Management Matters Blog

Top Brokers Do Deals in Bad Markets, Too

By Mike Myatt, Chief Strategy Officer N2growth

--Many in the industry long for the frothy markets of 2005 when sellers experienced record low cap rates, buyers were aided by loose credit and a strong flow of funds from the capital markets, and transactions just seemed to almost close themselves. While those days might seem like ancient history, the market will eventually recover, and when it does, likely even soar to new heights in the future.

The question is: "Can you survive the interim period of time, or will you be weeded-out by the exceptionally tough and competitive current market conditions?" In today's column I'll profile some of the industry’s top commercial real estate brokers who are still getting deals done regardless of market conditions. If you're a buyer or seller you should be working with these brokers, and if you're in the brokerage business you should study what they’re doing…

A fundamental macro-economic reality is that when markets cycle, consolidations occur…weak players who once prospered by riding the wave of booming markets are often crushed by more savvy competitors with greater skill sets capable of competing during even the toughest market conditions. Nowhere in the commercial real estate industry is this phenomenon more present than in the brokerage community. I witnessed novice brokers with little experience or competency have seven-figure years during 2005. Many of these same brokers are now out of the business because they didn’t possess the tools, competencies, skill sets, or the sphere of influence to navigate today’s market conditions.

The reality is that top commercial real estate brokers have staying power…they have reached the pinnacle of their profession because they invest in their business, have the best marketing platforms, possess better business and real estate acumen, and have the right connections. These are the power brokers that can close deals when everyone else’s transactions are falling out of bed. The following list of top investment sales brokers was derived by assessing the strength of their reputation, personal brand, market connections, marketing platform, transaction volume and their ability to dominate the markets they play in. While there are certainly other competent brokers that didn’t make the list, from my perspective the 8 brokers profiled below are worth of penny of the commissions you pay them…

Jeff Dunne, vice chairman, investment properties, CB Richard Ellis Inc., New York City – Jeff leads one of CBRE’s top producing investment sales teams and was CBRE’s top global individual producer last year. Moreover he has been in CBRE’s Top 5 producers worldwide since 2000. Jeff has a stellar reputation, works across asset classes, and has a pulse on the New York Market. Jeff is a top producer regardless of market conditions and has an excellent team behind him.

Jamie May, CEO, JBM Realty Advisors (JBMRA), Florida – Jamie is consistently one of the top producing multifamily brokers in the country, and is perhaps one of the most dominant brokers in his market niche. If an institutional multifamily transaction is occurring in the State of Florida, chances are Jamie May is involved. As a boutique investment firm, JBMRA consistently wins deals over larger national brokerage houses, and their offering documents are the truly the best in the business.

Rob Koger, president, Molinaro Koger, Washington D.C. – Molinaro and Koger is one of the top Hospitality firms in the world and Rob is one of the top Hospitality brokers. If you’re looking to buy or sell Hotels and/or Resort properties around the globe there is no better qualified broker to assist you in this space than Rob.

Stephen Livaditis, managing director and partner, Eastdil Secured, Chicago – If you’re looking for someone who owns the office market in Chicago look no further than Stephen Livaditis. Just a few of his representative transactions include the $39 billion acquisition of Chicago’s EOP Trust, The Sears Tower (Chicago), 111 South Wacker Drive (the highest price per square foot ever achieved in the Midwestern U.S. for an office building transaction), 333 West Wacker Drive (Chicago), and UBS Tower at One North Wacker (Chicago) to name a few.

Andrew Levy, senior managing director, Holliday Fenoglio Fowler L.P. (HFF), Dallas – Andrew is in charge of the HFF Investment Sales team in Dallas and is also consistently one of HFF’s top producing investment sales brokers. He has been apart of a number of the largest office and mixed-use sales transactions completed in the Southwest having closed major deals in Dallas, Houston, Austin, San Antonio, and New Orleans.

Bill Pollard, principal, co-founder, Pacific Real Estate Partners, Seattle – The consensus opinion is that Bill is one of the nicest and most honest brokers in the business. He is a dominant player year in and year out in the Seattle market. What is perhaps most impressive about Bill is that his production numbers remain huge while he is managing one of the fastest growing firms in the region.

Chris Johnson, executive vice president, NAI Norris, Beggs & Simpson, Portland – Much like Jamie May (mentioned above), Chris is one of the most market dominant brokers in the business. If there is a large office, industrial, or land deal happening in Portland chances are that Chris has a piece of it. His dominance is so well known that many real estate professionals often refer to the Portland NAI franchise as ChrisCo…

Steve Hermann, executive vice president, CB Richard Ellis Inc., San Francisco – Steve has been involved in the acquisition and disposition of more than $6BB dollars of commercial real estate. He is a member of CBRE’s Institutional Client Group and has been involved in many of San Francisco’s most notable transactions in recent years.

 

 

Know Thy Customer

By Mike Myatt, Chief Strategy Officer, N2growth

--How well do you really know your customer? Let me put this as simply as I can. If you want to succeed in business you must be in touch with the demands of the marketplace. While many businesses think they understand their customers, few of them really do. What most companies view as an understanding of their customer's wants, needs, and desires more often reflects their own internal biases, perceptions, and judgments. In this week's column I'll share a few tips that will help your business succeed by achieving a better understanding of your customer’s needs.

If you desire to possess a true understanding your customer’s needs, it is essential that you interact with them as often as possible. Moreover these interactions should be deep, broad, and come via a number of different inputs and touch points. If you want to get inside the heads of your customers, I would suggest implementing any or all of the following tactics:

1. Customer Surveys: Whether conducted via the phone, internet, or direct mail, a properly structured survey will allow you to elicit answers to your most important questions. What better way to find out what your customers are thinking than to ask them. Surveys today are relatively inexpensive and easy to implement. Surveys also provide quick feedback in that many tools allow for real-time feedback. More in depth analysis for more complex surveys can still typically be completed inside of 60 days.

2. Focus Groups: Again, whether conducted online or in person, there is no substitute for getting your information straight from the horses mouth. As with surveys, the key to success is selecting your groups and structuring your questions. Select the wrong participants and/or ask the wrong questions and you’ll receive information of little use.

3. Customer Reviews: Reviews can be done either one-on-one, or in group venues such as an annual client summit. If you incorporate reviews into your business process you can close the loop on any knowledge gaps on a regularly planned basis. When your customers understand that you not only value their feedback, but that you also provide them an efficient and entertaining venue in which they can have input into decisions, you will collaboratively maximize customer relationship value.

4. Gather Intelligence: Whether it is competitive intelligence, market research, or other forms of business intelligence, the more you know about your customers the better you will be able to meet their needs. If you don’t regularly conduct market research and participate in business intelligence initiatives you are missing a tremendous opportunity to gain insight into your marketplace.

5. Web 2.0: Use Blogs, social networks and other social media platforms to interact with your customers. Encourage user generated content and real-time input from your customers. You can also use these channels to address conflict or misperceptions when the inevitable corporate faux pas occurs.

Bottom line: If your company can meet or exceed the demands of the marketplace it will increase customer satisfaction and loyalty. On the flip side of the coin, if you’re not meeting your customer’s needs someone else will.

 

How to K.I.S.S Problems Goodbye

By Mike Myatt, Chief Strategy Officer, N2growth

--Keep It Simple Stupid. One of the most effective ways to order your world is to simplify everything you encounter. The problem is that keeping it simple often becomes very difficult when our basic human nature is to overcomplicate everything we touch. In thinking about the people I respect the most, to the one they possess the uncanny ability to take the most complicated of issues and simplify them. You will find that the best leaders, communicators, teachers, and innovators have a true knack for taking extremely dense or intricate content and making it engaging and easy to understand. In fact I believe it was Leonardo Da Vinci who said "simplicity is the ultimate form of sophistication." In today's column I'll take a look at the often overlooked benefits of keeping it simple.

While simplicity may have become a lost art, understanding the importance of simplicity is nonetheless critical to your success in business. Consider all the presentations/meetings you’ve attended in the last few weeks; was it the people who able to articulate their positions in a simple and straight forward fashion, or the individuals that made things complex and tedious that got traction with their ideas? It has been my experience that the more complicated, difficult, or convoluted an explanation is, that one or both of the following issues are in play:

1) the person speaking is a horrible communicator, or;

2) the person speaking really doesn’t possess a true command of their subject matter. It is one thing to toss around the latest buzz-words or to have the most complex flow chart, but it is quite another thing to actually possess such a deep and thorough understanding of your topic that you can make even the most complex issues easy to understand.

