and because of that, they have large networks of people who respect them as well.
  3. They consistently surround themselves with “A” players who challenge them and elevate their game.
  4. They are realistic enough to realize that not every idea works out, so they will quickly pivot to another idea rather than giving up.
  5. They are relentless in their drive to overcome obstacles and adversity.
  6. They are willing to take risks when others would have walked away.
  7. They hate to lose more than they love to win.
  8. They love giving credit to others, and always show their appreciation for the contribution others make to their success.

You can call these what you like…principles, characteristics, or virtues…but keep in mind that they are powerful factors that contribute greatly to success.  If you can internalize and practice these characteristics in your role, your chances of becoming successful will be greatly enhanced.

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The 6 Fundamental Axioms of Leadership

An axiom is a statement or proposition that can be accepted as true without the need for proof. I have six axioms that I believe in and have witnessed over the years, and they no longer require any proof to me. They are:

  1. You deserve the employees you hire (and keep)
  2. If it can’t be measured, it doesn’t exist
  3. Accountability is a cultural thing
  4. Every day is “showtime”
  5. You aren’t one of the guys
  6. The Samurai knew what they were doing

As a leader, and specifically as a CEO, these six axioms are fundamental to your ability to lead and inspire your organization. Although I cannot guarantee anyone’s success in such a complex and demanding role as CEO, I do believe that following these six axioms will immensely increase your odds of success. Let’s examine each one here:

You deserve the employees you hire (and keep) – Since the most important decision you will ever make is who you hire, this axiom is probably the most important. If you are willing to hire and accept mediocre (B and C) players, then you deserve whatever results they give you. Following-up on their performance, correcting their mistakes, and watching them miss critical deadlines is a sample of the punishment you get for keeping them around. On the other hand, if you take the time to recruit A players, nurture them, and sustain them within your organization, you will reap the rewards. I have been told over and over again that one A player is worth three B players.

If it can’t be measured, it doesn’t exist – Researchers know this axiom, but it’s just as valid in business. I know there are people who will tell me that there are things that can’t be measured; concepts and emotions like love, hate, and fear. I could take exception and say this isn’t true. We do measure conceptual things. We measure intelligence (IQ) and emotions (EQ), and I’ll bet I can measure love and hate on a scale of 1 to 10. But even if they are correct in their criticism, let’s just agree right now that I am speaking of business. Everything in business can and should be measured. That’s the only way to know if you are achieving goals, making quota, delivering on time, keeping customers happy, managing staff turnover, and so forth. The more you can measure your key performance indicators, the better you can manage your business and guide it in the right direction (and make corrections when something is going off course).

Accountability is a cultural thing – We all talk about accountability, but it won’t matter if you haven’t established a culture of accountability. Your organization and employees must live and breathe accountability. Your culture needs everyone from the top down to accept responsibility and to be held accountable when things don’t go as planned. If your culture doesn’t foster accountability, you will have a very tough time trying to keep your people on track and responsible for their employees’ behavior, and more importantly, their results.

Every day is “showtime” – As a CEO or leader, you are always on stage. If you are having a bad day, your face, posture, and behavior will signal that something is wrong. Have an argument with your spouse in the morning, and then turn up at work with a scowl, and your employees will think the worst…something is wrong with the business. Are we having layoffs? Is cashflow OK? They don’t know anything about your home situation, just that you look as though trouble is brewing on the horizon and they will be impacted by it. This means that you must always put on your game face before you walk into the office. No matter how bad things are (maybe you are having trouble making payroll or the IRS is doing an audit that makes a colonoscopy feel like a walk in the park), you need to show confidence and that you are in control. You must be the consummate actor, always playing the role of self-assured CEO.

You aren’t one of the guys – Too often a CEO or manager within an organization begins to identify with their employees. Surely you have seen or heard of the department head that defends his employees and takes their side against the company. These people over-identify with their employees. This leads them to make decisions based on what’s good for their staff, not what’s good for the company. Leaders need to understand that they are not one of the guys. Employees really expect you to be different, even if you don’t think so yourself. You see yourself as nothing special, but to your employees, you are. They know that you can hire and fire them, give bonuses, take time off, buy a nice car, pay yourself big money, play golf at the local country club, and make decisions every day that affect their livelihood and morale. Don’t try to be one of them. They need you to be you. They need you to play the role of boss. Once you try to be one of them, you will find yourself digging a hole from which you will have difficulty climbing out. Once you bring yourself to their level, becoming the boss again will be a monumental effort. And it’s tough making decisions that go against your employees’ interests, which many business decisions do, if you identify too easily with them. Bottom line is that the company comes first, because without it, the employees won’t have a place to work.

The Samurai knew what they were doing – The ancient Samurai had an advantage in mortal combat…they had no fear of death. And by not fearing death, they could take risks and make decisions without apprehension, never second guessing themselves. This allowed them to overwhelm their enemies and strike fear in their hearts. Similarly, in the military, soldiers accept the fact that they may die in battle, and that frees them to do what needs to be done to accomplish their mission. If they constantly dwelt on the fact that they could be killed at any moment in combat, they would freeze and never succeed in battle. On a much less deadly note, CEOs also need to be fearless. They need to stop fearing the things that will freeze them in place and keep them from succeeding. Being sued, losing a key employee, failing to win a major deal, missing a bonus, or making a bad investment are just a few examples of the types of “death” that leaders face daily. If your decisions are based on avoiding these issues, you will not have the freedom or the ability to do what’s needed to take your company to another level. Constant fear of a bad outcome can paralyze a CEO into a risk-adverse cocoon, stifling growth and innovation.

I can assure you, from my own experience and my observations of the CEOs that I coach, that following these six axioms will strengthen your leadership and help you to become a better CEO. Make these six axioms part of your management style and corporate culture.

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Do You Know How Your Employees See You?

Most CEOs think of themselves as “regular” people. Nothing special about them. So they govern their actions as if they were the same as everyone else. Well, there is a difference between you and the people that work for you…at least in their minds.

Perceptions are quite real to the people who see you in action. Their image of you is probably not what your image of yourself is, so you need to be aware of that. If you don’t understand this difference in perception, you cannot be a great CEO.

Your Perspective vs. Their Perspective

You see yourself as a typical business person, not much different than anyone else. You hang out with people like yourself, so everything seems quite “normal” to you. But look at it from the perspective of the people who work for you. They see a person who is in charge; someone who founded and built a company (or was brought in to run it). You make more money than they do. You probably drive a really nice car and wear an expensive watch. You are going to business lunches and traveling all over the USA or internationally for meetings. You are busy negotiating deals, giving speeches, attending important meetings offsite, and handing out awards and bonuses. Your signature is on their paychecks.

If you don’t think that presents a certain image to your employees, then you are blind. They have an image of a person who has put his/her stamp on the company, and of someone who is important, in charge, and successful. Most of them know they could never start a company and grow it, or do many of the things that you do so well. Believe it or not, they look up to you. They watch everything that you do, and you are setting the example for them. Don’t allow yourself to fall into complacency, believing that they see you like “one of them.” Because they don’t, no matter how much they say they do, or how much you try to be one of them.

Your influence on them is far beyond what you think it is. They will emulate you. They will worry if you seem distant or troubled. The part you play as CEO is crucial to their success. They need to know you are involved, interested, and thoughtful. Culture starts at the top, so that means that you, as the very top person in the organization, set the tone for everyone else. Don’t underestimate the impact your image has on your staff. Always be cognizant of the way they see you and act accordingly.