Dog Story

Do you know how they train hunting dogs these days? A TEC member told me the story the other day. It involves “technology.”

Well, it also involves humans….and that is where the story gets interesting.

My TEC member is an avid outdoors man and dog trainer. He uses a shock collar to assist him in the training process. A shock collar of this nature is capable, if necessary, of blasting the dog with 20,000 volts of electricity. A police issued stun gun carries 50,000 volts. You get the idea. My member has been trained extensively in training dogs and the proper use of the collar.

My TEC member tells me that some people are untrained or just plain stupid when it comes to the use of the collar. He can tell the dogs that have been mis-trained just by watching them. The dog will walk slower, with its head hung low between its shoulders. Mis-trained dogs can be very aggressive, when given the opportunity. They tend to develop all sorts of exotic diseases. They die prematurely.

My member said his dogs actually like it when he attaches the collar. The well trained dog knows it is going to go outside and hunt…run around, chase birds, have some fun.

My member told me the story because, over the past two years of a business downturn, he had the feeling of a mis-trained hunting dog with a shock collar. He did not know from where the next economic/financial/regulatory shock was coming. But he was pretty sure that the repeated blasts without warning were taking their toll on him mentally and physically. Cumulative stress is a killer.

TEC Resource Specialist James Newton has suggested the following prescription relative to relieving long term, cumulative stress.

- Eat better. Healthy food. No sugar. Simply stated…eat real food.

- Exercise very regularly. Like 6 out of 7 days a week.

- Clean up the “ankle bitters.” Finish that nagging project.

- Recreate. Newton pronounced it “re-create.” Have some fun.

- Take a vacation.

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On October 13th The Wall Street Journal promoted a similar approach to dealing with the effects of long term stress in an article titled “Slumping at Work? What Would Jack Do.” The Jack, in this case, was Nicklaus. Much of the article had to do with relaxation and positive visualization.

Business leaders in today’s environment may not be able to remove the shock collar entirely. There will always be weird things that happen in a highly competitive, increasingly regulated marketplace. Leaders can, however, mitigate the adverse effects of long term stress exposure. Indeed, they owe it to the people they lead. Take action. Relax.

The Blindside

At the request of a TEC member, I met recently with a former business owner. Dave, the former owner, had run a successful business for nearly 30 years. He was now a former owner because he was “blindsided” over the last two.

Dave’s company was forced into bankruptcy after a series of bad decisions. One or two of these decisions might not have been fatal. A string of poor decisions, however, ended with tremendous personal loss in terms of the number of lives affected. These poor choices would have been caught by an astute mentor, a trusted advisor, an advisory board or a TEC group. Someone needed to cover Dave’s blindside like Joe Theismann needed a Michael Oher.

As the story played out, the series of some of the questionable decisions looked like this…

- Dave decided to expand aggressively heading into the downturn in the business cycle. TEC members had been advised by TEC Resource Specialists such as Brian Beaulieu to plan on a recession in 2007. The macro-economic outlook was clear, according to economist Beaulieu, three years in advance of the actual recession. TEC members prepared in advance.

- Not only did Dave take on substantial debt to finance the ill-timed expansion, he added significant fixed costs that were difficult to shed when the downturn became apparent. The balance sheet was now leveraged for the first time in years and the company was hemorrhaging cash, when hording cash was the order of the day. Once again, TEC members were being advised of the exact opposite strategy heading into the recession.

- Dave decided to change banks. Typically not the end of the world. But in this case, the change in lenders appears to have been made without appropriate due diligence. Perhaps the regulators became more inquisistive. But when sales and profits began to deteriorate, the new bank grew increasingly nervous…and aggressive.

- The new bank told Dave it would be better if he would agree to a personal loan guarantee for the preciously unsecured debt arrangement. Dave eventually agreed, even though he had significant personal assets available at the time. No TEC group on the planet would have allowed this to happen. Ever.

The end of the business story is the bank called the loan, liquidated the business and took substantially all of Dave’s personal assets to cover the personal loan guarantee. The end of the personal story is that after running a nice successful business for almost three decades, Dave was left with, quite literally, nothing. Furthermore, this basically good (business) man ended up dazed, confused and embarrassed. And it didn't have to be.