It is almost as if business people have come to believe that complexity is synonymous with sophistication and savvy. It has been my experience that the only things complexity are synonymous with are increased costs and failed implementations. There is an old saying in the software development world that states “usability drives adoptability” which tends to lend support to my observations. Those of you that know me have come to understand that I prefer to cut to the chase and get to the root of an issue as quickly as possible…this requires the ability to simplify not complicate matters.

The truth is that simplifying something doesn’t make it a trite or incomplete endeavor. Rather simplification makes for a more productive and efficient effort that is often more savvy than other more complex alternatives. As an example I’ll use the area of design to prove my point. I can think of no better representation of simplicity at work than the iPod. Apple took something complex, sophisticated, and feature rich and crushed the competition by making it simple. The simplicity of the iPod is exactly what makes for a great user experience. Absolutely nothing is lost in the iPod’s simplicity, and it is in fact the simplicity itself which makes it so classically elegant.   

Another benefit of simplicity is that it serves as a key driver of focus, which enables greater efficiency, productivity, and better overall achievement. Keeping things simple allows you to focus on one thing at a time without the distractions that complexity breeds. I would suggest that you break down every key area of your business (operations, administration, marketing, branding, sales, finance, IT, etc.) and attempt to simplify your processes, initiatives, and offerings. As a C-level executive you must focus on simplifying your day in order to maximize your efficiency. By simplifying everything from the information and reports you view, to your communications protocol, to your agenda, to your decisioning structure, you will be better able to operate In today’s unnecessarily complex world. 

Does Appearance Matter?

By Mike Myatt, Chief Strategy Officer, N2growth

--So, do appearances really matter? They shouldn't, but the reality is that they most certainly do. As the old saying goes, "you only get one chance to make a first impression," and often times it is that initial perception that determines whether or not you are even afforded the opportunity to get up to bat. In this week's column I'll examine how managing appearances can have a substantial impact on your personal brand and your success.

In a perfect world professionals would only be judged solely on their character, skill sets, competencies and performance, but alas, we do not live in a perfect world. While appearances shouldn’t matter, the reality is that the car you drive, where you office, the clothes you wear, whether you’re in good physical shape, the vocabulary that flows from your lips, the company you work for, the publicity and PR you put out, whom you choose to associate with, and any number of other appearance specific issues can add to or detract from the strength of your personal brand.

I want to be clear that I’m not advocating for form over substance, extreme self-indulgence, narcissism, or masking insecurity by the trappings you surround yourself with, but I am a proponent of paying attention to detail and facing reality. Even the most discerning people make value judgments at the subconscious level as it is only human nature to use the power of observation in an attempt to validate perception. We want those with whom we work to not only be competent, but there is also an innate desire to have them look the part as well.

Let me be transparent and use my personal situation as an example. I’m a professional advisor that works with a very high-end clientele. My job is to take very successful professionals and make them even more successful. While I would like to believe that I would be judged solely on the merits of my qualifications, the reality is that I know I’m judged on EVERYTHING my clients see and hear that relates to their perception of my ability.

For instance, if I drove-up to your office in a beat-up Honda, wearing old tattered clothes, a generally disheveled appearance, and a very laid-back attitude would that first impression color your opinion of my ability? Sure it would. Likewise, if I drove up in a new Bentley, wearing a $3,000 custom tailored suit, sporting a fresh manicure and a GQ hair-cut, along with an attitude of arrogance would that also color your opinion of my ability? If not, it should. The overly slick professional always makes me want to grab my wallet and run. I actually prefer to play to the middle in that I am neither understated nor overstated but I am comfortable with who I am and my approach to the market. 

The advice I give to my clients is to be true to yourself, authentic in your approach to appearance, while striving to put your best foot forward in making a positive first impression. As an example, I don’t really care what someone pays for their clothing or automobile, or even how expensive their office accoutrements are, but I do notice whether or not they are well maintained and appropriate for the given situation. The bottom line is that your appearance should be one that both you and your clients/customers/stakeholders are comfortable with. You should manage appearances on creating a feeling of comfort and engendering confidence not on trying to impress.

While much is often said about first impressions, this phrase in and of itself implies subsequent impressions are made as well. Professionals must be just as diligent in their management of future appearances and impressions. I am a huge proponent of being consistent and having a high degree of continuity of impressions/appearances. If you happen to be someone who makes a great first impression, but cannot execute and/or measure-up to expectations, you are just setting yourself up for failure and your clients will be even more frustrated than if they had never engaged you to begin with. A negative experience is worse for your personal and corporate brand than no experience at all. 

At the end of the day it is not about how much you spend or spin, but the authenticity, integrity, appropriateness of how you manage your appearance that matters. Disingenuous and insincere positioning may get your foot in the door, but when the door slams into your backside as your engagement or relationship blows-up don’t say I didn’t tell you so.

 

Recognizing the Need for Change

By Mike Myatt, Chief Strategy Officer, N2growth

--Since the title of today's column is "Recognizing the Need for Change," I'm going to switch things up a bit and ask you to answer a question posed by me. I first warned readers of the slowing economy more than a year ago, so my question is this: "In the last year what proactive changes have you made to ayour business to improve your ability to navigate the changing economic conditions that are presently vexing many a CEO?" In the text that follows I'll give you a few places you might want to look at if you haven’t already…

Savvy CEOs have likely already made many of the adjustments mentioned below, but it’s not too late to jump on the bandwagon if you’ve been slow on the trigger:

1. Cost Centers vs. Profit Centers: Slowing economic conditions require a greater emphasis on growth in revenue and profitability. Reallocate financial and non-financial resources to marketing and sales activities to prime the funnel. Look to reduce commitments to business units, departments, and headcount that don’t significantly impact contribution margin.

2. Go Shopping: Tough times create opportunities to acquire companies and/or other assets at discounts over normal pricing. The best deals are not made when multiples and trailing 12’s are at all-time highs, but rather when true value is unlocked as a result of recognizing market opportunity created by adversity.

3. The Talent Advantage: Weed out the lower echelons (the bottom 10 percent-20 percent) of your work force and seek to replace them with higher caliber talent looking for a better opportunity during tough times. This is an employer’s market with a dearth of talent available. The big plus is that said talent can now be acquired without having to pay the signing bonuses of old.

4. Get Help: Surround yourself with the best and the brightest. If you’re a younger CEO and this is your first economic downturn, get help…Find a coach or mentor who can help guide you through. As the old saying goes: “You don’t know what you don’t know.” Even if you possess a bit of grey-hair and have successfully operated through a variety of business cycles, don’t let your bravado get the better of you. There is no such thing as a person who cannot benefit from sound counsel.

5. Add to the War Chest: While the capital and credit markets have eased-off the frothy pace of the last few years, there is still an abundant supply of smart-money looking for a home. Underwriting and due diligence may be a bit more painful these days, but don’t let that stand in your way. Work every level of the capital structure and create as much operating leverage as possible at the lowest blended cost of capital.

6. Don’t Forget the Customer: This is a time to not only remain close to your key accounts, but to also aggressively go after your competitions key accounts. Remember that if you’re not talking to your customers someone else will be. At no time is customer centricity more important than in a waning economy.

7. Don’t Miss the Boat: Change, disrupt, innovate, disintermediate, and generally unleash havoc in the marketplace. More wealth is gained, and more dominant brands are established in declining markets than in advancing markets. Smart CEOs aren’t looking for safe harbors, rather they understand that slowing economic conditions create a significant window of market opportunities.

8. It’s Not About the Risk: Don’t manage risk, exploit opportunities. Forget incremental gains and process engineering as these types of initiatives won’t carry you through tough times. Cost cutting is not a business model and it alone (especially the wrong kind) won’t save you. Invest your precious resources now where you can create significant leverage, velocity, or economies of scale. Don’t trip over dollars to pick-up pennies.

As the old saying goes, “it’s better late than never.” Only the most arrogant or the most foolhardy CEOs don’t recognize the need for rapid change in reacting to today’s slowing economic conditions.

How to Reduce Employee Turnover

By Mike Myatt, Chief Strategy Officer, N2growth

--Few things in business are as costly and disruptive as unknowingly having the proverbial revolving door for employees to exit from. While there are many secondary and tertiary items that can influence an employee's decision to leave, in this week's column I'll address the one single factor which constitutes the overarching reason that drives a person's decision to leave their employer.

Let me begin by stating that no company in the world has a 100 percent retention factor if measured over any meaningful length of time. It is also particularly true that today’s global business climate creates a “grass is greener” mindset for many individuals given the plethora of opportunities in the marketplace at any given point in time. The two aforementioned disclaimers aside, there are definitely companies that have created excellent work environments leading to superior employee satisfaction and retention. Organizations that display the healthy, dynamic, and positive culture that fosters a motivated and engaged workforce all have one thing in common...great leadership.

