We had a great TEC speaker for my TEC 20 group spouses meeting in December.  Boaz Rauchwerger (www.boazpower.com) is an author, trainer, coach and inspiration!  He is without a doubt, the most positive person I have ever met.

We learned a lot from Boaz, and I encourage you to check out some of his video blogs his YouTube channel (http://www.youtube.com/profile_videos?user=BoazPowerTV).  But what I like best about Boaz is that he started his program with an appreciation of how great we all have it here in America.  And despite all of the issues we deal with in our business or personal lives, there are about 6 Billion people who would trade places with us in an instant.  (6.9 Billion world population-307 million Americans-600 million world citizens who are happy just where they are).
By the way, we’ll be hitting 7 Billion next year.

 http://www.census.gov/main/www/popclock.html


Philosopher, and the best left-handed golfer on the PGA tour Phil Mickelson put it this way AFTER losing (choking) at the US Open at Winged Foot in 2006 said, “I want you to know that I am happy for what I have, and am a very lucky guy.  I am not unhappy for what I don’t have.”  I think about this statement a lot. 

I consider myself a high-achiever, and I hang around a lot of high achievers who are my TEC members.  There’s a tendency among many of us toward dissatisfaction.   Never quite getting the results we want, never totally happy with the team we’ve got, often not satisfied with the path our kids are taking.  Of course, it’s that wiring in our brain that makes us achievers, and entrepreneurs.  But it’s so easy to go from being driven, to being unhappy it’s scary.  One of the things I have to work on personally is to remind myself how lucky I am for what I have.

So if the US represents 4.5% of the world population, I contend that every citizen in the US is part of the 1%.  I am certainly NOT dismissing social and economic problems that exist in the United States.  But as Boaz puts it, we are a nation of opportunities and freedom.  We have the opportunity to succeed or fail, and the freedom to choose which path we prefer.  Or as another philosopher, my Dad, Dick Howman put it long ago, “John, people just need to get off their ass!”

So my New Year’s wish for everybody is to enjoy being part of the 1%, be thankful for what you have, to be a positive force in your home, your company and your community.  Have an Unbelievable! New Year.

I just finished the Walter Isaacson biography of Steve Jobs.  It’s an excellent book about a very complicated man.  All through the book I kept asking myself, “Would I hire a Steve Jobs to run my company?”  It’s a difficult question on several different levels.   So in some coherent fashion, I’ll take a stab at this question….

First, I need to start by admitting a few of my biases.  Steve Jobs and Bill Gates are personal heroes of mine.  I met Bill Gates in 1988, well before he was the second richest man in the world.  I regret never having met Steve Jobs.  I also regret the fact I didn’t really appreciate all that Jobs accomplished in a career played like an American drama production in two acts.

His first act (before Jobs’ firing in 1985) was an amazing combination of insight, bravado, luck, and timing.  Think about this.  The year Apple booked its first $1 billion in revenue, Microsoft’s sales were $32 million.   Jobs’ second act, beginning in 1986, included building Pixar; selling Pixar to Disney; returning to save Apple; then saving Apple; and forever changing the animated film, computer, music, and telephone industries.   At the time of Jobs’ death, Apple’s market value was 70% higher than Microsoft’s and Apple was the second most valuable company in the world.  (Gates remains the world’s second richest man.)

It’s pretty clear Jobs had both an extreme and an extremely difficult personality.  A visionary, his social skills bordered on mild Aspergers syndrome.  His impatience for anything that was imperfect—including food, people, products, and more, was legendary.  Jobs was a very emotional man who often cried if he was losing an argument.  He never forgave a slight or failed to hold a grudge.  Jobs himself had enough insight to know he was an Asshole, and he frequently called himself one.  I think he saw being an Asshole as an asset, not a liability (as most Assholes do, by the way).  But would I want a Steve Jobs running MY company?

Jobs had some terrific leadership insights.  Among them was his description of what he thought the CEO should be.  His first leadership insight was the need to have and demonstrate extreme focus.  Isaacson described Jobs as a visionary who was capable of having a Laser-like focus on a small number of things.  When Jobs returned to Apple, he slashed the number of products Apple made and sold.  He was as concerned about what to stop doing as he was about what to do.  He believed you could not focus on hundreds of SKUs and have any of them be really great.  His second leadership insight was the importance of collaboration—internally and externally.  For example, Apple could never have survived without Microsoft.  And certainly Apple launched Microsoft into the applications business.   Jobs was committed to keeping his businesses organized like start-ups:  Pixar in the 90’s and then Apple.  This meant maintaining a flat structure in his businesses, with a minimum of politics and committees, and organized his business work groups into relatively small teams.  Jobs spent the majority of his work time meeting with his team leaders.   His third insight was hard work.  In every part of his career, Jobs was a very hard working CEO.  I think he worked so hard because he loved his work.  But the leadership insight that resonated with me the strongest was Jobs commitment to being a “talent scout.” He was constantly on the hunt for “A” players.  One example was after his liver transplant, he took a tour of Sun Records in Memphis.  The tour docent was a young guy who really knew the history of The Blues and early Rock and Roll.  When Jobs toured Sun Records, the docent didn’t even know Jobs was the Jobs.  But the docent so impressed Jobs, Jobs flew him to Apple’s headquarters and hired him to run part of the iTunes store.  So how could a guy who was so brutal in his treatment of subordinates build a great company?  A big part of the answer is that he hired “A” players.  In fact, I think the majority of people who were less than “A” players washed out because they couldn’t deal with Jobs’ tyrannical nature.   So do you need to be an Asshole like Jobs to build a great company like Apple?

