Can A Focus On Culture Produce Financial Results?

by Elisa Spain1 Comment

 

In 2014, the theme for my Vistage groups was All That Matters is Culture. We talk about culture a lot in Vistage and we have several speakers that focus on this topic. Certainly we can all agree that focusing on culture creates a more consistent workplace. I say consistent, rather than harmonious, because as we learned from Vistage speaker, Edgar Papke, each culture is different – The important thing is to know what your culture is, hire accordingly and ensure your culture (inward facing) is consistent with your brand (outward facing).

And…when we went around the table at the end of the year, two of my CEO members shared that they had their best year yet (both had been in business 15+ years). When the other members asked the reason, both said, without hesitation, “because I focused on culture more than anything else this year. I got rid of the cancers. Everyone who is with my company today reflects the culture. I see it, the customers see it, and frankly to my surprise, the bottom line shows it”.

In one case, one of the CEOs fired his #2 producer. A risky move, so he thought. In fact, he even expected a down year as a result.  He decided the risk was worth it.

Good thing he took the risk because… he was one of the CEOs to report the best year ever.

Elisa K. Spain

Leadership Quote: Success Is All About Growing Others…

by Elisa SpainNo Comments

 

December’s leadership quote:

“Before you are a leader, success is all about growing yourself.

When you become a leader, success is all about growing others.”

-Jack Welch

While personal growth and development is lifelong, it is only through developing others that we achieve measurable results in our businesses. As a Vistage chair and leadership coach, I have the opportunity to observe every form of leadership. Here is what I see… it is those leaders that truly invest time and money in developing others that cross the dividing line from operator to leader.

No coincidence that nearly 20% of Vistage members produce annual revenue >$50mm; while less than 1.5% of US companies overall produce more than $25M in annual revenue and less than .27% produce more than $100M.

Elisa K. Spain

When The Obvious, Isn't Obvious…

by Elisa SpainNo Comments

 

Simplify, simplify… These are the watch words of our world today. The more complex our society has become the more is written on the benefits of simplification.

And, I have begun to wonder if the complexity of our society is also leading us to forget to look for simple solutions when things aren’t working right. The obvious sometimes is missed, along the way to finding a solution.

The following experience happened awhile back and I often use it as a reminder to pause and look first for the obvious, even when it may not at first seem so obvious.

My internet service was continually cutting out. It would go down for a few minutes, sometimes an hour or so, and would always come back on its own. This went on for many months. I called for service repeatedly, the provider sent technicians out repeatedly. They replaced modems, they replaced wires, they really tried to fix it. I became convinced the problem must be with the wiring in the building so I hired an independent company who came out and checked the internal wiring. Everyone who was here, and there were lots of people, all said it should be working. But it wasn’t.  

Finally I called a technician who had been out for another issue in the past. I had saved his name because he was particularly helpful. I told him the whole story and he sent his supervisor out. The supervisor asked a few questions, listened to my story and then solved the problem in 5 minutes.  

How did he do it?

This sounds like one of those brain teasers doesn’t it? Actually, I guess it was. What he did was simple. He asked a few questions, he really listened to my answers, and then looked for the obvious. There was a loose wire where the system was attached to the building. He tightened the wire, and I have not had a problem since!

My takeaway from this … when something isn’t working, in business or in life;

pause, ask questions, listen carefully to the answers….and then search first for the obvious explanation.

 

 

 

What Makes A Successful Business?

by Elisa Spain1 Comment

Opt 6 Sept 7

What makes a successful business? Is it vision; is it strategy, or ??

Geoff Smart and Randy Street, authors of the book Who, make a compelling case for the value of management talent as the #1 determinant of business success. In their interviews of 400 CEOs and business leaders, they found that 52% rated talent as #1, followed by 20% for execution, 17% for strategy and the good news, only 11% for external factors.

Additionally, in the research they did with the University of Chicago in 2007, they found that the CEOs who make money for investors are those that have both high EQ (Lambs) and work hard, are persistent, set high standards and hold people accountable (Cheetahs). And surprisingly to some and somewhat controversially, those that accentuate their Cheetah skills were successful 100% of the time.

So, does this mean that we, as leaders, should abandon vision and strategy altogether, hire great people, set high standards, hold them accountable and we are done?

Not so simple in my experience. What I observe is great people want to work for great companies. And, great companies not only have high standards and hold people accountable, i.e. operational excellence, they also can answer Simon Sinek’s, “Why?”.

So, yes, hire great people, and give them and your customers a reason to want to work for you and do business with you.

 

Elisa K. Spain

 

 

Are You Prepared To Govern In A Changing World?

by Elisa SpainNo Comments

Opt 1 Aug 10

Arguably the most important ingredient is good governance is having a vision and a strategic plan. I often notice that these plans are based primarily on what is within our control. In short, these plans often consider only internal factors, the SW of the traditional SWOT analysis, while ignoring the OT portion or external factors.

