Strategy

Is Your Company a CILO?

What is a CILO? A Continuously Improving Learning Organization. It creates a learning culture that enables each person to grow as they contribute strategically to the overall success of the company.

A little background.  Several years ago, I had the privilege of working with a new organization, now called ETW – Execute To Win, where I learned about a new management operating system. It was started by Lee Benson, a CEO who belongs to Vistage Worldwide in the Midwest. (I chair groups in New York City.) It’s based on the principle that if the work each person does is aligned with the corporate strategy and performed well, it’s a win-win for each employee and the company. At the time, he showed it to Jack Welch, former CEO of General Electric, who loved it so much that he became a partner in the project. Over the years, it’s evolved into a system used by large companies focused on launching new strategic efforts and helps everyone on the team focus on doing their part in concert with the whole. I

In the meanwhile, I adapting it (www.eval2win.com) to help CEOs of $5M – $1B companies with whom I work, to focus on achieving personal/corporate strategic goals and forging a culture of continuous improvement. The focus is on the employee-supervisor dyad, not just the employee. Each dyad collaborates to ensure that the employee can achieve the strategic objectives she/he has which lead to the achievement of the company’s strategic goals. (e.g., my actions, lead to sales, which are my contribution to the corporate revenue goal. The system requires that the dyad meet regularly to discuss how the employee is doing and can improve and create a document that:

  • Identifies the major responsibilities of a person with time allocations to each one to account for 100% of the person’s commitment. (E.g., a Controller may have specific financial functions, supervises people, provides Exec Team with advice and data, leads the budgeting section for new business proposals, etc.). Many have 5-8 major areas of responsibility.
  • Defines the key activities within each of these responsibilities. (e.g., collect, publish and analyze monthly financials; identify and guide career paths for each employee).
  • Creates KPI for measuring (e.g., close each month within 3 days and provide a report, highlighting key issues of concern).
  • Identifies areas of improvement for the employee within most of the areas of responsibility (e.g., investigate a few finance courses to take online), schedule the activities themselves and develop KPIs to measure progress (e.g., pick the course, take it, and achieve at least a B).
  • Schedules the next review.

As you can see, in a CILO, continuous improvement is a fundamental job responsibility for the employee and the system to achieve it is collaborative – not imposed on anyone. Moreover, the scheduling of reviews is triggered by the goal of continuous improvement – not just a calendar.

For a new employee with a stable set of job responsibilities, the dyad meets each month for the first three months to help the employee “onboard” and do the job correctly. If all is fine, the next review will be in three months; if there is a problem, monthly meetings continue as long as needed. Once things are fine, the intervals between reviews expand from monthly to quarterly to semi-annually to annually.

However, most people’s jobs change! Imagine you’re a graphic artist or sales person or marketing for retail and been promoted to take on new responsibilities, such as managing the graphic team, providing sales training, supervising social media e-commerce marketing. Since this is new, the cycle of reviews for these new jobs starts over; you get support immediately (e.g., training and direction) to perform the new job correctly. In this way, the Peter Principle is eliminated – people aren’t promoted to a new job where they lack the skills and the problem is only discovered later; problems are identified immediately.

As you can see, this system also encourages people to take on new responsibilities to advance their career by learning what they need to know and getting the support and feedback to do it well.

Is your company a CILO – encouraging continuous improvement through learning, feedback and support (by people and systems)?  If so, share your model. If not, let us know how we can help you become one!

The Complex Role of Leader-Manager

 

As I begin outlining the new Management MBA course I’ll be teaching this summer on Leadership, I realized that the reason there are so many different definitions is that there are many facets to this complex position, and each definition is focusing on a different perspective.

For instance, one approach is to distinguish leaders from managers.  “Leaders have people follow them while managers have people who work for them.” In other words, the leader is focused on vision (how the world changes because of us) and the relationships between people to achieve it. The manager is focused on executing the tasks involved in achieving the mission, the activities we actually achieve.  Each makes appropriate strategic decisions; the leader choosing between visionary options and the manager choosing between different ways of executing the plan. A successful business person needs to be both a strong leader and manager to get their team on board to follow them towards their vision of success and obtain the resources (people, capital, etc.) and engage in the business activities.