If you are running a business, the question is…”Who has your blindside?”

Retreat or Attack?

At a recent TEC meeting, a Resource Specialist from California suggested members dial back on their BHAGs to reflect the poor economic environment. Our speaker reasoned that scaling back the Big Hairy Audacious Goal was a first step to a more realistic assessment of vision, mission and strategy to account for certain “new economy” realities. He figured people in the organization needed to be reassured with sometime more "doable."

The TEC group pushed back. Pushed back on our West Coast friend rather hard, actually. Our members had scaled back in advance of the downturn in the business cycle – some as far back as 2007. They cleaned up their balance sheets, reducing debt and accumulating cash. Most members were making more money with less revenue, thanks to aggressive cost reduction programs that were in place heading into 2008 and reaping benefits through 2010.

Now, the TEC group reasoned, was the time to recalibrate on the upside, taking advantage of their relative strength vis-à-vis competition and potential new market and product opportunities. Now was the time to attack.

Let’s just let the poor schlemiel who had just limped through the downturn and exhausted his cash resources play defense now – or just go away, they agreed. This TEC group knew it was time to re-emphasize the strategic planning process. They had become “operationally excellence” oriented over the past few years. It was now time to shift to a higher gear with new strategy in light of the new playing field. It was time to attack.

Moreover, the members of this TEC group agreed that the people in the organization needed to know that the leadership of the company had a plan…to grow. It was time for leaders to lead.

SWOT Wisconsin

One of my TEC members – a manufacturing company headquartered in a suburb north of Milwaukee – initiated their annual business planning process recently. The eventual expected outcomes of the planning process will be the establishment of a new annual operating plan for 2011, with a significant recalibration of their longer term strategic plan.

As a long time TEC member, the CEO typically engages his management team in a no-nonsense version of SWOT analysis during the initial phases of the process. Classic SWOT analysis generally includes an evaluation of 1) Strengths – internal, company oriented; 2) Weaknesses – internal again, unique to the organization; 3) Opportunities – external, “out there” someplace usually focusing on changes or the new normal; 4) Threats – external, “out there,” change orientation.

A new item surfaced on the opportunities list and survived the culling process. The team determined that known competitors in California and Michigan would be at a distinct, long term disadvantage due to overzealous regulations and out of proportion tax increases on businesses and owners. More money spent on compliance and more money paid to state and local governments begets less money for capital expenditures, less cash for growth and less profit for owners. Subsequent phases of the planning process will determine how to attack their relatively wounded competitors.

Unfortunately, when the team considered threats, the same people were forced to include Wisconsin’s gratuitous regulatory environment and high tax climate as significant external “new normal” problems. They reasoned that known competitors in Indiana and Texas were probably targeting them just as they were targeting market share advances against companies in California and Michigan. Phase two for this managment team will be to identify alternatives for mitigating this emerging external threat.

This type of planning is going on now in companies around the world. One can only wonder how many competitors will be targeting Wisconsin companies because it is increasingly more difficult to do business, make money and keep it here.

Manager Or Coach?

I was talking with a TEC member the other day during our regular One On One. My member was feeling more inadequate than normal. CEOs are like that sometimes. He stated he really wasn’t a very good manager. He was trained as an engineer and liked engineering very much. This managing stuff was very difficult for him. He wasn’t trained in it, wasn’t good at it and didn’t expect much in terms of improved performance as a result.

We talked about the role of managers. Among other position objectives, managers are required to organize the work, staff the organization and train the workers. While CEOs are generally more interested in the “leadership component” of being the Chief Executive, managing necessarily comes into the equation. This did not help my member get over his current disenchantment with his job.

Fortunately, his TEC group participated in a presentation by Resource Specialist Jim Cederna at a recent TEC meeting. Jim brings a wealth of business knowledge and some extremely practical management tools to TEC members who work with him based on his years of running substantial companies – most of them in troubled situations when he arrived.

