Newsletter: April 2017

The topic of leadership has come up more and more in the past month through articles in the popular press and streams on my LinkedIn page. I have commented on several articles – and even commented on the comments – because I think some of the information and concepts are either too simplistic or incorrect. 

Leadership has many facets. When you read the leadership gurus like Peter Drucker, Warren Bennis and John Maxwell, they talk about leaders having influence and followers. That is certainly true. For a more current view, I like John Maxwell’s thinking on leadership because he has a more integrative approach covering 21 indispensable qualities of the leader, and 21 irrefutable laws of leadership. He, too, touched on many components of leadership and his insights are excellent. But I don’t believe even he goes far enough.

I want to add to this thinking by talking about StreetSavvy Leadership. This is my take, not from merely studying others and codifying what I observed, but also because I lived it and had both successes and failures as a leader. Regardless of your position in the organization, you will have both success and failure as leader. Witness the rise and fall of luminary leaders such as Jeff Immelt who took over GE and is struggling with the growth of the company.

And let’s look at leaders who were successful in one company but failed to capture success in their next company … or vice versa. I am a NY Yankee fan and remember when the Yankees hired Joe Torre. Torre was not a good manager with the Mets, Braves and Cardinals and compiled records marginally below .500. But with the Yankees, who saw something unique, he was able to win 4 world championships and 2 additional pennants. Granted, they had great players (competencies) in that era as well but Torre was the leader and a lesser manager might not have been as successful.

StreetSavvy Leadership blends theory with reality and execution to garner results. It is leadership within the context of the company and the environment in which the company operates. Leadership without positive results in business is being a pretender. StreetSavvy Leadership means doing things differently than before to grow your business and protect against mediocrity. StreetSavvy Leadership looks at data and transforms data into knowledge and gives that knowledge to the right people closest to the decision point and trusts them to make the right decision. It means setting the right vision and ensuring alignment among all members of the exec team and throughout the organization to execute effectively and efficiently.

Here are the 7 Cornerstones to StreetSavvy Leadership:

1. Set actionable vision.  The vision has to be credible and recognized to be eventually achievable even if there is no clear path to that end. Recall when President Kennedy said: our vision is to put a man on the moon by the end of the decade. Vision is achieved by looking at the 3 Cs – customers, competitors and competencies – and ensuring that the company knows the best way to grow relative to these three components. The vision may be such that one or more of the three C’s must change over time.

2. Keep a mindful eye on the environment and adjust.  Within this construct is a concept called PEST – political, economic, social and technology changes. The leader needs to watch for changes in all of these factors and be prepared to manage responses relative to the shifts in some or all of these factors. Clearly the leader doesn’t do that on his or her own, but tasks different groups or select individuals to keep a watchful eye.

3. Build a sustainable team. Unless you are a one person company, leaders have to hire, train, manage, and motivate people in their organizations to achieve success. I recall one definition of leadership is to get ordinary people to extraordinary things. That is partially true. The StreetSavvy Leader understands that a strong team needs to be built and that employees want to see a solid career path. That encourages loyalty and ensures that the top employees rise to the top. However, there is a time and place to hire from the outside and not merely from the competition. If every company in the industry hired from a competitor, eventually all companies will regress to the mean, ceteris paribus. However, the StreetSavvy Leader might hire from an entirely different industry or for entirely different skills to ensure that the company doesn’t become too internally focused and can challenge its own prevailing wisdom. Training, shadowing, mentoring and other assignments make the employees well rounded. A formal program for top 10% of the execs should also be in place as both a reward and expectation of future success. IBM for many years and GE have successfully established internal programs to supplement the training of the top tier executives.

4. Establish the right culture. Would you want to work for a leader who sets a punitive culture such that if bad news is given the leader goes ballistic? Or work for a leader who fails to recognize the success of individuals in the company yet accepts the kudos for him/herself? I worked for one boss who liked to yell at people who brought bad news to the executive meetings. I realized many years ago that I would rather meet that bad news head on and ask the executive who brought the bad news for prescriptions to manage the impact of the bad news. That reinforces the concept of responsible management and ensures that each person in the organization has the obligation to find solutions to problems.

5. Practice open book management. People need to feel part of the organization. Ideally they should feel like part owners and have the opportunity to own a stake in the company. To do that I am a firm believer in sharing the financials and metrics that the company uses to determine success. Once these metrics and financials are shared, it would be incumbent for the executive and managers down the line to work with their people such that each person in the organization understands their role in creating revenue or managing cost. By doing this, each person can see how their job affects the success or failure of the company.

6. Live the 5F Factors. There are five factors that characterize the StreetSavvy Leader. They are Focus, Fast Afoot, Fluidity, Flexibility, and Fast Failure. The business world shifts quickly and these five F factors enable the leader and the company to be nimble and take advantage of opportunities.

