Why CEOs Fail

There are few who acquire the title CEO. Those who do are capable of making a huge commitment and have an abundance of talent and ambition. However, CEOs who lack effective succession plans find themselves overwhelmed and missing opportunities to build thriving enterprises.

Succession plans impact so many aspects of a business that this article will not allow me to do the subject justice. However, some of the benefits it provides are: it supports CEOs who want to drive innovation, it creates a learning organization, it develops leaders throughout the enterprise and it allows the company to exploit new and profitable opportunities. Unfortunately, everyone feels it is a simple process and assumes they are doing it correctly.

Succession planning has a few basic fundamentals. The best CEOs surround themselves with people smarter than they are and give them room to run with huge responsibilities. The worst try to prove they are smarter by handling everything and trusting no one.   

Leaders who do it well use delegation in a thoughtful and strategic manner. Delegation is a powerful strategy to create a learning organization and it develops the next 2-3 generations of future CEOs. It also builds an underrated quality: trust. When the CEO delegates to her direct reports, it empowers the direct reports to learn new skills and competencies. In turn, they will have to delegate to their direct reports with the same results. At that point, the CEO is freed up to learn new skills and competencies as well as explore untapped opportunities that may require new skills. 

When he does not delegate, there is a chance the CEO’s plate will become too full for him to learn new skills and competencies. As a result, he becomes mired in the same challenges year after year and no plan to get beyond them. This inescapable trap causes far too many companies to miss opportunities. Lack of delegation also sends a message down the organization that the CEO does not trust his people with larger responsibilities. And the culture of mistrust is created.  

Worst of all, when the CEO retires, poor succession planning and delegation leaves a void in the organization. The company is forced to pay a search firm to find a successor or a qualified board member has to step in. Lee Iacocca, who was CEO of Chrysler from 1978 to 1992, was seen as exceptional for his time. Except, when he retired, Chrysler fell on its face. Iacocca was known for having yes men while he took care of the most important matters himself. 

Furthermore, the best succession plans do not seek out the right person for today. They are looking for the CEO who is right for the next several years. Training and development must take that into account.

Succession planning is difficult, and often, CEOs are in a position where it’s lonely at the top and there are few people with whom to discuss the most pressing challenges. Without someone to speak openly about everything, a leader could find himself or herself in a difficult fight for survival. Although many executives and board members try to overcome their problems by working harder and being smarter, the tenure for CEOs decreases every decade.

From the day you become CEO, preparing the company for the moment when you leave is one of the most instrumental steps, and the benefits are clear. Look at Steve Jobs who demonstrated great succession planning, which has allowed Apple to create new and profitable revenue streams through innovation even after he left.

I welcome any of your comments and suggestions below.

The Henry Ford Model for Success

"I am looking for a lot of men who have an infinite capacity to not know
what can't be done." Henry Ford

At the age of 15, Henry Ford dropped out of school to help on his father¹s
farm. Yet, his tinkering with watches and other machines earned him a
position as an engineer for Thomas Edison¹s company. Somehow it seems Ford
lived by this quote. When you look at his accomplishments, it is clear he
pursued what he wanted instead of viewing a lesser education as a
limitation. And then he surrounded himself with people who could commit to
what seemed impossible.

In every human being¹s life, there are circumstances that give the
appearance of impossible. However, impossible is determined in how you view
yourself. It almost never has anything to do with what is in front of you.
With that thought, get clear on the conversations you have with yourself and
others about what can and cannot be done.

If you are surrounded by friends who try to convince you of your
limitations, it may be time to find new friends. People who are committed to
accomplishing what they want instead of doing what is acceptable according
to friends, family and society live a life with many self-imposed limits.
Those who don¹t know or don¹t care about what can¹t be done seem to reap the
greatest rewards in life. When you choose your friends, choose wisely.

North Korea After King Jong-Il

After the unexpected death of North Korea’s ruler, Kim Jong-Il, what will be the fate of the isolated country? Kim Jong-Il died December 17^th, 2011 at the age of 69. His death has sparked widespread rumors and speculation.

North Korea has a reputation for instilling fear. While the society is closed to the rest of the world and holds many secrets, they are known for ambitious pursuits to develop atomic weapons as well as their attacks on South Korea. And now the rest of the world holds with abated breath and uncertainty over how the successor, Kim Jong-Il’s son, Jong-un will lead the country.

With 2012 Around the Corner, It May Be Time for a Mental Makeover

Businesses invest enormous amounts of time and money in 3-year plans and strategies with the hope for certainty.  Yet, the environment changes so rapidly that the 3-year plan becomes obsolete after the year one leaving many businesses to run on an obsolete model. 

Even the most ambitious plans and strategies expire and have an expiration date. New capital and employees have a way of conforming to the existing culture rather than generating long term change.

