Order of Magnitude CEOs

Thanks for Believing in Me Grace and Getting Me Out of My Comfort Zone

This past Friday morning I did something I had never done before, something that I thought would be too difficult, something that would make me too uncomfortable, something that just wasn’t for me.   Which is why I stayed away from it, until now!  I had also stayed away from it because I was told that I was no good at it, by somebody very close to me.  So what made me change my mind, what made me try it? Why was this past Friday morning different than all the other Friday mornings in my life?

Fridays is the day that I get my two daughters ready in the morning and put them on the bus.  It is a ritual that the kids and I look forward to each week. It turns out that this past Friday morning, my older daughter Sarah was not around.  She had left very early in the morning to appear as a snowflake at the Count Basie Theater in a ballet production of “The Wonderful Wizard of Oz.”  (you don’t know about the snowflakes in “The Wonderful Wizard of Oz”, well, neither did I).  So for the time ever, this past Friday morning it was just myself and my younger daughter Grace, who is currently in kindergarten, that I had to get ready for school.

I woke Grace up at the appointed time, she got dressed with my help and then I hoped we would head downstairs for her breakfast.  And then I heard the words I was dreading, “Daddy, can you put my hair in a pigtail?”  I immediately replied with my stock answer that had always worked before, “Daddy is no good at that stuff.”   That excuse had always worked because there was always somebody else there to do it and because my older daughter didn’t want me coming anywhere near her hair because of my lack of expertise.  Grace calmly replied, “Don’t worry Daddy, it’s easy, I’ll show you.”  And she did.  After I got the first tail done, she looked at it in the mirror and complimented me, “Good job Daddy, now for the other side.”  Feeling emboldened, even a little cocky, I started on the second side.  This one was a bigger struggle for me (I think because I used too much of her hair on the first side, although I am still not sure why.)   I tried multiple times to get the second side done right, Grace was patient each time until it was good enough for her.  I could tell that it wasn’t perfect for her but she let me off the hook.  “Good job Daddy, now we can go eat breakfast.”  After breakfast, as she was just about to get on the school bus, she exclaimed, “Next time, I will teach you to do a ponytail.”

Although, the story is cute, hard not to be, when it is about a Dad relating a story about his 5 year old daughter, the point is not.  I have had numerous chances over the years to do a pigtail or ponytail and I refused for what I thought were very good reasons.  They weren’t good reasons and I was wrong.  My older daughter who I thought was helping me, was actually not, she was my accomplice in not believing in me, in stopping me from doing something that made me uncomfortable. To get me to break out of my comfort zone, it took somebody else truly believing in me, then willing to help me, and then making me feel good about the work I did.  Nice job Grace!

When you walk into your office tomorrow, take a look at your key staff that you are counting on to handle more for your firm this year and down the road, are you accidentally complicit in helping them stay in their comfort zone?

(By the way, to get Grace to pose for the picture above, I had to incent, ok bribe her.)

Are you Prepared to Avoid Big Problems and to take Advantage of Big Opportunities like the NYSE or are you Running on a Treadmill towards Nowhere?

 

I took this picture on Broad Street about a block from the New York Stock Exchange (NYSE) last week.  As anybody who has been in this area knows, the security around the perimeter of the NYSE is very tight, especially for vehicles.  As far as I can tell, T&M together with the NYSE has put in an elaborate system, complete with vehicle roadblocks to prevent anything potentially dangerous, like explosives, from getting anywhere near the exchange.  The NYSE has invested heavily in preventing a big problem.

On the flip side, last month, the NYSE decided to merge with The Deutsch Boerse after years of conversation, mainly due to a major change their executives noticed in the value of an exchange marketplace. In their view a trading platform for US equities has become a commodity, and value creation for an exchange is now about being global across a number of different products with a value chain setup to drive transaction costs lower.  Sure, there are plenty of people in the United States concerned about selling a US icon to a “bunch of foreigners”, but NYSE executives realized not making any move, could have been the weakest move of all for one of their key stakeholders, their shareholders.

On a much smaller scale, a business owner I know recently completed an acquisition of another firm in a strategic city which significantly increased her firm’s market share in this city where previously they had trouble gaining traction. Having already formed a friendly relationship with the other owner several years ago, as well as having developed the staff and processes to evaluate and consummate acquisitions, she was able to get this long-term value creating deal done ahead of her competitors that were not thinking big.

Unfortunately, another business owner I know exclaimed to me recently that he has been “running on a treadmill since the mid-1990s”.  He has a great product and excellent customer service but he is in a crowded space with no sales team other than himself and essentially no marketing. He makes a “living” that enables him to take care of his family, but he acknowledges that’s it, essentially he is an employee of the business he owns.  As innovation and value is created in his industry, this passionate and motivated business owner is forced to watch from the sideline as he is not prepared to make a big move nor setup to avoid a big problem. 