I really don’t think so.  It’s the same problem I have with so many business books like the Tom Peters books, which highlight a small number of successful companies and then attempt to connect the dots of cause and effect in hindsight.  Using this approach, one might conclude in order to have a successful company like Apple, the CEO needs to be a tyrannical, impatient, socially-impaired, perfectionist Asshole.  I could argue for every Apple, there are hundreds or thousands of companies that failed or went bankrupt with leaders possessing the same “Jobsian” qualities.

What really set and still sets Apple apart  -- and it starts at the top -- was a fanatical dedication to a higher purpose….best said in Jobs’ words: “Putting a dent in the universe” and building “an enduring company.”  Certainly Jobs was a very wealthy man and Apple has $76 billion on its balance sheet to prove it, but he never ran his businesses putting profits first.  He simply believed making money was a license to continue to do great things.   And his team believed this too. 

Now, if I were a real writer, I’d have to list about 30 acknowledgements for this blog.  But rather, I suggest you buy the Isaacson book and it will cover about half of it.  The other half of the credit for my quotes and musings goes to SIRI, the iPhone 4S electronic assistant.  It’s amazing.  She (SIRI) found Apple’s balance sheet cash, Gates net worth, and the size of Ellison’s boat.  SIRI and the iPhone 4S are great legacies to Jobs.

Obviously, we can never answer the question about Jobs running MY company.  But the question of whether I would hire a tyrannical, impatient, socially-challenged, perfectionist Asshole to run my company is clear….
Only if he was “The” Steven P. Jobs!
  

Mark Zuckerburg,  Time Magazine 2010 Person of the Year, and my Choice for the 2012 Nobel Peace Prize
 
I am in awe of what has changed in the Middle East in 2011.
When I was growing up in the dark ages of the computer business (in the 80’s), there began to be the discussion of what will be “The Next Killer Technology”.  For those of you old enough to recall, the main driver of PC technology was replacing dedicated word processing systems such as Wang Word Processors, or simple accounting systems such as the IBM Datamaster with PC’s.  LAN’s and servers replaced mini’s and mainframes, and on and on.

Of course, the late 90’s saw the invention of The Internet (Thanks Al) and the web, which we all can agree was The Next Killer Technology.  In the words of William Shatner, “The Internet is going to be big—really big!”


So here we are in 2011, and it is clear to me that the next “Killer Technology (or Killer App in our current language) is “Revolution”.
The convergence of smart phone technology, the web and social networking has done more to change the world than 100 years of Middle Eastern diplomacy (Yes, I know Middle Eastern diplomacy is an oxymoron).  The Arab Spring certainly would never have happened they way it happened had it not been for the invention of Tim Berners-Lee, credited for the first browser prototype, Marc Andressen (raised in Wisconsin, by the way), creator of Mosaic, the first useable browser, Sharp & Kyrocera, creators of the first phones with integrated cameras, and Mark Zuckerburg, creator of Facebook. 

RIM deserves a lot of credit (before they go out of business) for proving in 1999 that wireless email communication was addictive and a “Must Have.” 

2011 saw hundreds of gatherings of hundreds of thousands of repressed Egyptian, Libyan, Syrian and other Middle Eastern citizens was coordinated on Facebook.  It gave a voice to people who have had none.  We saw, practically in real time, the gruesome documentation of the end of the Gaddafi, captured on cell phone video.  Imagine if our own Civil War had had this historical record!  But what is most amazing is that 20 years worth of technological developments converged and in nine months changed the world!

Look at this time line:
1990:       Tim Berners-Lee develops first prototype browser
1993:       Marc Andressen’s Mosaic Browser appears
1996:       Kyocera VP-210 Visual Phone, First phone with video Camera
1999:       First Blackberry sold (BTW, my company was one of the first 10 Blackberry dealers in the US)

2004        Facebook founded by Mark Zuckerberg, at the age of 20, ONE YEAR AFTER THE BEGINNING OF THE IRAQ WAR

2011        As of October 2011, revolutions have resulted in the overthrow of three heads of state in less than one year. Tunisian President Zine El Abidine Ben Ali fled to Saudi Arabia on 14 January following the Tunisian revolution protests. In Egypt, President Hosni Mubarak resigned on 11 February 2011 after 18 days of massive protests, ending his 30-year presidency. Former Libyan leader Muammar Gaddafi was overthrown on 23 August 2011, after the National Transitional Council (NTC) took control of Bab al-Azizia. He was killed on 20 October 2011, in his hometown of Sirte after the NTC took control of the city.  Lot’s of gruesome video available on YouTube.  (Taken from Wikipedia)

So here is my big take on all of this:

1.    These major, major changes in our world all started with a simple idea.  (Cataloging online information, wirelessly sending a photograph, meeting girls.)
2.    Much of the technology that changed the world was invented by somebody in their 20’s.  I vow to listen more closely to the 20-year olds!
3.    As Carlos Rizowy said 1998 at a TEC meeting, “The Satellite Dish will do more to overthrow dictatorships than tanks.”  The only thing Carlos missed was the key technology, but he had the concept spot on.

So at the risk of showing my age, I’ll admit I can’t get this song out of my head

John Lennon—Revolution, 1968

You say you want a revolution
Well, you know
We all want to change the world
You tell me that it's evolution
Well, you know
We all want to change the world
But when you talk about destruction
Don't you know that you can count me out
Don't you know it's gonna be all right
all right, all right


 

You say you got a real solution
Well, you know
We'd all love to see the plan
You ask me for a contribution
Well, you know
We're doing what we can
But when you want money
for people with minds that hate
All I can tell is brother you have to wait
Don't you know it's gonna be all right
all right, all right

ah, ah, ah, ah, ah...

