Water wasn’t invented by a fish

Digital Equipment Corporation didn’t survive the death of the minicomputer. K&E didn’t survive the death of the slide rule. GEISCO didn’t survive the death of mainframe timesharing. Why?

One of Marshall McLuhan quotes I love is, “I don’t know who invented water, but I know it wasn’t the fish.” Peter Drucker identified that one of the biggest challenges of large corporations is that as the number of management layers increase, the CEO and Senior Executives become increasingly focused internally.

Motivated reasoning is the process by which this happens. As David P. Redlawsk, a professor of political science at Rutgers University, said: “We are all somewhat impervious to new information, preferring the beliefs in which we are already invested. We often ignore new contradictory information, actively argue against it or discount its source, all in an effort to maintain existing evaluations. Reasoning away contradictions this way is psychologically easier than revising our feelings. In this sense, our emotions color how we perceive ‘facts.’ ”

Over my business career, I’ve not only seen dozens of examples of motivated reasoning, I’ve personally experienced and been damaged by a few. “The CEO’s vision must be ok. No venture capitalist would continue to put money in if it wasn’t.” Nope, the vision turned out to be utter nonsense. “Our sales management software will dominate the market because it isn’t just address management software.” Nope, the market went to ACT, a glorified address management system so simple that even salesmen could learn it. I could go on, but it would be too painful.

So, how do you avoid falling into the trap of motivated reasoning? You need to tap into diverse sources of opinion. First, you need to interact with people who literally “have boots on the ground” — namely, your employees and customers who are deep into the forest and spend their waking hours among the trees. Second, you need to interact with caring but uninvested folks who can recognize the forest for the trees, such as CEO peer groups like Vistage or the CEO Club. Third, you need to build and sustain a senior management team that shares a common visualization of the future but brings real-world perspective on how to get there utilizing their understanding of markets, customers, finance, development, HR, development, and operations.

Additionally, you need to create forums for creating your visualization of the future. Rather than visualizing the future as a continuation of the past, you need to look out and ask where you want to be in five years and why you want to be there. The forum should address answering the “why” question, how you are planning to get there, and what you need to be working on today in order to implement the “how.” Addressing those questions should raise issues that can overcome motivated reasoning.

A proven strategic planning process that translates vision into reality creates such a forum. For more insight on how strategic planning can benefit you, take a look at our website, http://www.myrna.com/Strategic-Planning-Benefits.

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Ten Common Mistakes Companies Make when Recruiting.

1. Focusing on a candidate’s resume rather than on exploring in depth their aptitude, past behaviors, and current attitude.

The right candidate can share specific stories illustrating their past behavior that will give you confidence they can quickly overcome challenges and gain any necessary expertise.

2. Not verifying alignment with personal and company needs and values.

Calibrate mutual expectations – do occasional long hours mean 8am-5:30pm once a month or 6am-midnight 1-3 times a week? Verify their behavior in the past aligns with your core values. Don’t overlook alignment with their spouse/significant other.

3. Hiring a totally new expertise without outside help.

You especially need a BS detector when hiring your 1st Sales Manager, 1st HR Director, 1st CFO, 1st IT Director, 1st Quality Director, etc.

4. Not orchestrating the interview process

Make sure every member of the interview team has an assigned task – identifying the candidate’s passions and core values, verifying skills and experience, selling the company’s features, closing the hire.

5. Setting low expectations.

Ask the candidate how they intend to change the company’s status quo within their first 90 days. What do they bring to the table? With their experience they should be able to make an immediate impact, applying their knowledge of different programs, processes, technology, etc.

6. Assuming you will only need to hire two people to fill two openings.

HR professionals have told me that in their experience, one well vetted hire out of three will not work out because of poor chemistry once they were on the job.

7. Trying to replace a long-term employee with a clone.

Use a zero budgeting approach, identifying the key results you need and expect the hire to accomplish without them checking with a supervisor first. Over the years the long-term employee’s job has molded itself tightly around their particular passions and competencies, many times at the expense of the company’s current needs and opportunities.