7. Seek self-improvement.  I personally have never been satisfied with who I am and what I can be. Executives have to continue to improve functional skills but also should improve in their understanding of business issues. Unfortunately, in the business world, I have seen too many CEOs and other high ranking executives believe that once they hit that lofty pinnacle, they can stop improving. Self-improvement takes place on many levels. Executives can and should continue learning by participating in peer groups, reading various business journals and biographies of successful leaders, and even self-improvement books. Having an executive coach and advisor can help as an external sounding board and someone who is not fearful telling the emperor so to speak – that he or she has no clothes. Three sixty and employee survey results which should be shared with the team can be used to help the executive understand his/her style of communications which may affect the organization’s growth. And to understand the business, what better way to do that than becoming an undercover boss or walking the production line or working as a customer service rep or front desk employee or even a bellhop or maid. I don’t believe these are radical ideas and they should be considered if you want to improve to eventually be a StreetSavvy Leader.

Jimmy Dean said: You cannot change the wind but (a leader) can always adjust his sails to reach the destination. How true. StreetSavvy Leadership reflects the Jimmy Dean quote. It is something that can be learned and if used correctly I believe it offers the best chance of success for a company. I would be glad to hear your thoughts. Feel free to comment, share and repost and let’s continue this dialog. 

I attended a roundtable discussion with senior executives regularly and we discuss topics of interest. The topic we discussed revolved around whether a strong leader is not afraid to change his/her mind and under what circumstances they should be flexible in changing course. It appears that many leaders, in order to look strong, set a course of action, and don’t want to change for fear of looking weak and flighty.

The initial discussion centered on the need for clearly setting goals and objectives, continuity of strategy, becoming agile in one’s thinking, recognizing challenges and preparing your team to meet the uncertainty of these challenges, and keeping options open, e.g. predesigning flexibility into your decisions.

Many years ago, I coined the term StreetSavvy℠ as applied to many executive functions. When I worked for founding CEO of US Cellular Don Nelson, Don and I coined the phrase fast, fluid and flexible as we were trying to grow in the young but growing wireless market. I have used that concept over the past many years of my career. This was the start of thinking about the characteristics of what StreetSavvy Leadership is about. Additionally, I have also talked about fast failure in getting products to market. More recently I wrote a blog and did a talk on managing a business. The two words are Focus and PODFU (plan, organize, delegate and follow-up). After participating in this discussion group, I found myself seeing how all these components now come together in what I call the 5F Factors in StreetSavvy Leadership.

These are the five factors I believe that can make leaders stronger and their companies grow.

1. Focus. Business executives are constantly bombarded with many different product opportunities, decisions, strategies and the like.  If everything is a priority, nothing is a priority.  Therefore, the first characteristic for a StreetSavvy executive is to be laser focused.  Don’t try to do more than two or three major initiatives at the same time.  You have to have clear priorities because you need to have dedicated resources to be successful.  As Sun Tzu said: concentrate your resources at the competitors’ weakness at the point of attack.  This is the business correlate.

2. Fast Afoot. Fast doesn’t mean reckless. Most executives believe they have to make a decision and do it with speed. Then once a decision is made you execute relentlessly. This is basically true. As executives we need to have information and facts upon which to base decisions. Unfortunately, in business, information and facts are never complete and there is a point at which more facts give you limited additional utility in making a decision. Because an executive never has complete information, decisions are always uncertain and it is a matter of how likely the decision will be correct and how potentially damaging uncertainty becomes.

3. Fluid. Things change. Water conforms to the changing landscape to reach its destination. The destination or goal may still exist but there may be impediments along the way and obstacles to overcome. Fluidity means dealing with these changes, mostly tactically without changing the strategy or the end game. StreetSavvy Leaders continually scan the environment absorbing new facts and information. They figure out a way to maneuver through the changes that take place. Scanning the market through customer panels, tactics like mystery shopping or Undercover Boss, assigning people or teams to track a competitor – both direct and indirect – are critical to get new information and upon that new information to make informed decisions which might change the tactics of the strategy or to a lesser degree the strategy itself.

4. Flexible. Opportunity knocks and changes in tactics may occur. Tactics and strategies must be consistent with goals and objectives which are much longer term. Andy Grove, former Chairman and CEO of Intel wrote that only the paranoid survive. To me, paranoia in business is good in order not to be complacent. Executives have to look at opportunities as they arise and address them. Should an opportunity exist executives might need to change course. I recall working for one company which had negotiated a large contract with a supplier many years before. The technology shifted and over time that technology was neither as robust nor cost effective as a newer technology invented by an Israeli company. Our company chose to stay with the older technology and that was perhaps one reason why our company was not as successful as we could have been. It happens all the time. Culture has to be set to enable this flexibility as changes to a plan are not normally welcomed by the highest levels of leadership due to economic or political concerns.