A successful leader therefore is someone who  “earns the enthusiastic loyalty and commitment of followers and molds them into a high performance team”. (Tom DeCotiis) He/she inspires people (through words and role-modelled actions) to align their own performance with the organization’s overall strategy (i.e., vision, mission and goals). This involves, painting a compelling vision of the team’s future, pointing the way to successful accomplishment of the vision.  Ultimately, it’s getting someone to do things they don’t want to do, to achieve what they want to achieve. (Tom Landy)

On the other hand, a successful manager, is focused on optimal execution: recruiting, developing and growing talented team members; obtaining and using resources to most efficiently and effectively achieve the work necessary to give the stakeholders (i.e., employees, customers and investors achievement of its mission.

The leader-manager has to balance the different realms in order to be successful. Where are we going? What’s the best way to get there? What are the implications of each strategic choice? (G. A. Lafley.) As a CEO coach, I know it’s important to address both realms in terms of time allocation, expertise, and training (of self and other team members) to advance their own abilities as leader-managers. My challenge, as a teacher is to enable students to see the differences, and cultivate the perspectives and skills needed to see how they will fulfill these roles as they grow professionally.

What are your biggest challenges?? Share with us.

Disrupting Retail: What Will Happen?

What do you do when you’re “marked” for execution? You can either adapt – and possibly live for another day – or find ways to significantly change the game. Unfortunately, in the retail business, most of the disruption is taking place by the disrupter itself, and not those marked for extinction.

Several years ago the Bespoke Investment Group, created a listed of companies which it believed were marked for “Death By Amazon” (AMZN)  and created an index of these stocks. It includes such swell known companies as Best Buy (BBY), Barnes & Noble (BKS), Wal-Mart Stores (WMT), and Macy’s (M). As we noted in my classes this week (I teach business strategy for CUNY), several additional companies recently announced closings of physical stores  – including the entire chain (e.g., Bebe, Payless, Radio Shack). As I understand it, the projection is for over 8000 retail stores being closed this year about four times last year’s number.

So the challenge is how to change the retail model.  Many companies are looking to integrate e-commerce into its operation – as the proposed $300M purchase of men’s clothier Bonobos would do for Walmart. Target and other bigger stores are working on shrinking their stores to increase productivity and profit per square foot. Many are adapting customer-friendly  practices to optimize the number of customers still using their stores; omnibus marketing strategies, collaborating with manufacturers to improve margins and cut costs, embracing social issues that customers care about, and increasing end-customer personalization. Whether these will result in long-term success remains to be seen.

The final challenge is who can do it better and faster. Will these individual and/or cumulative changes enable the retail stores to reverse their sales and profits slide, or will Amazon, with its potentially transformative approaches to retail (e.g., Amazon Go) give it a competitive advantage.  For people with creative new ideas on how to transform purchasing and selling practices that integrate online and physical shopping, these can be exciting times.  What are your ideas?

Metaphors Are Memorable

 

Think about the recent election cycle.  When Donald Trump wanted you to thinkabout an opponent ina derogatory way, he found a simple metaphor – that stuck.

Remember, these people? “Lyin’ Ted”, “Low-energy” Jeb, “Little Marco” Rubio, “Crooked Hillary” and  “Crazy Bernie”. Sure you do. Why, because, just as a picture is a thousand words, metaphors are memorable because they paint the “big picture” and leave out all the words, that often no-one wants to read!

In Conversations that Win the Complex Sale, Erik Peterson and Tim Riesterer, remind us of this point and give us some interesting pointers when we’re engaged in selling.  In a sales situation, the first thing you need to do is set the framework – draw a picture of what your prospect’s world looks like.  This allows you to demonstrate you understand his/her world and enables you to help create the framework you want to use.

