Daily Archives: July 2, 2018

Enough Horseless Carriages!

It’s time we change our frames-of-reference and language to address the reality of the world into which  our children are aging, instead of holding on to antiquated ones that reflects a world that is becoming history.

Sure, lifestyles, habits, cultures, norms, etc. change over time. At any time, we define our “present” by some aspects of the past and some of a “coming” future. There is no right or wrong there. But as role models for the next generation, we need to let go of the world we see growing around us. If we like it, great; if we don’t, we can try to change it.

Take the concept of “retirement”. In the 1880s, in a predominantly agrarian world that was moving toward industrialization, Otto van Bismarck recognized that after a life of fighting wars and working in the fields, people needed a break from work, and created the first Western “retirement system. At 74 year of age, he advanced legislation to allow people to retire with a pension at age 70; later it was dropped to 65 – which is the age that many other societies then adopted.

Fearing that workers in factories and hard labor would continue to work till they die, in 1935 Social Security was created, giving people at target: work till (about) 65, retire from work, and then enjoy a few “golden years” of non-work.

In the meanwhile, the world is changing dramatically:

  • The previous agrarian economy was replaced by an industrial one; more recently we live in a knowledge economy. It means fewer and fewer people are “laborers”, who are less able to handle the physical demands of their jobs.
  • Life spans increased – from 41.7 years at the beginning of the 20th century to mid-80s in the 21 century. If it weren’t for the opioid and related epidemics killing young adults, longevity would keep increasing. Indeed, the fastest growing subgroup is people over 85!
  • Recent research shows that beliefs propagated in the last half of the 20th century are myths. Today:
  • Increasingly, people are living to 100+. Today, over 60 million Americans are over 60; by 2030, they will constitute 20% of our population. In 2050, not very far in the future, 2 Billion people, globally, will be over the age of 60 (worth about $15 Trillion!)
  • Thirty plus years ago, industry experts referred conceptualized a world where people work and when they retire, re-wire, re-invent themselves (whatever term you like), they then seek an encore career. Today’s researchers find that people approaching “traditional” retirement age do NOT plan to retire from work; they want to continue at their jobs, take other jobs, volunteer, etc.; they want “purpose” in life. Moreover, they will have many careers, not just two; indeed, today most people have multiple jobs/careers through life; the largest group of entrepreneurs according to the Kauffman Foundation are adults past 50.
  • We perpetuate too many negative stereotypes. People do not necessarily become decrepit and depressed as they get older; many men are having children in their 60s and 70s (examples). Many important leaders (examples like Warren Buffet, etc). are between 60-100, and going strong.
  • As a result, most people age 50+ do not consider themselves part of the “old crowd” – a mistaken framework created by people who group people by whether they’re older or younger than 50.
  • Finally, get rid of stereotypes which make it harder for older workers who have so much to offer in a knowledge/relationship economy to continue contributing.

What does all this mean? We need to change our frameworks and language.

  • As Henry Ford noted when he invested the “car”, people didn’t want faster horses or buggies, they wanted faster travel. To drive a “horseless carriage” means looking backward; calling it an “automobile” addressed a future world. (We’re still making the same mistake: We’re not entering a world of “driverless cars”, but one of “autonomous vehicles”. And so on.)
  • While every generation can learn the basic development passages through school, careers and family, we’re the first generation trying to figure out how to navigate a longer life. We’re not just adding on extra years post-retirement, we’re creating new paths.
  • More important, however, is that we’re the first role models for younger generations and that’s an important responsibility. Our children and grandchildren will live elongated lives – expecting to live to 100+. We need to help them navigate adult lives (from 20-100+) according to new rules for balancing personal passions with life’s purposes (e.g., work, social causes, learning, etc.) while recognizing the importance of handling the other life basics: health, wealth and relationships.
  • For instance, in an elongated life, you will have multiple careers (the authors of Becoming Brilliant believe today’s children will have 10!) and need to take time off between life events to figure out who we were, are and want to be. (e.g., GROWTHH time- Goal Reorientation with Time for Health and Happiness).
  • Finally, just as BMW has discovered in its assembly plans, businesses should recognize that ergonomic design of facilities can meet the needs of different people and keep them productive regardless of age.