8. Missing a key requirement of new or replacement positions.

There is an invisible characteristic of a healthy organization, diversity of passions. A healthy organization requires a mix of counterbalancing advocates. For example, an aggressive growth advocate balanced by an advocate for stability and profitability. Identify where you need to add a passionate advocate to maintain a healthy balance.

9. Not proactively countering the inevitable buyer’s remorse.

Start with a highly personalized offer letter, then immediately give them business cards and logoed items, invite them to planning sessions, etc. Ask them how they will respond to a counter offer from their current employer. (Studies suggest around 15% of candidates take the counteroffer.)

10. Not firing someone within their 1st 90 days when it’s clear the chemistry isn’t working.

The only way to know for sure that the chemistry between the company and a new hire works is to live together. If it clearly isn’t working within the first 7-90 days, it won’t ever work. (It’s not unusual for a third of your hires to fail chemistry.)

Whatever your personal, professional, or corporate goal may be, you want to work with team members that energize, inspire, and fully support your vision.

A strategic planning process that clarifies the what, why, and sustains the how will enable you to turn vision into reality. If you’re interested in having a facilitated strategic planning meeting that moves you from concept to tangible implementation, read my latest book – The Chemistry of Strategy, check out our service offerings online, contact us by email, or better yet, give us a call at (800) 207-8192 to arrange for a complementary consultation to determine if you are ready for strategic planning and if our program is right for you.

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Managing employees and raising children

My wife Mary and I decided to have children in our late twenties, somewhat later than many of our peers. One of the advantages of waiting, however, was the decade of experience we had accumulated in managing independent, unrelated employees. Here are a few of the lessons we learned that stood us in good stead both as managers and as parents.

  • Be consistent in your responses and behavior.
  • Decide what small set of things is truly important and which things fall in the “don’t sweat the small stuff” category.
  • Define consequences if your expectations aren’t met, and truly be prepared to follow through if required.
  • Focus on the positive things rather than the negative.
  • Make your rules and expectations clear.

Before setting expectations for your employees, you need to set expectations for your company as a whole. A proven strategic planning process is an effective way to define and articulate a visualization for your company’s future. To learn more about how strategic planning lets you work through issues like this, take a look at our services webpage. If you’re interested in having a facilitated strategic planning meeting that sets your strategy and launches its implementation, contact us (800) 207-8192 or success@myrna.com.

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What business leaders can learn from PhD candidates

I went to graduate school at Montana State University (MSU) in Bozeman, Montana. Uncle Sam drafted me into the Army before I could finish my PhD program, but my heart remains a lover of the Big Sky Country.

One of my fellow PhD candidates — I’ll call him Larry — taught me the importance of taking a disciplined look at what you want to achieve, why you want to achieve it, and how to accelerate getting there. He was married and after four years at MSU spent getting his undergraduate degree, saw getting his PhD as a means to fulfilling his vision rather than an end in its own right.

Larry’s wife had taken a clerical job at the university. While the job didn’t pay much, as an employee’s spouse he didn’t have to pay tuition, a major economic boost. As a married student, they were able to take advantage of the university’s subsidized housing for married couples. Larry recognized the importance of clarifying and documenting the university’s expectations. In those days, a PhD candidate was expected to take four years to complete the degree. Larry asked himself why. Why four years? Why not three or even two? He sat down with his adviser, and pushed the administration to specify exactly what he would have to accomplish in order to earn his PhD. He kept asking, “When I accomplish these items, then I can graduate?” He pushed and pushed until he had clarity and absolute confirmation of what constituted successful completion of his program.

With that checklist in hand, he focused every day’s actions on achieving each requirement. Two years later, much to the chagrin of the MSU administration which had been counting on another two years of cheap graduate student labor, he graduated with his PhD and went on to a highly successful career.

Another colleague of mine had a very different experience. After five years at a prestigious California university, Tom realized that the school was perfectly happy to have him as a PhD candidate in perpetuity. (He was, after all, cheap labor available to assist the professors in their research.) He sat down with his adviser and forced clarification of what it would take to finish the program. Finally, after spending six years as a PhD candidate, he got his degree.