You say you'll change the constitution
Well, you know
We all want to change your head
You tell me it's the institution
Well, you know
You better free you mind instead
But if you go carrying pictures of chairman Mao
You ain't going to make it with anyone anyhow
Don't you know it's gonna be all right
all right, all right
all right, all right, all right
all right, all right, all right

I have been doing some TEC/Vistage talks recently called, “There’s NO Training after Toilet Training!” taken from my August Blog.  The goal of these talks is to convince business people there is no use in trying to coach “C” players into “B” or “A” players, because it’s just not going to happen.  Or….it happens so seldom, it’s usually not worth the energy and time expended, since the ROI will likely be negative and the coach (i.e. you) will be frustrated and exhausted from the effort.

My belief is personality and its suitability for a person’s role in the work place, is the major, if not the sole determinant, of success on the job (and in life, too!).

One of the interesting questions that ALWAYS surfaces is, “Where does our personality come from?”  Followed by….“Are we born with our personality or is it a function of our environment?”  Which, in turn, is followed by….”When is our total, adult personality formed?”  My reply to these questions is always the same:  “How the hell should I know??  I am a business guy!”  But, in truth, I am more of a “one-man sociology study” than I’d like to admit.  Here’s why…

I am adopted.  Dick and Katie Howman brought me home on April 1, 1958.  I had a modest, but awesome upbringing in Neenah, Wisconsin.  My Mom, Katie Howman (now 86 and with a better social life than most 20-year olds) was the secretary at our high school.  She was and still is a superb Mom.  Funny, Irish, kind, unselfish.   My Dad, Dick Howman, was a fairly quiet guy, who, while friendly, definitely wasn’t in charge of the social calendar.  He wasn’t a Reagonesque communicator, but he loved and could tell a good and dirty joke (and so do I!)  My Dad was a rural letter carrier for the U.S. Post Office before it went bankrupt.  My Dad and I were extremely close.  We played catch almost every day after school from my 1st grade on.  We fished and did my paper route together.  We bought my first dog together (for which my Mom didn’t speak to either of us for a couple months, by the way).  He got me into gun collecting and hunting.  We even tried to start a business together until the neighbors discovered he was converting our garage into a gun store.  I learned what a zoning violation meant when I was 12!

As I was working on my Psychology Degree, my parents and I would often talk about the “Nature versus Nurture” question.  I would always tell them it was my loving home and their wonderful Nurture. My folks would always say, “We didn’t do much.  You came to us with great genes.”  They were on the Nature side, of course.

My Dad, Dick Howman passed away in 1998.  He was an incredible guy.  He loved my Mom until the moment he died.  A bittersweet anecdote about his death I cherish is that just before he died, he was having a Brandy Manhattan (which I'd never drink!) after which he and Mom had planned to go out for a Friday Fish Fry with friends.  He died with that glass in his hand; I put it in the freezer when I got to our house to help Mom and it stayed there for about a month until she finally made me throw it away.  I just know he would have loved and chuckled at this last story.  I really miss him!

About 15 years ago, more or less by accident, I met my “other” Dad, my birth-father, Richard J. Callaway.  My Dad, Dick Callaway, was a lawyer and a judge in Madison, Wisconsin.  The first time I met my Dad was at the Badger Candy Kitchen in Madison.  He had on a blue, pinstriped, Ralph Lauren suit.  So did I.  He wore a set of yellow suspender braces.  So did I.  When we went outside that first day, we both put on our crushable Bailey hats (his was green, mine black).  My Dad and I both drank Scotch as our preferred vice.  I’ve signed my name as “JRH” since I was 12.  He went by “RJC.”  We even had friends in common.  If I sat down and made a list, I could come up with at least 40-50 things I did the same as he, without any rational explanation -- except “Nature.”

My Dad, Dick Callaway, would be described as a larger than life guy.  A one-of-a-kind character with a real memorable personality, he knew everyone and made friends everywhere.   He was non-conventional, non-conformist, and very politically-incorrect (especially for a lawyer and a judge).  Funny, smart, he had a wide variety of interests from boxing, flying, golf, cars, and politics.  He once helped prospect an old underwater silver mine in Canada.  Enthralled with the area (which was once an old-time mining camp in the late 1800’s), he bought the camp’s old Methodist Church and converted it into a cabin.  Each summer for at least the past 25 years, he “went to camp” (as they say there) at Silver Islet, Ontario, Canada. 

Interestingly, most of these personality traits have also been used to describe me.

So when I was growing up, I was all-in for the “Nurture” side of the argument.  After meeting my Dad, Dick Callaway, I swung way, WAY back to the “Nature” side of the argument.  I have been constantly surprised and amazed at the similarities between my Dad and me over the past 15 years.

But in reality, it doesn’t matter.  Because no matter where it comes from -- your genes OR your environment -- your personality just doesn’t change.  And I really believe it’s a waste of time to try.  So, here’s my business tie-in…are you ready?  Please, do me and your company a favor:  Select the right people and don’t try to change them.  (P.S. This applies to employees and spouses.)

Finally, and most important, I am writing this on Friday, September 23, 2011.  My Dad, Dick Callaway died today at the age of 84.  While I only knew him for 15 years, I so appreciate the gifts he gave me.  My intellect, personality, sociability, my non-conformist bent…and, of course, an appreciation of great Scotch!  Plus the 1,000’s of other traits that make me who I am.

