I’m a Philadelphia Phillies fan, which means I’m following the team with the worst record in Major League baseball right now (July, 2015). It’s a “rebuilding year” for the Phillies, a pretty rough period.
In baseball, a rebuilding year generally causes more than a poor win-loss record. Management changes are inevitable. Fewer fans attend the games. High-priced players are traded for younger, cheaper, potential-laden minor leaguers. In the case of the Phillies, all of this is happening, and more. The manager they brought on to see the team through this difficult transition grew weary of losing, and resigned. (That’s right. He wasn’t fired, he resigned.)
For the past six years, I’ve been coaching a CEO (we’ll call him Tom) who decided to take on a “rebuilding year”. Sales were flat, profits were meager and cyclical, and the competition was intensifying. Tom’s tendency was to try to do everything himself, and he longed to discover effective marketing and sales processes, areas that he considered to be personal weaknesses. His relationship with his business was unhealthy – his description: “I feel like a slave”.
Tom’s rebuilding year actually took about four. It included the following:
- Developed a new product that addressed a shift in customer preferences – earlier than was recognized by his competition.
- Pushed his VP Marketing & Sales hard to identify and grow new opportunities. When he didn’t, he was replaced.
- Took a personal interest in an area of marketing that was integral to their future success, and brought others in to do the work after he understood what was required.
- Through some trial-and-error, figured out how to recruit, hire, and mostly keep talented people needed to stimulate and sustain ongoing corporate growth.
It was a bumpy ride. The new product development effort sucked up resources that the company did not initially have (both human and financial). The development of a larger organization included the usual complement of bad hires and redirection. Boot-strapping the financing of the growth, rather than borrowing a bunch of money, caused serious frustration in the early going. But Tom persevered, knowing that neither resignation nor termination were options.
While the “rebuilding year” (four) is now in the rearview mirror, it’s not over. The vision that Tom developed for his enterprise has the entire team working towards “the next big thing” for the business. His bank account is healthy, his workforce is high caliber, and the team has a sense of direction. The need for rebuilding has been replaced by a drive to stay on top.
The Phillies should be so lucky.
Down But Not Out
I wanted to write on this first day of 2015 about what a great time this is for the CEO to be engaged in planning. I had planned to offer a few comments on the value of strategic planning, a discipline many of us resist.
But a couple days ago I saw the movie Unbroken. I had read the book of the same name by Laura Hillenbrand about a year ago.
Let me explain why this changed my blogging plans. The subject of this movie, Louis Zamperini, served in World War II as a bombardier on a B-24 in what was then the U.S. Army Air Forces. His plane went down in the Pacific Ocean 850 miles south of Hawaii. He was one of three crew members (out of eleven) who survived the crash. They had no fresh water, little food, and a life raft. He was afloat on the ocean for 47 days before reaching the Marshall Islands, where he and Russell Phillips were captured by the Japanese. (The third survivor, Francis McNamara, had died at sea on the 33rd day afloat). Zamperini was held captive by the Japanese, brutally beaten and generally mistreated, until the war ended in August of 1945. He had been assumed dead and, in 1944, his parents had actually received a formal condolence note from FDR. (His actual death occurred 70 years later, in 2014.)
Many CEOs I know have faced extremely serious struggles with their businesses as well as in their personal lives. Some have faced life-threatening illnesses and business-threatening near-collapses. Many have downsized significantly. For the most part, these challenges are not quite in the same league as surviving a plane crash, then a month and a half drifting on the open sea, followed by two years of brutal captivity by a wartime enemy. But the parallel is legitimate. Running a business can be brutal.
There are many stories of survival that inspire. I am in awe of the Louie Zamperini story. And I’m also tremendously inspired by the survival of so many businesses that have been through something akin to a plane crash.
Maybe this is your story that I’m telling. Or maybe you know somebody who has lived this scenario. Someone who has been through hell personally or professionally but was not quite broken. If so, I would urge you to begin 2015 by celebrating their (your own?) survival.
Quickly thereafter, get your strategic plan together.
Riding a Dead Horse (not really)
There are some subjects that are difficult to approach positively. This seems to be one of them.
Every CEO occasionally finds himself or herself riding a dead horse. It could be that new product program that is consistently delayed and where the projected cost to manufacture is much higher than the original estimate. Or that new employee whose performance is so far below what you anticipated three months ago during the final interview. Or it might even be your entire company. Maybe you’re worn out, ready to move on, and have never really created the entity that you envisioned when you founded it.
Regardless of the situation, you feel the right decision in your gut. Your gut understands that you are riding a dead horse and that the only appropriate next step is to dismount.