Yet another colleague of mine went through the entire four-year program at another California university. Bill finished his research, wrote the thesis, and his adviser scheduled the usually pro-forma defense. When he appeared before the committee to defend, however, they informed him that his research area was unacceptable. “That would have been nice to know three years ago when I decided on the topic! My adviser said the topic was acceptable, so I think it’s a bit late to question it now.” Needing to get on with his life, he left the university with a bad taste in his mouth — and no PhD.

Here are the lessons I drew from these three sets of experiences:

  • You must have a clear sense of what you want to accomplish and why.
  • You must take personal responsibility for clarifying expectations – what it will take for the stakeholders to be satisfied with your results.
  • You must take personal responsibility for how you will achieve your goals. There are usually dozens of paths that can get you to your destination. Pick one that leverages your passion and competence.
  • You must ask yourself, and verify, how what you’re doing today is consistent with getting where you want to be in the future. If it isn’t consistent, it’s up to you to change what you’re doing or where you want to be in the future.

Whatever your personal, professional, or corporate goal may be, you must have clarity with yourself and every stakeholder on the what, why, and how. Once you have defined the what and the why, communicate it to everyone who can help being part of how you achieve it.

A strategic planning process that clarifies the what, why, and sustains the how will enable you to turn vision into reality. If you’re interested in having a facilitated strategic planning meeting that moves you from concept to tangible implementation, read my latest book – The Chemistry of Strategy, check out our service offerings online, contact us by email, or better yet, give us a call at (800) 207-8192 to arrange for a complementary consultation to determine if you are ready for strategic planning and if our program is right for you.

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The challenge of changing the status quo

I believe that one of the reasons people resist changing the status quo is because every change creates winners and losers. (See my “Why do people resist change?” blog entry.)

This insight is not new; in fact, one of the most influential authors of all time identified the challenge of implementing change 1,500 years ago this year.

“And it ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.”

“Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them. Thus it happens that whenever those who are hostile have the opportunity to attack they do it like partisans, whilst the others defend lukewarmly, in such wise that the prince is endangered along with them.”
The Prince by Nicolo Machiavell, 1513

The chemistry of strategy is about affecting a change in the status quo. It starts with the leadership team agreeing on what they want the future to look like and why. The how of changing the status quo, which usually cuts across the entire organization, comes through the sustained effort of the leadership team. The first group to embrace change must be the leadership team. They must resolve how to balance all the personal short-term negatives of change with the long-term positives for the their organization. Once the leadership team puts the plan in place, the real work begins. To quote Winston Churchill:

“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

Over the past two decades, we at Myrna Associates have identified and refined the elements that enable teams to change the status quo for the better in their organizations.

Thirty-seven years after my first encounter with strategic planning, I continue to be struck by the power of that process to shake up the status quo in a positive way. The right rules, roles, and process will consistently deliver results. You can find specifics in the articles on our web site and our books on Strategic Planning and Meeting Management.

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Where to look for innovation

At every annul planning meeting with a client company, we have the team take a look at their business from a different perspective, inspired by a current business book or article. This year’s inspiration is Ten Types of Innovation: The Discipline of Building Breakthroughs, by Larry Keeley, Ryan Pikkel, Brian Quinn, and Helen Walters.


The authors write: “Executives need to understand that not only can they expect innovation from anyone in their organization—they are doing themselves and their company a disservice if they don’t do so. The most innovative organizations rely on systems of individuals and teams working across functions in their organizations. Innovation isn’t the work of only scientists, engineers, or marketers; it’s the work of an entire business and its leadership.” Directly quoting from the book, here are five key insights that we are highlighting with our strategic planning clients. 

Knowing where to innovate is as important as knowing how to innovate

Striking oil or mining gold depends far more on knowing where to dig than on the digging itself. Identify the right innovation opportunities and be very clear about the nature of the innovation you intend to create before you begin a project. (Look at Keeley’s ten types of innovation in this short BusinessWeek article.)