On a very personal note, I am most grateful for the three “other” brothers who I found at the same time as my other Dad.  I can’t say I share as many personality traits with them as I did with Dick Callaway, their Dad, our combined Dad.  Yet, the legacy Dick Callaway so graciously gave me (beside just the “ME” that I am and will always be) is a lasting relationship I now share my newest brothers, a relationship which I will forever cherish and Nurture….because of the Nature!

Many Thanks to my Editor and Muse, Laura A. Gille.  She does a great job!

JRH

My dear wife (who by the way is also my Editor-in-Chief) and I were discussing stressed and distressed businesses.  She works as a banker by day with problem business loans, so she gets to see lots of business stress as do I.  She asked me, “So John, what percent of stressed businesses are suffering mainly because of the economy and what percent are suffering from self-inflicted wounds?”  I replied, “Oh… about 100%.”  Shocked, my dear banker wife gasped, “100% due to the economy?” to which I replied, “It’s not the economy stupid!”  This explains why I am writing this from the Baymont Inn in Grafton.

Now, I tried to tell her I was making a reference to Bill Clinton’s famous 1992 campaign slogan.  I think I’ll have her convinced by kickoff time of the Packers game. 

So do I really believe 100% of business stress is caused by management and NOT the economy?  Maybe not 100%, but very, very close.  What are the main causes of stressed businesses?  There are hundreds, but here the ones I see frequently.

1.    People.  People that end up in the wrong roles.  This happens for all sorts of reasons.  Hiring the wrong person in the first place.  Or, the role has evolved but the person has not.  Remember, you will NOT train the person into the right role.  (See last month’s blog.)


2.    Leadership.  As much as I hate to say it, many leaders are letting their companies down.  Whether it’s boredom, ADD, hubris, laziness or something else, stressed and distressed organizations often suffer from leaders failing to lead.  I have had to chastise clients in the past that the first thing they need to do to start their corporate turnaround is to work harder AND work smarter.  I’m not a Spartan, but a struggling company needs more than a 20 hour per week CEO.  And when you factor in golf, vacations, vendor boondoggles, shopping online, etc., you’d be amazed how many CEO’s work less than 20 hours per week.


3.    Customer concentration.  In the old days I used to love to come to work in the morning.  Johnson Controls in Milwaukee was our biggest customer.  The fax machine (sorry, you will not relate to this if you are under 30) would be buzzing, and it would be filled with orders.  It was awesome and JCI was  85% of our business.  One day, my partner, a former auditor from KPMG, asked me what I would do if JCI stopped filling the fax machine every day?  I got my ass out the door later that morning!  If you are getting more than 25% of your revenue from any single customer, you have a very serious issue that needs to be addressed.  NOW!


4.    Your marketing stinks.  On the radio, we used to have the “Ram and Rom Rules of Life.”  One of the rules was “The best products don’t always win, but the best marketing always wins.”  At the time, we were thinking about Microsoft, which rarely had the best product, but used to have the best marketing.  I see a lot of businesses that have really, really great products and services, surrounded by incredibly lousy marketing.  And I am not talking brochures, websites, and tradeshow displays.  I mean strategic marketing like strategic pricing, prospect identification, product roadmaps, etc.  If this rings a bell, check out the website of Mitch Gooze who runs a business called the Customer Manufacturing Group.   And if you have a Marketing Director that isn’t part of the strategic planning group, you have the wrong Marketing Director.


5.    Too much focus on expenses and not enough focus on margin.  Believe it or not, it is often MUCH easier to increase Gross Profit by 10% than reduce SG&A by 10%.  And less painful.  And less destructive.  Obviously a business losing lots of money, in trouble with their bank, and in a downward spiral has to reduce expenses.  But before it gets to that, the CEO and Chief Marketing Officer should be asking their team “How can we increase our margin?” at every management meeting.


6.    Abdicating responsibility.  Don’t rely solely on your professional advisors to know and understand what you should really know and understand.  My wife used to tell me (when she worked as lender for a non-profit organization which focused on financing start-ups) stories about how she would review projections or business plans in detail and ask, on a line-item basis, how the start-up entrepreneur came up with a revenue or expense line.  Too often, the person would respond, “My accountant did these projections.”  To which my wife would reply, “Then will your accountant be repaying this loan?”  Business owners need to read and understand their financial statements, their loan documents, their insurance coverage….you get the idea….and not just rely on their professional advisors in such matters.

7.    Believing in forever.  Products and services will not always stay young, vibrant, wanted, and needed.  Companies are not Peter Pan and we sure aren’t in Never Never Land.  The most recent example which comes to my mind are these excerpts from an internet article about the recently-announced layoff of 2,000 (11%) of RIM’s (as in RIM Blackberry) workforce:  “Analysts pointed to Research In Motion's sluggish response to Apple and Android technology….RIM wasn't aware of or reactive enough to changes in the market….This entire chapter in RIM's history is being driven by its lack of agility… It's always a danger with any one-trick pony strategy, what you consider to be a distinctive feature, which is going to keep you apart from everybody else, but you ignore everything else people might want.”  


Now this is not a comprehensive list of every reason businesses come under stress.  But it’s not a bad place to start.  And while I am writing this, I’ve discovered the Baymont has pretty good WIFI and it’s quiet here.  But the beds are too soft.  So hopefully, my Editor-in-Chief will take me back so I can watch the Packers kickoff!

I recently re-connected with my favorite TEC Speaker of all time, Ed Ryan, of MPR Inc. in Chicago.  www.buildwiththebest.com.  I hadn’t talked to Ed in a long time so I hiked on down to Park Ridge IL to see him.

