Archive for the ‘CEO Advantage Journal’ Category

Preview: Is Financial Performance a Core Culture?

Thursday, October 13th, 2011 by Ellen Bryson

The following is an excerpt from an article by CEO Advantage advisor Ellen Bryson.  The full article is scheduled to appear in the upcoming 4th edition of The CEO Advantage Journal. 

While there is no “right” purpose, I suspect there is a wrong one: financial performance.  When growth becomes your purpose, trouble is not far away.  McDonald’s discovered this in the late 1990s when they shifted their focus from “QSCV” (quality, service, cleanliness, and value) to building more restaurants.  By early 2000, McDonald’s had more than 28,000 restaurants with annual revenues in excess of $15 billion.  Two years later, they experienced their first quarterly loss since 1954. 

Starbucks had a similar experience.  In Onward: How Starbucks Fought for Its Life without Losing Its Soul, Howard Schultz shares how Starbucks lost its focus.  In effect, growth became their purpose.  Schultz says that financial growth is not a strategy; it’s a tactic.  He admits that when Starbucks began pursuing undisciplined growth as a strategy, their culture crumbled and they lost their way.  Ironically, the financial performance they were pursuing eluded them when it became their chief focus. 

 …In their book The Discipline of Market Leaders, Michael Treacy and Fred Wiersema talk about three distinct operational models: customer intimacy, innovation, and operational excellence.  In my experience as an advisor to CEOs and executive teams, I have seen each of these manifested as the driving force of culture.  I have never seen a thriving company with a culture centered on its own financial performance ahead of serving the customer.  Is financial performance important?  Of course!  But it is the result, not the cause, of serving customers well.


An Important Reason to Grow

Monday, January 31st, 2011 by Troy Schrock

Contrary to what one might assume, not all business leaders want to grow their businesses.  Bo Burlingham highlighted this line of thinking in his book Small Giants (read additional thoughts from Bo on the subject).  Within this group of CEOs, however, are those who choose to grow their businesses anyway, but for a unique reason.

Great organizations, no matter how large or small, are driven by great people.  But the same qualities that make these people great engender a yearning for bigger and better things – personal growth, if you will.  How does a “small giant” of an organization continue to provide opportunities for its talent to grow?  Well, it has to grow. 

In preparation for an article in the 2011 CEO Advantage Journal, I had the pleasure of sitting down with two successful CEOs who have chosen to grow specifically so that their employees can grow without leaving the company.  In “Growing Your People,” John Gongos and John Hiltz talk about how they came to this decision and how they have strategically approached it.  I encourage you to read their comments.


3 Ways to Better Leverage Your Time

Monday, January 31st, 2011 by Ben Anderson-Ray

Time is always a valuable resource, and its value increases with increasing levels of leadership.  Since you cannot add hours to the day, the question is how to best leverage that available time.  

Before making decisions on your use of time, first understand the actual worth of your time.  The way that most people do this is to calculate an hourly rate based on salary.  However, I encourage clients to calculate an hourly rate based on organizational revenue.  After all, if your job is to lead and grow the organization, your worth should be measured relative to organizational goals.  This number will be much higher than a salary-based rate.  It reflects the real impact – the leverage – you have on the organization, providing a tangible incentive to shift to more transformational roles.  Simply stated, if you spend your time doing $20 per hour tasks, you will not achieve your growth targets.  Further, as those earnings grow, your hourly rate also increases, so the work you do must continue to increase in value. 

Here are three practical tips for how you can increase the leverage of your time:

  1. Audit your time.  I know one CEO who keeps a time log in 30-minute increments on his Outlook calendar.  When he first started doing this, he was shocked to find that trivial matters consumed over 50% of his time.  How much of your time is being consumed by low productivity activity?
  2. Begin each day by jotting your 3-5 most important priorities for that day on a note card.  One of our clients is the CEO of a $100M company who does this with great success.  He told me, “Putting my top priorities on a simple card that I keep in my shirt pocket frees me from thinking about so many to-dos.  I know that if I get these done today, I will have done the most important things to drive the company to its goals.” 
  3. After logging your time use each week, identify the least productive use of your time and delegate that responsibility to someone else.  It sounds easy, but it takes a lot of dedication.  Another client of ours has been working at this for a year now.  Every week, he finds at least one more “normal” activity that should be delegated.  His senior leadership team helps him.  He routinely asks them what he is doing that they should be doing.  The first time he asked, the number of activities he needed to delegate amazed him. 