Contrary to my opening statement, this negative post really does have a silver lining. Dismounting creates a better situation. Killing the new product program frees up resources that can be more profitably applied elsewhere. Terminating or reassigning the failing employee eliminates drag on the organization and allows the individual to find their true niche – either within or outside your organization. Selling your company to a strategic buyer who has the resources or market position to make it a success is good for you, your employees, and probably the overall economy.
The timely dismount can be every bit as potent for your company as any new initiative might be. So, how are your feet stuck in the stirrups?
Remnant of 1990s war in Croatia
I recently returned from a journey to Eastern Europe. I briefly visited towns in Hungary, Croatia, Serbia, Bulgaria, and Romania. The tour caused me to reflect more seriously than ever on the freedoms and opportunities we enjoy in the United States.
We took a photograph of a bombed out building in Vukovar, Croatia, located on the Danube River. Someone had placed beautiful blooming flowers in several openings of the building where windows used to be. The symbolism was intense.
My professional life for the past fifteen years has been devoted to working with leaders of privately owned businesses. Most small to midsize businesses cycle – from relatively good times to relatively poor times. Occasionally a business is devastated. Even in “normal” times, my clients face difficult challenges. Some are fighting serious diseases while still running their businesses. Others are unable to pay themselves a salary for months at a time due to negative cash flow. Some are angry with and frustrated by lending institutions who offer little or no support. Still others must struggle through broken family relationships that are exacerbated by the demands of the business.
So it’s not surprising that businesses are sometimes figuratively blown up. Maybe more surprising are those occasions when, out of the ashes, something beautiful emerges. Individual perseverance and guts, and the unbending support of family or friends or customers or suppliers, produce bright color where only gray existed before.
Now, back to Eastern Europe. Having met and heard the stories of a number of people who once lived behind the Iron Curtain, I am struck by the power of having the freedom of choice. I’m more appreciative of having a system of checks and balances in a government that sometimes seems to be gridlocked. I’m grateful to live in a country where any entrepreneur has the freedom to choose his own next step. Doors may not be wide open at every decision point, but at least the doors exist.
Has your business ever seemed like a mere shell of the structure it once was? And you’re still standing? Then my photo from Vukovar is for you!
Do you remember Peter Falk’s character, homicide detective Lt. Colombo? In almost every episode of that TV series he would interview the suspect in a non-threatening manner, start to leave, then turn and ask that incisive question that began, “Oh, just one more thing…”
As CEO, you often play the role of the suspect in the Colombo dance. And an employee, or customer, or vendor, or creditor plays the role of Colombo. They are wrapping up an important meeting with you when they say those fateful words, “Oh, just one more thing…”
What follows is generally another piece of information or a request, rather than the type of interrogation question that Colombo would spring on his unsuspecting target. But it is just as important as the Colombo question, and your senses should be on full alert.
Even though the deal has all but been done, they are about to toss a grenade that they hope you will ignore in your haste to tie a bow around a decision finally reached. Don’t be too hasty.
“Just one more thing” is often way more than an incidental comment. “Just one more thing” is often the real crux of the matter for your Colombo character.
Being the chief decision maker in your company can wear you down. Make sure that your weariness on any given day, regarding any important decision, doesn’t lead to your dropping your guard at the critical “just one more thing” moment.
I just read John Dini’s latest book, Hunting in a Farmer’s World – Celebrating the Mind of an Entrepreneur. If you are a business owner or leader and you pick this book up, you won’t put it down.
John draws a line of distinction between what he calls “hunters” and “farmers”. He treads along that dangerous slope of stereotyping, but with good cause. It allows him to explain in a compelling manner some of the reasons why certain private businesses struggle, while others blossom. Let me share with you just a few reasons why I am not really summarizing the book here, but rather encouraging you to read it for yourself.
He provides a mirror for the business owner to reflect on whether they own a job, a lifestyle business, or a legacy business.
He deals effectively with that nagging question, “How much should my company be making?”
He provides thought-provoking insight into the philosophical quandary, “What is rich?”
He even touches on the alternatives for selling a business, and some rules of thumb for estimating the value of a business.
Most importantly, John highlights the significant behavioral style differences between a “hunter” and a “farmer”, and how those differences can be successfully combined in a business organization.
A summary, by me or anybody else, does not do this book justice.
Full disclosure – John is a colleague of mine in The Alternative Board® network. More important disclosure – You don’t have to be a colleague of John’s to fully appreciate this very practical, experiential, straightforward, soon-to-be classic, on the mind of the entrepreneur.
Jackson Hole Paragliding
Have you ever jumped off a mountain tethered to a piece of fabric? Tandem paragliding has a lot in common with business ownership. If you have launched your own business, or have bought a business, or have made a decision to redirect, or turnaround, or chart a new course for your business, you can understand the parallel.
First off, you cannot do it alone. Continue reading