There is an old saying that goes; “Employees don’t quit working for companies, they quit working for their bosses.” Regardless of tenure, position, title, etc., employees who voluntarily leave generally do so out of some type of perceived disconnect with leadership. Furthermore, while the accuracy of exit interviews are somewhat debatable, they nonetheless support the conclusion drawn in the previous sentence. The following list contains just five representative samples of the differences between solid company leadership and poor leadership as it relates to employee turnover…

• Hiring Methodology: Great leadership teams use a values based hiring methodology. They hire slowly, carefully, and only to fill a defined need with a specific skill set. Companies with challenged leadership hire quickly, often based solely on how affordably they can fill a position, and many times in absence of a defined need.

• Leadership Continuity: Great companies have a clear vision, mission, and strategy, which are evangelized by a cohesive leadership team. A crisply articulated vision, and continuity of leadership creates an engaged workforce that understands the business model and key objectives of the enterprise. Companies that have a fractured leadership team lose the confidence of line and staff. Employees that don’t understand what they’re playing for are very difficult to motivate and as a result are often disengaged and non-productive.

• A Planned Transition: Outstanding leadership teams set employees up for success and not for failure. They have an established onboarding process which puts forth an initial roadmap for a successful transition by clearly defining key performance indicators, business objectives, and other key metrics. Well honed leadership teams immediately assign an in house mentor to new hires to help insure a successful acclimation. Unsophisticated leadership teams usually have a sink or swim mentality with regard to new hires and have substantial voids in training and management processes in the early days of a new hire. Poor leadership teams have a lack of continuity in their training and development which breeds discontentment and dissatisfaction.

• Compensation: Great leadership teams understand the value of tier-one talent, and are not afraid to pay-up in order to attract it and retain it. They create a multi-tiered compensation plan that rewards employees at the top of industry scale when performance objectives are met or exceeded. Moreover they understand the value of non-compensatory recognition and apply it generously and judiciously. Companies with poor leadership often trip over dollars to pick-up pennies when it comes to compensation. Their compensation plans lack sophistication, creativity, and are engineered by default and not be design. People will often cite non-competitive compensation as an issue for leaving a company, but what they are really stating is that the company has an unsophisticated leadership team which is out of touch with both the market, and the needs of its employees.

• Professional Development: Solid leadership teams challenge their employees by offering them a clear path toward personal and professional growth. Great companies create a career path that offers the successful employee the option of matriculating throughout the company based upon achievements, needs, and qualifications. Great leadership teams understand that in order to create a thriving and sustainable enterprise that a key priority is to develop talent to their greatest potential, and ultimately to create other leaders. Poor leadership teams don’t see the value in training, mentoring, coaching, and other forms of professional development. Their workforces are stagnant and not competitive, which places them a not only a competitive disadvantage, but also at risk for long-term sustainability.

While today’s column was a bit of an extemporaneous highlight covering only a few critical issues,  I hope it clearly portrayed the value of leadership in employee retention and development.

How To Delegate for Success

By Mike Myatt, Chief Strategy Officer, N2growth

--If you desire to become a top CEO it will be essential for you to master the art of leveraging down. Think of any top performing CEO and you'll find that to the one, they possess an uncanny ability to focus on highest and best use activities. While most executives that have reached the C-suite level understand the importance of scaling via delegation, far too many CEOs struggle with the effective implementation of the concept. To this day I'm amazed at how many CEOs still own tasks, roles, projects, and responsibilities that should be delegated to others. So, in today's post I'll share two tips on deciding which tasks, and to whom, should be leveraged down in the organization…

As a CEO it is critical to develop a keen understanding of your value to the enterprise, and to further develop an awareness of activities that are dilutive to said value. The main role of a CEO can certainly vary based upon skill sets, stage of corporate maturation, and the talent level of the rest of the executive team. That being said, it is nonetheless safe to say that CEOs who find a way to focus their efforts on values, vision, mission, strategy, team building, networking, and branding will be the CEOs who achieve the highest and most sustainable levels of success.

One of the first things you need to understand as a CEO is what your time is worth relative to others in the organization. There is a simple short-cut which allows you to quickly extrapolate an hourly rate from a total annual compensation figure that I find useful for quick comparative purposes. The calculation works like this: if you make $350,000 per year, just eliminate the last three zeros of your annual compensation figure and divide 350 by two. This will give you an hourly rate based upon a 40 hour work week and a 50 week year. In this example the hourly rate of a CEO who makes $350k is $175 dollars per hour. So if you run the same calculation on a $100k employee you find a $125 dollar per hour delta between your hourly rate and theirs. Therefore any items that don’t constitute $175 dollar an hour work that can be leveraged down to someone with a lower hourly rate provides positive arbitrage both in terms of cost savings and time recovered for higher and better use activities.

Another simple rule of thumb that allows you to maximize the equation mentioned above is to leverage down to the lowest level of talent possible while still insuring an acceptable level of execution. For instance, rather than leveraging down to the $100K talent in the example above, if you drive down further to let’s say a $30k individual, you increase your organizational leverage factor by almost 30%. The most productive, high-performance organizations have the ability to deliver fairly complex solutions and complete difficult tasks at the lowest levels within their organization.

Now that we’ve made the economic case for what and to whom you should leverage down to, let’s discuss what does and does not merit the attention of a CEO based on non-financial analysis. In Stephen Covey’s “The 7 Habits of Highly Effective People” he put forth a simple decisioning framework that helps to distinguish between those activities that are truly priorities and those that just appear to be priorities. Basic human nature is such that each individual believes that his/her problems and challenges are truly important, and therefore should constitute an emergency on your part. Your job as the CEO is to quickly be able to distinguish between the true emergency and the perceived emergency. In Covey’s classic illustration below, you’ll find a simple chart (click to enlarge) to use as your guide:                 

The moral of the story is this…Focus on making the lower echelons as competent and productive as possible, driving all decisions down to the lowest possible level in the organization possible without suffering an unacceptable increase in delivery risk. The tips mentioned above will help you build a formidable organization, make better use of your time, and insure operational performance gains across the enterprise.

Movies Can Teach Leaders Cannes-Do Attitude

By Mike Myatt, Chief Strategy Officer, N2growth

--The best leadership movies...you're likely thinking right now, "can anything about leadership actually be learned by watching movies?" You bet. I was recently asked for my opinion about which movies I felt were the top leadership movies of all time. After thinking about my answer for a few minutes, I realized that, while not all leaders are fans of cinema, all leaders can certainly learn valuable leadership lessons by watching movies with a critical and discerning eye.

You've probably surmised by now that this week's column is not going to be a real brain-teaser. However, it will nonetheless offer you the opportunity for leadership development. While the most natural leaders possess a large number of innate qualities and characteristics, the best leaders refine their leadership skills over time through a variety of learned behaviors, experiences, and activities.

There are certainly more academic, substantive, and challenging ways to acquire leadership insights, but you’ll find few methods of learning more enjoyable than popcorn and a movie. I must confess to being a bit of a movie buff, so when it came to putting together a list of top leadership movies it didn’t take too long to come up with the following list of favorites (in no particular order of preference):

1. Braveheart 
2. Remember The Titans
3. 300
4. The Last Castle    
5. Schindler’s List
6. Lord of the Flies     
7. Apollo 13
8. We Were Soldiers
9. Pistol Pete
10. Miracle
11. Saving Private Ryan
12. Amazing Grace
13. Hoosiers
14. Chariots of Fire
15. To Hell and Back
16. The Alamo
17. The Last of the Mohicans     
18. K19 Widow Maker
19. The Mission
20. The Green Berets
21. Dead Poets Society
22. Glengarry Glen Ross
23. Mr. Holland’s Opus
24. Glory Road
25. The Shawshank Redemption     
26. Twelve O’clock High
27. Band of Brothers
28. Ben-Hur
29. Blackhawk Down
30. Rocky
31. The Longest Day
32. Rudy
33. The Lion King
34. Passion of Christ
35. Men of Honor
36. The Last Samurai
37. Deliverance
38. The Patriot
39. Bridge Over The River      Kwai
40. The Guardian
41. The Ten Commandments     

If you feel something has been left off the list, which I’m sure is the case, please let me know and I’ll add it. Enjoy!

 

How to Become a Great CEO

By Mike Myatt, Chief Strategy Officer, N2growth

--What does it take to become a great CEO? Much more than it did even 5 years ago to be sure. The rapidly changing global landscape and the evolving complexity of business makes the job of CEO something that is only well-suited for a rare few. For these reasons sustainable success at the C-suite level is an elusive thing in today's business world. With the average tenure of a CEO being less than 5 years it is critical for executives to understand what it takes to beat the odds. In today's column I'll examine the characteristics that a CEO must posses in order to maintain his or her position and remain in control for as long as they choose.

