A colleague of mine told me about a recent Zoom meeting. This Zoom was with the CFO of a successful distribution company, calling from his mobile line instead of joining via video.
She asked him, “What do you worry about?”
The CFO talked about the slowness of his team to adapt to changing market conditions, and that he was disappointed.
‘Curious response from a senior business leader’ I thought.
After a few other follow-up questions, my colleague then asked “What are you looking forward to?” The CFO responded, “I can’t wait until we are back together again in the office so we can get some real work done.”
My curiosity began shifting to queasiness.
“How has the team responded when you’re talking with them face to face on Zoom?” her final question.
“Well, my set-up doesn’t have a camera, so we have frequent one-on-one calls.”
My queasiness shifted to full blown discomfort!
I’m sure you’re following this, but let me summarize anyway.
This CFO is unhappy with the performance of his team, but has not invested $100 in a camera to upgrade his technology so that he can more effectively lead his team.
I’m reminded of advice that my Stryker mentor, Jeff Paulsen, gave me:
“The speed of the leader equals the speed of the team.”
Jeff is a very, very smart person who provided lots of good advice. But this phrase I have repeated more than any other.
When my team isn’t getting the urgency of the situation. I look in the mirror. My sense of urgency (or lack) must be setting the pace for the team.
When my team isn’t adopting new processes or technology. I look in the mirror.
When my team isn’t finding problems, instead, hoping everything is ok. I look in the mirror.
How am I showing my team that all of this poor performance is ok? What example am I setting?
When I figure out how I am challenged in a specific area, and change my approach, the team usually follows.
Now, that doesn’t mean that I always know HOW to change my approach. That’s where colleagues, coaching, mentors and experts come in.
In order to make an effective change, I must know where I’m heading – what “great” looks like.
And then I start with “good”.
Because I also believe that “great” can sometimes be the enemy of “good”.
I’ve seldom gone from no experience in a particular skill, to “great” immediately. So I shouldn’t expect my team to get there instantaneously either.
Let’s go back to that CFO leading a virtual team. If he were interested in creating a great virtual team, he would purchase a good video camera, and he would reach out to thought leaders.
We happen to have a great thought leader here in South Florida – Nina Segura from Super Virtual Teams.
Nina has taught me literally everything I know about creating and leading virtual teams. It’s not something that I have been naturally inclined to do. When working in an office environment, I’m voted most likely to walk over and knock on a door before even calling.
So, virtual teams were initially a big stretch for me. Now my consulting business depends on them.
I wasn’t much different than the CFO we met earlier. Except, I was willing to seek out experts and learn, so that I could move faster.
Speed of the leader equals the speed of the team.
How are your business reopening plans progressing?
How are your teams moving to capitalize on market opportunities?
What’s your speed making these critical changes?
Are you actively demolishing roadblocks that stand in their way, or are YOU the roadblock?
You and I can be both the problem and the solution. We’ve created roadblocks, and we also get to clear them.
Please share your speed with me. I look forward to hearing from you!
On a sweltering April day in 2004, near the intersection of West Commercial Blvd and 441 in Fort Lauderdale FL, I interviewed with the founders of ABB Optical Group. We sat in an empty, dimly lit, Thai restaurant while Angel Alvarez, CEO sketched the strategy and planned trajectory of the company on the back of a napkin, next to a circular iced tea stain.
Angel described the current status of this small contact lens distributor – $80M in sales and planning to grow exponentially! Then, in between bites of food, he started to share some of his secret sauce for growth.
“At ABB, we not only seek to take care of our direct customers – the Eyecare Practitioners, we support them to take care of their Patients too.” He said.
“When we provide the contact lens service and tools that our customers need, we help them to maintain and grow the number of patients they serve.” Angel added.
“So knowing your customer’s customer is an essential part of your growth and the Eyecare Practitioners’ growth.” I summarized.
“Roger that.” Was his reply as he wiped Pad Thai off of his white shirt.
Within a few weeks, I joined ABB. In 2007, we greatly expanded our ability to ship contact lens orders directly to patient homes or offices. Our Eyecare Practitioner (ECP) customers were getting pressure from on-line contact lens sellers. So, we created a direct shipping service so that ECPs could provide the same convenient delivery service to their patients, eliminating the need to order online. This is an example of taking care of the customers’ customer.
By 2009, I was promoted to Chief Operating Officer, growing the team and business infrastructure supporting ABB efforts. In the time period from 2004 to 2016, our sales rocketed forward by 14x and profits by over 30x. More importantly, ABB grew to serve over 25,000 Eye Care Practitioners in the US, and shipped directly to over three million patients per year on behalf of those doctors.