That cultural mindset is often the product of the founder who has gotten to where he is because of specific skill sets, knowledge base and belief system, which unfortunately all come with inherent limits.  Why?  Skills, knowledge… come from what he or she already knows or has experienced.  In other words, it comes from the past.  We (people) make our future decisions based on what we’ve experienced.  However, just because something worked in the past, doesn’t mean it is appropriate for the future.

5 Things to Avoid If You Want to Do Well

In last week’s article, I talked about how leaders are different from managers.  Leaders intentionally create problems to drive innovation and accelerate revenue growth.  Managers solve problems.  This time I will give 5 tips on strategies that can give you unwanted problems.

As a rule, it is rare to hear me discuss what you should not do.  There is more power pursuing what you do want, rather than focusing on what you don’t want.  This week I am making an exception. 

The Difference Between Management and Leadership

Most of what is taught in business school has a focus on steady, incremental improvement.  I don’t want to throw that out.  I do, however, suggest that businesses can create quantum leaps.  And the difference between the two processes is what defines leadership.

So, where do I start?  I ask:  What’s the difference between a manager and a leader?  Managers become managers because they were great at solving problems.  Those that make the transformation become senior managers.  Senior leaders transform from problem solvers to problem creators.  If a President or CEO spends more than 5%-10% of their time solving problems, they need to devise a plan to change that. 

Why Do Americans Hate Smart People?

There is a saying: If you make people think they are thinking, they will love you. If you make people really think, they will hate you.

In Thomas Friedman’s book, The World is Flat, he talks about how people stand in long lines and buy tickets from scalpers to see Britney Spears. Yet, in China, they stand in long lines and scalp tickets to hear Bill Gates speak. Friedman makes this point to question American values and priorities.

Britney helps us escape reality. Great innovators such as Bill Gates, Steve Jobs, Frederick Douglas, Henry Ford and, for those of you who want to think, Nikola Tesla, helped us invent new realities.

Why do we, at first, condemn those who give us new realities?

The Problem Isn't a Shortage of Talent, It's How You Hire

Over the decades, many corporations complain about the trouble of finding talent.  However, I question whether that’s true.  Most businesses look for someone who is experienced at doing exactly what the company needs. This is a poor strategy for recruiting. Because skills and competencies become obsolete in a relatively short time period, companies need talent for tomorrow, not today. In fact, organizations constrain their ability to find very talented individuals because they are seeking people who have the exact experience for today. That is just laziness on the part of businesses. Every enterprise needs to have a commitment to train people for tomorrow. If they did, unemployment would be a lot lower.

There is a report from McKinsey which underscores the amount of staff who do not provide sufficient value to the enterprise. Those people will be part of the next round of layoffs we experience in the US. Corporations need to rethink training. People need to be trained to add value to the enterprise. This would increase innovation.

Watch out! Don't Be Your Own Worst Enemy

Everyone has moments of self-reflection where they question what makes them who they are. While the answer to that is complicated and depends on the person, I would like to propose that who you are was predetermined before you were born. Each of us was given an identity based on race, social economics, gender, height, weigh, etc. Those factors informed us as to whether or not we could be cool, smart, beautiful, tough… While the very characteristics that we were given from birth create our identity, they also stand in the way of creating breakthroughs.

To put it bluntly, what got you to your current level of success is not what will take you to the next level. As a rule, you will have to become someone else and acquire new skills and competencies to rise to the next level of success. However, most of us lack the process for achieving that or the imagination to conceive of new mental models. Others lack the courage in some cases to invalidate who they were. If you observe your life, you will see that your environment and network supports who you have been. Anything that disagrees with who you are makes you uncomfortable, and you avoid it.

Is There a More Effective Method for Hiring Talent?

With companies like Google, Facebook and Apple aggressively seeking top talent, you have to wonder if there is a method to their success. Are the employees at those companies the reason for their success? Or is it the vision? Author and management consultant Peter Drucker said that too many companies focus on “who” to hire. He emphasized that businesses should focus first on “what” has to be done before you ever decide to choose “who”. 

Drucker disdains traditional hiring practices. He has dubbed them “creeping credentialism”, whereby employers focus on how applicants look on paper. He felt we have gotten ourselves into a trap when it comes to recruiting talent. In Managing in a Time of Great Change, he stated, “It’s easy to fall into the trap, because degrees are black-and-white. But it takes judgment to weigh a person’s contribution.”

When you look at the social dynamics in the US, you have to wonder if we (human beings) are as good at judging people as we think. While the fact that over 50% of marriages end in divorce is a sign of incorrect judgment is another article, it has some relevance in the conversation about poor judgment in the workforce. Most of us have little or no training in judging people. And we have very few tools that can judge future performance of an individual. Perhaps we need better tools instead of relying solely on the perspectives of human resources. 