The job of CEO is all about managing expectations. Put simply a CEO’s shelf life will be equal to their ability to align vision with execution. A CEO must be able to focus on deploying the necessary resources at the right time to achieve to desired results. By exhibiting strong leadership skills a good CEO will manage talent, performance, change, innovation, influence, rapport, and messaging to consistently drive an enterprise forward regardless of circumstances. In my book “Leadership Matters…The CEO Survival Manual” I offer more than 200 pages of insights for CEOs, but if you don’t have time to read the book and still want to insure longevity as a CEO, work towards a mastery of the following characteristics:

1. Integrity: Always do the right thing regardless of sentiment and never compromise your core values. If you cannot build trust and engender confidence with your stakeholders you cannot succeed. No amount of talent can overcome illegal, immoral or otherwise ill-advised actions. A leader void of integrity will not survive over the long-haul.

2. Excellent Decision Making Skills: As a CEO you will live or die by the quality of the decisions you make. When you’re the CEO good decisioning is expected, poor decisioning won’t be tolerated, and great decisioning will set you apart from the masses.

3. Ability to Focus: If you cannot focus you cannot perform at the level necessary to remain in the C-suite for very long. The ability to do nothing more than understand, and lock-onto priorities will place you in the top 10% of all executives.

4. Leveraging Experience: Inexperience, a lack of maturity, needing to be the center of attention, not recognizing limitations, a lack of judgment, an inferior knowledge base, or any number of other common mistakes made by rookie CEOs can cause your house of cards to fall. If you don’t have the experience personally, hire it, contract it, but by all means acquire it. Great CEOs surround themselves with tier-one talent and the best advisors money can buy. They don’t make uniformed or ill-advised decisions in a vacuum.

5. Command Presence: Great CEOs possess a strong presence and bearing. They are unflappable individuals that never let you see them sweat (unless of course it serves a purpose). Everything from how they carry themselves to how they speak and dress messages that they are in charge.

6. Embracing Change: Great CEOs have a strong bias to action. They don’t rest upon past accomplishments and are always seeking to improve through change and innovation. In today’s fast paced and competitive environment those CEOs who don’t openly embrace change will often be shown the door prior to the expiration of their initial employment contract.

7. Brand Champions: Great CEOs understand branding at every level. They seek to build not only a dominant corporate brand, but also a strong personal brand. CEOs that are not well branded on a personal basis, or who let their corporate brand fall into decline will not survive. 

8. Boundless Energy: Great CEOs have a boundless amount of energy. They are positive in their outlook, and their attitude is contagious. A low energy CEO is not motivating, convincing or credible.

9. Business Acumen: Great CEOs have a deep understanding of the business and a strong orientation toward profit. Great CEOs possess what often appears to be a sixth sense or an almost instinctive feel for what the company needs to do to make money and remain competitive.

10. People Acumen: Great CEOs have a nose for talent…They understand how to recruit, develop and deploy talent while focusing on applying the best talent to the best opportunities. They also know when it’s time to make changes and cut losses as needed.

11. Organizational Acumen: Great CEOs know how to engender trust, know when and how to share information, and are expert listeners. They develop strong and positive corporate cultures driven to performance by aligned motivations. They can quickly diagnose whether the organization is performing at full potential, delivering on commitments, and whether the company is changing and growing versus just operating.

12. Curiosity: Great CEOs possess a powerful motivation to increase their knowledge base and to convert their learning into actionable initiatives. They question, challenge, confront and are never accepting of the status quo.

13. Intellectual Capacity: Great CEOs are also great thinkers both at the strategic and tactical level. They are quick on their feet and know how to get to the root of an issue faster than anyone else. I’ve never met a great CEO who wasn’t extremely discerning.

14. Global Mindset: Regardless of the geographical boundaries of the current business model great CEOs think globally. Limited thinking results in limited results. Whether global thinking is applied to capital formation, supply-chain issues, business development, strategic partnering, distribution, or any number of other areas, those CEOs who don’t grasp the importance of thinking globally will not endure. Great CEOs are externally oriented, hungry for knowledge of the world and adept at connecting developments and spotting patterns.

15. Never Quit: Great CEOs refuse to lose…They have an insatiable appetite for accomplishment and results and while they may reengineer or change direction they will never lose sight of the end game.

Engaging Your Employees Essential

By Mike Myatt, Chief Strategy Officer, N2growth

--Long gone are the days where the executive leadership of a company can remain sequestered in their offices with an internal focus on hard metrics. It is the soft metrics of customer centricity and employee engagement that will create sustainable growth in revenue and brand equity. In this week's column I'll examine the need to have a fully engaged work force.

Before you read any further, I want you to stop and ask yourself the following question: How many of your employees are truly passionate about your company, its vision, its mission and the role that they play within the organization? Don’t fool yourself. Conduct a harsh, critical analysis and come up with a true head count of the passionate employees within your organization.

Your answer to the question above should be a very telling sign about the overall health of your business. Are people just showing-up and punching the clock to collect a paycheck, or are they personally consumed and committed to achieving the company vision? Are your employees’ corporate evangelists serving as a motivating force to be reckoned with, or do they gather in small groups to gripe and complain about all the things wrong with the company and its leadership?

The key to having an engaged workforce is to have a passionate workforce. And the simple truth of the matter is that no single person in the company can instill passion in the ranks like the CEO can. Despite the consensus recognition that employee engagement matters, the enormity of its impact on the company’s bottom line still appears to be misunderstood by most CEOs. I rarely talk to a CEO that doesn’t understand this principle in concept, but yet I rarely see chief executives who put theory into practice…

So it begs the question, why are CEOs listening but not taking action? The answer seems to be that CEOs continue to allocate considerable effort and resources toward engineering the corporate strategy, yet they seem to be unaware of what forces can prevent it from being delivered successfully…Not surprisingly; employee engagement is often the critical missing factor.

As the CEO you must also become the chief engagement officer. Operating in a vacuum and being out of touch is never a good position to find yourself in as the CEO. I have consistently espoused the value of walking the floor, dropping in on meetings on an impromptu basis, taking employees of all ranks to lunch, and any number of other items that focus on raising your internal awareness and creating a passionate workforce.

It is your passionate employees that are the franchise talent (regardless of position) that you should be building around. If you can’t get employees to see the light and become passionate about the company and their contribution then seek to replace them as quickly as possible. Just as passion is a positive, contagious trait so are apathy and dissatisfaction. Passionate employees are productive, energized, committed and loyal assets. Apathetic employees quickly become disenfranchised liabilities that will hurt both productivity and morale. To drive home the point of how much I value passionate employees, I would take a moderately talented but passionate employee over a very talented but complacent employee eleven times out of ten…

Truly great companies are built around passionate employees. When you walk into a dynamic, thriving company you can sense the passion…you feel a certain buzz and fervor that pervades everything. Contrast this with a company that feels as if it has no pulse…If you’ve ever walked into an organization that feels like rigor-mortis has set in you know what I’m referring to…

As a leader you need to understand that your employees not only want to be led, but they want to be led by a passionate leader. Ultimately employees want to be passionate about what they do; in fact, they’ll go to the ends of earth and sacrifice tremendously if passionate about the endeavor. Think of the employees that started off with Gates and Allen at Microsoft, or those that worked with Phil Knight in his garage before Nike even had a name, or those employees that endured the early days with Larry Page and Sergey Brin at Google…it was their passion and commitment that helped change the landscape of business, not their starting salaries.

To build an extraordinary company, you must light the “fire in the bellies,” of your workforce…You must get them to feel passion about your organization and to connect with your vision. You must get your employees to engage. As the CEO your ability to transfer your passion to your employees is the essence of being a great leader…So much so that if you can’t accomplish this, you simply can’t be a great leader. Think of any great leader and while you’ll find varying degrees of skill sets, intellect and ability I challenge to name even one that did not have passion.

 

The Name Game: Part 3

By Mike Myatt, Chief Strategy Officer, N2growth

--This is the third and final piece in this series on naming. The first column dealt with how to select a naming firm, the second one addressed the components that go into creating a great corporate name, and this final piece will deal with other venues within the naming field.

A lot of focus and attention is brought to bear on the topic of corporate naming as this is the most visible high impact area of naming. However naming applies to products, services, projects, reports, books and publications, newsletters, microsites, blogs, intellectual property, business practices and a long list of other areas that often receive less attention.