Today, knowing your customer’s customer has never been more important. I’ve heard many discussions during this Coronavirus time starting with “How are your customers doing?”.
While that’s a good question, it does not drive deep enough. A better question would be “How are your customers’ customers doing?” When you and I know how our customers’ customers are doing, we can anticipate growth or decline over a longer period. That longer view will support you and I to create better plans for our own businesses.
For instance, one of my clients is an online optical company. Like a lot of e-commerce companies, their sales have increased considerably in the last two months.
Will this growth continue, and create opportunities for my company to support their growth? I don’t know just looking at their recent results. I won’t know meaningful information until I look to the next customer, those consumers purchasing the products online. Diving deeper, I ask:
How is the product sales mix changing?
What’s driving this change in consumer purchasing, and will it continue?
How might this trend continue for my client once the lockdown eases a bit?
Does my client have business constraints such as availability of inventory to consider?
What investments are necessary now to ensure success a few months from now?
When these questions are answered, we begin to have information that supports us to shape a plan for the remainder of 2020 and into 2021. Amazing how a discussion over Thai food sixteen years ago resulted in a business concept that helps me today with a virus pandemic. Thanks for the insight, Mr. Alvarez.
How are your customers’ customers doing during this pandemic?
Please share with me what you’re finding. I look forward to your comments.
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.
While many companies are facing closure or significant downsizing, I can share that all my regular clients are GROWING during this terrible Coronavirus time.
“Why?” You might ask. “That’s just lucky”, you might also say. I can tell you it’s not dumb luck, and I’ll show you why in a minute.
In one of my prior blogs I talked about business models that are pandemic resistant. As you might expect, these growing companies each have pandemic resistant models as a main source of revenue. But there’s something that each of these companies does well in addition to choosing a terrific business model. They’ve created their luck with:
The Top 3 Things to Know When Pivoting Your Business:
State the problem to be solved
Get in motion now
Pivot now, before you’re tempted to perfect your response
I’m reminded of what a great pivot is by the famous Jack Welch quote.
When the rate of change on the outside exceeds the rate of change on the inside, the end is near. – Jack Welch
Though Mr. Welch passed on before the Coronavirus, he very well could have been thinking about our current Coronavirus situation when he said it.
Companies that will not survive are likely are having internal discussions sounding something like this:
Rate of change on the outside. “Hmm, rate of change on the outside, that must certainly mean the current pandemic. But when everything goes back to normal, will it really have changed that much?”
Rate of change on the inside. “Oh, I’m ready to change. As soon as I know the right path, I’m going to go for it. I promise you I will.” In another words, when I know the perfect pivot to make, I will commit to starting to act. If I don’t know the right pivot, I will not act.
The first issue here is that these business leaders have not stated a clear problem, so how do they know a good pivot when they see it? Without knowing the problem they’re solving, they won’t see any pivot as the right one. In fact, even after stating the problem, most successful leaders seldom make the perfect pivot. Getting into motion now, they make the best pivot they can with the best information they have at the moment.
Here’s an example from a client company:
Problem. “My employees don’t have the virus protection they need to perform their jobs.”
Get in Motion. “I must provide an ample supply of masks and gloves to my employees. They deserve to be protected.”
Using their procurement expertise, the company secured a supplier able to provide many more masks and gloves than their employees could ever reasonably use.
Pivot Now. “Ok, how do I serve the situation with the masks and gloves that I can purchase? The answer is, “Use my supply chain capabilities to provide these at a fair price to the public through our online partners, such as Amazon. ”
In addition to being a generally good place to work, by having an ample supply of masks and gloves the company has been able to attract workers at a time when many are afraid to leave their homes! And the very modest profits made from the sale of the masks and gloves pay for all of the employee protection! I’d say that the rate of change on the inside is exceeding the rate of the change on the outside at this company!
Last point, this client company has built a culture accepting and leading change, so the need for a pivot is expected, not treated as an exception within their culture.
The leader who earlier in this article said “But when everything goes back to normal, will it really have changed that much?” has not prepared their team for change, any change really. On the contrary, they taught their employees if they wait long enough, things will go back to normal.
My successful clients have seldom waited for an opportunity to come to them. They are active making changes in their businesses every day. Their employees expect change, and as a result, this pivot for the Coronavirus also feels easier to manage.
What problems have you clearly articulated in your business?
Are the pivots happening now?
Is the rate of change on the inside exceeding the rate of change on the outside?