(Remember, in the “old” world of sales, where people were to note features, sell benefits and overcome objections, the objections usually came from the fact that your framework missed key issues and they arose “objections”. For instance, if you’ve qualified the prospect as having the budget you need, and created a framework for high ROI and value, then price isn’t an objection anymore.)

After you’ve created the Big Picture, present the detailed sales points, providing evidence to support each one. Then, close with a metaphor that summarizes your point and makes it memorable.  Another example: a client with a warehouse, created a sales pitch in which he notes the pain many customers experience in other facilities (often hidden charges, complications, slow services), describes the quality, speed and efficiency of its logistic services, while showing the facility, and ends with a metaphor that appeals to the emotional side of the buyer:  warehousing made easy.

What metaphors do you use in your sales presentations?  Share them with us!

Innovation and Location: They Go Together!

After years of sending manfuacturing to offshore facilities, America has realized that it’s damaged our economy. As US factories close, millions of jobs were lost and many workers were not able to find other sources of work. The trade deficit ballooned and it may have reduced our innovative edge. Indeed, President Trump campaigned on a platform to bring jobs back to America and won the election.

Gary Pisano  and Willy Shich, in “Producing Prosperity: Why American Needs a Manufacturing Renaissance”,  suggest that another key benefit of moving some manufacturing back to the United States is to revitalize innovation.

Theses Harvard businness professors, argue that when a company loses it’s capability to manufacture, it also loses the ability to innovate and compete. “ Instead of job creation, we believe that the central objective of a national manufacturing strategy should be keeping America’s innovation capabilities healthy, because innovation drives productivity and productivity drives wages.”

Pisano notes that the trend to deindustrialize the US started with the globablization of supply chains. Companies thought they could move manufacturing elsewhere to be cost-competitive, yet keep design (innovation) here.  Solar power technologies offer an example. While solar cells (Photovoltaic (PV) cells) were first invented in the United States in 2012, only 3% of PV production was based in the US and Canada; 81% is Asia, with China and Taiwan leading the market.  “Once you lose the capabilities, you can bring them back, but the level of investment, activation energy to bring back is higher”, says Pisano.

Indeed, Shih discovered this first hand while working with Kodak. “ Because of earlier decisions to outsource camera manufacturing and consumer electronics assembly to Asia, the innovative capability no longer existed in the United States.” Today’s “endangered species” of American industries include semiconductors and rechargeable batteries.

Andrew Liveris, Chairman and CEO of Dow Chemical, notes “without a vibrant manufacturing secor, R&D will be done not by the US but by its major competitors. Over time, that will leave America dependent on intellectual property that’s created by other countries; American’s ability to generate its own growth will atrophy.” (Make it in America: the Case for Re-Investing the Economy by Liveris.)

Two companies that appear to be aware of this great risk include Intel, which controls the manufacturing of its proprietary process for making chips, and Corning, which maintains leadership in all its business, including Gorilla Glass, a very thin, damage-resistance glass display for mobile devices.

The authors make a second important point: that distance matters in certain industries. For example, biotechnology and life sciences are mainly clustered in Boston, San Francisco and San Diego. Semiconductor manufacturing is amassed in Taiwan, South Korea, Singapore, Shanghai and Beijing. High-end shoe producers are located in the south of Venice, Italy. Hi-tech and Venture Capital grew in Silicon Valley; the auto industry grew in Detroit, Michigan. Why?  Because these industries form “industrial commons” that operate within an “ecosystem” and share know-how and capabilities. To stay innovate, they stay close to one-another, so there are frequent interactions between workers, companies, suppliers, universities, etc. This also permit these companies to cultivate a workforce to meet expanding workforce demands in these industries, through apprenticeship and internships.

In sum, innovation is fueled by close contact and communication – not by distributing parts of the process to the four corners of the world. We must facilitate the development of ecosystems for design, innovation, teaching , manufacturing, etc. of critical industries so jobs which will enable people to stay creative and innovate new solutions for delivering superior products.

What do you think?  Share examples!

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