Category: Leadership

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Are You Encouraging Insanity in Your Company?

Einstein defined insanity as doing the same thing over and over again and expecting different results. But in business, insanity goes a step further. In business, insanity is doing the same thing over and over again, expecting different results, and then making it a standard operating procedure for everyone to follow.

One of the easiest rules I stress in business, and one that most CEOs never fully grasp is this: “If something works, do more of it. If something doesn’t work, stop doing it!”

Sounds simple, doesn’t it? Yet we fail to follow it. Let me give you an example:

I will often ask someone “What are you doing in sales that has been giving you the best results?” I will typically get an answer like this: “When we bring an engineer with us on the presentation, we close almost every deal after doing that.” Then I find out that they only do this rarely and only on certain occasions. I can’t help but ask: “Well, if it gets you such great results, why aren’t you doing it more often? In fact, why aren’t you doing it every time?”

Then I’ll ask: “What are you doing that doesn’t work for you?” A typical answer might be: “We do a lot of direct mailing, but the response rate is dismal at best.” My anguished response is: “So why do you keep doing it?” Usually, they don’t know why. Corporate insanity? Perhaps.

The bottom line here is that you need to identify, within your organization, those things that are working well for you and figure out how to leverage them, do more of them, and enhance them.

STOP!

And you need to identify what isn’t working for you and stop doing it. Why spend time and money on things that aren’t generating a return? It just doesn’t make sense, but it happens all the time.

My recommendation is to begin a corporate-wide initiative to pinpoint the practices that are working across the different functional areas (accounting, sales, manufacturing, marketing, product development, human resources, etc.), and start doing more of them, and doing them better.

At the same time, you should be making a monumental effort to figure out what’s not working…what’s costing you effort, money, and lost opportunities. Then STOP doing them! Stop institutionalizing insanity in your organization. Every manager in your company should be able to answer this question: “What’s working and what’s not working?” If they can’t answer that question, maybe they shouldn’t be working — for you.

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Don’t End Up As The Best-Looking Horse In A Glue Factory

Your company is having financial problems. Products aren’t selling. You are not keeping up with competitors, and customers are heading out the door. What do you do? Redesign your website. Sure, there’s your top priority right there. If you change your colors to something innovative-looking and add some new content, then the rest will fall into place. With a website like that, well, people will think you’re Apple.

What you’re doing here is putting lipstick on a pig, something a lot of companies do. When performance starts failing at a business, CEOs and senior executives spend a lot of time focusing on the wrong things rather than understanding the real problems that are derailing them.

Stop Focusing On Symptoms

Most executives treat symptoms and never diagnose the underlying causes. If you were a doctor and did nothing but treat symptoms, never diagnosing core diseases, you’d be sued for malpractice. The truth is we commit malpractice all the time in business. Companies take steps to look better to themselves and the outside world. They remodel offices, write useless policies and forget about them, revamp they’re websites; and all the while their company is dying around them. They end up being the best looking horse in the glue factory.

Say, for example, a leader says, “I have a problem with morale in my company. I need ways to boost morale.” A less-than-adequate coach might say, “Have employee parties. Have a barbeque each month and hand out awards.” A real coach would ask questions like: “Give me some examples of why you think morale is bad. How is it manifesting itself? What behaviors are you seeing that make you believe morale is low? What do you think is causing those behaviors?”

Well, we find out that the company hasn’t given raises in two years and had a nasty round of layoffs. Now we’re getting somewhere. The solution isn’t a picnic. We need to look at the whole problem: people are afraid of losing their jobs. They’re insecure, worried, and, maybe even strapped for cash.

Focus On Solving Real Problems

No wonder you have a morale problem! Or rather – a morale symptom. You have to start by dealing with those problems. Communicate more about the layoffs and the company’s performance; talk about the initiatives you’ve undertaken to create more stability. That’s how you get morale back on track, not by putting more lipstick on the pig with parties or plaques.

If you’re treating the symptoms, you are letting the underlying cause grow and fester, and eventually, it will become so severe that you can’t ignore it. It’s going to force you to look at it, and it’s going to be ugly. You can save everyone some time, resources, and anxiety if you start digging now. Changing your website colors or adding new waiting room art can wait.

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Real Leaders Don’t Complain

I can’t tell you how many times I am in a coaching session with someone, and I end up spending most of the time just listening to them complain. After a while, I have to stop everything and tell them this: The true leader in any organization is the person who doesn’t complain.

No truer words were ever spoken. You may be the appointed leader, the elected leader, or even the founder of an organization, but if you are a complainer, you will never be seen by the employees and other stakeholders as the real leader of the organization. Somewhere in the organization is the person who never complains. He or she will be viewed as the true leader of the organization. The problem is, as the CEO, that person SHOULD be you!