Please be safe and healthy. Also, please share how you’re doing with the changes around us and comment on this article.
Have you seen the video of Madonna sitting in a bath with rose petals, talking about how the Coronavirus is the “great equalizer”?
Broadcasting from that luxurious, pampered scene, the Coronavirus seems to be many things, but the great equalizer isn’t one of them.
Madonna may mean we all have the same chance of dying from the virus, rich or poor, healthy or unhealthy, tattooed Rockstar or middle-aged married guy living in coastal Florida. Although I reject that thinking for reasons that I won’t get into here, I do agree the Coronavirus is the great equalizer; however, for quite a different reason than Madonna is likely thinking.
The great equalizer comment does apply to your business right now because much of what we know about business will likely be significantly challenged post-Coronavirus.
Successful business people like me and you know how to strategize, plan and execute, both in times of prosperity and economic downturn. We compare each new opportunity to one that we’ve seen or experienced before. Successful business leaders will also, in fact, be hampered by confirmation bias.
Confirmation bias is the unintentional tendency to process information that is consistent with one’s existing beliefs, especially when the issue is highly important or emotionally charged. So even though there is no precedent for the Coronavirus impact, the temptation is great to equate it to something similar in your past experience. And, when you and I make it similar to another event, we may miss something big in the solution we create. Inexperienced business leaders aren’t usually encumbered by this bias since they don’t have the depth of experience to draw from.
Summing it up, leaders with significant amounts of business experience and leaders with little business experience know approximately the same about what a Post-Coronavirus world will look like. This is the great equalizer that I see in business right now.
We can use the great equalizer to our advantage. Experienced business professionals, we could for at least a few moments, put aside what we know about business in order to determine the best path for our business. It is time to approach the problem with a beginner’s mind, listen to inexperienced business leadership voices on Zoom and use this input constructively.
I’m interested in your thoughts about this great equalizer topic! What do you see when you think about our Post-Coronavirus world with a beginner’s mind?
In our consulting business practice, we work with many successful, entrepreneurial business owners and also long-term employees who acquire equity in the business and seek to grow into a senior leadership role.
A foundational element of our coaching is that one essential mind shift is necessary to move from employee to owner. As luck would have it, this is also an essential skill to exercise in your business to ensure that it survives the COVID-19 crisis, and best illustrated in a story.
Much earlier in my career, I was a mid-level manager at a fine china manufacturing company, a company that took pride in the fact that it provided china service for the White House for over a hundred years. The company had a sound distribution model with excellent relationships in the retail space. The corporate owner of this fine china company, full of artisans including painters, silversmiths and porcelain designers, demanded that profitability improve year over year. What could the management team do, none of whom were owners, to increasing profitability? Well, they did what many employees do in their roles. They made the best decision they could and “hoped” there weren’t any problems. In this case, the decision was to expand from two outlet stores to over one hundred, thereby increasing sales tremendously! A brilliant plan, right? Brilliant except for one thing, no one on the team that came up with this idea thought like an owner.
What do I mean “think like an owner?” Through my experience working with successful owners of many companies, plus, owning and leading a company myself, an owner asks: “What could go wrong?” and intentionally and persistently looks for problems inside their own business. While employees are “hoping” something works so they don’t get into trouble, owners are looking for trouble, heck they’re inviting trouble into their day by looking for problems. And after these problems are uncovered, then and only then can they be resolved.
Back to the fine china company. The outlet plan was a huge success for a few years. Until…problems began – the demand at the outlets outpaced production at the factory. Inferior goods were brought in to cover the supply shortfall, customers started returning more of their purchases because they didn’t match the 1st quality china they had at home. The brand reputation was tarnished. Ten years of this cycle put the company in a very bad place and the corporate parent sold this once proud fine china company at a loss.
I’ve thought about this decline many times over the years. Had there been even one leader in a position of influence who thought like an owner, could this fine china company still be impressing us with its American handcrafted products?
So how does this apply to the business environment now around COVID-19?
I hear some people in companies talking like employees, saying things like…”When things come back” or “When we are back to normal.” These are two statements firmly anchored in hope, but not anchored in an owner approach of looking for problems. Owners looking for problems are asking questions including:
“What may never be the same about my business?”
“What if key employees that I’ve furloughed don’t come back?”
“What if key customers don’t come back?”
“What if my line of credit from the bank is withdrawn?”
“What are all of the expenses that I can cut now?”
“What could go wrong after social distancing ends?”
How have you talked about your business today? Did your remarks come from an owner or employee perspective?
Thanks for reading this article and please share your thoughts with me in the comments.
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