In sum, to have a fulfilling life to 100+, we need to follow the lead of Wayne Gretzky, possibly the greatest ice-hockey player ever. Instead of going to where the puck is, as other players do, he goes “to where the puck is going to be” Start planning your elongated life. Start being a role model for future generations. Start sharing your life’s wisdom – become a SharExer, sharing your expertise and experience.

Why Should Prospects Choose Your Firm?

Do you REALLY have a Competitive Advantage? In March, our CEO groups were treated to an eye opening presentation. Jaynie Smith taught us that while WE think our companies have a Competitive Advantage (CA), that doesn’t mean prospects and customers do!

Leaders think their companies have a CA, because their teams try to produce the best possible products/services and market/sell it to their prospects. We forget that a CA is in the eye of the beholder: the customer. Prospects have lots of options (and with mobile search engines and e-commerce and related rating systems, it’s easier than ever to check out competitors). Similarly, if customers have not had an A+ experience from all perspectives, it’s easy to be picked off by a vendor with CA that outshines yours.

The solution is to understand what a real CA is!  As we went around the room, CEOs told us that their companies had products with superior quality, more efficient and effective, delivered on-time, had stronger customer relationships, had more expert staff; were more customer-responsive, etc. As Jaynie pointed out – we all use the same “blah.. blah” – without proving it.  that’s why prospects move on to someone else.

A true CA is something that simultaneously offers desired benefits (e.g., ROI, convenience, etc.) and also reduces risks. Using objective, measurable criteria, you need to quantify it for your target customer.

For instance:

  • TD Bank is “America’s Most Convenient Bank for small businesses who use branches because they are open 7 days a week and longer hours on week-days. But if you’re a “digital” banking customer, it’s not.
  • Vistage Worldwide’s has helped CEOs become more effective to grow their companies better for over 60 years; Dunn and Bradstreet evaluates its impact regularly and finds that companies who join, grow 2-3X faster than competitors. That’s a CA to leaders committed to growth; not to status-quo lovers.

It reminded me of a story about a company selling sunk pumps. The industry leader was selling a $30,000 unit. A new competitor entered the market and sold theirs for $25,000. As sales dropped, the sales people demanded that their company drop the price – which would have made sales unprofitable. A consultant was hired to compare the two units; they discovered that their competitors’ unit needed to be replaced every 3 years, which meant major disruptions to company operations on that day, and that service cost was $5000. The main company’s unit had to be serviced every 10 years at a cost of about $3000. With that, management changed its marketing and raised the price! The result: sales increased and surpassed initial levels!

You can learn more by reading her books Competitive Advantage and Relevant Selling.

When was the last time you really analyzed whether the CA you developed years ago is still working for the different client/prospect segments you serve?  How easy is it for a prospect who quickly scans competitors to see your CA?  Share with us your experiences and what you’re doing to develop a more effective CA.

Why You Need Succession Planning..At All Levels

Whether you build a company or form a government, the goal usually is to make it sustainable not just for the time you’re in office, but afterwards.  Most leaders focus on what all the strategic components of running a coompany – leadership, strategy, talent management, operations, finance, sales/marketing, etc. Succession planning at all levels – makign sure you have the right people in place with the leadership and technical skills to continue the process – often is often until someoone is ready to  leave or is not ready able to continue in the function – and that can undermine the future of the enterprise.

Three different situations drove home this key point.