And, I find these same companies are excellent at identifying their weakness and occasionally good at identifying their strengths and true competitive advantages.

I have had the privilege to work with several successful companies and I find, despite their success, they enjoy telling me everything they could be doing better. It is only when I hear them talking with customers, or preparing for these customer conversations that I hear their strengths. In the category of “only the paranoid survive” (Andrew Grove), perhaps this focus on what we can do better leads to stellar results. I certainly can’t argue that in these companies, it certainly has.

And.. what I also notice, in the few consistently high performing companies, is they are equally paranoid about their external environment, not just what their competitors are doing but also regulatory changes, environmental changes, technology changes, etc. They consider all factors that present both opportunities and threats to their current strategies.

It is these companies that focus externally that truly innovate and maintain consistent results.  And effective governance requires this external focus. Without it, sustainability is a question. With this in mind, as you begin to consider your plans for 2015, I ask you to consider the following questions:

  • When was the last time I visited a customer just to understand more about their business? Is it time?
  • What changes are happening in my industry – new technology, consolidation, regulation, etc.?
  • What is happening in other industries, perhaps ones more/less mature than mine, that I can learn from?
  • How are the demographics of my customer base changing?
  • How might all of these changes present both opportunities and threats as we plan for the next 3-5 years?

Elisa K. Spain

 

 

Why Now?

Why Now?

by Elisa SpainNo Comments

Hand writing Time to Adapt concept with red marker on transparent wipe board.Continuing the beginning of year theme of strategic planning. The question is, why diversify my business now, when everything is going so well?

Anyone who has hired an investment advisor knows, all of them advise first and foremost, to build a diversified portfolio. And, despite all the data supporting the long term benefit of diversification, some investors believe they can time the market. There are LOTS of stories in the investment press about the risks and consequences of market timing.

Those of you who are frequent readers know that my background is in financial services and investments and I often compare running a business to managing an investment portfolio. And, as with some stock market investors, when it comes to our businesses, we frequently ignore our advisors and the diversification advice they give. We have a great product or service, we are making money, we think “if it ain’t broke, why fix it?”.

Over the years, I have worked with a number of businesses and watched this process unfold…

Business is great, there are industry measures that indicate the product or service is maturing, but business still remains strong. Then suddenly (one could argue it wasn’t suddenly), it isn’t strong anymore, in fact, the business has gone from significant profits to losses, seemingly overnight.

The thing about income statements is they are lagging indicators. If we ignore other key indicators, especially the external industry trends, it is easy to be lulled into market timing behavior. And as with market timers, by the time the CEO realizes the market has turned, it is often too late to adjust without incurring significant losses.

As you continue your planning for 2014 strategic actions, I encourage you to pause and ask yourself the following questions:

  • What are the trends in our industry; where is our industry in its business life cycle?
  • How does our product/service compare to others in the industry; are we a leader or a follower?
  • What is our current level of product/service diversification; where would we like it to be?
  • What new product or service can we begin development on this year that will replace our core offerings in the future?

 

Elisa K. Spain

Strategic Lessons From David & Goliath For 2014 Planning

Strategic Lessons From David & Goliath For 2014 Planning

by Elisa SpainNo Comments

Option 2 D and GAs you put the final touches on your business plans for 2014, or for that matter, your personal plans, I suggest a read or a listen to Malcolm Gladwell’s Latest Book, David and Goliath: Underdogs, Misfits, and the Art of Battling Giants. 

The book is not about how the weak rise up and triumph over the strong, as you might expect given the title. Rather, the book is about how throughout history, people succeed not in spite of, but because of their disadvantages.

Gladwell begins the book with his own interpretation of the David and Goliath story describing David’s triumph as a function of his going into battle using methods unique to him, (i.e. working in his genius as I am fond of saying), fighting Goliath with a sling shot rather than hand to hand, as was the norm. David takes advantage of his small size and wins because he was innovative and confident.

Throughout the book, Gladwell points to examples of successful inventions and innovations that happened because entrepreneurs who, like David, were perceived as disadvantaged, used their disadvantage to win.

So, as you think about how you might win against the Goliaths in your industry, I encourage you to consider the following questions:

  • What do you perceive as your competitive disadvantages?
  • How might you turn these disadvantages into true competitive advantages?

Here is a 15 minute Ted Talk from Gladwell to inspire your thinking.

 

 

Elisa K. Spain

Stay The Course…

Stay The Course…

by Elisa SpainNo Comments

2013-10-13 Hand on Ship iStock_000010063419XSmallStay the course….

How often have we heard this phrase, and at same time, how often do we react to what is happening in the moment and as a result lose sight of where we were heading?

