Leadership Quote: Yesterday's Home Runs…

 

This month’s leadership quote:

“Yesterday’s home runs don’t win today’s games”

-Babe Ruth

Not only don’t yesterday’s home runs win today’s games, the way we got to yesterday’s home run may not work today. While the past can be our teacher, it can also delude us. When we have been successful in the past, we often think that if we repeat what led to that success, we will have those same results, that same home run, again.

Sometimes it works.

More often, the players and leaders who achieve multiple home runs do so by pausing, noticing what is different and adjusting accordingly. And… they keep moving forward; expecting to work just as hard to get the next home run as they did to get the last one.

 

Elisa K. Spain

The Emperor's New Clothes

 

I have come to realize, duh… that the fairy tales we read as children were intended to prepare us for our adult lives. (Robert Fulghum was right, All I Really Need to Know, I Learned in Kindergarten).

A couple of weeks ago I wrote about The Other Side of Success, when confidence becomes hubris. The Emperor’s New Clothes is, in my view, the ultimate risk of this hubris.

The Emperor’s New Clothes is a short tale by Hans Christian Andersen about two weavers who promise an Emperor a new suit of clothes that is invisible to those unfit for their positions, stupid, or incompetent. When the Emperor parades before his subjects in his new clothes, a child cries out, “But he isn’t wearing anything at all!”

The emperor is so vain, he believes the tale. The adults are afraid to tell him the truth for fear the outcome may have consequences for them. Only a child tells the truth; he is too young to realize he is taking a risk by doing so.

To be a successful leader, one must be confident, have the courage to move forward even when questioned. And at the same time, the successful leaders I know also ask for feedback. They are constantly in touch with their constituents – customers, employees, vendors, advisors, family (after all it was a child that told the emperor the truth).

Recently I heard a new CEO talk about the changes he had made since assuming his position. He was proud of those changes and went on to say, “things are better because of these changes”. Yet, he hadn’t ever asked his users (customers, employees, vendors, etc.) what they thought. He believed it to be true, just like the emperor. I later had the opportunity to hear from some of his constituents, and they had a different perspective. For them, the changes had made their work more challenging. Which is true? I don’t know. What I do know is most of his stakeholders are telling the CEO what he wants to hear, not what they truly feel and believe.

Years ago, I saw the effect of this first hand. I was working in the investment business and several of the large institutions, like ours, decided to install a new software system for managing trust accounts. The system was built by a small company and it turned out they were better at marketing than at software development. Our largest competitor at the time was the first to “go live” with the new system. It was a disaster, such a disaster that they ultimately exited the trust business. I remember saying to my colleagues at the time “someone, probably several people, at that bank knew this was going to fail and they were afraid to speak up”.

I leave you with these questions:

  • What are you doing to solicit honest feedback in your organization?
  • What are you doing to foster an environment where your customers, employees, vendors and other stakeholders feel they can provide feedback without fear of consequences?
  • Do you have a “child” in your company and your life who is willing to tell you that you are naked?

Elisa K. Spain

 

SWOT And Risk Management

 

Most every business at one time or another, most often annually, spends a bit of time on a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats). This is simply good governance. And, as I discussed in a recent post, Are You Prepared to Govern in a Changing World?, successful companies focus externally on the O and the T, because they know internal actions must be based on these.

An often missed corollary to SWOT, is the broad topic of Risk Management. Business owners sometimes believe that by purchasing insurance they have addressed this topic.

While insurance is available to mitigate some risks, there are many business risks for which insurance is neither available nor financially practical. Instead, it is management practices that are the key ingredient to managing many, if not most, risks.

How are you, as a leader, managing each of these?

Reputation Risk
  • Does the behavior of your employees reflect your company values?
  • Have you articulated these values and do your own actions consistently reflect them?
  • What do you want to be known for? (your brand)
  • If you surveyed customers, vendors and others who have contact with representatives of your company, what would they say you are known for?
Operational Risk
  • Simply put, does your product and service work?
  • Do you have quality standards, and do you measure them?
  • Is it easy to do business with you?
  • In short, do you have operational excellence and if you don’t, is doing something about it a priority?
Legal Risk
  • Are you keeping current on HR and other regulations that impact your business?
  • What actions are you taking in your hiring, promotion and other business practices that may inadvertently create legal risk?
Human Capital Risk
I am fond of the saying, “Take care of your employees and they will take care of everything else.”
  • Are you focused on retaining your key employees?
  • Do you deal effectively and swiftly with behaviors that are not consistent with your culture?
Business Model Risk
  • What is happening in the marketplace (competitors, regulators and customers, etc.) that may impact your business model?
  • Is your business model sustainable? How do you know this?
  • What have you done, or need to do, to diversify this risk?
Financial Risk
Financial risk is the primary (ultimate) risk to business owners and their investors, and it could take awhile for the impact of each of these risks to show in the numbers and…. it may not happen. The question is, “how much financial risk are you taking by not focusing on risk management”?

Elisa K. Spain

 

Vistage CEO Confidence Index: Optimism At A 2-Year High in Q3 2014

 

q3 (3)The quarterly Vistage Confidence Index is now available.

Confidence among CEOs reached its highest level in two years, finally achieving a lift-off from its favorable holding pattern in the last three quarters. The Vistage CEO Confidence Index was 103.4 in the 3rd quarter 2014 survey, up from 101.0 in the 2nd quarter and 97.8 in last year’s 3rd quarter, and the highest level since 105.1 was recorded in the 1st quarter of 2012. There is no greater indication of confidence in future prospects than a firm’s willingness to increase their fixed investment spending and to expand their workforce. On both counts, firms reported the most expansive plans since 2006.

Below are some key highlights from the Q3 2014 Vistage CEO Confidence Index (all members surveyed):

  • 75% of CEOs anticipated revenue gains over the next 12 months. Only 4% anticipated declines in their revenues, the lowest ever recorded.
  • 52% of CEOs reported an improving economy, up from 50% one quarter ago and 46% one year ago.
  • 59% of CEOs anticipated increased profits in the next year, just above last quarter’s 56% and above last year’s 54%.
  • 58% of CEOs planned to increased their workforce, while just 4% planned reductions.

Elisa K. Spain