My life and business are full of experts. That’s good thing. Experts know things that I will not ever learn myself, nor have any interest in learning.
Please note that experts are much different than “those with opinions”, I see many more opinions expressed in the course of the day than expertly vetted information. In almost all cases, the old adage about opinions is true for these too – even if they’re free, they’re still not worth it.
Yesterday, my wife and I met with our friend and expert financial advisor – Bob Rubin. Bob manages the majority of our investable assets. He’s super knowledgeable, an experienced student of market fundamentals and quick to make recommendations backed with facts.
Our question was, “What do you think is driving the stock market?” Bob’s response, “other than irrational exuberance, I’m not sure”.
He admitted that it bothered him to say it.
Bob realizes we put our trust in his ability to read the market. He went on to add “the market isn’t behaving normally based on any traditional model.”
Conclusion? “I don’t know.”
My judgement of the market before our meeting was “I don’t know” also. However, my response tells me much less since my “I don’t know” is partially born of ignorance as I’m not a market expert.
Bob’s “I don’t know” was credible.
An interesting thing about “I don’t know” is that it indicates the need for more action rather than inaction. “I don’t know” does not mean “do nothing.”
How do we make a decision in an “I don’t know” situation? In this case, we looked at the possible outcomes, and possible actions based on these outcomes.
Outcome #1 – The Best-Case Scenario. The market will continue to rebound. Action: Buy stocks.
Outcome #2 – The Middle Road. The market will decline because investors will realize their irrational exuberance. Action: Sell stocks.
Outcome #3 – The Worst-Case Scenario. The market will decline because there is a loss of confidence in the dollar. Action: Sell stocks and other assets, buy gold and bitcoin and build our survivalist retreat on high ground in central Florida.
Debating these options, we selected the most “likely”, with the guidance of our expert Bob. While considering, we took into account our current circumstances, biases and checked our gut reactions.
A major factor supporting Outcome #1 was – “where else are people going to put their money?” In the end we just couldn’t consider that an investment strategy.
Outcome #3 seemed too extreme in the moment, we’ll know over the next few months if we made the right choice there.
So, Outcome #2 it is! Bob moved to take more of our assets out of the market.
Have you been hearing “I don’t know” from experts who have known the answer to your past questions?
How does all this apply to your business?
“When will the Covid pandemic be over?”
The expert consensus is “I don’t know.” That’s likely the most responsible answer we could hear, or give. In fact, my BS detector alarms when anyone has a certain answer to this question.
How does this inform you about your plan for your business?
What’s your worst-case scenario? Best? Middle road? The middle road sounds reasonable, but is it most likely? What are the business circumstances, personal biases (ego anyone?) or gut reactions you and your team have?
Our best answer, gleaned from experts and news sources, to “When will the Covid pandemic be over?” is “Sometime in 2021” – pretty darn close to “I don’t know.”
As a result, we’re planning to operate virtually for the next year, and have begun to set expectations with clients that reflect that. That’s not a terrible response for a company like mine that is organized virtually anyway. I realize it is not a possibility for many company owners though.
For most, the current choices range from undesirable to terrible. Though the choices are bad, please don’t let that deter you from selecting one. At a time when “I don’t know” is actually the responsible answer, we make the best choice we can and move ahead.
If you need the support of a business expert to select the best choice, you can find me here >> http://billionizeme.com
My Mom recently sold her half of a duplex in Jupiter, Florida. Cleaning out the two-bedroom house, originally owned by my grandparents then passed to my parents, was a trip down memory lane. I kept a few things that were sentimental, and also a few that I thought were valuable.
While poking through the kitchen cabinets, I noticed white Corningware casserole dishes with the blue flower patterns circa 1965, neatly stacked with their clear lids nearby. These were familiar. Any frozen vegetable served to me between the ages of five and fifteen arrived at the dining table in one of these Corningware dishes. They possessed some sentimental value perhaps, but who could possibly want these old, outdated dishes? “Donate” was the determination, and I might have used the word “junk” as I hauled them out to our SUV.