Are Breakthroughs a Matter of Luck? Part I

Introduction

This article presents a dilemma for me. My commitment here is to give you a new perspective on problems and disruptions. In many respects, America is a country that is dedicated to finding ways around problems and avoiding inconveniences, and that culture affects our lives and business. We accept the way we are or how we interact with our environment primarily because it’s convenient, and change requires risk. For this moment, I encourage you to forget this way of thinking. I invite you to completely alter your relationship with problems and see them as empowering.

My message here has nothing to do with simply turning your problems into opportunities. Instead, I am asking you to intentionally create problems in your life or organization in a way that gives you a new way to dramatically change status quo. Whether you want to build the next I-pod or simply be a healthier person, consider that you have to go through a significant disruption before you can envision a breakthrough or new way of thinking. Over the course of this series, I will show you how to create the right problems.

As a caveat, these problems should and will be big enough that you require support from others. With the right foundation, however, you are more likely to keep your focus on the outcome and less likely to be derailed from accomplishing the breakthrough. 

Are Breakthroughs a Matter of Luck? Part II

To distinguish the method for creating breakthroughs on purpose, it will be important to look at the pieces of the puzzle.  However, first let’s understand why it is called disruptive.

Most breakthroughs are initially destructive or counter-intuitive to the normal functioning of the organization.  It requires people to think and do things differently.  Perhaps that is the reason most companies avoid breakthroughs.  Disruptions are problems if you are not skilled at managing yourself and others.  It is the reason they are not a matter of luck.  Without structures to support breakthroughs, they just look like problems.  And most people just want to get rid of problems.  Therefore, there is a certain mindset needed to effectively manage breakthroughs. 

Throughout my 20 years as an international traveler, C-Level executive, sales trainer, trusted advisor to C-Level executives, and record-breaking performance as an athlete, I have distinguished patterns in my performance as well as the extraordinary performance of others.

Are Breakthroughs a Matter of Luck? Part III

As you move through the Disruptive Leadership Model™, it becomes clear that the process quickly shapes mental models in the direction of high performance. It allows you to more effectively gain insight into what you really are committed to accomplishing as well as what stops you from getting it done.

From experience, the vast majority of business leaders have a vision that they would like to pursue. Except, they feel it is not the right time; the economy is wrong; their people are not ready; they don’t have resources…etc.  When people or companies are able to get clear about what they are committed to accomplishing and become comfortable declaring a future that currently does not exist, it is easier to develop plans and strategies. 

The empowering part of this method is that it allows for people and organizations to be comfortable with the breakdown that declarations create.  The moment you declare a future that has never existed and stand for it to happen, you have created a problem, and it is likely that you do not immediately have all the answers that will help take you to where you want to be.

Is This a Repeat?

(via The Guardian)

Some people say Occupy Wall Street is similar to the protests in Egypt. That’s unfortunate. At one time, the US was known as the country of pioneers. We were first and the best at everything. Does this mean we have been converted to “me too?”

When I hear the interviews of the people protesting Wall Street, I see similarities to the protests of the 1960s. While the ‘60s represent a significant time period in US history, the revolution lacked responsibility. It was almost an excuse for being promiscuous and experimental with narcotics. It was all done in the name of being against the system.

So are the Wall Street protests a remake of the ‘60s? Or are they a copy of Egypt and Great Britain? 

The movement, if it can be called one, is revolutionary in many ways. As our social and cultural values change as a nation, it is undeniable that the entities governing them must change, as well. The question remains, however, as to what changes are these protestors seeking and what changes will be in the best interest of the country.

Unless a clearer mission evolves, protestors may not receive anything for their actions.  If a common pattern amongst them does not emerge for whom they have distinguished as the perpetrators – government or corporate America, they may eventually be ignored.

It is rare to find individuals with the laser focus to fulfill their goals. Politics aside, it seems the so-called 1% has the laser focus to get what they want.  If you observe and listen to the protestors, that lack of clarity is apparent in their demonstrations.  What do they want?  The fact that they are protesting shows that there is a personal unhappiness with their lives or careers, and this lack of clarity is a possible cause for this dissatisfaction. It’s reactive, rather than proactive. At the same time, I cannot deny that the fact they are taking action to develop the laser focus for what they want has power. Except, it will be a challenge – they will certainly have to make a commitment, negotiate, and compromise in order to find a new way of thinking that can address everyone’s needs.

There is clearly an opportunity for something unprecedented. However, people have to present what they are committed to and take actions to manifest it.  If they only talk and take actions to support what they don’t want, they will have more of the same.

I know transformation requires responsibility.  Without it, people resort to blame. Once those “Occupiers” can articulate what they stand for and the new future they are declaring, and organize the means to achieve it, we will see the potential for breakthrough change and disruption of the modern corporate world.

This can happen in the same way we saw Dr. Martin Luther King. He stood for something. In Egypt, they also made demands and stood for something. If the Wall Street protestors do not get clear about what they would like to see happen that is not happening, they will follow the fate of the protestors of the ‘60s. If you look closely, some of those people are now part of the 1% on Wall Street.