Suck It Up

People don’t like whiners and complainers. I’m sure you don’t either. So, if you are constantly whining or complaining about things, you can imagine how others feel about you. Samuel Johnson, the noted British author, once said: “The usual fortune of complaint is to excite contempt more than pity.” Who the heck wants to be looked at with contempt?

Think about all the famous leaders who are held up to us as examples, whether they are business leaders, military leaders, or political leaders. How many of them complained? How many of them were constantly whining about things? None, that I can recall. Now think about your own organization. Who are the people who never complain or never whine about things? Aren’t those the people you respect the most? They are the natural leaders within your organization.

Time Is Precious: Don’t Waste It Complaining

Complaining is an admission of failure. It is a negative energy that disrupts the smooth operation of the organization. It reflects on you and provides you with an image to others of a miserable, unhappy, and uninspiring person. And it wastes a lot of time…People who are busy complaining aren’t busy doing what they should be doing in their jobs. The late Congresswoman, Shirley Chisholm, once said: “You don’t make progress by standing on the sidelines, whimpering and complaining. You make progress by implementing ideas.”

If you can honestly reflect on yourself, and see that you are a complainer, then you need to shift your attitude and become a doer instead. This is particularly true if you need to be a leader and inspire others. Moreover, look around your organization for the people who never complain. They are the aspiring leaders within your company, and you should keep your eye on them. They will be the people who will take your organization to the next level.

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Do Your Employees Hate To Lose More Than Love To Win?


Have you ever had an employee lose a sale, or a customer, or a negotiation, and say, “Well, I gave it my best shot.”? Although he would have enjoyed winning, he was more than willing to accept his loss because giving it his best effort was enough for him. Trust me, this guy is a loser. Everyone enjoys winning. I have never met a person who didn’t like to win, but some people are content to lose if they know they gave it their best shot. True winners – those that are highly competitive – won’t simply settle for winning. They can’t stand losing, and they will do anything rather than suffer a defeat. These highly competitive types tend to work harder, make greater sacrifices, put forth extra effort, and perform heroic actions. They are like athletes at the top of their game.

What Really Drives Athletes

When top athletes in their professions are surveyed, we find that winning isn’t what fuels their success, but instead, hating to lose is what drives them to compete at extraordinary levels. It’s no different in the corporate world. We need to staff our companies with employees who think and act like these top athletes. A culture of winning is fine, but just imagine what your company would be like if everyone there hated to lose. So you have to go beyond having a winning culture…you have to create a culture of people who hate to lose, and who would do anything rather than experience defeat. These are the people that will propel your organization to its next level of performance. When I coach CEOs about this, I make it a point to say that their company motto ought to be: “We Hate to Lose.” What else do you need to say? That’s pretty much it… Then you have to slowly weed out the people who are content to come in second, and bring in people who hate not being number one – in anything they do! These “hate to lose” people actually feel physical pain when they lose.

Creating A “Hate To Lose” Culture

A winning culture is fine for some companies, but a “hate to lose” culture will kick the crap out of that company every time. Take a good, hard mental look at your key employees, and you will know who is OK with losing, and who hates to lose. Over time, you need to build your organization around the “hate to lose” people, and get rid of the people who are OK with losing. Your culture will take a dramatic turn that will pay dividends going forward. To reinforce my point, take a look at these memorable quotes from some great athletes: – “I hate to lose more than I love to win.” (Jimmy Connors) – “I’m a competitive person. I hate to lose and competition is everything. When you lose you’re easily forgotten.” (Michael Jordan) – “Above anything else, I hate to lose.” (Jackie Robinson) – “If you’re going to play at all, you’re out to win. Baseball, board games, playing Jeopardy, I hate to lose.” (Derek Jeter) – “Boy, do I hate to lose.” (Peyton Manning)

How do you feel about losing? Are you a “hate to lose” CEO? And what about your company’s culture? How intensely do they hate to lose?

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Are You Challenging Your Management Team?

Most of us accept the concept that we improve our performance by being challenged. When people around us challenge us, most of us will rise to the challenge. We perform better, strive harder, and achieve greater things. But did you know that we also improve and become better when we challenge others?