Fast forward to the next weekend, and the first twist. My twenty-two year old daughter, home visiting from Orlando is talking about a dish she will be listing on eBay. Her question: “Dad, do you know why these are so valuable?”
She reaches for her phone to show me a listing, a seller willing to part with a valuable casserole dish, without the lid, for $2,000. I was curious, what was this exotic casserole that commanded such an impressive price. Was it a hand-decorated Russian Faberge? The image came up, and my jaw dropped. Yes, you guessed it. This valuable, exotic dish is the vintage Corningware casserole with the blue flower pattern.
Quickly, I did the math. Three casseroles with lids, four small dishes and one coffee pot, all in the blue flower pattern – that’s over $10,000 worth of Corningware “income” lost. And I was sure the stuff was junk!
Still queasy about that missed opportunity, I rapidly shifted to a radical thought. “If I’m living in a world where Corningware is worth thousands, what else am I missing that’s right in front of me?”
It wasn’t like I was torn between donating and keeping these – an epic struggle that resulted in a “donate” verdict. It much more closely resembled a quick wave of the hand and a quiet compliant that I needed to move them the twenty feet to our car. I was 100% sure these were of zero value, and I was 100% wrong.
Which raises these questions:
“What assumptions am I making, assumptions where I am absolutely positively sure that something is true, that are in reality completely false?”
“Do I undervalue things that are familiar to me?”
“Do I do this with people too, taking for granted their amazing gifts and talents because I see them every day?”
As a human being, it’s to my benefit to be open to what’s going on around me. All too often, I’ve assessed and profiled people, using my logical brain to sort them neatly by perceived strengths and weaknesses. Once determined, this assessment seldom changes.
The problem with this is that people do sometimes change.
A $10 casserole in 1965 could be a $2,000 one in 2020. You and I have people in our lives, you know the ones, who we judged as $10 casseroles in our youth and still consider them as $10 casseroles today. Is that a beneficial approach?
Ok, now for another twist, found after further research this morning. There seems to be disagreement online about how valuable vintage Corningware really is. Casseroles appear to have sold for thousands on eBay, yet antiques experts quoted in other articles say the pieces are only worth a few hundred or much less. Further research is required to make a final determination.
As a leader, it is valuable for me to remember that I don’t have all the answers. In fact, I don’t even possess a fraction of them. Research IS required. What was originally a $10 casserole, now worth $2,000 might still be worthless to me because I don’t recognize the value.
Being present, recognizing and challenging assumptions, getting a 2nd opinion even when I’m sure I’m right. These are skills worth practicing.
Several times a month, I find myself in an in-depth conversation about company culture.
There are compelling reasons why a company’s culture must be healthy. In fact, it’s hard to argue the counter point when talking about long term value of a company.
The most interesting part of the culture discussion is not whether you need a healthy one, it’s when do you work on improving it? When is that right moment to create a healthy culture? I will answer these questions soon.
First, when do most companies attempt to evolve to the right culture? Based on my observations, the most popular time seems to be during a merger or major acquisition. In this case, most popular aligns with worst time to change.
To illustrate my point, let’s talk about a major acquisition first.
For clarity, we’ll call the company being acquired as the “selling company” and the company doing the acquisition as the “buying company”.
In a successful major acquisition, the buying company will have the culture that remains for the combined company. Please note that I am only talking about successful acquisitions.
There are examples of failed acquisitions where the culture was expected to change for everyone. The important word here is “failed”. Think AOL and Time Warner, where AOL was expected to culturally reinvigorate the stodgy media giant, and Time Warner was expected to provide AOL with some maturity. It was described as “transformative”, which means “we’re messing with the culture at both companies.” Post-acquisition, the total value of AOL stock declined from $226 billion to about $20 billion.
In fact, a leading indicator of a successful, major acquisition is that the buying company culture is supported to win, quickly. This doesn’t mean that the buying company always has a better culture, it is simply the one that is chosen.