Why Are We Giving Him a Hard Time?

Since returning to the US, it seems the news is filled with criticism for President Obama. In a subtle way, it almost sounds as if people are blaming him for the high unemployment. They are holding him accountable for the amount of people out of work because he has not created enough jobs.

Looking at the big picture, you have to wonder if any politicians are committed to fixing the economy or if they’re busy playing the blame game. So who’s to blame? President Obama because inherited an economy that was in a downward spiral?

For Obama, it is analogous to a sinking ship. What are the choices when the ship is as it’s going down? You can jump ship. You can use buckets to throw the water overboard while the water is coming in at a faster rate. Or you can patch the hole. Obama hasn’t bailed. He has tried to create jobs, however, entire industries were collapsing around him. The economic landscape was changing, and even if he had created jobs in the beginning, people would still be out of work as their entire industry sunk. Unemployment levels were rising faster than we could hand out jobs.

You have to start at the source of the leak, and patching the hole in our economy does not happen over night.

When you have a sinking ship, you would have to make many tough choices and incredible sacrifices. Where do you devote your resources? Do you save lives or worry about temporary damage to the contents of the ship? In the case of the economy, once the cargo, in this case, the industries in danger are secure, they can go back to a stable growth mode. The ship can continue on its way.

Additionally, while Obama needed to be sure these industries grew, it seems apparent that additional regulatory policies had to be put in place to avert another economic crisis. Even if that regulation risked destabilizing some of their growth. It was necessary to patch the hole so it does not open again. 

We’re now in a testing phase, patching the holes and seeing if the cork we used was the right size.

While I believe the President took appropriate measures to fix the economy, it does not mean I agree with everything. He should be careful about additional taxes for the people who create jobs in this country: business owners. As a business owner, if I am willing to risk my resources – time, money, effort and family – why should I be penalized? We live in a country where people who make the greatest effort reap the greatest rewards. It’s the American way. Imagine if the person who trains the best and wins the gold medal in the Olympics is told they have to give up their medal to the less fortunate.  Who would want to win the gold?

Whether accumulating wealth from trading stocks or owning a business, allow us to benefit from our expertise. Entrepreneurs and those growing businesses should be rewarded and encouraged most of all. As we gain, we eventually need greater support from others. Let us distribute the wealth to others who have developed an expertise.

What do you think? I would love to hear it below.

Escaping the Concrete Jungle: Suriname, Part III

Trading taxi cabs for four wheelers.

I am writing this on a 6:00am flight that is leaving Suriname and returning to NY. I experienced so much this week that I am unsure of where to start.

Over the past week, I spent 2 hours riding a 4-wheeled motorcycle through the Amazon. See photo. Afterwards, I swam in a river that separated me from the piranhas with a thin mesh net. I attended three birthday parties: one for a 70 year old, another turned 50 and the third turned 45. I also attended another Hindustan wedding. The wedding was for Ellen’s best friend. She and I left the reception at 4:00am. However, it continued until 6:00am. And it was outside. Did I mention the DJ played the music quite loudly? I walked across a very high and long bridge that clearly was not made for walking. It is for motor vehicles only. And most of the days during this activity the temperature was easily above 100 degrees.

Two birthday parties were for Javanese women. The third was for a Hindustan man. The party for the 50 year old woman was a unique experience for me. There was an ensemble that played with wooden instruments made from bamboo. I have never seen these instruments before. The sound was incredible. In addition, there were a couple of women who performed traditional Indonesian dances. And the food only enhanced the experience. There were a wide variety of Javanese dishes. Unfortunately for me, all communication was done in Dutch or Javanese. Ellen was my translator for Dutch.

A few days before Ellen’s aunt’s 50^th birthday party she and I took a day trip to a part of the country called Nickcarie. It is the rice district. During the 3 ½ hour drive to get there, I saw a completely different terrain. As a rule, Suriname has many large rivers that are connected to lots of streams and smaller rivers. As a result, it is ideal for growing rice. Nickarie is the place where most of the rice grows. I saw millions of acres of rice growing in perfectly flat land. While in the rice district, we stopped at a market and bought fruits. There I had a few fruits that were new to my taste buds. Without question, the rice district is filled with small towns. However, you get the feel of any city while at the market. When you arrive in the parking lot it is filled with cab drivers hustling for a buck. They are clearly not shy to offer you a ride. They are all very persistent.  

While I know I have responsibilities that I enjoy waiting for me in NY, it was great to get away and barely think about business. I loved eating delicious foods that I have never tasted. I had a couple of incredible fruits. And I truly enjoyed the food from Indonesia. Seeing Ellen and being shown new lands for both of us was an added pleasure. She will be back in NY a few days from now.