  • Developing democracy in Myanmar has been very difficult. It’s taken decades, including many years when Aung San Suu Kyi, the symbol of democracy and current civilian leader was under house arrest by the miltiary leaders, for democratic practices to begin to be adopted. Making sure that a new generation of leaders would be available to continue the process should have been a priority. Yet the Wall Street Journal reports that the “graying leadership of the nation’s ruling party lacks new blood to inherit power”. When the 71 year old president resigned, a 66 year old Suu Kyi loyalist was picked to replace him. Two thirds of the ruluing Executive Committee is over the age of 66 – the male life expectancy is Myanmar. The government seems to be “recycling the same top leaders”. The author observes that the National League for Democracy “risks losing its struggle with the (military) institution if it fails to groom a new generation of leaders”.  Clearly, encouraging a new generation of democratic leaders in a country still run by the military leaders who took power in 1962 is not easy; but it should be a priority.
  • A CEO who made a decision recently to join Vistage, explained that his main reason was a desire to retire in a few years and build a solid management team that can take over the company. An analysis of the senior team revealed that many were there a long time and not very effective and had not considered devleoping people below to help take over should something happen to them. Turns out not all of the team members were as competent as he thought, and left. So now, the CEO has to postpone the effort to expand the business to make it more valuable to the next owners, and focus on identifying who can take over their divisions (from inside and/or outside) and tain them to be effective leaders. Further, there are some capable people within the company that have not been earmarked for future leadership roles and can be fast-tracked, with supervision, to see what they really can do. All this extra work is draining substantial energy. We now have a race to do a lot within the allotted time period.
  • Age Brilliantly advocates allowing talented people to continue working in companies as long as they want to do so and continue to be productive – regardless of age – either in their jobs or as SharExers where they “share their expertise and experiences” with others to groom new leaders and help innovate processes and products. Recently, a CEO, who runs a company that uses lots of specialty equipment, mentioned having a few employees over the age of 70 that are quite skilled; they haven’t initiated discussions about “retiring” for their jobs, and neither has he. Periodically, we discuss how they’re doing… and raise the question of who will take over when they want to, or need to, leave. It’s been flagged as an issue because no successor exists in the company and no outside search is being initiated. (“Ostrich, keep your head in the sand.”) Recently, the conversation changed…two are thinking of moving on. So now we’re scurring to find ways to “phase their retirement plans” for the good of the company and these valued employees. Stay tune for how the SharEx model gets adopted by this company!

Everyone benefits when we begin succession planning early on.  What are you doing in your company?  Share with us your experiences and solutions.

Do You Explore for Disruption?

In a world where competitors, strategic partners and customers are focused on innovation and how it will improve their lives, it makes sense for leaders to do the same thing in our companies. However, we need to recognize the differences between different types of innovation – and commit not just to the low hanging fruit but also the transformative changes.

Generally, innovation focuses on people, products/services and/or processes. Today’s car-sharing services (e.g., Uber Lyft, etc.) affects all three customers order differently and the drivers operate differently (i.e., their own businesses). The process is involves using an app to have transportation come to you rather than you go out to where cabs travel. The product differs in the quality of the transportation experience, including knowing how much it costs before entering the vehicle. Innovation come in two styles: incremental and disruptive (transformative); ask any yellow-cab owner, and you’ll hear that car-sharing services are transformative.

What’s important to understand is that innovation creates an inevitable tension for company leaders. They are responsible for building and executing a strategy.  Execution means cascading the goals from one level down to the next and creating a supportive culture to enable each member/team to achieve their objectives, especially when the inevitable speed bumps and road blocks get in the way.  If at the same time they want to be innovative, they can’t be disruptive, because that would disrupt the elements that make for success. So leaders resolve to focus on incremental innovations – and put their energies in helping creative an innovative, incremental culture. People’s skills ae upgraded, products improved, processes made efficient and/or effective.

But transformations require disruptive thinking. Henry Ford realized that people wanted faster transportation than was available with existing horse and carriages. Incremental innovations would take the form of lighter carriages, faster wheels, superior horses; a disruptive “horseless” carriage meant an automobile.  The key to such disruptive thought is for leaders to be curious and explore options outside the current frame-of-reference. They know that these innovators cannot be concerned with executing the current business strategy.

Leaders need to be self-aware of the conflict between growing through innovation while maintaining the status quo. It takes a commitment to explore for disruption and develop a structure where they are separated from the day-to-day activities and supervised by someone who nurtures and protect their efforts (often referred to as the “skunk-works” project.)

Are you committed to exploring all your opportunities?  Share how you launch disruptive technologies.

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