Why does this make sense?Because major acquisitions are about great change on a compressed schedule. It’s expected that the selling company will have significant adjustments to make.
If cultural changes are also made at the buying company, then the combined entity will see significant upheaval – and that’s not the point of an acquisition.
An acquisition is about creating competitive advantage in the market through the addition or strengthening of a team, product or service. Integration synergies are needed quickly so that the buying company maintains its growth momentum.
Now what about a merger? Isn’t that about two equal companies coming together?
Yes, and no.
Yes, there are two companies coming together. No, it is NOT equal, even if announced as such.
Winners and losers exist in mergers too, in fact they’re not much different than an acquisition.
The only difference I’ve seen between a merger and an acquisition is that the employees of one of the merged companies think they have as much leverage as the other, and it takes them longer to figure out that they don’t.
In late 2013, the largest optical distributor in the US merged with the 2nd largest. It was billed as a merger of equals, taking the “best-of” both companies to create a stronger whole. Sounds like a nice story, huh?
The team started with the intention of creating “best-of” processes, documenting them with detailed spreadsheets and flowcharts. Then, as a systemic and practical integration plan developed, most of the detailed changes were value engineered out of the process. Exactness was correctly replaced by expediency.
By the end of 2014, the culture, IT systems and management team of the largest optical distributor were in place for the combined company, displacing all of what the 2nd largest brought to the party.
Ok, I promised I’d get back to the right time for culture change. Ready for it? If you’re a company not in the midst of a major merger or acquisition, the time is now.
Now? You might respond:
“But we’re all working virtually, what about COVID-19?”
“Sounds good, we will start when things calm down.”
“Our culture is just fine, in fact it’s been fine for many years.”
My typical answer to this is “What market conditions do you need to see for you to start culture change?”
You’ll give me a list of requirements.
My next question, “When in the last twenty years have you seen these requirements occur?”
After a pause, a one-word response, “Never”.
Get started now evolving your culture. Be the healthy company that acquires sick competitors, knowing that your culture is the right one to support scaling to the next level of growth.
Please let me know how you’re doing evolving your culture.
As a leader it’s my job to shine a light on what’s going on around me, interpret it and influence others in a positive direction.
Using my sight, I notice what’s important to benefit my team, my organization and our world.
Sometimes, just like when a light image is projected on my retina, I’m upside-down in my view. Other times, I’m blind in one particular spot like where the optical nerve connects to the retina. (What can I say, I’ve spent a lot of time with Optometrists).
It’s only through noticing my upside-downness or blindness that I can process it through my nervous and emotional system to connect with the full picture.
Throughout my career, I’ve recruited and coached diverse business teams of talented individuals. Diversity of skill, viewpoint and relationship is critical as we create services for the complex needs of human beings. I could tell you that I started building diverse teams because it offered a way for everyone’s voice to be heard, and to connect to the humanity in each person, but that wouldn’t be true.
The truth for me lacked emotional and idealistic content. I believe in diverse teams because they outperform homogeneous groups. A 2015 McKinsey report on 366 public companies found that those in the top 25% for management ethnic and racial diversity were 35% more likely to have financial returns beyond the mean for their industry.
I led these diverse teams with “can-do” attitude and optimism. And with this optimism, I strode into action. I was ready to do something about a challenge, but not really connecting to the problem.
The problem was racism, yet I didn’t see it even when I was so close.
I shrugged my shoulders, remained positive and continued to move ahead. When I noticed racism, it was mostly in video news clips including reprehensible words of those looking to incite fear.
But racism was around me, and I was shamefully ignoring it.
A friend helped me realize just how blind I had been, like the spot on my retina.
“Imagine if you were kidnapped,” she said, “brought to another country, raped, beaten and owned as property. And if that wasn’t enough, your collective history was erased and replaced by white European culture, the culture of your oppressors.”
“Essentially, my identity was suppressed by the people who were supposed to be my neighbors, and I struggled in this life to find it.” She added.