Here is a true story that demonstrates this notion:

Give It Everything You’ve Got

Back in the late 1960’s, John Wooden, one of the all-time greatest college basketball coaches, was playing a center named Bill Walton on his team at UCLA. Walton practiced with the other team members, but there was no one on the team over 6’7’’ to really challenge him and help him improve his skills. Out of the blue, a junior college basketball coach phoned Wooden, and said he had a 6’11” player who could give Walton the opponent he needed to practice against. Wooden gave the junior college player, Swen Nater, a scholarship to UCLA just to practice against Walton. Coach Wooden told Nater that he would likely never play in a game; his role was just to play against Walton in practice, much like a sparring partner. “He told me to get good enough to challenge Walton,” said Nater. Swen did what he was told, and gave it his all, challenging Walton as hard as he could. “I really understood the concept of team basketball, not just in the games, but in the roles you play in practice,” said Nater. “No one outworked me, not even Bill. I had fun challenging Bill. I gave him everything he could handle. That was an investment on my part and it paid off.”

The Pay-Off

With Swen challenging Walton as hard as he could, playing with all of his effort, Walton became a great basketball player, one of the greatest centers to ever play the sport. He would credit a lot of his skill to the level of opposition that Swen gave him. “Bill always said that I was the best center he played against…” said Nater. The interesting part of the story is that as Swen became better at challenging Walton, he developed into a great basketball player himself. Although he never started a game at UCLA, and averaged only about 2 ½ minutes per game when he did play, Nater was a first round NBA draft pick (16th overall), and played for 11 years, setting a number of records. To this day, Nater credits his success to the time he spent challenging Bill Walton.

You see, being challenged helps us get better, but we also get better when we challenge others.

Are you challenging your management team? If you do, not only will they get better, but your game will improve as well.

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Are You Smarter Than a Monkey?

When faced with tough times, the first thing most CEOs do is to cut costs. Well, it doesn’t take a genius to do that. In fact, I can take a monkey in a red jacket, hand him a banana and a copy of my budget, and he will randomly select line items to cut. Most CEOs won’t do any better than the monkey. You see, in doesn’t take a genius to cut costs when times are tough…but it does take a genius to figure out how to increase revenue in tough times.

You have all seen this before. The company’s profits are down, so the CEO puts out an edict: “I want a ten percent across the board cut in expenses,” or “Have every department cut two people,” or “Find the people who make the most money and get rid of them.” None of these are based on any rational or thoughtful approach. It’s a knee-jerk reaction to a scary situation.

Here’s What I’m Talking About

Perhaps the best example of this behavior was Circuit City. You may recall that Circuit City was one of the companies that Jim Collins wrote about in “Good to Great.” It was one of those companies that did everything right and was “built to last.” So where is Circuit City today?

Circuit City went bankrupt and couldn’t even find a buyer for any of its stores, assets, etc. It’s completely gone…nothing more than a bad memory in the history of business. Its management team put it into a spiral of death by cutting the wrong costs.

Circuit City’s CEO decided to get rid of the highest paid staff in its stores, which just so happened to be the best and most experienced sales people. So 3,400 were let go, most with little or no notice, and the plan was to replace them with new, less experienced, but cheaper hires. Circuit City also stopped paying commissions and went to an hourly rate. Guess what happened. Shoppers noticed the difference in the sales staff. The newbies didn’t know anything about the products, they didn’t have a good attitude, and they weren’t very helpful. They also had no incentive to sell. Shoppers left in droves, favoring other stores like Best Buy, and the company’s sales plummeted. In an attempt to stop the sales slump, Circuit City’s management cut more jobs, and started closing repair facilities and stores. The spiral was now completely in motion, and the rest is history.

Lessons Learned

The moral to the story is that Circuit City never fully understood the value of its loyal, experienced sales staff, instead seeing them as a cost. The CEO cut the one thing that it needed to be successful because he could only see the line item on the P&L. Short-sighted? You bet!

This kind of thinking goes on all the time. When I was a salesman, I landed some big deals that got me some very big commissions. I kept waiting for my commission check, but it never came. In desperation, I went to the CFO, who had been holding the check on her desk. She couldn’t part with it because she thought it was too much money to give to a salesman. I finally had to convince her that it wasn’t her money, but my money. After all, I had earned it. She couldn’t see the value that my sales brought the company, only what it cost them. I learned something valuable at that time, which I now impart to all of my CEOs: You should never have a problem writing a check to someone who makes you money.

When times are tough, CEO’s will cut the very things that they need to remain profitable. They will cut marketing costs (the very thing you need to generate business). Or they may cut their commissions or sales staff (like Circuit City). Or they may cut their support staff (the people who keep the customers happy). If this is what you want, then get a monkey to choose which expenses to cut. But if you want to be smart about it, start identifying those pet projects that people are attached to, but drain the company of needed cash; seek out initiatives that don’t make sense anymore; or force your team to identify outdated products/services that cost more to maintain than they bring in.

As a CEO, you need to be smarter than a monkey.

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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.