As you are reading this, I will be back in the office. If you have questions about Suriname or want me to write on a specific topic, connect through the comments. 

Escaping the Concrete Jungle, Pt. II

At the Hindustan wedding.

This was my second post from Suriname, South America: 

I am staying in a city called Lelydorp. It is the second largest city and the birthplace of my girlfriend, Ellen. Paramaribo is the largest and the capital.

Lelydorp has a very large population of descendants from Indonesia. They are from the island Java, they are called Javanese. They brought their culture and food. Lelydorp is known for their warungs. You havent’t experienced Lelydorp if you haven’t stopped at one of these.  At first sight, they look like stands serving food.  When you get closer, you see that they have a kitchen, running water, electricity, and even a roof.  Except, you may see five or six of theses clustered together under one roof. The food is very good.   

As you can imagine, in a country with such a small population, everywhere you go there is a small town feel. In fact, everyone who knows Ellen has already heard that I am in town and I only speak English. So when I speak a few words in Dutch, they all laugh and look at her and ask if can I understand everything in Dutch. Those who don’t know Ellen assume I am from here and approach me in Dutch. Take away the language and I fit right in.

Oh, and I forgot to mention something. While the amount of English spoken will make the average American comfortable, they drive on the wrong side of the street – ha ha. The steering wheel is on the right side of the car. I have not driven a car here. However, even riding a bicycle requires an adjustment for me.

Speaking of which, Ellen and I rode bicycles and she took me through back roads. What a sight! There are streets where people have built houses and roads in the jungle. The tall exotic trees, plants, animals and people are a sight to see. To add, the people are very friendly. Don’t forget when greeting a person you know, you kiss 3 times on the cheeks – alternate.

The other thing I find interesting in Lelydorp is the demographics of the neighborhoods. If the average house is about 1,500 square feet, you will see right next to that home an 8,000 square foot home that is fenced in as though a celebrity lives there. It looks like it was pulled out of Beverly Hills. I have yet to see a neighborhood of 8,000+ square foot homes.

This past Sunday Ellen and I did visit a beautiful home where we attended a Hindustan wedding. From what I saw, the traditions that originated from India are still practiced here. It is an example of how people retain language in culture even though they are in a very diverse society. See photo of wedding.  

As you are reading this, I will be exploring the diversity of Suriname. I will be touring the Amazon on a four-wheel motorcycle. In the meantime, I have to go. I promised Ellen I would be here on vacation, not a working vacation. At the same time, can you really leave home without the Blackberry and laptop?

If you have questions about Suriname in the meanwhile or want me to write on a specific topic, connect here through the comments.

Escaping The Hurricane

My girlfriend and I far from the concrete jungles.

Without question, I escaped the merciless hurricane called Irene that attacked the Northeast. It seems like I took the easy way out. Except, I made my plans months ago. I am in a Dutch speaking country in South America: Suriname. No it’s not an island. It sits between British Guyana and French Guyana and borders Brazil. Population is 450,000.

For me, the weather is perfect. I am just south of the equator and it is hot all year round.

Because of that, I am taking a needed vacation and a break from writing about business. However, I will share my experience in this beautiful country where they hardly ever have natural disasters.

As soon as you land here and the airplane door opens, you can smell the jungle. Once again, something I love to smell and explore. Some of my friends describe me as Tarzan in the city. As you all know, New York City is a concrete jungle. So somehow it all works for me.

What is best about this trip is my girlfriend is from here. She has been here with her family for a few weeks too long. On this trip, I not only get the joy of a reunion, it happens in a beautiful country with great weather and many new lands to explore. Suriname is part of the Amazon.

If you decide to come here, you will be pleasantly surprised at the amount of English that is spoken here even though it is a former Dutch colony. It is one of the most international countries I have seen. There is a huge population of people from Indonesia, India, China, Holland, and Africans that were brought here during slavery. There is also a significant amount of people from the Dominican Republic, Brazil, and Guyana and of course there are the natives that were here before the Europeans arrived.  Each nationality has retained its religion and language. What makes it more interesting is they inter marry. The people are beautiful.

My girlfriend is Chinese, Indonesian and Dominican.  She speaks four languages and is well versed in cultures outside of her own. It seems like it is impossible to be born here and speak one language. In general, they see themselves as a Caribbean culture. 

As far as business, Suriname is filled with opportunity. While Suriname is rich in natural resources, like gold and bauxite – clay from the earth used to make bricks, the Dutch did not build an export industry. Holland, Canada, and the US continue to extract those resources for themselves.  There really is no strong manufacturing here.  They import almost everything. While I am here to enjoy, there are a number of possibilities I will explore. The culture of business and leadership in general is very different from the US. There are gaps in efficiency here.

I will keep you posted. I am here until September 12^th. If you have questions about Suriname in the meanwhile or want me to write on a specific topic, connect through the comments.