Racism is real and alive every day in this country. For many, authority figures such as business leaders and police are oppressors instead of protectors.
These are not just beliefs. There are many verifiable facts about this. Facts that, up until recently, I have filtered out in my naïve, optimistic, and disconnected efforts to build diverse teams.
Let’s bring a real reason for diverse teams into the light – because racism exists and must be overcome at every level. I get to (not have to) see my team through empathy. And I get to put that into action. I get to feel the pain and responsibility too.
There is no room to hide the bigotry I have ignored, those who only want to work with “their kind”. I am ready to have that conversation more directly now.
As leaders, it is our responsibility to see and eradicate racism and bigotry. First by education, and if that doesn’t work, we cut it out like the cancer it is. The majority I am in has a moral obligation to serve and protect the minority.
A few articles ago, I challenged leaders to exercise ownership thinking – asking “What could go wrong?” I invite you now to look through your own unconscious bias and answer these questions:
What is upside down or in my blind spot?
What has gone wrong for so long that I might not even notice most days?
What can I do right now, tomorrow and for our future?
As leaders, it’s up to us. #BlackLivesMatter
How are you shining a light on racism, shameful acts and deeply disturbing elements of our society?
Recently, I met with an experienced CEO, Ray* who is a former client. He’s had a great record of business growth and value creation at his company, with a string of twenty consecutive years of profit increases. That string will likely end in 2020 with the Coronavirus pandemic.
While talking about the changes he expected to make at his company, I asked him “How ready do you think your organization is for this change?”
“Well, they need to be ready, because it’s going to happen one way or the other!” was his sharp response.
My body twitched a bit with anxiety that was familiar, and my stomach started churning. I’ve been a CEO, so I recognize this comment as something that I’ve also said. To put it bluntly, ego was talking when I said it, thinking that I could speak change into existence, due to my leadership position, instead of looking for evidence of my organization’s real ability to create change. Thankfully this time, after hearing this from Ray, I paused, took a deep breath, and then he and I got into a long discussion on best practices leading change.
According to Nina Segura, CEO of Metaspire Consulting and Change Expert, over 80% of business changes fail. That’s a dismal result, and a stat that many leaders fail to consider when creating plans for change. So how do the 20% who are successful do it? They leave their ego aside, put away the bluster, and take a measured, thoughtful approach to change.
They use three steps to lead change in their company:
Get a frank assessment of the company’s current ability to make a change
Create a plan for the change
Focus on what’s in it for me (WIIFM) for employees and customers
Each of these steps have a number of attributes to consider. I will highlight a few.
A frank assessment is created by talking by talking with employees across a wide area of responsibility. The important thing to remember here is that you must seek feedback beyond those who report directly to you. Enlist allies to get this feedback, especially those whose natural way of thinking is contrary to yours. It’s also a good idea to tap informal leaders in your company, those who have influence among their peers, but perhaps don’t have the title. This step takes time, consider leverage experts in this area to accelerate efforts.
The first element of a plan for change is a vision of the company after the change, illustrating the impact of the result. Other essential elements include a structured approach on how leaders will communicate and support the change, resources required and for how long, and whether outside expertise is needed. This plan is initially created with the best information we have at the moment, then iterated as new information becomes available. Our initial plan never survives contact with the market. Expect it to pivot and evolve.
The focus on WIIFM is important when things do go wrong, or the path is harder than imagined. Employees need to know why they’re change their routine, and are being asked to learn new things. Openness and directness are key when communicating in this phase. Employees have very well-developed BS detectors, and will often feel unexpressed doubts that you may have. Customers are a little less connected to you but also need to also understand why, and how long should they expect to see these changes?
In our current business climate, we are required to make changes. How are your changes progressing?
Happy to support you as you consider a new change for your team or organization. Please comment here, call, text or email.
This website or its third party tools use cookies, that are required to provide functionality and to achieve the purposes stated in our privacy policy. By clicking close or continuing to browse, you agree to the use of cookies.
