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Fresh Eyes

FreshEyesRichard Nixon was early in his first term, the Detroit Tigers had won the World Series for their first time since 1945, and Fred Borch was CEO of the General Electric Company, when I came out of college and began a 17-year career with GE, a historically strong company, often emulated by other enterprises around the world. The company continued to build on that reputation well into the twenty-first century.

Few manmade constructs last forever. GE’s CEO for the past 16 years has just retired, and the new CEO is wasting no time making changes. Investors have been disappointed with GE earnings and strategies and performance for some time. They now have fresh eyes at the top and new directions and predictions of performance are being established.

My emotional ties to GE (even though I left prior to the turn of the century (how depressing does that sound?) have drawn my attention to their current circumstances. Having spent the final 15 years of my working life as a business coach, and having worked with a number of outstanding entrepreneurs, and having witnessed the making of numerous business decisions of consequence, GE’s current situation reminds me of the power of Fresh Eyes.

If you have operated your own business for a few years, you may or may not realize the upside potential of Fresh Eyes. Ingrained leadership can be very bright, very competent, very hardworking, but locked into a particular view of the business, its employees, its customers, and all its other stakeholders. Fresh Eyes can provide a path to improved performance, particularly when nothing the current leadership is doing appears to be working.

My suggestion is not that you look for a CEO to take your place (unless you are ready to exit your business), not that you get an eye exam and new prescription glasses, but that you seek the advice of trusted outsiders. One of the most effective approaches – in my experience – is to become part of a peer advisory board, a group of non-competing business owners, a collection of openminded leaders, an assemblage of generous entrepreneurs. Once you’ve become a board member, use the board effectively: do your homework; keep your board members advised of your business progress; seek their counsel prior to making key decisions.

You’re still the decider. But your decisions can benefit from the clarity of vision and variety of alternatives identified by Fresh Eyes.

As always, your thoughts are welcome and you may share them below.

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The Sweet Sonorous Sound of My Name

MyNameIsWe were on Delta Flight 1833, connecting through Salt Lake City on our way to Cincinnati. It was the usual, my hips wedged into the 12-inch wide coach seat, the lady in front of me comfortably reclined into my lap, my lower back and legs already beginning to cramp, only sixty minutes into the 3-1/2 hour flight.

“Would you like a beverage, Mr. Roof?”

Say what!? Had that soft-spoken flight attendant just called me by name? I was almost speechless, a little tongue-tied, but managed to blurt, “Fresca please, no ice.” While she was turned away pouring my drink, I smiled and searched through the gray cells that were still searchable, trying to recall the last time a flight attendant had called me by name. Ever? I think so, once, when my flights were so botched that the airline bumped me into a first class seat to try to make amends. But I have generally grazed in the cattle car over the years, silently enduring a mental fog, where even I am unable to remember my name.

My wife had mentioned that she had read somewhere that Delta was on a customer service kick of some sort when I noted that the gate agent had thanked me by name as we boarded both planes on this particular trip, but then he was looking at my boarding pass. The flight attendant had to be looking at a seating chart between filling orders. Suddenly she reappeared with my drink, looked me in the eye while handing the cup to me and said, “Thank you. We appreciate you being a Delta frequent flyer.”

Delta is a huge company, operating more than 5400 flights per day, in business since 1928, eighty thousand employees worldwide, $40 billion in total revenues. Their planes, like those of most competitors, are uncomfortable. Outside of their aircraft, their primary customer contact occurs in airports, venues that rank right up there with dental offices in terms of customer destination preferences.

So, if you’re giant Delta, how do you grow your business? It seems they have opted to make their customer interactions more friendly, a little more intimate. Probably won’t cost much, and it just might work.

What type of business will not benefit by being more friendly, more personal, more intentional in dealing with customers? Hard to think of one, isn’t it?

Maybe you’ve been in business a long time, or maybe you just started your business. Or maybe you don’t really have your own business, but you are a key cog in the organization that employs you. Have you or your business done anything different in the last year to endear yourself to your customers? Calling your customer by name may be a small deal to you, a regular part of your business operations. But it’s a big deal for a major airline. What would be a big deal for you in your industry, a big deal that wouldn’t cost a lot of money?

As always, your comments are welcome below.

D’Ya Think?

thinkingI needed to hire a technical writer, and Larry (not his real name) had solid experience and proven capabilities in that area. On top of that, he was an Army veteran. That military discipline would be a real plus in this highly self-directed position. Lanky Larry, the lettered literary lieutenant, was my logical election. This decision felt very right.

As CEO, you’re making important decisions under a cloud of uncertainty all the time. You’re probably pretty good at it; after all, you’re running a successful business.

But you could probably be better if you had a little more knowledge about how you think about choices.