For a much more extensive discussion on this topic, check out my recently published article, “Leveraging Leadership.


5 Pitfalls in Setting and Executing Quarterly Priorities

Monday, January 31st, 2011 by Troy Schrock

In my mind, nothing is more critical to successful strategy execution than setting priorities.  In The CEO Advantage process, we call quarterly priorities “rocks.”  Setting quarterly rocks is a simple process; yet, I have found that executive teams are susceptible to five potential pitfalls in setting quarterly rocks. 

1: Bad Rocks

There are four kinds of bad rocks: 

  • Non-Rocks, as the name applies, are not really rocks at all.  This usually becomes apparent once the work on them begins. 
  • Mountains are legitimate objectives, but they are way too big to be quarterly rocks. 
  • Pebbles are wimpy rocks – the opposite of mountains.  It may be something that is more appropriate for a weekly task than a quarterly priority. 
  • Amoebas are squishy rocks.  These priorities are so nebulous you don’t really know how to measure their progress, much less recognize when they are complete. 

2: Rock Champion Flies Solo

When the rock champion tries to do everything on his own, things usually do not turn out well.  Resources are wasted, information is incomplete, and when the rock is debriefed at the end of the quarter, important questions and insights are found to have been missed by the rock champion. 

3: Rock Creep

Rock creep occurs when the scope of the rock expands during the course of implementation.  As the team fleshes out what needs to be accomplished, it can quickly grow beyond the initial objective.  T

4: Selfish Use of Resources

Once rocks are set, individual executives might choose to withhold some of their resources for non-rock purposes. 

5: Great Mental Exercise

Some executive teams enjoy setting rocks but not working on them.  They find the strategic discussions invigorating – a form of mental exercise – but they shy away from the “mundane” work of actually executing the rocks. 

Each of these pitfalls can be avoided, and it’s important that you and your team learn how to do so as this is the fundamental discipline of strategy execution. 

To learn more about these pitfalls, how to avoid them, and real-life examples of each, read my recently published article: “Rock Rules.”  You can also purchase an online course we have prepared on how to set and consistently execute quarterly rocks.


7 Strategies for Conquering Fear

Monday, January 31st, 2011 by Praf Pande

“Fear defeats more people than any other one thing in the world,” wrote Ralph Waldo Emerson.  You and your business cannot afford to let fears control you, so you must take proactive steps to confront and conquer your fears.   Here are 7 suggestions.

  1. Differentiate real danger from perceived danger.
  2. Ask the Josie question: what is the worst that can happen?
  3. Confront your fear head-on.  Whatever you fear, there is something you can do to eliminate it. 
  4. Recall past successes.  This will build your confidence that you can confront the fear. 
  5. Develop a goal that is greater than your fear. 
  6. Deliberately seek fears to confront on a daily basis.
  7. Create a system to take you through complex problems where fear might otherwise stop you.

For further detail and examples on how to practice these fear-conquering strategies, read my recently published article, “What Is the Worst That Can Happen?


Questions for the Family Business Owner

Monday, January 31st, 2011 by Dave Dudon

The following is an excerpt from my recently published article: “Strategic Planning in the Family Business.”

Have you thought about the Envisioned Future of your family and your business?  Have you written them down?  This is incredibly important.  Both the family and the business should have a clearly worded vivid description of the future.  Will a family member always be running the business?  If not, how will you structure the leadership while maintaining ownership?  How will the authoritative roles of the family and business leadership work together?  Who in the family will be involved, and how will you determine this?  What if future family members don’t want to be involved?  How will you approach a sale?  What will happen to the profits?  An exit strategy is perhaps the most important component of any strategic plan.

These plans are not set in stone; you should revisit them annually and revise them based on current events and understandings.  But write them down.  It will help you focus your activities on both the family and business side, and it will eliminate surprises and misunderstandings down the road that hurt feelings and threaten to tear your family and business apart.