Tackle the hardest problems first

Don’t look for low-hanging fruit. Instead, target big, gnarly problems with no easy answer. This isn’t about what’s easy for you; it’s about solving deep problems for your customers. When innovating, focus on the hardest parts of a concept you have to get right. The easy stuff can wait until later.

Turn complexity into simplicity

It’s easy to take something simple and make it complex: politicians and lawyers seem to do it for a living. Yet very few innovations are championed for their intricacy. Most are known for bringing elegance and simplicity to even the thorniest problems. (Then, and only then, can you be confident that you’re on track for successful implementation of your company’s strategy.)

Refuse incomplete answers

Having embraced big challenges, be patient and work to create comprehensive solutions. Look for ways to resolve tensions instead of defaulting to trade-offs. This requires you to be comfortable with ambiguity and to wait for the answers to emerge.

It doesn’t count until it’s on the market

You haven’t finished the process of innovating until you bring the offering to market and you’re getting revenue for it. Or, in social or government contexts, until you have helped your stakeholders in a new and better way that can sustain itself over time.

For more detail on the authors’ insights, click on authors’ video or
this BusinessWeek article or a second video.
Better yet,
purchase the book from Amazon.com.

Creating an innovative culture can be a powerful status quo changer. Getting the team onto the same page and committed to strategic goals like this is what strategic planning is all about. Our two-day intensive planning meeting helps foster innovation in strategic planning in a similar manner to the way Bell Labs fostered innovation in technology — you’ve got key people in a room, interacting and collaborating, even off-site to minimize distractions, thus somewhat mimicking the conditions of wide hallways, open doors, no elevators. (See my 2012 blog post on this.)

If you’re interested in having a facilitated strategic planning meeting that moves you from concept to tangible implementation, check out our service offerings online, contact us by email, or better yet, give us a call at (800) 207-8192 to arrange for a complementary consultation to determine if you are ready for strategic planning and if our program is right for you.

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Is the capital you need hiding in plain sight?

On a recent flight, I was sitting next to a Southwest Airlines pilot and asked him about the “things” on the end of the plane’s wings that weren’t there a few years ago. He told me that the airline was able to earn back, in under a year, the substantial cost of adding the “winglets.” The airline spent $750,000 in January and the added fuel efficiency paid off the upgrade costs that very same year, according to the pilot. The winglets lead to average fuel savings of roughly 2 percent, more than enough to recover the capital investment in less than 12 months. In effect, the upgrade was “free.” The $750,000 was “hiding” in the operating budget; it just had to be recognized.

Not all capital investments are created equal. An investment of $1 million to add a new capability may look attractive based on the five-year ROI projection. But what if the new sales take a lot longer than anticipated? That million dollars of capital will be unavailable for even more years than initially projected. It’s not unreasonable to be extra cautious when making those decisions, especially in uncertain economic times. However, this caution can be ill-advised when looking at capital investments that directly affect your company’s day-to-day operations.

I just experienced this phenomenon myself on a small scale. I have a couple of workhorse color printers I use extensively. I was intrigued by a new HP printer that uses innovative edge-to-edge technology to print at a rate of 40 sheets per minute. I asked myself why I’d invest around $1,300 for a new printer and supplies when I had a perfectly good working system. Then came the epiphany. The new printer not only prints twice as fast as my old ones, it would replace my scanner and fax machines and the power they consumed. The new HP printer consumes one-third the electrical power of my old color printer. Further, the ink and maintenance supplies would cost half that of my old printer. The money I’d save in electricity and supplies would quickly overcome the upfront cost. This was a no-brainer decision, since the money to pay for the new equipment was already in my operating budget.

Over the years I’ve facilitated strategic planning meetings where the team started out trying to solve the wrong problem. They would ask, “Where will we get the capital to upgrade our quality assurance system, or ERP software, or capacity?” Asking what the positive financial impact of the new equipment would be has led many a team to realize it was a no-brainer decision. If the new quality assurance equipment would reduce scrap by $50,000 per month, then as long as the entire cost was under $600,000, the investment wouldn’t even impact that year’s profitability.