Ed was my first TEC speaker in 1991.  When he opened his TEC talk, he said, “As a Catholic priest, I was in the behavior modification business for 25 years.  Now I am in the behavior selection business and I am a much happier person!”

That philosophy has stuck with me for my entire business career.  As hard as I try to change adult behavior, I do not believe I have ever seen it happen.  Ask my wife.  She has been wholly unsuccessful in changing me too!  Why not?  Well… we don’t have the time or space to go into Lewis Goldberg’s “Big Five Taxonomy of Personality.”   (Start with this link if you want to learn more: http://en.wikipedia.org/wiki/Lewis_Goldberg.)  So for now, please take my word for it - you can’t change personality or most behaviors.  But despite this caveat, let’s talk about hiring and managing people to bring out the best!

I continue to see so many business leaders invest their personal time in energy in trying to coach bad behavior out of people.  I’m sure that’s also part of our human nature and personality.  And, of course, we all invest a lot of our time in self-improvement in an effort to be better leaders and managers.  I consulted on this topic with professional leadership speaker and leadership development guru, Jack Altschuler.  He said in order to have a really successful coaching session, you need to start with a really good individual.

Another Ed Ryanism: “You get hired for what you know, and you get fired for who you are.”

So if you can’t “coach out” bad behavior, what do you do?

You must, before the interview, and certainly before the hire, select the personality and behaviors that are right for your company and the job itself.

Here are my recommended steps for creating and maintaining the best culture in your organization:
1.    Pre-employment screening.  You MUST screen every candidate that you talk to about employment.  There are lots of tools.  As you may know, my preferred tool, by far is The Culture Index (CI) http://www.cindexinc.com/  I prefer the CI because they offer an unlimited use license to their customers and it’s the most simple yet accurate assessment tool I have used.  Many people who use “Pay-Per-Test” instruments are reluctant to use them on every candidate.  You’re guaranteed to waste a lot of time talking to the wrong people if you take this route.

By pre-screening everybody, you should be able to eliminate 50-70% of the resumes you receive without speaking to anybody.  And you will be in a much better frame of mind to speak to more qualified candidates.


2.    Behavioral selection interviewing.  The key to behavioral selection interviewing is preparation and developing in advance the most important behavioral traits the candidate needs to possess in order to be successful in the role and the organization.  MPR has an excellent set of tools for this. 
You also need a thorough interview process.  You cannot interview too much.


3.    Background checks.  I am AMAZED at the number of folks who do little or no background or reference checking.  I’ll hear excuses such as, “You can’t get the truth anyway, so why bother?”  That’s insane.  In Wisconsin, I start with CCAPS (Wisconsin Circuit Court Assess Program).  Next stop are all the social media sites like Jigsaw and LinkedIn.  I love to check the references that are NOT provided by the candidate.  And before I make an offer, I’ll do the $100 background check at GoBackgrounds.com. 

At the end of the interview I ask the ultimate question and then both listen to the answer and watch the body language:  “Is there anything we have not talked about in your background that would embarrass me if I recommend you for this position ?”  Depending on what you hear and see, you may need to do more due diligence on your candidate before you make your hiring decision.

So is coaching a total waste of time?  Of course not!  But please be realistic about what to expect.  Better individuals will respond better to coaching.  People in the right roles will respond better to the right coaching.  People who are not depressed will respond better to positive coaching.  But, C-players, in the wrong roles, who are not happy, WILL NOT respond to coaching.

And, as Dr. Sigmund Freud once said, “Behaviorally speaking, there is NO training after toilet training!”  Actually, I said that, not Freud, but it sounds better when you think of Freud, with his thick Viennese accent saying this, no?

Enjoy the remainder of your summer!  Packers season is only weeks away (and we know they are a team with the right players and the right coaching!!).


Happy Spring! 

Most business folks I know are frustrated Marketing experts.  Or maybe not frustrated, but marketing experts nonetheless.

Me, I am a frustrated HR expert!  I continue to be really interested in this new, four-generation workplace that has evolved and the role that technology is playing in new ways to work.  And since I want to go for a motorcycle ride, I am going to steal (re-print) this blog from Robert Pease, Vice President of Marketing at Gist.com, my new favorite social media tool.  More on Gist at the end.  Robert's blog this month has done a great job of showing that it isn't about the workplace but rather the "Workstyle".  If you want to employ Millennial's,  read on.

The New Workstyle according to Gist:

1.  Mobile – always on and aware.
2.  Connected via hi-speed/broadband access – connected by a seriously big pipe or 4G.  No dial up in the new workstyle.
3. Self-sufficient - have their own equipment which is often superior to what is provided by their employer or used in lieu of (computers, mobile device, printers, software, etc.). Demonstrate resiliency in their ability to navigate and thrive in an increasingly ambiguous workplace (and world).
4.  Virtual – location independent with minimal impact on contribution.  In fact, productivity is higher as the lines between work time and personal time blur along with designated work and personal locations.
5.  Broad personal and professional on-line networks – meaningful connections across social networks like Twitter, Facebook, and LinkedIn that are not just collected and counted but leveraged and often engaged around questions or for advice.
6.  Productive – not obsessed with productivity per se but owns the concept and applies it every day focusing on outcomes and accomplishments versus activities.  Is always looking for tools and methods to improve an already productive daily pace.
7.  Off-line driven – an important dimension of the new workstyle is both a consciousness and focus on off-line, person-to-person interactions facilitated by on-line tools and forums.
8.  Balances work and personal lives –  knits both work priorities and commitments with personal pursuits throughout the day (and night) combining flexibility with increased overall productivity and contribution to both.
9.  Gives back – thinks beyond themselves to causes, community, or others less fortunate and uses their connections and resources to make significant contributions.
10.  Intellectually curious – constantly seeks out new and betters ways to work by experimenting with new tools, listening to others, and critically examining the things they do and why they do them.