Unlike corporate naming, which receives everyone’s attention, the smaller naming genres are often left to individual brand managers or staff members. Regrettably these people often operate with a singular focus or agenda, outside of best practices, and without a global perspective. This focus at the granular level can sometimes have the opposite effect of what is being sought after in the way of desired results. I have seen many a product or service name actually dilute brand value as opposed to increase it.

Every company should have a naming strategy and process that is consistent with corporate vision, and as a subcomponent of the overall brand strategy. Naming should have an integrated process across the enterprise to insure that an individual naming effort doesn’t detract from the overall brand strategy and dilute brand equity.

Brand guidelines need to specifically address naming conventions and protocols such that cross product, business compatibility, color pallets, phraseology, font style and sizes, and other criteria are considered in the process. The keys to ensuring a proper outcome across business units and product lines is having continuity, clarity, and consistency in your naming conventions. Each new name created and implemented should add value to the overall brand by enhancing and strengthening the preexisting names.

So rather than pushing  naming down, I would suggest that most firms would be better served by elevating all naming up the chain of command, along with engaging an outside naming firm for advice and counsel. The time spent giving naming the proper attention and focus will lead to a stronger brand and solid return on investment.

I hope this series on naming has been of benefit. Good luck and good branding!

The Name Game, Part 2

By Mike Myatt, Chief Strategy Officer, N2growth

--This week's column is part two in a three part series on naming. Last week's column contained advice on how to select a naming firm and today I'll address the elements that go into creating a great name.

Contrary to popular belief all of the great names have not already been taken. So, what are the components of a great name? While the answer varies a bit from industry to industry, the following rules of thumb should be kept in mind:

1. Keep it short: Short names are more memorable, easier to design around, more suitable for domain names and e-mail extensions, and possess a number of other advantages when contrasted with longer names. Another by-product of a short name is that it will likely be easier to spell.

2. Make it memorable: What good is a name that no one remembers? Your name should be distinctive and creative. Stop and think for a moment about names that you feel are great names, and you find that it is likely those catchy, memorable names that your brain will recall.

3. Your name should describe what you do: If your name is short, memorable, and descriptive you have hit the naming trifecta. Most of all, your name should not confuse the market about what you do. If you refer to the use of the name “Alfalfa” for a tax and financial planning firm described in last week’s column you’ll see what I mean. If you work for a company where you consistently have to explain who you are, and what you do, then you may want to reevaluate your choice of name.

4. Your name should be Internet friendly: The domain name exactly resembling your brand name should be available so that you can maintain continuity in your branding. If you find that your name is either not available, or that you have to shorten the name to make it work you may want to think twice. Additionally you should enter your domain name into all of the major search engines and if the returned search count is too high it is a good indicator that you will have a difficult time securing high search engine rankings and that there may be confusion in the market with regard to your name.

5. Color pallet: Make sure that the colors you choose work well across all mediums, and that the color is memorable while still being appropriate within your industry. Have your naming firm provide you with several different color pallets to work from so that you can make sure you end-up with something that is credible, works across mediums, and still has some “pop” to it.

6. Your name should be easy to design around: In a perfect world your name should consist of an integration of your name, logo and tagline into a single design concept. Okay, I can’t resist a little shameless promotion…Look at the N2growth logo (www.n2growth.com), and I think you’ll agree that it is short, creative, memorable, internet friendly, associative, descriptive, relevant and contains an integrated design.

7. Your name should be conflict free: Step one is to do an internet search to see if others are openly conducting business using your name. Step two is to check with the municipalities in which you will be doing business to make sure that someone has not registered the name, step three is to search the database at the United States Patent Office (www.uspto.gov), and step 4 is to do a linguistics check to make sure that you will not be offending other cultures with your name selection. There is little sense in selecting a name that is going to be fraught with future legal battles.

If you make sure to follow the seven steps noted above it is likely that your name will be effective and have some staying power to boot.

 

The Name Game: Part 1

By Mike Myatt, Chief Strategy Officer, N2growth

--The disciplines of branding and corporate identity have long been personal passions of mine, and nothing within this genre holds greater fascination for me than the practice of corporate naming. This column is the first in a three part series and will discuss whether corporate naming should be handled as an internal initiative, or whether it should be outsourced to a professional naming firm.

Done well, corporate naming can be one of the most powerful assets in a company’s branding arsenal. A great company name can support, energize, and leverage your brand. The right name will also create strong competitive separation while at the same time establishing a bond of trust and loyalty with your target market(s).

Given the critical importance of selecting a great company name I’m always amazed at the haphazard approach that many organizations use in their methodology (or lack thereof) when creating a name. There are basically two paths a company can travel when creating a name, they can create it internally or they can collaborate with a service provider. Both options are assessed below:

1. The Do it Yourself Approach: In all but the rarest of circumstances companies that attempt to develop a name internally usually do themselves a disservice.  Names should not be developed in a vacuum. I have seen pride of authorship create many a naming train wreck. Just because it is your idea doesn’t necessarily mean it’s a good name.

Naming is a competency that spans mediums, cultures and geographies. Naming is equal parts art, science, linguistics, strategy, competitive positioning, research, business intelligence, marketing, branding, creative, intellectual property and above all else talent and experience. If you can’t honestly say that your company possesses all the aforementioned capabilities then you should not organically pursue naming.

Even if your organization possesses the aforementioned abilities you may still want to think twice when you consider the fact that companies like Disney, Coca Cola, Microsoft, Time Warner, ABC, MTV, Apple and many others outsource naming to experts. There is something to be said for third party objectivity.

What about cost you say? If you think you can’t afford a professional naming firm think about all the money you’ll spend down the road trying to breath life into a bad name, the future cost of a rebranding initiative, the legal fees you’ll spend defending an intellectual property infringement claim when it turns out that you’re using someone else’s name, or the fact that you can’t do business in foreign market because the name you’ve chosen happens to be an expletive. It just pays to get it right the first time.

2. Select a Third Party Naming Expert: Your second option is to outsource naming. For all the reasons noted above the undisputed best practices approach to naming is to hire a third party expert. The tricky part associated with this method is determining what it is that actually constitutes an expert. For if you select the wrong firm all the negative aspects of the do it yourself approach referenced above will also apply here.

Let’s start by defining who does not qualify as a naming expert. While there are clearly exceptions to any rule of thumb, generally speaking graphic designers, printers, PR firms, logo shops and yes even many advertising agencies don’t qualify as naming experts. They may dabble in the practice, but you’ll find that it is rarely a competency.

Complicating matters even further is that many firms who profess a competency in naming are simply not very good at it…Just for kicks and giggles let’s put some naming companies under the magnifying glass and see what they’ve done for themselves…

The Avant-garde firms: Avant-garde is defined as way out or ahead of its time. Firms that fall into this category tend to confuse off the wall and ridiculous with being creative…Trust me when I tell you there is a big difference. Point in case: The first thing that comes to mind when I see “A Hundred Monkeys” is what were these guys smoking when they came up with that name? A Hundred Monkeys is a naming firm that created the name “Alfalfa” for a tax and financial planning firm; Go figure…Firms that try so hard to be cool at the expense of all the other critical factors that go into creating great names should be avoided.

The Completely Predictable and Boring Firms: Firms such as “The Naming Firm” clearly understand relevant association, but there is a certain lack of creativity in this name, don’t you think? Firms that have no sense of flair should be eliminated from the search as well. There is no need to make sacrifices when it comes to selecting the right name. It is possible to be relevant, associative, creative, memorable, and distinctive.

The trick to selecting a great naming firm is to avoid the extremes represented by the firms mentioned above. There are two main factors to focus on when selecting a naming firm. The first is to find a firm who has a portfolio that is really good. Their work should reflect a variety of styles that demonstrate relevancy to the industry they were created for. This type of diversity of work history will give you a better chance of ending-up with a style that is compatible with what you are trying to accomplish. The second is to find a firm that is very collaborative. They should spend time getting to know your company, your industry, your competitive value propositions and your vision. Great naming firms achieve success based upon their ability to align their talent with the client’s vision.

Now that you are armed with what to look for in a naming firm, Part 2 of this series scheduled for next week’s column will discuss the individual elements contained in great names.

 

Knowledge Is Power

By Mike Myatt, Chief Strategy Officer, N2growth

--The ability of an executive to sort out who, what, why, when, where, and how while contemplating how decisions are made will largely determine the qualitative outcome of said eventual decisions. Even though people often treat theory as knowledge, and opinion as fact, they are not one in the same. In this week's column I'll address what I refer to as the hierarchy of knowledge which will provide you with some logic surrounding how to filter the various sources of input.