Most of us want to be flexible and responsive to our constituencies be they employees, customers, shareholders, family or friends. And when we set a new direction or introduce a new idea, the reality is, we are often met with resistance. Change is hard and most of us resist change. When met with resistance, it is tempting to retrench.

In my experience, when I resist this temptation and stay the course, I have been rewarded.

Just recently, a speaker was presenting a new concept.  Some folks in the room were able to see the relevance to their business, but a few were not. The ones that could not spoke up and what the speaker heard was “my content isn’t relevant, I need to move in a different direction”. And when he and I spoke during the break, we agreed instead to stay the course. In the end, we were glad we did. In talking with the members afterwards, the vocal ones explained, “I just wasn’t getting it. All I wanted was help in making it relevant”. The others said they found great value in what they heard.

And, then Diana Nyad, gave us the best reminder of all. She had a goal, she stayed the course, despite folks telling her, “it couldn’t be done” and she was too old. And, after several attempts, tweaks along the way, she did it!

Huge leadership lesson here for me: When the vocal minority speaks up, listen, evaluate, help them understand the mission and then stay the course. The flip side, is not to listen when they see you are on a collision course, and that is a topic for another blog.

Elisa K. Spain

When Making The Counter-Intuitive Choice…

When Making The Counter-Intuitive Choice…

by Elisa SpainNo Comments

2013 09-08 iStock_000024950177XSmall
I have often heard our Vistage economists, Brian & Alan Beaulieu say, “the time to invest is late recession, early recovery”. And it is one thing to say this in theory, and quite another to actually have the courage to do it. Not unlike the recommendation to buy more equities when the market is down. While we all understand the “buy low, sell high” adage, natural risk aversion causes many of us to do exactly the opposite.

And yet, the Beaulieu’s advice works. As an example, I had the pleasure of watching Baird & Warner, the 2nd largest real estate company in the Chicagoland area. With two of their top executives as members of the Vistage Advisory Boards I lead, I have a close connection to Baird. And while Baird, like everyone else, made tactical cost saving efforts such as closing offices and increasing efficiencies; at the same time, they were also investing in the future, making capital investments and key hires.

The result: as the real estate industry continues to recover, Baird has earned its unfair share of the market. Outperforming the competition on every key indicator, deals written, deals closed, etc.

When I spoke with Steve Baird, his response was “while everyone else is hunkering down – I took the opportunity to double down”.

Here is Steve’s summary of what it takes to build, and sustain (in his case for 5 generations), a world class company. Food for thought as the current economic cycle matures:

  • investment
  • reinvention
  • continuous feedback loop
  • commitment /stick to your principles
  • time is an asset
  • you have to do it for years – not just ride market share up and be really good
  • not just a great product – need a great business
  • building world class is not building to sell – be clear
  • be careful of sacrificing profitability for the sake of more business

Elisa K. Spain

Diversity Or Integration, What's The Difference, Why Bother?

Diversity Or Integration, What's The Difference, Why Bother?

by Elisa Spain1 Comment

2013 03-10 DiversityStock_000014186302XSmallLately I have had a number of conversations with the leaders I work with about the challenges of adding diversity to their organizations. Diversity comes in several flavors. There are the traditional forms of diversity – gender, race, ethnicity and sexual preference. It also comes when someone from the outside joins an existing culture.

Some organizations handle this “integration” well and some don’t. Why?  My sense is the answer lies in how intentional the leader is about both the spoken and unspoken characteristics of their culture.

The word integration is rarely used today. It harkens back to the 1970’s when schools were being “integrated”. Fights broke out, learning became challenging and it was largely viewed in retrospect as an experiment that failed. And, this “experiment” for me provides learning for leaders who want to diversify their organizations.

Integrating- Merriam Webster “to form, coordinate, or blend into a functioning or unified whole”

Isn’t this exactly what we are wanting to do when we diversify? And…Diverse teams are hard…they are harder to build, are unlikely to come to consensus and are more likely to have conflict.

So, why bother?  Because… they are harder to build, are unlikely to come to consensus and are more likely to have conflict, they make better decisions. Research studies prove this.

What to do?
Diversity is not always the best approach. Homogeneous groups are easier. Because of their similar backgrounds, preferences and styles they are likely to agree and move forward quickly.
  • If the goal is getting more of what you already have, then a homogeneous group may be the way to go.
  • If the goal is innovation and critical thinking, you are more likely to get there with a diverse group.

If you decide you want to build a diverse team, first begin by defining what you are looking to accomplish with the diversity. Then ask yourself the following questions as you begin to form, coordinate, or blend into a functioning or unified whole:

  • Do I know the backgrounds, preferences, and styles of current team members?
  • What actions do I need to take to learn this information about my current team?
  • Have we defined our culture? And, even if we have, what are the unspoken characteristics of our culture?
  • What actions do I need to take to learn this information about my culture?
  • What on-boarding actions do I need to take to achieve integration?

Elisa K. Spain