Gist is a simple interface that combines all of your contacts (address book, Linkedin, Facebook, Twitter, etc.) into a Dashboard.  It really exceeds the capability of any CRM product I have seen recently when it comes to knowing your contacts.  Just check it out at www.gist.com!

I love the Internet!  One of the best things for me is the ability to find long-lost friends.  We all have certain teachers who made a difference in our lives.  For me it was my 9th Grade Social Studies and Home Room Teacher, Rod Buchen.

Rod was a young teacher when I was a High School Freshman.  That’s what made him so cool!  But he left teaching shortly after that and I had not spoken to him in more than 35 years.  I knew he had entered the business world and that his father was very accomplished and somewhat famous.  Rod’s Dad, Phillip Buchen was President’s Ford’s Law Partner in Michigan and became White House Counsel when Ford became the President.

Last December, I was trying to re-connect with some of my Neenah, WI friends and decided to look for Rod.  Between Google, Wikipedia and Linkedin, I found him in about 20 minutes.  It was awesome.  Since then, we’ve been talking about our respective careers and I was amazed at the similarities.  Rod left teaching for the corporate world and ended up as an HR executive with some very large organizations including Xerox.  After leaving LARGE corporate America behind, he’s been working as a mentor, executive coach, and advisor.  Like me, Rod believes in not just getting the right people on the bus, but getting them aligned and on-boarded quickly and effectively.

I was discussing with Rod my role as a TEC Chair, and how important I think it is to develop leaders in the organization—usually from the top down.  This month’s Fortune article about Steve Jobs and Apple is an excellent example.

So in the course of our conversations, Rod has offered to write my blog this month!  Talk about role-reversal!  I was the one that used to have to write for him.  But I like his message and I think you will like it too.  I give Rod an A+ for this month’s blog about leadership development.






An Overview of Benefits and Best Practices
(Summarized from Corporate Executive Board Senior Leadership Development Roundtable)

I.      Definition of Leader-Led Development (LLD): 

“An ongoing and dynamic series of job-related interactions between a Senior Leader and a Leadership Development Participant designed to improve the Development Participant’s performance and increase readiness for future leadership roles.”

II.      Why LLD Makes Good Business Sense:


Senior Leaders who are very effective at Rising Leader (Participant) development can boost the performance of their Direct Reports by as much as 27%.


These same Effective Senior Leaders demonstrate 33% higher competence in strategic thinking than Senior Leaders who are very ineffective at developing Leadership Development Participants.

 
Effective Senior Leaders are also twice as likely to exceed their financial goals as others.

 
Of seventeen organizations surveyed, the top LLD company out-performed the lowest LLD company by a factor of four!


III.    Factors that Drive LLD Success:


The relationship between Senior Leader and Leadership Development Participant (tone: positive or negative; open or guarded; friendly or more formal)


How the Senior Leader is perceived throughout the organization (personal reputation and credibility; management style; vision and business management skills; and leadership abilities)


The Senior Leader’s personal receptivity to being developed or “coachability (openness to new ideas and suggestions; approachable to informal feedback; willing to admit need for personal improvement)


Note:  Research shows that  “coachability” drives “coaching ability”


The Leadership Development Participant’s receptivity to, and enthusiasm for, being developed by their Senior Leader (clearly signals openness to new ideas and suggestions; is aware of limiting beliefs and behaviors; actively seeks out feedback and constructive criticism; follows through on development goals; successfully applies new learnings)


The company’s ability to guide and support all those involved in an LLD program (giving Senior Leaders and Development Participants the knowledge, skills, tools and coaching support needed to raise their competencies and sustain new desired behaviors)


IV. Five Essential Roles for Senior Leaders Who Are Very Effective at Developing Leadership Development Participants:


1.  The Performance Advisor: Effective Senior Leaders provide less instruction and provide more advice that helps Leadership Development Participants find answers themselves by asking, not telling, and building on the Development Participant’s strengths that drive performance, not correcting weaknesses. Effective Senior Leaders serve as a sounding board for difficult challenges and provide feedback on limiting beliefs and behaviors.


2.  The Relationship Advisor: Effective Senior Leaders help Development Participants build critical relationships, expand their personal network and provide insights into navigating the internal political landscape.


3.  The Experience Advisor: Effective Senior Leaders create clear connections between developmental assignments and career advancement; they share stories of their personal experiences; they place Development Participants in situations that push their comfort zone and provide new learning opportunities in areas needed to advance.


4.  The Experience Optimizer: Effective Senior Leaders open discussions that help the Development Participants maximize their learning from new experiences, taking them from action to reflection to new application; they provide opportunities for Development Participants to safely practice new skills and new leadership approaches, while providing real-time feedback.


5.  The Career Champion: The best Senior Leaders act as visible, active champions for their Development Participants so that others see their long-term potential.