A few decades ago, Amos Tversky and Danny Kahneman started a revolution about human thinking. Michael Lewis captures their story in The Undoing Project: A Friendship That Changed Our Minds. Two of the numerous conclusions of Tversky and Kahneman were:

  • Humans naturally develop cognitive biases or shortcuts – shortcuts that can sometimes lead to very poor choices.
  • Humans tend to think in stereotypes or classifications which, again, can undermine solid decision-making.

In my personal experience cited at the beginning, I did hire Larry, and four months later we agreed it was not a good fit. It turned out that Larry was attracted to computer games the way a certain US president is attracted to a good brawl with the media. My technical writer was drawing a full time paycheck while working half time. My bias toward the discipline of the military had caused me to assume that Larry would be a self-disciplined worker. Had I done my homework, I could have learned otherwise in advance.

The research described in The Undoing Project provided the seeds for what has become known as behavioral economics. According to Stephen Dubner (co-author of Freakonomics), behavioral economics “combines the economist’s point of view that people respond to incentives, with the psychologist’s point of view that people don’t always respond rationally to those incentives.” And therein lies the rub.

How can you – or how do you – use behavioral economics as CEO? Two implementations come to mind immediately. Your personal decisions under circumstances of uncertainty (i.e., most of your decisions) are hindered by natural biases of the human brain, such as the two mentioned earlier. Being aware of this allows you to consciously look for your own biases any time you are making a high stakes decision (such as hiring someone).

The second implementation of behavioral economics is one I’ll bet you already use…at least some of the time. It has to do with marketing. It’s the challenge of seeing the world through the eyes of your customer or prospective customer when developing your marketing strategies. In so doing, you must recognize the inherent irrationality of people (your customers) under conditions of uncertainty (such as deciding to buy your product or service). This is particularly important in crafting your marketing message. Offering “the best” product may not be nearly so convincing as offering “the safest choice”.

While some of this may seem obvious, that doesn’t mean it’s easy. On the one hand, you run a business based on rational thinking. On the other hand, uncertainty often brings out the irrational – in your employees and in your customers – as well as in you! Recognizing where the irrational brain is operating is paramount.

We would all benefit if you are willing to share an example of where you were either tripped up by the irrational brain, or where you took advantage of the irrational brain. Why not take a minute and reply with your story?

I Can Do Hard Things

Phil had dropped in to go through our insurance coverage in detail. Two hours later he was headed out the door when Karen asked him about his family. He explained he had six children and sixteen grandchildren. When I commented that Karen is a reading tutor for kids getting started in elementary education, Phil mentioned that he has two autistic grandchildren and one Down Syndrome child. He then told us a short story I will not soon forget.
His Down Syndrome granddaughter came home from school one day with bloody and skinned hands. After a fair amount of questioning and prying, her mom got out of her that she had been trying to prove she could do what the other kids do at school. In this case, she was trying to make it from one end of the monkey bars to the other, hand-over-hand, without dropping off. Her mangled hands were a result of many unsuccessful attempts. Through tears she told her mother, “I can do hard things!”

I’ll think of that the next time I run into a business challenge that is important but where I am shrinking from the hard work of seeing it through. I’ll think of that the next time a family member asks me for help on something that metaphorically looks like a steep mountain, at a time when I’d really rather expend my energy elsewhere. And I’ll think about that little girl the next time I set a personal goal, large or small, that suddenly reveals itself to be much more difficult than I had planned.
One more thing…I’ve asked my family to adopt with me a motto for our clan. It doesn’t have to be the only principle that states who we are, but I think it will prove to be an important one. “I can do hard things.”

Your Black Labrador

oscarexposed

Oscar

Oscar, my black lab, looks a little different from most black labs. His legs are shorter, his fur is shorter, and his head is smaller – not to mention his entire body. But he’s a black lab because, where we have recently moved, everybody has a big dog, and many are black labs. So, he needs to be a black lab.

When we hike a trail with his new best friend, Delmar (who looks a lot closer to a black lab than Oscar), Oscar invests himself in the walk almost completely. He wants to keep up with Delmar. His short legs churn at blazing speed (OK, maybe not blazing, but faster than normal), constantly trying to catch up to Delmar. This attempt at speed is in dramatic contrast with a normal Oscar walk which is more of a saunter, a meandering, a sashaying, guided by his nose, and at a pace resembling that of the occasional slug he confronts on our garden path.

Oscar’s metamorphosis when walking with Delmar is not unlike some small businesses. When they get around larger businesses, they develop more of a spring in their step. Large customers, large suppliers, large potential investors, and large member companies in their peer advisory group can cause the business to step it up a notch.

As a result of hanging out with Delmar, Oscar is healthier and his self esteem is elevated. He’ll probably live longer because of his new friend. He dares to try new things (like actually getting close to the creek that runs along one of his favorite hiking trails).