Gaining 20/20 Hindsight Today

Every CEO is uniquely responsible for driving change and innovation in a way that would not have been possible without them. They must take risks and push their companies outside of their current boundaries in order to stay ahead of the competition. Otherwise, why are they there?

Although every CEO must have confidence in their growth strategies, uncertainty is inevitable when pushing a company beyond its current operations. It may take two to five years to learn new lessons, find a sense of direction and understand what works and what doesn’t in these unforeseen situations. What if one could have that hindsight to support decision-making today instead of several years from now?

My organization built a platform to do just that. Five times a year we invite former CEOs of Fortune 1000s to transfer their knowledge and valuable hindsight to current CEOs of midsize to large businesses. The sitting CEOs run significant enterprises in a variety of industries including financial, manufacturing, pharmaceutical and retail. They all have revenues between $100 million and $2 billion, and many are experiencing double digit growth. You would recognize several household names.

Over a 2 hour breakfast, these 10-15 sitting CEOs have an opportunity to speak openly about their biggest real time challenge with their peers and 1-3 former CEOs. The former CEOs have been in their shoes and have taken a corporation from the $100 million to $2 billion range up to Fortune 1000 status.

On September 23^rd, we will have the former Vice Chair of PaineWebber and the former CEO of Restaurant Associates. In the past, some of the former CEOs we have had are the Chairman of the NYSE, the former CEOs of Dun & Bradstreet, Chase Bank, Xerox, Harrah’s Hotels & Casinos and one of the first African American CEOs of a large company, Ben & Jerry’s.

I moderate these forums. It is a phenomenal experience to be part of conversations that positively impacts the future of many organizations.

Contrary to popular belief, CEOs are concerned about the health and growth of their businesses, which means protecting jobs. In the media, you see a lot of press about the greed of CEOs. Clearly there are self-serving CEOs who are more concerned with their own payoff. You can find that type in any profession. From my first-hand perspective, however, most CEOs are focused on developing empowering and functional enterprises. They want to produce valuable products and services for customers and of course they want to remain profitable.

These forums help them achieve that holistic growth in an increasingly risky global economy. They are especially beneficial to CEOs because it gives CEOs a chance to talk confidently about the issues they are facing and receive candid feedback and advice from their peers. The saying it’s lonely at the top becomes very real for CEOs. Moreover, the former CEO is able to ask the right questions and provide a perspective that current CEOs may not have considered. That hindsight is a tremendous advantage to help avoid the costly trial and error that comes with growing a company to new revenue milestones.

This forum is an outlook that is relevant to so many other aspects of our daily life. At some point, everyone’s career goes through a period of challenging uncertainty. How do you gain access to the hindsight you will gain in the future? I would love to hear how you do that. 

The AAA Ratings Downgrade Could Be a Blessing

The US has been the cornerstone of the global economy for the last 50 years. Now that we have lost our triple A rating, what will happen?

Maybe not much. Even though there will have to be a new perspective on risk, the US is likely to remain the safest place to invest. For example, while China has $3 trillion in US cash reserves, $1.2 trillion is invested in US treasuries. So it is unlikely they will take their money out. A massive withdrawal would destabilize the value of their financial assets. And where else would they put it? Europe?

France, for one, has a triple A rating. At the same time, they have similar challenges as the US, and a proportional level of government debt. So one potential outcome is that agencies take a closer look at the remaining triple A countries like France and perhaps downgrade their rating as well. If that were to happen, it would be a greater catalyst for investors to view risk and to find new safe havens for money.

Otherwise, if these countries maintain strong ratings, there still is no market large enough to support the amount of global investors besides the US. China’s economy is huge, yet there are limits to how many assets are available to foreign investors. So as it stands, the US may retain its place in the global economy by default.

Even if the downgrade doesn’t have any major consequences for investor countries, it may be a great blessing in disguise if it can force countries to come together to solve the fluctuations in the global economy.

To be sure, the US government will have to rethink itself. Whether the downgrade is appropriate or not, the government will have to deal with a new reality – it can’t borrow its way out of its self-imposed dilemmas. The time has come for the US government to develop new financial instruments to manage the economy. And since what happens here affects economies of other countries and vice versa, it may be time for the world economies to work as one to develop new tools to instill balance in the global economy.

I once attended a breakfast at the Economics Club of NY. The speaker was the Deputy Director of the International Monetary Fund. I asked him if there was a room of people from different industries and expertise from around the world working for one purpose – to develop new tools and thinking for the new global economy. To which he responded, “If you know where those people are, please give me their address.” 

And it’s true; the world lacks this kind of bold leadership and initiative. However, the intensity and symbolic enormity of a US downgrade requires an equally enormous and intense effort. As Albert Einstein said, the level of thinking that got you into a problem is not the same level of thinking that will get you out. Perhaps it’s not such a bad idea to start looking for those people.