Rod Buchen can be reached at:  The Buchen Group,
                                                    813-765-7800

First I want to say “Thank you” to Simon Sinek who presented at the All-TEC Inspirational Leadership Conference earlier in April.  It was fantastic and inspired me to share some of his thoughts with you and what they have meant to me as well.
If you are interested, I’d first recommend that you watch a 20 minute video from Simon’s recent TED talk.  Click here to go to that talk on You Tube.  Simon Sinek, “Start with Why.”  If you like the video, I would definitely encourage you to either get the book on Amazon “Start with Why” or better yet, get the audio version from Audible.com “Start with Why Audiobook”, narrated by Simon. (Note I AM NOT getting a commission on any of these click-through links, although it’s a heck of an idea.)  In my opinion, the book is a must read or must listen if you are a business person, parent, child or other type of human being.
It’s a pretty simple concept.  Whether thinking about your business, your family or yourself as a person try to understand WHY you do what you do.  In the workplace, understanding the WHY will help everybody on your team go home every night feeling more inspired and more fulfilled. 
Simon uses a simple diagram called The Golden Circle.  Below is an example of the Golden Circle for TEC:

Here’s my personal Golden Circle:

I realize this is pretty simple stuff.  But I guarantee if you take a few minutes to think about your WHY or your organizations’ WHY, tomorrow will be better than yesterday.
Happy Spring, whenever it decides to arrive!

                                   WARNING OBSTACLES ARE
                                        CLOSER THAN THEY APPEAR!

I recently facilitated a TEC mediation between my TEC CEO member and his controller “Jim” (name changed to protect me!).  They were extremely frustrated with each other.

Jim is a great controller and the CEO an excellent entrepreneur.  The CEO complained Jim wasn’t giving him what he wanted; Jim complained the CEO was asking him for information he really didn’t need.  So like any good TEC Chair/Marriage Counselor, I called a timeout and asked to meet with each person separately.

I spoke to Jim first.  I told him he’s an excellent controller and he provides much of what the company needs - but not everything.  I asked him about his career goals.  He said, “Of course, I want to be the CFO here when we are large enough.”  I responded, “Jim, you’re an awesome controller, but I don’t think you’ll ever be the CFO.”  Deflated, he asked “Why not?”  I responded, “Because your boss is looking through the windshield and you’re looking through the rear-view mirror.  And… knowing your personality, I think you will always prefer the rear-view mirror.”

Jim wasn’t too happy with me.  We talked a little more about his role at this company.  Eventually, he understood and agreed.  He can’t and doesn’t want to look at the future and where the business might go.  He’s a classic and dedicated “list crosser-offer.”  He’d rather have the books closed on the 10th, than analyze whether it makes sense to buy a small company in another market or open a branch.  He’d rather harass the VP of Sales about an excessive dinner tab with a key client, than analyze whether the client’s account is profitable.

Don’t get me wrong!  This company needs a controller.  It’s a critical role.  But they won’t grow much past $5 million in revenue until they get an excellent CFO, even if it’s just on a part-time basis.

Later, I talked to the CEO and we had a great discussion.  He asked me why I thought the relationship with his controller was rocky.  I told him “It’s because you’re looking through the windshield and Jim’s looking through the rear view mirror.  And it’s a sign the company is ready for a CFO.  While you need to express your appreciation to Jim for being an excellent controller, guarding your treasure, and being willing to say “No” once in a while, you must also to tell him you need to bring in additional financial horsepower to get the company to the next level.”  The CEO then asked me what to consider for his first, part-time CFO.

I went to my old friend, colleague, and best-in-class financial and operations executive, John Jensen, CPA, and CEO of Jensen Consulting in Milwaukee.  John put together this continuum of financial expertise needed by entrepreneurs to grow their companies:

I.  Level One:  Bookkeeper to Controller


“Transaction Processing and Timely Information”

• Sales invoicing.
• Cash receipts.
• Cash disbursements.
• Payroll.
• Manage A/R, A/P.
• (End of month typically done by outside CPA firm.)

II.  Level Two:  Controller to Accounting Department Manager


“Fiduciary Responsibilities and Risk Management” - Performing or managing the above plus:

• Timely completion of Financial Statements (10th to the 15th).
• Managing A/R, A/P and purchasing associates and insuring a separation of duties.
• Risk management, in particular cash management.

III.  Level Three:  Part-Time CFO to Full-Time CFO


“Consultative Decision Support” - Managing functions listed above plus:

• Provide financial analysis and tools for business decision support.
• Foster a close business relationship between finance and the rest of the organization.
• Create and disseminate innovative, relevant information.
• Work closely with bank or other sources of financing, focusing on the next 12-36 months.

IV.  Level Four:  Full-Time CFO:


“Corporate Strategy Development” - All of the above plus:

• Help the CEO focus on strategy.
• Anticipate industry trends.
• Launch new businesses.
• Advise on the purchase or disposition of business units.
• Create and sustain shareholder value.

So….many thanks to John Jensen for this succinct and complete roadmap to the role of your top financial executive and your company’s future.  Next month, we’ll talk more about how do you know what you need and how much should you pay for all of this!
Until then…enjoy Spring!  And look for me on the bike….I’ll definitely be looking through my windshield (and smiling)!

For my part, I’m (thankfully) almost over a most unpleasant exposure to an individual who simply won’t pay bills or tell the truth to critical constituents.   In cases like these, the MCD-afflicted person portrays him or herself as a victim, conjuring overly dramatic excuses for not paying as agreed or telling the truth, all the while rationalizing the actions or lies as “necessary,” or, at the absolute height of MCD affliction, actually believing the lies.  Once you correctly diagnose a person with MCD (which unfortunately often only results from prolonged exposure to the affected person), you feel a little foolish for not having quarantined yourself sooner.  So, early diagnosis is critical to avoid harm to yourself and others (read “your credibility, your company, your employees.....”).  As one of my mentors once said, “If you deal with a jerk, you are a jerk.” 