5. Fast Failure. Making a decision is one thing. Staying with a decision that becomes a losing one can cause irreparable harm to a company with potentially serious side effects like going out of business or having to lay off people. As one of the participants stated: bad new does not get better with age. I recall when I was at one of the Baby Bells and we were trying to grow our business by focusing on new product development. Unfortunately, one of the products on which we spent significant resources was not going to be a winner. The right decision was to terminate the project yet the project lead who worked for me did not want the stigma of failure on his shoulders. The culture was to “punish” failure. In this specific case it was a slow failure. In retrospect, the life support on this project should have been pulled years before. In this case with a little prompting, the project lead terminated the project and I gave him a reward for making the right decision. The culture had to be established for fast failure. Just think of Google and how many projects they have in the works at any one time. Or even 3M. They know that some projects will fail and executives are ok with that. Similar to stock trading you have to let your winners run and cut your losers quickly. How many of you are willing to do that?

How does the StreetSavvy Leader manage to implement these 5 F Factors? The primary need is to communicate and have an open dialog with your team and others lower in the chain of command. It is critical for the leader to walk the talk and become Pattonesque in their leadership style. Be on the front lines with your troops. Be visible and be communicative. Ask questions and listen and know that your obligation to your company is to seek  new and even divergent information so you have the best chance of building a successful company.

Glad to have other viewpoints.

As a reader of Sun Tzu and the Art of War, I have been applying the rules of warfare to business and marketing for more than 30 years (hard to believe it is that long but I started as a child prodigy!!). In warfare, there is a concept called Battle Rhythm and usually that goes hand in hand with knowledge management.

A battle rhythm is the heart of military operational management. Effective management means efficiently processing inputs and intent to enable the Commander to make decisive decisions. Knowledge management is less about technology than it is about identifying the right information, putting that information in context of the end game, and then collaborating and sharing information with the right people.

Developing and maintaining a business battle rhythm takes the military concept into the business world and enables an organization – company, division, department, or group – to ingest data, turn that data into knowledge, and use that knowledge to collectively or individually make decisions and put the resources in play to implement those decisions. Business battle rhythms are important because the pace of business today is extremely fast. With the internet and communications technologies available to most companies, even the smallest competitor can outflank a larger competitor to gain an advantage in the market.

The following attributes are needed in a business battle rhythm:

• Speed and sense of urgency because everything today operates at internet speed. (Remember the concept of fast, fluid and flexible.)
• Accountability and responsibility such that a person is accountable for a result and a team is in place to support the one accountable for the final result.
• Engagement to ensure that there is collaboration and interplay among the executives relative to the metrics that drive success and to ensure that there is alignment of all internal resources for the common purpose of winning the battle or the war against the company’s common enemy.
• Competitiveness which focuses resources of the company on a common goal of winning against the outside enemy while putting aside internal differences and petty turf wars.
• Diversity of thought to get different views on a problem. With diversity of thought data can be viewed from different perspectives and the context of the data will lead to different knowledge based on the perspective, background and history of the different participants in the decision process.

A battle rhythm uses information and decision processes to make business decisions. One way to look at business battle rhythm is through the scheduling of meetings. Each meeting should have a clear purpose, specific outcomes, and specific attendees. In the most simplistic form, let’s assume that a business builds products and services to meet the needs of customers, manages the materials, capital and human resources to build the product and then sells and supports the products/services to customers directly or through distribution.

A battle rhythm can therefore be developed around this business and its basic processes. In large companies meetings are a necessary evil but you want to be focused on the clarity of the objectives of the meeting, the issues to be discussed and the appropriate people in the room to make the right decisions.  Here’s an example of a business battle rhythm that we used on a tech company.  

1. Executive staff meetings. Executive staff meetings are used to review items of import to each of the team and in addition to use the time to build trust and relationships. I believe that executive staff meetings should occur early on Monday morning so the week can be started with all executives understanding the issues, problems and priorities for the week. Unlike other meetings with a more fixed agenda, executive staff meetings should a) review the past week and highlight issues that need to be handled in the coming week, b) ensure that each of the executives at the meeting raises issues or problems that are important to the group, and c) prioritize the items that need to be handled in the coming weeks and make assignments of the executives to handle each of those items.

2. Operational reviews. Companies can set an operational weekly (or bi-weekly) meeting to review metrics, the balanced scorecard, status of strategies, products, financials, human management factors and related items. The reviews can be conducted on Weds morning after part of the week has gone by and this timing enables the team to correct actions by the end of the week.

Deep dives. Based on results which have not met expectations or projects that are behind schedule, there might be a need for these intensive reviews where contingency plans or options to get the metric or project back on track are discussed and assignments for corrective action made.

3. Product reviews. Product review meetings ensure that major projects and strategic initiatives are on track. Milestones are reviewed and corrective action for milestones not on track is put into place.

4. Sales reviews. Sales are the lifeblood of any company. In these reviews, the entire sales funnel is reviewed with particular attention to moving sales to the next stage in the company’s sales process. Resources are assigned as appropriate to support the sales managers.

The following calendar is representative of a week of operational reviews.