After the financial crisis, Standard & Poor’s was seen as missing the mark when evaluating mortgage backed securities. It is said they focused too much on past performance to predict the future. Similarly, some believe they downgraded the US in error because it is once again based on past performance. In the end, only time will tell if the future performance of the US economy will hold up its reputation as the global economic leader.     

The Underlying Value of Trust in Your Organization

Trust seems like one of those warm and fuzzy attributes. Yet despite how abstract it may seem, trust- or the lack thereof- has a number of easily recognizable consequences in any organization. How can something so abstract have such a noticeable impact?

While working as a COO for a rapidly growing transportation company, I witnessed how the President placed low levels of trust in his operations team. He did not

One of the First Steps of Any Successful Venture: Taking a Stand

Last week Carl wrote a piece about what people stand for. If you listen to any leader throughout history you will hear them talk about their stand. You may disagree with them. However, you will appreciate they are standing for something bigger than themselves and are courageous enough to enlist others to support their stand.  

Similarly, if you listen closely to those around you, you will hear what they stand for. There is no escaping that. We all stand for something, even if we are unwilling to admit it in public. And we enlist others to support our stand.

At the same time, if you ask most people what they stand for, they will have no answer. They may even say they never thought of that before. Or that is something leaders think about. Yet, what we stand for shows up in our lives everyday.  If you look at the way people handle life, it can tell you something about what they stand for. Listen to how some complain about things while others constantly challenge themselves to accomplish projects that require them to be a greater person than they have been in the past.

When I work with clients, I notice that once they are clear about what they stand for, their actions and life become more purposeful. Instead of waiting for a sign to show them what their purpose in life is, they start to live on purpose – they live on purpose, not for a purpose. They successfully make up and adopt their stand. 

The ugly truth is that most of us stand for something that will never empower us or others. Some of us have never considered it. We live in a world were it is held in high regard to be the victim. As long as we can prove some perpetrator did us wrong, we can justify some action that is disempowering.  In fact, entire communities or races feed off of being the victim. The victim role frees us from having to do something about it. Unfortunately, it is a trap.

Without question, it is a trap that closes in on everyone at some point, regardless of race or gender. If you feel you have walked into this trap, you can ask yourself two questions: 1. What do I stand for? 2. Do I stand for something that empowers me?

Who are you becoming without a stand? Maybe that was the unspoken question of Carl’s piece last week. Who are we becoming? What do we stand for? What will the next generation say about us? If we play the role of victim, we will miss the opportunities even when they are screaming at us. Once the answers to the above questions are uncovered, the last question is, what are you going to do about it? What future are you willing to declare such that it requires you to take actions you have never taken before? I have no interest in sounding Pollyanna. Except, possibility really is infinite. With a stand, bold declaration and courageous actions you can make the future what you say it will be.

Book Review: Outwitting the Devil

Believe it or not I read the latest book by Napoleon Hill. He is the author of Think and Grow Rich, which was written in 1937. He wrote the manuscript for his latest book in 1938, although he refused to publish it until 2011. He felt the book, called Outwitting the Devil, would be too much for the public to believe and could tarnish his name. 



Outwitting the Devil (Amazon)





In it, Hill says he interviewed the devil. The devil claimed he was the destroyer of dreams and ambitions. He revealed how he made people give up on life and settle. He said there were 2 types of people: drifters and non-drifters. He stated that 98% of the population are drifters. They are the people he derails with various tricks. The remaining 2% are the people who have a laser focus, and he has no way to deter them from success and happiness.



How can he so easily lure some people away from their dreams while others are immune? Although the devil outlines in detail the many ways of discouraging people, there are two that seem to hit everyone. They are fear and vanity. He said that he uses fear to make people avoid the things they say they want. He makes people fear success because many people do not want to be dominated by the responsibility of success. For some, the expectations accompanied by success appear overwhelming. There is a fear of failure; People are terrified of looking bad if they do not accomplish difficult ambitions, even though it’s their heart’s desire. It’s better to play it safe or small and avoid it than take the risk and look like a failure. People fear the unknown, the uncertainty of risk. Hill made a special point of saying that as long as people fear the devil he uses that fear to control them.

As for vanity, some of the most successful people are consumed by their own pride and selfishness. Vanity is just another self-deluding mindset that people embrace that eventually robs them of their dreams. 



On the other hand, when Hill asked the devil why he was not being controlled, the devil’s response was unbelievably simple and amazing. He told Hill that once he found great love with one woman he could not touch him. The devil said that once you and that woman become one mind he was unable to separate them. Imagine love as the greatest weapon. At the same time, it is one of the treasures in life that people fear. In fact, many people are afraid of being totally open with someone and allowing themselves to become one. People are afraid of losing their identity. People equate losing their identity with being controlled by the other. However, from the book, it is the fear and false sense of security to stand alone that causes the most damage to your identity. From the book, standing along leaves you vulnerable to have some of your most important dreams controlled and taken away from you because you do not share that single minded vision with another.



