Leadership Quote: CEO’s Job…

This month’s leadership quote:

“CEO’s job is to grow it, not run it.”

Paul Orfalea, founder of Kinkos

Easy to say, hard to do.

Whether owner or professional CEO, the temptation is to run it, to make the important decisions, because after all, we know what to do. People often say that Steve Jobs was in the weeds, involved in every key decision. And, how could this be true if he built the largest company in the world? Not physically possible. To me, he focused on growing it, not running it. It’s just that coming up with the next big idea in his business was what it took to grow it; and to some this appeared as though he was too involved.

  • What does it take in your company to grow it?
  • Is this what you are spending your time doing?
  • If you are spending time doing something else, what changes are necessary?

Why Vistage Works

Elisa K. Spain

Better, Faster, Cheaper

For many years, the adage was “do you want it right, on-time or cheap, pick two”. And then somewhere in the 80’s and 90’s, perhaps associated with the dot.com era, marginal costs moved close to zero in some industries. Because of this, we began to expect all three. In fact the new adage became “better, faster, cheaper”. And, some believed we had moved to an era where all three were in fact possible.

Or did we?

I wonder if instead, more and more businesses, driven by customer unwillingness to pay for quality, have simply picked two on our behalf, with the two being cheap and fast. We see this happening in B2B, B2C and B2Self (i.e. w/internal corporate customers) three examples:

  • Amazon delivers using their own drivers because they are cheap. Amazon made this choice because they believe what we consumers want from them is fast and free delivery and when quality of logistics suffers (packages left in strange places, in the rain, etc.), we are willing to accept that cost.
  • Airlines overbook and sometimes have to deny boarding to passengers or in a recent highly profiled United airlines case, remove passengers to accommodate crew. This recent scandal with United brought attention to the consequences of this (and while this particular situation captured on video was awful, we all know it isn’t just United Airlines that overbooks and removes passengers).
  • HR support and IT support is outsourced in many, perhaps most?, large corporations. Ask any employee or user of IT which 2 of the three choices they are getting?

In an article entitled “Why Flying in America Keeps Getting More Miserable” Matthew Yglesias of Vox news sums this up well when he says, decades’ worth of evidence suggests we prefer cheap and safe to pleasant. Pleasant, defined as available seats all the time combined with higher prices to cover the costs, is a price we pretty clearly could bear as a society if we chose to, but as consumers we have collectively and repeatedly chosen not to. Instead, wherever competition has reared its head in the industry, the mass market has aimed for low prices above all else, followed by a vigorous culture of collective complaining when something goes wrong.

Where will this take us in the future…

  • Will this trend toward faster and cheaper continue to drive most products and services?
  • If it does, will there be exceptions where quality is the driver? The obvious exception is medical products and medical care, or is it?
  • Will some markets bifurcate such that parallel services will develop where consumers are willing to pay for quality?

What are the implications for your business?

Why Vistage Works

Elisa K. Spain

 

What Does “Implement Dictatorially” Mean?

A few weeks ago, I posted the following as the leadership quote for the month of March:

“Decide democratically, implement dictatorially.” Peter Schutz, CEO of Porsche 1981-1986

One of my readers replied with the following comment:

“Schutz got the first part of that quote right. I however believe you implement collaboratively.”

In our conversation that followed his comment, I was reminded how everything is subject to interpretation. My reader heard Schutz say “command and control”.

What I hear in this quote is, gather input in the planning and then once the decision is made, get it done. It is incumbent upon a leader to hear input from those impacted by a decision. Two reasons for this:

  • to inform the decision, perhaps others see opportunities or risks that the leader does not
  • to allow those impacted to feel heard, to weigh in

And, it is incumbent upon a leader to move quickly once the decision is made. The time for feedback is over, it is time to execute and for all parties involved to move together toward implementation so as to maximize the benefits of the decision once it is made.

How do you see this question?

Why Vistage Works

Elisa K. Spain

And What About Our Own Resistance?

Whether leader or follower, we are all in the position of having change thrust upon us. Vistage Speaker, Mike Scott, responded to my March 19th blog (Is Resistance The Problem?), with the questions I asked, turned inward. Thank you Mike for this wonderful reminder of the responsibility we each have to notice our own resistance.

HOW DO I OPERATE?
I justify my resistance when:
1) I resist when I don’t “get it.”
2) I think I know more than I do therefore I don’t actively listen. Then I resist. 
3) I think I heard all you said when I didn’t. Then I resist. 
4) I think I know what you’re going to say so I stop listening. Then I resist. 
5) I mentally criticize what you’re saying and how you’re saying it. Then I resist.
6) I really don’t know what you mean when I think I do. Then I resist.

I blame others when I should be asking, “What was my part in this problem that was created?”

In my workshops one of the principles is to have people repeat or paraphrase all verbal requests. I’m going to use this as the logical justification for repeating and paraphrasing. A new context.

 

Why Vistage Works

Elisa K. Spain

Q1 2017 Vistage CEO Confidence Index Results: CEO Economic Confidence Reigns

Q1 2017 Confidence Index

 

A rebound in CEOs’ perceptions of economic growth combined with a more favorable outlook for the economy has created a new optimism. The Vistage CEO Confidence Index was 106.9 in the 1st quarter 2017 survey, slightly above the 105.2 in last quarter’s survey, and well above the 3rd quarter reading of 91.4. Although the surge in optimism has thus far only restored confidence to the highs recorded following the Great Recession, the return of optimism to the highs of the past few years has meant that CEOs anticipate favorable trends in their revenues and profits.

Q1 2017 Vistage CEO Confidence Index highlights include:

  • Economic growth rebounds. 57% of CEOs expect the economy to post additional gains during the year ahead, more than twice the 23% who expected improvement a year ago.
  • Robust hiring plans. 60% of all CEOs plan to expand their workforce in the year ahead.
  • Record revenues and profits. 77% of CEOs expect increased revenue, and 64% expect increased profits in the year ahead.
  • Strong investment spending. 47% of CEOs expect to increase investment expenditures in the next year, barely below the decade peak of 49% set in the closing quarter of 2014.

Why Vistage Works

Elisa K. Spain