One of great challenges for any business is to learn to efficiently and cost effectively leverage knowledge on an enterprise wide basis. We have all heard the saying that “knowledge is power.” We’ve all also heard the refinement of that saying which states that “the application of knowledge is power.” I prefer to take it one step further and say that “the successful application of knowledge at the right time, for the right reasons, and with the proper emphasis results in a certainty of execution that creates power.”

Understanding that a hierarchy of knowledge exists is critically important when attempting to make prudent decisions. Put simply, not all inputs should weigh equally in one’s decisioning process. By developing a qualitative and quantitative filtering mechanism for your decisioning process you can make better decisions in a shorter period of time. The hierarchy of knowledge is as follows:

* Data: Raw data is comprised of disparate facts, statistics, or random pieces of information that in-and-of-themselves hold little value. Making conclusions based on data in its raw form will lead to flawed decisions based on incomplete data sets.

* Information: Information is simply an evolved, or more complete data set. Information is therefore derived from a collection of processed data where context and meaning have been added to disparate facts which allow for a more thorough analysis.

* Knowledge: Knowledge is information that has been refined by analysis such that it has been assimilated, tested and/or validated. Most importantly knowledge is actionable as a result that proof of concept exists.

Making executive decisions in today’s world has never been more complex, and when under extreme pressure I have seen many a savvy executive blur the lines between fact and fiction resulting in an ill advised decision. Decisions made at the data level can be made quickly, but offer a higher level of risk. Decisioning at the information level affords a higher degree of risk management, but is still not as safe as those decisions based upon actionable knowledge.

Another aspect that needs to be factored into the decisioning process is the source of the input. I believe it was Cyrus the Great who said “diversity in counsel, unity in command” meaning that good leaders seek the counsel of others, but maintain command control over the final decision. While most successful leaders subscribe to this theory, the real question in not whether you should seek counsel, but in fact where, and how much counsel you should seek. You see more input, or the wrong input, doesn’t necessarily add value to a decisioning process. Volume for the sake of volume will only tend to confuse matters, and seeking input from sources that can’t offer significant contributions is likely a waste of time. Two other issues that should be considered in your decisioning process as they relate to the source of input are as follows:

1. Credibility: What is the track record of your source? Is the source reliable and credible? Are they delivering data, information or knowledge? Will the source tell you what you want to hear, what they want you to hear, or will they provide the unedited version of cold hard truth?

2. Bias: Are there any hidden and/or competing agendas that are coloring the input being received? Is the input being provided for the benefit of the source or the benefit of the enterprise?

Good luck and good decisioning.

 

How to Manage Passion's Downside

By Mike Myatt, Chief Strategy Officer, N2growth

--In a recent speaking engagement I was talking about the downside of passion and was quickly interrupted with the question: "How could being passionate about what you do ever be a bad thing?" As most people understand, anything taken to the extreme, or in excess, can in fact be harmful. Therefore I thought it might be of value to examine the downside of unbridled passion in this week's column, so that passion can remain an asset and not end-up becoming a liability for you or your company.

Most of the professionals I know would agree with me that passion is a necessary ingredient for success as an entrepreneur or C-level executive. While I have always been a champion of passion as a key success metric, I have on numerous occasions witnessed passion impeding purpose, which in turn hinders success. As I have observed this situation on more than a few occasions over the years, it has been my experience that passion only becomes a barrier to success when it is misunderstood and/or misapplied.

Passion is an emotion of exuberance that can almost single-handedly fuel greatness. History is littered with accounts of marginally talented individuals who have risen to greatness based upon little more than being passionate about the pursuit of their objective. Passion creates a “refuse to lose” mentality which can enable the average person to move outside comfort zones, take-on greater risk, go the extra mile and achieve phenomenal results. That being said, passion without perspective and reason can actually serve to distort one’s perception of reality allowing them to slip into very dangerous territory. Have you ever known someone who wanted something to be true so badly that they started to adopt positions and manufacture circumstances to support their own false reality? Just because you can convince yourself that your position is correct, doesn’t necessarily mean that it is.

Just as there exists a very fine line between brilliance and insanity, there also exists a fine line between passion and many negative traits such as narrow-mindedness, narcissism, fanaticism, delusion, and even paranoia. For instance, there is a big difference in an entrepreneur who is passionate about his business, and one that is emotionally over-invested in his business. Healthy passion for one’s business actually brings focus and clarity of thought, which serve to accelerate growth and create sustainable success. However being emotionally over-invested in one’s business can lead to irrational decisioning, prideful or ego-driven actions, the use of flawed business logic and poor execution, which can in turn lead to unnecessary loss and/or failure.

It is not at all uncommon for entrepreneurs and executives to be too close to the forest to see the trees. Passionate professionals thinking clearly will seek independent outside counsel and advice to continually gut-check and refine their thinking. Emotionally over-invested professionals will either avoid counsel or surround themselves with the proverbial yes-men.

Another trait of healthy passionate thinking is to recruit tier-one talent at the executive leadership and senior management levels in order to stimulate innovation and thought growth. Effective leadership teams have a balance of left-brain and right-brain thinkers from a variety of backgrounds so that they can draw from the broadest possible array of experiences when formulating positions and options. Emotionally over-invested professionals tend to surround themselves with very small teams of like minded individuals from similar backgrounds who tend to reinforce one another’s thinking instead of challenging it.

I applaud those of you reading this column who constitute the passionate minority. I would, however, also counsel you to take pause and evaluate your current positioning and thinking. Are you operating in a vacuum? Do you seek advice and counsel from those who will tell you the truth, or from those who will just tell you what you want to hear? Is your passion creating clarity, focus and purpose or is it blinding you from seeing the reality of your current situation?

My advice? Be passionate where prudent and justified, and always stay grounded in reality.

Business Should Be a No-Spin Zone

By Mike Myatt, Chief Strategy Officer, N2growth

--In the wake of some of the recent, and highly publicized, business, financial and political scandals that seem to dominate the media of late, I thought it might be an opportune time to assess the value of truth in business. If you peel back the layers on most of the debacles that often transform themselves into highly sensationalized headlines, you'll see that said problems often begin with rationalizations, justifications, posturing, and spin being substituted for the truth. I think sometimes we all need to revisit reality, and examine why we do the things we do. It is my hope that this week's column will be of some use in this regard.

Try this thought on for size. I believe that truly great leaders view business as a no spin zone. The most successful business leaders of our time have built their personal brand by letting right thinking, right decisioning, and right acting serve as their guide. If you have to manipulate the truth to gain an advantage, the advantage is not worth the perceived gain, for any advantage gained in deceit will surely come at a very high cost…the sacrifice of your honor and integrity. In today’s post I’ll address the often overlooked benefits of truth telling as a key success metric.

While there is not an adult breathing today that hasn’t “misspoke” err--told a lie, not everyone is pathological liar. A key difference between those that succeed and those that fail as leaders is whether they are known for their honesty or lack thereof. One of the best traits you can possess as a leader is to be known for your candor. Whether in written or oral form, communication that is clear, concise, on point, and truthful will gain the respect and admiration of peers and subordinates alike. While many wannabe leaders possess the ability to selectively self-edit on the fly as they wax eloquent for the purpose of persuading their audience, true leaders understand that all the justifications and rationalizations in the world cannot replace the value of the truth.

The truth is an interesting tool in that it is often a difficult master to serve. Telling the truth is not always easy, and may subject you to substantial opposition and controversy over the short run, but it will do nothing but help build your reputation, success, and sustainability over the long haul. While I’ve come across many executives that have been able to achieve short term success via less than honorable conduct, these successes to the one have been short lived as poor business practices will eventually be found out and in turn will unwind any ill gotten gains. However I have yet to meet a CEO or entrepreneur who has endured the test of time without having an exceptionally strong moral compass. When reflecting about how you communicate and conduct business with others consider the following thoughts:

1. Telling the truth is a habit. For those not grounded in the truth you’ll find that it requires practice. Each truth-telling event strengthens you for another, and each one gets easier, until telling the truth becomes second nature. It is never to late to start telling the truth. Regardless of whatever your past indiscretions might be, you can change your future by beginning to tell the truth today. Truth is a habit well worth forming. 

2. Telling the truth is the right thing to do. Lying is wrong. It’s just that simple, and oh by the way, omitting, editing, spinning, blurring or repurposing the truth is also wrong. Selective truth telling is synonymous with being a liar. Resist any form of deceit or manipulation if you want to achieve sustainable success.

3. The heaviest baggage you can carry is a lie. By opting not to tell the truth then you are simultaneously opting to take on the heaviness of the burden of deceit. Each time you encounter a person, circumstance, or situation that reminds you of the untruth, your conscience will weigh you down as you become a fugitive in your own mind running from the lie you told.