Another one of my unhealthy encounters involved somebody who committed out and out fraud.  Now, by nature I am a very trusting and positive person.  But this guy was enough to shake my faith in human kind....he had no qualms about infecting and threatening the health of an entire company and the livelihood of its extremely hard-working and dedicated owners.  And I really have to fight my reaction to spend every free moment sending this guy to jail.


So how do you identify a person with this terrible affliction?  Here’s my list of the ten character flaws....uh....I mean symptoms of MCD:




If you have a customer, supplier, prospective employee, or prospective business partner who is flashing you a yellow light, just listen to your inner voice.  Some of my most expensive and upsetting mistakes have come from not proceeding with caution (read “exit”) when my gut said “slow down”....”stop”.... “get the hell out of here ASAP.”


OK, so no advice on New Year’s Resolutions, optimistic predictions about 2011, or giving thanks that 2010 wasn’t 2009.  (Sorry about that.)  I’ll cover that in January.  But please accept my sincere wish for a prosperous, and especially a healthy 2011 - free of anybody afflicted with MCD!--JRH

In working with people who are learning to run a business, they often follow a common pattern.  We'll call it the Howman "Hierarchy of Business Management".

Customer Service.  (Basic Needs) Customer service is like oxygen.  We can't live without it.  It is the  basis of the culture in the organization.  No customer service culture?  You are the DMV!  Customer Service without advancing to the next level?  You're bankrupt.  BUT, there are many entrepreneurs who never leave this level.  And as a result, the business cannot scale.  Think about a one chair barber shop.  Nothing wrong with this if it’s what you want.

Revenue Focus.  (Safety)  Most entrepreneurs find safety in top line growth.  Very typical level two management.  (See the Inc. 500/5000).  Very important and you cannot survive very long without consistent growth.  Most businesses should, no, MUST grow at 5-%15% per year for long term survival.

P&L Focus.  (Psychological Needs)  Having the biggest whatever on the block.

It’s often difficult to manage profitability while growing a company.  Guess what?  You’ll need to do both!  I am amazed however; at the disproportionate amount of time most of us spend managing the SG&A section of the Income Statement.  The old saying that “Profit is an orphan and expenses have children” is very true.  But the best advice I ever got on the subject happened when I was asked to read 20 business plans over a weekend.  When I complained to a business friend about what advice I could possibly offer anybody if I had to read all 20 plans, he said “Tell them all their margins are too low!”  He said it’s universally good advice to get business owners to focus on improving their gross and net margins.  It’s true.  I believe if we spent the same amount of time improving margins as we spent trimming expenses, we’d have a better company.

The Balance Sheet Building Value (Self-Actualization).  It’s all about building long-term value.  If you are focusing here, YOU are becoming a self-actualized business owner.

The Exit (Peak Experience).  Whatever your long-term goals are:  Passing the business on to your kids, the employees, a sale or going public, the exit should be your peak experience.  That’s why we do what we do.  If you’re young, you may be lucky enough to do it several times.  Or it may be a once in a lifetime opportunity for you.  Good luck.

My friend Stuart Banghart, CEO of The Grover Corporation sent me this excellent newsletter from John Mauldin.  His website is www.frontlinethoughts.com  It's great information and has a plug for TEC (Vistage) as well.  Thanks Stuart!

My unscientific, informal survey of TEC members tells me that things are definitely up from last year, but flattening out with little visibility about future business.  So do me a favor and check out the newsletter above.  Or if you're in a great mood, and want to get a little depressed, check out Harry Dent's newsletter with this link:  http://www.hsdent.com/recession.pdf

Lot's of good information in both.  My take?  Outsource everything, buy weakened competitors, fire quickly and hire slowly AND join TEC.

Go Pack Go!

Hello TEC Members and Business Friends,

I, like many TEC Chairs have two business lives. The happiest part of my day is working with TEC members. We often discuss strategy, growth options, dealing with success and other optimistic issues. Of course, in TEC we also deal with difficult issues—business and personal. But on average, TEC members are significantly more successful than non-TEC members and WAY, WAY ahead of the S&P 500 and many public companies.

The other half of my business life is often spent with businesses that are in trouble or heading for trouble. What is interesting to me is how consistent the signs of trouble are as are the reactions of business owners to these early signs. I’ve noticed that the business owners’ reaction was similar to Dr. Elisabeth Kübler-Ross’s Five Stages of Grief Model.

Remember Roy Scheider in “All That Jazz”? He did a great job of reviewing them.

1. Denial

2. Anger

3. Bargaining

4. Depression

5. Acceptance

It turns out that a lot has been written that the Five Stage Grief model IS representative of many types of personal and business changes that we experience.

So let’s review the five stages in a business context.

Elisabeth Kübler-Ross Five Stage Model
EKR Stage	Symptom
Denial	“If only we can land one order”, “I hope the economy will improve.” (BTW, Hope is not a strategy) And this is where most people stay stuck.
Anger	“Why me?” “It’s not fair.” “It’s the(employees, customers, vendors) fault.”
Bargaining	To the bank, “If you increase my line beyond the collateral just this one time, we can make it up when the economy turns around.”
Depression	“I quit.”, Selling the business at a low point
Acceptance	Bankruptcy OR doubling your effort and investment

I’m not writing this to bum you out! What’s critical is recognizing in yourself if you are facing a business challenge and are “stuck” in one of the EKR stages. If you are, get some help! It’s amazing what a little outside perspective can do for you.

I have some links to some excellent websites on the subject. Email me if you’re interested! Enjoy the great weather and remember, “Hope is not a strategy!”

JRH