Perhaps life, success and happiness are much simpler than we imagine. I highly recommend the book. I suggest that you avoid wasting time trying to figure out if Hill is really interviewing the devil or is the entire conversation in his head. The content of the book has tremendous value. Would love to hear your comments.

 

The Paradox of Driving Innovation

If a company wants to grow organically by driving new revenue streams, innovation will be key. Innovation, however, can be disruptive and difficult for a company and its employees to make the adjustment. Consider Apple Computer, a company whose business model was built around selling computers. If you can imagine, one day Steve Jobs decided that they were going to find a way to make the Walkman obsolete. To employees, this may have sounded absurd. How does a computer company compete with a Walkman?

In hindsight, Steve Jobs looks like a hero and everyone thinks that it was so easy. Yet, creating the I-pod required Apple to look at their target market, their technology and resources differently.

Asking people to completely change their perspective of their job and their target market usually requires employees to develop new skills and competencies. However, the dilemma is people generally do not want to leave their comfort zones. We are taught change is hard. In fact, some people will try to resist the change because they rely on the stability of their current position. In the beginning, innovation can be disruptive to the organization’s existing business model. Except, the same disruption allows for new revenue growth, job growth and career growth for existing employees. The I-pod for example, targeted an audience that was a completely different from Apple’s existing customer demographic. Instead of selling $1,500+ computers to creative advertising agencies, they were selling I-pods to thirteen year-olds. Without question, this move required a transformation of the way staff and management thought about customers and competitors.  

In general, transformation is not a walk in the park. For most people, innovation that causes transformation can look risky. In addition to having to learn new skills and competencies, people are often hesitant because of the fear of the project failing. In other cases, perhaps one of the biggest fears is the set of presuppositions employees have about new projects, “If I launch this new initiative and I don’t develop the necessary skills and competencies, will I still be relevant to the organization?”

It is imperative that leadership be able to guide employees through uncomfortable yet potentially rewarding circumstances. One good way is to hold a town forum in small groups or divisions and ask people their concerns and address them. Find out what people’s fears and concerns are as well as the changes that appear uncomfortable. That allows people to voice, be heard, and have an opportunity to contribute to the new initiative. Otherwise, people could feel like they are going down a dark alley and they have no control and have made no contribution to the outcome.

To survive, companies need to be able to work around the risks and threats posed by disruptive innovation. The market will always give you the power to be innovative. Once Apple had the I-pod, they turned it into a phone. As an additional consequence, computer sales are up. They continued diversifying even though the company was doing well. Whatever the situation may be the greatest risk to the company is often standing still. 

How To Annihilate the Competition

If you lead a team or an organization, simply executing strategies to survive is not enough. You should be looking for ways to annihilate your competition – market dominance. While it may sound counter-intuitive, the best way to do this is to annihilate yourself first.

To do this, have your direct reports work in teams and individually. Ask them to create a

Missed Opportunities for US Carmakers in China

As 2011 moves forward, it is turning out to be an extraordinary year for German auto manufacturers. Mercedes, BMW and Audi are experiencing record profits in the US. In China, Mercedes is about to sell more cars there than they do in Germany or the US. Are Ford, GM and other US car brands fully engaged in China’s automobile market? On the surface, it would seem they are, especially because GM just sold more vehicles in China than in the US. 

However, while GM is growing at 45% in China and 15% in the US, Mercedes is doubling sales in China and experiencing record profits¹. Chinese consumers are hungry for high quality luxury items. As their wealth grows as a nation, it appears they are seeking to enjoy the fruits of their labor by purchasing the best. Still, as the market for luxury cars grows, American automakers lack products to compete.

Is there a reason US cars have sunk to the lower end of the demographic scale? There was a time when the US was synonymous with high quality. Now the highest priced GM vehicle is approximately the same cost for the lowest priced Mercedes. By not making high-end luxury cars, the US has given up the title of high quality without a fight when it comes to automobiles.

Think about it. How often do you hear someone say: I am trying to decide if I want the Cadillac or the Bentley? When you want the best car for your money and you can afford what you want, you buy German.

Most recently, the excuse has been that the affluent market was not large enough. With record profits by German luxury automakers and consistent, rapid growth globally, what more does the US need to know that they are missing the boat? Earlier this year I wrote an article on my blog and outlined the need for a luxury US automaker and why Chrysler should fill it. What do you think? I welcome your responses. 

In time, I assert, China will replicate Germany’s efforts to produce luxury cars. If you need proof, look at Japan’s Lexus and Infinity. When China joins the global competition for cars, especially luxury cars, it may be a matter of time before China bails out the US car makers. Maybe that will be the badly needed wake up call for the US to do things much differently.