One of the most interesting tools in Jim’s toolbox is a simple process that replaces the dreaded performance evaluation. It puts the manager in the role of coach, rather than boss. It allows the employee to set their own performance plan based on his or her understanding of what success looks like. It provides feedback to the worker. The process minimizes the need to “manage” people. No defensiveness. No hard feelings. No stress. Just coaching.

The analogy is a good one. Great coaches expect high performance, but only to the level expected by the athlete themselves. Great coaches know when to give their player a pat on the back and when to give them a kick in the butt. Coaches never take the field. All work must necessarily be done through others. Micro-managing is not possible. Effective delegation is mandatory.

My TEC member felt better about being a coach. He experienced great coaches in his earlier years as an athlete. He agreed to take some of the Jim Cederna tools and put them into practice in his company. My member felt certain his "management results" will be significantly better based on his new coaching frame of reference.

What do you think? Would you rather manage people or be a great coach? If you would like more information on the Jim Cederna coaching process, please contact me at dennis@globenational.com.

How Is Your Vision?

A TEC member was struggling with the concept of vision recently. He wasn’t clear on the differences between vision, mission, core values and purpose. Further, he’d seen enough flowery mission statements hanging in lobbies at vendor and customer locations that didn’t seem to be worth the plaque they were inscribed on. He brought his dilemma to his TEC group.

Does the organization really need a vision statement? How do you go about getting and articulating a vision? What makes a vision statement effective? What are the differences between vision and mission?

As it sometime occurs, several members of his TEC group were grappling with similar questions. The group challenged our inquiring member to do some research and come back to the group to share what he had learned. Some members agreed to provide resource materials that might assist in the research.

Here is what our member learned about vision.

- Vision is what the organization wants to become at some future point in time.

- It is a BHAG. A Big Hairy Audacious Goal.

- For example, TEC – The Executive Committee’s vision might be
“TEC is the dominant CEO think tank in the world.”

He also learned that mission is different than vision. Mission defines the outcomes that the organization intends for the customer. It is a “filter” to manage the business more effectively. TEC – The Executive Committee’s well understood mission is to “increase the effectiveness and enhance the lives of CEOs.” We see it played out with hundreds of TEC chairs and thousands of members with every interaction. CEOs helping each other become better CEOs and better people.

Our member reported back to his TEC group at the next TEC meeting. His work in progress vision statement…"To become one of the most respected, exciting and recognized electronics manufacturing companies in North America."

The company’s mission…."To delight customers and contribute to their success."

Not bad for a CEO who was somewhat skeptical and confused before embarking on the exercise. He accomplished the vision and mission statements with the help of his senior leadership team. No “buy in” necessary. Everyone contributed and now understands what they are about. Next step in the process: alignment. But without clear vision, alignment of the balance of the organization would not be possible. How is your vision?

Life Balance

I returned from a week’s vacation today. Relaxed, recharged and relatively ready to go back to work. We spent the week on Silver Lake in Wautoma, Wisconsin. After taking the time off, I wonder why we don’t do more of it.

We all know taking time off is healthy, both personally and professionally. The evidence is more than adequate that time away from work is good for you and good for your business. The research is also clear that CEOs are the worst offenders when it comes to “down time.”

While on vacation I had the opportunity to play golf with a TEC member who has a beautiful home on Silver Lake. He and his wife use it regularly, mostly on summer weekends. My CEO TEC member was playing relatively well through about the first 13 holes. Then, his cell phone rang. He answered it. Handled some business…it was Friday afternoon, after all. Then, he went to the tee box to hit his Big Bertha on 14.

The CEO hit his tee shot into the woods. His recovery shot hit a tree on its way out. He hit a worm burner on his third whack at it. Eventually, made eight on a relatively easy par 5.

I wondered how well the CEO might have played had that cell phone call not come in. I wondered how much of a distraction the little electronic device contributed to the sense of frustration he felt after seeing a nice round of golf turn to dog do. I wondered about work-life balance and how we’re all caught up in it, in one way or another.

One final TEC principle about CEO time off. If you take your spouse, it is a vacation. If you take your kids, it’s a trip. Vacations or trips, take the time. It is good for you and your business.