Identifying unstated assumptions, communicating personal insights, and developing new and productive way to view issues is at the heart of the strategic planning process.

If you’re interested in having a facilitated strategic planning meeting that moves you from concept to tangible implementation, check out our service offerings online, contact us, by email or better yet, give us a call at (800) 207-8192 to arrange for a complementary consultation to determine if you are ready for strategic planning and if our program is right for you.

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Why does he want to be a manager?

“Where do you want to be in five years?” I asked Burt, the grandson of one of my oldest friends. Burt had just graduated college and was in the midst of job hunting.

Burt answered: “I’d like to have my MBA and be in management.” So I asked him why he wanted to be a manager. After a long pause, he said: “I suppose it’s because managers have more responsibility and make more money.” I suggested he may want to think a bit more about why.

In my experience, accepting a job because of the title and pay increase is not a path to long-term success and happiness. Greater compensation and bigger titles are recognition of the value you create for your organization. The strongest reason for stepping into a new job is because it magnifies the value you can create.

I wanted to be a manager because the dreams I had for our organization couldn’t be implemented without a team of others. The only way I could realize that next level of value was through others, with me as their coach and manager as well as coworker.

When I was made a vice president I asked, the president of the company why the board gave me the title. He answered: “Well, John, you’ve been acting like a vice president so we thought we’d just recognize it with the title.” Titles and money are recognition of the value you create.

As an organization grows, it exceeds the capacity and/or capabilities of the founder(s). Building a strong senior executive team becomes a key strategic requirement. As the organization grows even bigger, it will exceed the capacity and/or capabilities of those senior executives and it becomes imperative to develop a strong middle management team.

Make sure that you recruit candidates with the attitude and aptitude to work through others. Look for people with a passion to coach and assist the personal development of each member of their team. Unless your people display those qualities, promoting your senior sales rep to manager just so she has a “better” title and a bigger paycheck is as foolish as promoting your accounts payable clerk to a senior salesman just so he can have a more impressive title and paycheck. It’s bad for the organization and more often than not, bad for the employee (see my promotion strategies blog entry on 8/29/13 for more about this).

Identifying key positions to fill in order to support your strategy is part of the strategic planning process. It’s common for a company to identify recruiting, on-boarding, and retaining a key new senior team member as a strategic goal for the coming year.

If you’re interested in having a facilitated strategic planning meeting that moves you from concept to tangible implementation, check out our service offerings online, contact us, by email or better yet, give us a call at (800) 207-8192 to arrange for a complementary consultation to determine if you are ready for strategic planning and if our program is right for you.

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Leave a trail of breadcrumbs

My one-time boss and long-time friend Dan was sharing his work experiences at Westinghouse and IBM. Over a dinner of succulent lobster and locally grown corn, he contrasted the two company’s staffing strategies.

When Dan was at Westinghouse, they promoted a talented salesman to a major management position. It quickly became obvious that he was in over his head. Westinghouse left him in the position until they couldn’t ignore his failures and then they fired him. An exceptional employee was lost because the company promoted him too soon and had no process in place to correct the mistake except termination.

After Dan joined IBM, a similar thing happened but with a completely different outcome. “IBM was fanatical about never having to fire talent,” Dan recalled. “When the promoted employee was failing as a district manager, he was quickly reassigned to run a smaller, more manageable branch office. A few years later, after regaining his footing, he had the experience and confidence to be a very successful district manager.” IBM’s ability to match employees with the right jobs at the right time was one of their secrets to success.

When I was managing computer programmers, I was always careful about promoting people to management positions. The top salesperson or engineer promoted to a failing management position is a business cliché. I would always structure things so that the employee could “try the job on for size” with a face-saving way to return to their previous, non-managerial position.