4. Lies will always come back to haunt you. We’ve all witnessed some fairly elaborate cover-ups over the years, and as we’ve all seen they always turn out the same way…in disasters that could have been avoided had the truth been told to begin with. You might be able to run, but you can’t hide from your lies. While you might be able to conceal your deceit for a time, your lies will always resurface at some point in the future…it may be a week, a month or a decade but they will find you out.

5. Lies create a barrier to personal and professional development. Time, energy and worry are often spent on hashing and rehashing wrong acts and untruths. Instead of wasting resources on fruitless endeavors you could be invest in transacting business, building relationships, learning, or any number of other positive things.

6. Truth strengthens your reputation and enhances your personal brand. If you consistently and effortlessly tell the truth a strange thing happens…other people will notice. You will quickly earn the respect of others by becoming known as a person of character and integrity. There is no more valuable mental association you can tie to your personal brand than that of integrity.

7. Truth deepens the quality of relationships. There is a distinct difference between the surface level acquaintances that will gravy-train your success and the deep professional relationships and true friendships that will endure the test of time regardless of circumstances. 

8. A clear conscience leads to a healthy mind. Its a nice feeling to be able to look at yourself in the mirror each morning and actually like what you see. I don’t know about you, but I have better things to do than try and remember all the different stories that I’ve told to people. The truth is a gentle, healing sponge that keeps your conscience clear, provides you with a positive outlook and a confident and formidable presence. 

9. Truth is a powerful example. As a leader you have in fact chosen to be a role model and as such it is incumbent upon you to model the truth. When friends, peers, subordinates, competitors, vendors, partners, suppliers, investors, lenders, etc. see that you actually walk the talk, you will not only have earned their confidence and respect, but you’ll find that they will also try to model that behavior.

I think the subject of truth telling can be best summarized by reflecting on the following axiom: ”The truth will set you free.” It has been said that a person is only as sick as their secrets, and I would strongly encourage you to be honest and forthright in your communications and actions as you’ll be healthier, happier and more successful. Remember that business should be a no spin zone.

 

When to Replace a CEO

 

By Mike Myatt, Chief Strategy Officer, N2growth

--It is not uncommon that I receive inquiries from board members wanting to know when it is time to consider replacing the CEO. While it is refreshing to know that at least some board members are actually paying attention to CEO performance, the decision to replace a CEO not only requires a complex analysis, but the wrong decision will have far reaching consequences. In this week’s column I'll share my thoughts on the right reasons to transition the CEO.

Before I address the question at hand, for contextual purposes, I believe it’s important to actually define the role of the board of directors. While there are certainly a variety of opinions as to the roles and obligations of a company’s board of directors, from my perspective they can all be boiled down into four simple responsibilities:

1. Shareholder Accountability: A board member’s primary responsibility is to act in good faith as a fiduciary in representing the long-term best interests of shareholders. A board’s actions and decisions must be able to pass the litmus test of public scrutiny (legally, morally, and ethically), rise above personal agendas, and always place shareholder interests above all else;

2. Corporate Governance: A board must insure that the corporation’s charter and by-laws are adhered to. Moreover a board must use its best efforts to hold executives accountable for insuring that corporate actions fall within other legal, financial, regulatory, and compliance boundaries. Ignorance and apathy are not the traits of a good board. Great board members are proactive, involved, supportive, consultative, experienced, and savvy. They know the rules, play between the lines, and do the right things. 

3. CEO Oversight: It is the board’s job to select the CEO, provide the CEO with support and guidance, and to hold the CEO accountable. Good boards exercise great care and prudence in profiling CEO candidates, recruiting the right CEO for the job, providing the CEO with a clear job description, successfully onboarding the CEO, and holding the CEO accountable for meeting a set of clearly defined expectations. Good boards do not attempt to micro-manage a CEO, rather they understand their highest value in being a value added resource for the CEO focused on helping the CEO become successful. 

4. External Visibility: A key responsibility of the board is to serve as an external champion of the corporate brand. Board members should have a clear understanding of the corporate vision and mission, and where prudent, evangelize the message for the benefit of the corporation. Whether this requires providing networking assistance, investor relations support, or engaging the media, a highly regarded and active board can add substantial value to the enterprise.

Let’s turn our attention back to the original topic…In the text that follows I’ll offer several points that will help a board evaluate whether or not they have the right CEO for the job:

* Tenure: I have taken a public and very outspoken stance against CEO term limits. I firmly believe that there is no such thing as a standard shelf-life for a CEO. No rules of thumb apply when evaluating whether a CEO has outworn his/her usefulness purely from a chronological perspective. I’ve witnessed CEO’s where the company has outgrown their skill sets, and/or abilities within a year of hire (a bad hire…), and I’ve also observed many instances of CEOs that have successfully guided companies for 20 years. The question is not how long a CEO serves, but rather what he or she does while serving. Whether age 32, or age 72, a board must ask themselves, is our CEO doing the job, and perhaps the better question is, are they the best CEO for the job?

* Performance: The topic of performance is a multi-faceted issue. A CEO’s performance should be benchmarked against a variety of key performance indicators which are clearly spelled out in the chief executive’s employment agreement. When evaluating performance, a board must evaluate whether a lack of performance exists across all areas or in a single area, whether the lack of performance is a short-term aberration vs. the likelihood of it being a burgeoning problem, and whether the CEO can be coached through the performance gap or whether the lack of performance is an irreconcilable issue.

* Ethics Violations: The character of the CEO is often synonymous with the brand of the enterprise. Once a chief executive has violated the public trust, or made a gross or negligent error in judgment which could taint the corporate brand, a board should move swiftly to restore the integrity of the corporation. Many things can be spun, justified, rationalized, or managed, but a lack of ethical behavior on the part of the chief executive is not one of them.

* Loss of Confidence: Once the board, the employees, the capital markets, the press, or other key constituencies have lost confidence in the CEO, the board must replace the CEO. A CEO cannot lead, motivate, or inspire without the trust and confidence of those they serve.

* Lack of Development: The corporate enterprise and the business world in general, are dynamic, fluid, and evolving environments. Therefore great chief executives cannot be static in their personal or professional development, or in their strategic and tactical approach to doing business. A CEO that does not exhibit the ability to change, innovate, and grow with the world around them is someone who will likely need to be replaced.

In the final analysis, the board’s decision as to whether a CEO should be replaced is a decision that should be made within the framework of managing risk and opportunity. The board must weigh the transitioning a CEO against the financial costs, the impact of the business disruption and lack of continuity that can come with replacing the CEO, the market reaction to a change in leadership, and whether the decision is ultimately motivated by right thinking.

 

Are You Creating Growth in a Down Economy?

 

By Mike Myatt, Chief Strategy Officer, N2growth

--Recession, economic slowdown, inflation, tight credit and capital markets...from my perspective it doesn't really matter what the economy is doing, as a senior executive you are still responsible for creating growth. Tough economic times are no excuse for a lack of performance, and in fact, are all the more reason to focus on catalyzing innovation, change, and growth. In this week's column I'll share my thoughts on how to successfully lead your business through an economic downtown.

Lagging economic data is not the information you should use to make strategic business decisions. Don’t wait until there is a formal acknowledgement of a recession to start planning how you’ll navigate tough times. Rather, use the many present warning signs of the slowing economy (slowing job growth, declining Dollar, constricting availability of capital and credit, slowing retail sales, lack of consumer confidence, stepped-up Fed intervention, correcting stock market, growing inflationary trends, etc.) to adjust your strategy and tactics while maneuvering is still a bit easier.

The lack of astute, decisive, and proactive thinking by your executive team in a slowing economy can make it much more difficult to survive the large challenges that likely lay ahead. I can’t even begin to tell you how often I’ve heard statements like: “I’m concerned about the stability of the market, and want to wait and see how everything shakes out over the next few months before I make any decisions”, or “I’m cutting back on marketing expenditures until I see how bad the economy is really going to get”. This type of thinking is akin to driving your car toward a brick wall and watching the brick wall get closer and closer, yet doing nothing to alter your course. My advice is simply not to hesitate…change course now while there is still time to avert disaster. 