If there’s a downside, it’s the potential for injury as he tries to keep up with the big dogs. He could experience a heart attack, or he could develop the confidence to leap into a fast moving stream that whisks him away prematurely to doggie heaven.

Business lessons? Acquiring large customers or large suppliers or large investors, or joining a business owner peer advisory group with some larger members can be helpful to your business growth, if you’re willing to run faster to make up for your shorter legs. While it’s OK to tell fellow business owners that you are running a $10 million business, even if the best year you’ve ever had was $7.8 million, do not let that bravado lead you into overburdening the business with debt, or seriously overcommitting to large customers.

One of your challenges as CEO is to balance your view of your business against reality. Dreaming of a bigger business can be the beginning of a true metamorphosis. Driving the business considerably faster than its current capabilities allow can lead to a bad ending. The best CEO is a balanced driver.

A Big Fish in a Small Pond?

small business hiring corporate manager

Salmon Coming Home

Not long ago I read John Dini’s excellent blog post on importing a manager from a large organization into a small company. When I recently heard a tour guide comment on sockeye salmon migration, it brought to mind John’s exposition. Let me explain.

The tour guide had declared that as the salmon return from the vast ocean to the stream where they were hatched, they must make the transition from salt water to fresh water. He highlighted the fact that, as they entered the brackish waters near the mouth of the river or stream, they lingered – maybe days, maybe weeks – allowing their body to make some important adjustments to their new environment. [Although I have no empirical evidence to offer, I suspect the percentage of salmon making it all the way home has increased since the advent of those navigational apps for their cell phones. I mean, really, how do they find their way back? But I digress.]

It’s been my experience that a significant percentage of the Corporate Migrants decide to return to the sea, or are asked to find another body of water in which to swim.

As a business owner, you may have several good reasons for wanting to bring an experienced large-company person into your fold. Their background in systems, in planning, in structuring, and in thinking broadly about crucial decisions can be invaluable to a small business management team. If you are positioning the business for your own eventual exit, they bring an outside perspective and professional expertise that can be very attractive to a potential buyer. However, in the words of Paul Simon, “…a man hears what he wants to hear and disregards the rest.” True of business owners, be they men or women. So don’t disregard the risk that the imported large catch can also be ineffective or even disruptive.

Like salmon, some who leave Corporate America are indeed returning home. They see small business as a better fit for them, for whatever their reasons, and they are correct. Others, however, are simply looking for a resting spot prior to returning to the sea. Your recruiting, hiring, and onboarding processes need to take this into account. Here again, you will likely be tempted to hear what you want to hear and disregard the rest because you consider the candidate such a valuable find. In truth, you may be flattered that they would even consider coming to work for you. Get past that. Dig deep to try to determine all the motivations for the candidate’s interest in your company.

Then, if you both agree to move forward, bring them aboard in a manner that allows them to acclimate. Both the migrant and the organization need time to make adjustments. They will probably see many areas where changes would strengthen your organization. But they also have the potential to damage a healthy culture in the process of pushing for change. You are the filter through which their initiatives must pass. It’s your job to help orient the new hire to a significantly different environment. If, after a fair amount of time in your brackish waters, they are not meshing, it becomes your job to return them to the sea. By that time, they have probabl come to the same conclusion, even if they haven’t yet admitted it to themselves.

I’m not saying you should never bring a Corporate manager into the fold. I’m saying be diligent if you do.

The Long and Winding Road

business planning

Indian Creek Trail – Hood River, OR

How does that Beatles song title grab you as a description of your business journey?

Earlier this year, my wife and I moved to a new state and a new home. The house itself is situated adjacent to the Indian Creek Trailhead. The first time we hiked this segment of the trail, I knew generally where it ended, but of course I had never actually made the journey. As we began our short expedition, certain attributes of the trail became evident. The path itself was dirt in some places, gravel in others, with various amounts of pine needles and leaves covering it (as well as an occasional bit of dog poop). It was a winding trail since it was following a creek, and our trek was compounded by many ups and downs. Seldom could we see more than a hundred feet of trail ahead.

I have had countless discussions with business owners regarding the relative merits of business planning. The winding road metaphor is a good one for arguing how much business planning is optimal. Any business journey is filled with twists and turns, hills and valleys, good footing and poor footing. The important thing is to determine the general direction you want to head. The planning process is paramount in establishing this destination or waypoint. It’s key to deciding major strategies for how you will move in the direction of your goals. But the unpredictable nature of the path itself renders detailed planning useless.

We’re just over  halfway through the calendar year. Summer is always a good time to review how you’ve handled the surprises of your snaking trail thus far, and to recalibrate your compass.