Ideally, you can have a candidate experience management responsibilities by leading a temporary task force and/or an ad-hoc problem-solving team. You can structure a position where the candidate is acting manager while the current manager is on vacation or a field assignment. Make it clear up front that if it turns out that if the new job doesn’t feel right within 90 days, he can return to his old responsibilities. Be sure to defer changing titles or compensation until you both agree that this promotion made sense.

Leaving a trail of breadcrumbs back to an employee’s current job will allow you to skip the all-too-common (and often destructive) cycle of promote and fire. Identifying staffing strategies that support your overall business strategy is part of the strategic planning process. It’s common for a company to identify developing a middle management as a strategic goal for the coming year.

If you’re interested in having a facilitated strategic planning meeting that moves you from concept to tangible implementation, check out our service offerings online, contact us, by email or better yet, give us a call at (800) 207-8192 to arrange for a complementary consultation to determine if you are ready for strategic planning and if our program is right for you.

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Beware hiring a “Charles Ponzi” to lead your sales or IT team

“How strong is our sales pipeline for next year?” Bob, the CEO of Creative Analytics asked in the annual strategy planning meeting.

“Great!” replied Pat, the sales VP. “I’ve got a dozen projects lined up, at least half are a lock to start in the first quarter. Revenues next year should be more than 50% higher than this year.” Pat had been a real find, a sales executive who had joined Creative Analytics eighteen months earlier with a solid track record with her past two employers.

Creative Analytics typically had a two- to three-year sales cycle for most of its projects, so it wasn’t surprising that Pat hadn’t yet brought in projects that were generating revenue. With that positive report from Pat, the team put aside their concerns that half of this year’s projects were coming to a close. In anticipation of next year’s anticipated growth spurt, they focused on plans to insure that there would be sufficient staff and capacity to support it.

Two months later, Pat surprised everyone by resigning to accept an attractive offer from anther company. She explained: “They offered me more money and a relocation to the city where I grew up and where my family still resides. I’ve loved working here and wish you all the best of luck in the future.” When Pat’s prospective new employer had done a reference check, Bob had given Pat a glowing report, highlighting how she had filled the pipeline for Creative Analytics.

One month later, Bob had a completely different view of Pat’s track record. None of the projects that were thought to be “a lock” came to fruition. As it turned out, Pat was an expert in three areas. She always appeared to be busy with lots of sales activity. She was very good at reporting progress, whether or not there was any. Third, she had impeccable timing in switching jobs before being held accountable for the ultimate results. When Bob had a chance to talk to Pat’s former employers, he found out that they had the same experience he did.

In effect, Pat had successfully pulled off a Ponzi scheme — using “good will” from a previous job to “pay off” the next duped company. There are two aspects of a position that attract potential Ponzi candidates:

  • The executives of the company don’t have a base of experience in hiring and working with senior executives in this position.
  • Tangible results won’t be seen for several years, creating a window of opportunity for the Ponzi schemer to get paid for talking a good game and then leaving before he or she is found out.

Big IT projects are notorious for attracting Ponzi-style leaders. The pattern involves many promises for a major system development, a couple of years of positive “progress reports,” and the Ponzi schemer moving to a new position 6 to 12 months before the new system effort is declared a failure. Having moved on, the former IT leader can claim that “had I still been there, it would have been a success.”

When hiring people for a top sales or IT position, it pays to get outside assistance. Call on board members, outside consultants, and CEO group members to vet the candidate. Push harder when doing reference checks. Identify just how tangible the results were that the candidate is claiming. Once someone is hired, insist on meaningful metrics and periodic audits by outside experts. If your new leader yells something like “don’t you trust me?” call on the old President Reagan slogan: “Trust but verify.”

Identifying key positions to fill in order to support your strategy is part of the strategic planning process. It’s common for a company to identify recruiting, on-boarding, and retaining a key new senior team member as a strategic goal for the coming year.

If you’re interested in having a facilitated strategic planning meeting that moves you from concept to tangible implementation, check out our service offerings online, contact us, by email or better yet, give us a call at (800) 207-8192 to arrange for a complementary consultation to determine if you are ready for strategic planning and if our program is right for you.

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