Let me state that I realize that many CEOs and entrepreneurs have only seen growing, robust, and even frothy markets, and that for many chief executives this is the first time they’ve had to face the test of a strong economic correction. That being said, there is good news…The simple truth of the matter is that more tangible, enduring wealth and market dominant positions are created in declining markets than in advancing markets. Significant rewards exist for those smart enough to move forward and strategically leverage their business model to exploit opportunities while their competition pulls back and braces for tough times. The following business principles will help your business thrive regardless of the state of the economy: 

1. Don’t Stop Growing: Get very aggressive while your competition pulls back, starts slashing costs, and is asleep at the helm. While it is certainly necessary to reduce extraneous expenses, resist the temptation to slash expenses across the board, and especially resist the temptation to cut budgets in the areas of sales, marketing, and business development. Let it be noted that I am a strong advocate of sound financial governance and the prudent implementation of cost containment measures. However not when applied in a vacuum irrespective of the ripple effect across the enterprise. An enterprise can have all the cost containment in the world, but without revenue what does it matter? Remember that cost containment is not a business strategy. The strength of your sales funnel, and your ability to create revenue will never be as important to your business as when you face the reality of a slowing economy. Use the caution of your competitors to your advantage so that by the time the economy starts its recovery you will have created a huge gap in market share and brand equity. 

2. Improve Communications: The frequency and the quality of your communications, (both internally and externally) needs to be at an all time high. The genesis of most business mistakes can be traced to poor communication, or worse yet, no communication at all. While strong markets and bullish economies are forgiving of management errors, down economies are not. Make sure that all employees have a clear understanding of mission and vision, that all stakeholders are inside the communication loop, and that you err on the side of over communication. 

3. Leverage Technology: Use technology and business automation to provide increased leverage and a platform that embraces cost-effective scalability. Strategic investments into process improvement and business accelerators will allow you to shorten cycle times, bleed out system inefficiencies, and create needed economies of scale. If your enterprise replaces innovation with caution and extreme cost cutting, you will not only find survival more difficult, but if you’re still around when the economy starts to recover, you’ll find yourself at an operating deficit compared to more savvy competitors who did not make the same mistakes. 

4. Outsource, Outsource, Outsource: Be very strategic about head count acquisitions, only making key hires that produce immediate and significant impact. It has been proven time and again that the most chaotic and cost prohibitive implementations are conducted with organic efforts. The failure rate of internally implemented initiatives as measured against initial expectations show failure rates in excess of 75%. There is significant leverage in outsourcing implementations to competent subject matter experts (SME’s). Outsourcing frees your internal resources to focus on highest and best use activities that allow for continuity of mission critical agendas. Outsourcing to SME’s will offer the following benefits: 

• Shorter time frame to implementation.

• More cost effective implementation.

• Access to existing toolsets and solution sets that have a proven track record of success.

• Access to a more diverse base of skill sets and core competencies.

• Access to best in class human capital within the area of domain expertise required.

• Reduction of investment into infrastructure expenditures. 

Velocity to market is critical in the success of any business. In a down economy the stakes are higher, the money and resources are tighter, and the decision-making ability of your management team will be the difference between success and failure. If your management team can streamline operations, facilitate solid strategic planning, conduct flawless tactical execution of business initiatives, and recruit, motivate and retain best in class human capital, your business will gain ground while your competition is “down-sizing” or “right-sizing”.

 

Making Crisis Management Profitable

 

By Mike Myatt, Chief Strategy Officer, N2growth

--Crisis management can in fact be a profitable endeavour when handled properly. If you are in business for any length of time you will at some point in time be party--willing or unwilling--to a major crisis that can affect not only the company you work for, but your career as well. A large portion of my practice deals with advising corporations and executives during a crisis to protect the corporate brand and the personal reputations of senior executives and board members. Given that in today's business world, the likelihood of crisis is much greater than it was in times past, it never ceases to amaze me that corporations don't have a crisis management team assembled and on hand ready to deal with trouble when it rears its head. The reality is that the proper handling of a crisis, while never easy, can in fact be a very profitable endeavour. In this week's column I’ll discuss the upside of crisis management…

In previous columns I have addressed many of the basic benefits of a prudent crisis/reputation management initiative. However, this week I want to discuss the pure profit motive of a well conceived crisis management initiative. If you’ve paid any attention at all to how companies deal with bad news you’ll notice that in most cases when a company makes a public disclosure of an adverse event or unexpected news that there will be winners and losers associated with said disclosure. The are serious amounts of money to be won or lost based upon the decisions made in a moment of crisis…

Companies that either don’t react, react slowly, or react improperly to adverse events will likely see an erosion in stock price, brand equity, and in many cases, see forced resignations and unexpected firings at the C-level. Contrast this with companies that react to a crisis in a swift and proactive fashion who can often see an immediate up-tick in stock price, a favourable boost in public opinion and brand equity, and substantial promotions in the executive ranks. Given the choice, which of the aforementioned scenarios would you prefer to be a part of?

You see the bottom line is this…Wall Street analysts hate nothing more than the unknown. If the street knows of trouble, but doesn’t have visibility as to the likely outcome, your company’s stock, its corporate brand, and the personal brands of corporate executives and board members will be severely penalized. In this scenario Wall Street’s perception of your company and its leadership will begin to be shaped by the speculation and innuendo of third parties, which may differ radically from the facts of the situation.

What Wall Street, the media, politicians, and regulatory agencies love is clear, concise, and open dialogue in times of trouble. Wouldn’t you rather proactively shape the opinions of others as opposed to sticking your head in the sand and watch others determine the public’s perception of your corporate and personal brand? By being proactive in your approach to crisis management you turn breaking news, speculation and innuendo into old news by putting a face to a position. By taking a visible and open position, you will take the media’s natural desire to create a corporate villain, and offer instead a refreshing breath of fresh air…a corporation and executive team operating in the light of day by taking swift, prudent, and corrective action to the problems at hand.

When a crisis occurs you have a choice to make…you can do the things that appear right, or you can simply do the right things. Remember you can run but you cannot hide….attempting to lull public opinion, or delay the inevitable will result in increased scrutiny and eventually have substantial negative financial consequences. Get the issues out in the open, adopt a position, do the right things regardless of short-term costs, and communicate, communicate, communicate. If you subscribe to the latter as opposed to the former, you will most likely come out on the right side of whatever problems you may face.  

 

Avoiding Spreadsheet H*ll

 

By Mike Myatt, Chief Strategy Officer, N2growth

--Any CEO or entrepreneur still vertical and breathing has spent more hours than they can likely count pouring over poorly conceived financial information. I probably review at least 50 spreadsheets a week, and few things chap me more than feeling like the spreadsheet I'm reviewing was constructed by an alien. PowerPoint presentations certainly receive more notoriety for being the butt-end of business jokes, however in my opinion a boring slide-show pales in comparison to the sophomoric use of a spreadsheet. I know this may seem like a trifling rant of little consequence, but if you stay with me I promise to connect the dots in a way that will resonate with most of the senior executives that read this week's column.

Let me begin with the premise that few commonly available business tools are as valuable and proficient at justifying business logic, validating proof of concept, synthesizing data, and testing a variety of assumptions and hypotheses than that of a well-crafted spreadsheet. However, it is the caveat “well-crafted” in the preceding sentence that gives strength to my original premise. An adeptly authored spreadsheet is truly a thing of beauty which can serve to crystallize the ambiguity often surrounding financial complexities and decisioning conundrums. Contrast the aforementioned elation with the antipathy you feel when trying to interpret the anathema represented by some spreadsheet monkey’s hack attempt at sophistication and you will start to empathize with my frustration.

It should be clear by now that poor spreadsheets are a huge pet-peeve of mine. They not only waste my time, but the time of the people who prepared them to begin with. Rather than serving to advance an idea, decision, or initiative, a poorly conceived spreadsheet can have the unintended outcome of serving as the final nail in the coffin. Just as sound business logic and great presentation can serve to validate, the lack thereof can just as easily serve to invalidate. My point is that if something is worthy of taking the time to assess, then it is also worthy of good analyses. The following 5 items represent a few basic pointers for authoring a spreadsheet that will serve as an asset and not a liability. I would suggest that you forward this post to those within your organization who prepare your spreadsheets in hope of reducing the amount of unnecessary brain damage you’ll incur in the future:

1. Planning: Don’t lose sight of why you’re creating the spreadsheet to begin with. Major in the majors and don’t get lost in extrapolating massive amounts of useless information, or bogged-down with convoluted minor analysis, both of which can be dilutive to the mission at hand. Great spreadsheets are not built on the fly. Rather they are conceived through a rational planning process that leads to a seamless design and a good outcome. I suggest spending about 75% of your project time planning what you want to create and about 25% of your time creating it. 
2. A Narrative Introduction: Few things are more annoying than not being able to even discern what it is that you’re looking at. The first spreadsheet tab in your workbook should contain a textual, narrative overview of your business case. Explain what it is that you are attempting to prove/validate, as well as your methodology for doing so. Moreover, if there are any major points you want your audience to take away from the presentation, explain them in narrative form by “telling them what you’re going to tell them.” 
3. Headers, Navigation & Footnoting: Make your spreadsheet easy to understand and navigate by using consiste