To take advantage of business impacting opportunities and prevent business impacting threats, it all starts with what I learned as a Boy Scout “Be Prepared.”

Want a Great Culture for your Business? - Get Some Religion

 

This past weekend not only did I attend a Bat Mitzvah of the daughter of an old family friend, but as a bonus I got my answer to the question above.

As I sat in the synagogue taking part in this important ritual celebration, something dawned on me that I had not explicitly noticed before.

The elements of a strong religion are very similar to what it takes for a business to design its own strong culture.

Religions, as do businesses, share three fundamental elements that can lead to having its members (or employees) purposely acting by design or intention of its leaders:

Tell Stories that Matter - In religion, “the policies and procedures” for how to live our lives are not given to us as impersonal theoretical statements but rather, we learn them through stories.  Whatever bible (or bibles) your religion happens to follow, it is made up of a series of truly personal and memorable stories with people making tough decisions or extreme personal sacrifices helping us remember why the religion got started, what is important to the religion including what is acceptable (and not acceptable) behavior.

When there is an issue with a client, how do employees know what to do - through a stagnant formal written policy issued years ago or do they know compelling stories of how the company founders and early employees resolved issues with clients in the past.

(Hollywood, the leading modern creator of stories, is the first to admit that religions have great stories and even made a film about the life of Jesus Christ called The Greatest Story Ever Told.  My personal favorite bible movie is The Ten Commandments starring Charlton Heston, which I first watched as a child with my family, but perhaps I have a cultural bias – wink wink).

Create Rituals -  Each religion has its own customs, celebrations, and holidays that reinforce the stories of the religion as well as indicate whether somebody is actively involved in the religion or not.  These can be daily, weekly, annually, or by milestones.  Participation in these rituals is considered vitally important to the religion.  What gets celebrated and rewarded in your firm?  The day people start or the day people leave or when they reach a certain milestone or achievement?  Do meetings start on time with an agenda or is it expected that meetings start 15 minutes late? Do people leave right at 5:30pm or are they expected to stay late or it doesn’t matter as long as their work is completed? How are the accomplishments treated? And, what about the failures?

Invest in Training – When new people join a religion, typically children, but not always, it is up to the experts in the religion including its local leader (e.g. the local priest, rabbi, minister, imam), to teach the children about the religion, what is important, what is acceptable and what is not.  What do the experts use for material? Exactly; they use the stories and rituals of the religion so the students can learn what is valued and considered significant in the religion. The stories and rituals of your own business and why they are important should be the starting points for the critical foundational training with your own employees.

How do people end up losing their religion? They no longer follow or believe in the stories or rituals. Or in some other way the religion repels them.  If the culture of your business is strong, the wrong employees never join or end up being repelled from the organization - either leaving on their own or at some point the culture naturally forces them out.

If you’re not satisfied with the design of your business culture, I respectfully suggest you get some religion.

You want that Espresso To Go - Not Gonna Happen - What Business Owners can Learn from Café Grumpy and other NY Restaurants that say “No” to their Customers

 

“I have no way to stand out other than providing great service or the lowest price.”

This is a complaint I recently heard from a struggling business owner who is competing against many providers with a similar offer.

On the flip side, another business owner I know recently left his current professional service provider who provided great customer service and was relatively cheap compared to the alternatives. So why did he make the switch?

It turns out his current provider said “Yes” to every request without digging deeper to understand the implications of fulfilling the request. The business owner finally concluded that his current professional service provider wouldn’t be able to help him solve the really difficult issues his business would face in the future and thus it was just too big a risk to not make a switch.

If you read The NY Times this past weekend you might have come across a fun article profiling NY restaurants  that are getting noticed for saying “NO” to their customers based on their product or domain expertise:

A French bistro that serves great fries but you must hold the ketchup

A hamburger joint that won’t make you a cheeseburger, unless that cheese happens to be Roquefort

A bagel shop that won’t toast your bagel

And,

A coffee shop that doesn’t allow you to get your espresso to go (Café Grumpy)

(The links above all point to Yelp reviews where you can see that each establishment scored on average 4 or more stars out of 5 from their customers).

Don’t forget that you can differentiate based on your product and/or trust built through domain expertise.

For example, as an executive at M5 Networks, a business hosted VoIP phone system provider, I had to turn down signing up prospects that wanted to skimp on the connection between their office and the M5 data center. Sure, it may have been cheaper for the prospect in the short run, but I knew that an increased likelihood of their phone service being down was definitely not worth the risk for them and for us. 

Plenty of customers would end up signing with M5 anyway. Others would try a different provider that agreed to provide the inferior solution with a high percentage of these businesses migrating over time to M5 as they came to understand and appreciate the value of our domain expertise.

If you truly are the expert, sometimes telling the customer why they are wrong, is not only the right thing for your customer, it is actually the best way to build your business over the long-term, even if it means sacrificing some short-term profits along the way – eventually enabling you to attract more of the customers you really want.