Leadership

What’s the Focus of Excellent CEOs?

McKinsey recently published a study in which it tried to understand the mindsets and practices of excellent CEOs. To help future CEOs achieve excellence, it identified six elements that these CEOs focus on, and three key practices within each to guide up-and-coming leaders. I thought I would share it the model with you.  Are you sufficiently focusing on these six elements?

  1. Corporate Strategy
    1. Vision: reframe what winning means
    1. Strategy: Make bold moves early
    1. Resource Allocation: Stay Active
  2. Organizational Alignment
    1. Talent: Match talent to value
    1. Culture: Go beyond employee engagement
    1. Organizational Design: Combine speed with stability
  3. Team and Process
    1. Teamwork: Show resolve
    1. Decision making: Defend against biases
    1. Management processes: Ensure coherence
  4. Board Engagement
    1. Effectiveness: Promote a forward-looking agenda
    1. Relationships: Think beyond the meeting
    1. Capabilities: Seek balance and development
  5. External Stakeholders
    1. Social purpose: Look at the big picture
    1. Interactions: Prioritize and shape
    1. Moments of truth:  Build resilience ahead of a crisis
  6. Personal Time and Energy
    1. Office: Manage time and energy
    1. Leadership model: Choose authenticity
    1. Perspective: Guard against hubris

Read the study article in its entirety to fully appreciate what they learned about the 18 mindsets and practices.  If you have questions and comments, share them with us. If you’d like to experience a Vistage CEO Board meeting, especially in New York, where members resolve significant challenges with an Advisory Peer Board to get fresh perspectives, “brutal truths”, and lots of support so you can make necessary changes, contact me.

7 Ways to Avoid Common Entrepreneurial Mistakes

We usually think of entrepreneurs as being young adults (e.g., 20-30). In fact, the Kauffman Foundation tracks entrepreneurship, and finds that the largest cohort is older adults approaching traditional retirement age. (Not surprising, when you realize that many are SharExers, people who like to share their experiences and expertise, have identified market needs, and have the time and resources to start a company.)

Regardless of your age, as a rookie, there are mistakes entrepreneurs are likely to make. Arlen Meyers shared some in “Business Model Rookie Mistakes”. Here are a few mistakes that you want to avoid:

  • Going after too many customer segments
  • Defining an industry segment, not a customer archetype or persona that you can clearly identify
  • Creating a value proposition that focuses on features and technology, not benefits for specific  personas
  • Not quantifying the customer pain and what they would be willing to pay to get rid of it
  • Grossly underestimating the barriers to adoption and penetration and the journey needed to go from early adopters to mass usage.
  • Not appreciating the cost of customer acquisition in each market, particularly when there are incumbents
  • Not planning on how to keep and grow customers once you get them

He notes that you also have to address your own role as the company scales up. As the company evolves, you need to work on the business, not just in it, or you become the bottleneck to growth.  That means planning for plateaus where you can turn to new hiring, outsourcing, automation, new distribution channels, etc. which will support the larger company.

One way to help avoid such mistakes is become part of a peer-advisory-group of other company leaders, and use a network of professionals to ensure use of resources. Consider Vistage Worldwide, where new members grow 2-3 faster than their competitors because they seek out ways to avoid being blindsided and making mistakes.  See Vi-NY.com for more information.

Lessons On Leadership from Microsoft’s CEO

What’s it take to be a transformative leader?

Today, Microsoft is the #1 company by market capitalization; the last time it held that position was 2002. In a recent article in INC Magazine, Terence Mauri notes that its CEO, Satya Nadella, just celebrated his fifth anniversary in this position. He’s successful because he adopts a long-term perspective: planting seeds for the future, reinventing today while building tomorrow, and rethinking everything including culture, operations, strategy and talent.

He offers three top winning rules to future-proof a business which Nadella advocates:

1. Lead with Culture.

How are decisions made and what kind of culture do you aspire to have? A winning culture means encourages people growth for people over products. He changed the corporate mission from “a computer on every desk in every home” to “empowering every person and organization on the planet to achieve more.” Teams are encouraged to focus to think of 42 year old Microsoft as a challenger organization with day one in its DNA; you must think and act like 10,000-person startup, because fast eats slow.

2. Act Quickly, Think Slowly.

In a VUCA world (volatile, uncertain, complex, and ambiguous), Nadella is a long-term thinker who embraces new trends and weak signals early to stay ahead of the curve. He values high-speed decision making, where 80 percent confidence is enough to act; 100 percent certainty before making a decision is too slow a pace. As a result, Azure Cloud Services, for example, accounts for 32% of total revenue, with usage doubling last year.

3. Learn-It-All Beats Know-It-All.

In 2014, when Nadella became Microsoft’s new CEO and declared the new game was to be a “learn-it-all” company rather than a “know-it-all” one. Every day is a new day, with learning, exploring, and experimenting as the norm. This means asking three powerful questions:

  • How successful are we at creating new products, services, or business models?
  • How effective are we at adapting to new changes or disruptions?
  • Does our culture reward risk, learning, and smart failure?  

With today’s economic slowdown and a recession possibly on the horizon, now is the time to step-up and become a transformative leader. What are you doing to be a transformative leader capable of still maintaining growth in the near future? Share your recipe for success!

To Win, Presentations Require Emotional Intelligence

One of the fun parts of my job is the ability to draw insights from juggling the diverse set of issues I address in an average week.  Working with our Vistage CEOs, we focused on Emotional Intelligence. Working with Presentation Excellence, we focused on ADAP – our simple formula for great presentation. It occurred to me that people who focus on ADAP to produce winning presentations are using their Emotional Intelligence (EQ).

ADAP stands for Audience Driven, Authentic Presentations. After helping over 5000 (executive-level) presenters develop winning presentations, we saw a clear pattern: they built and delivered their presentations using these two key ingredients. To be Audience-driven, you need to understand where your audience is coming from. This includes a variety of issues, including:

  • How “ready” are they to accept arguments you present (from opposed to already convinced)
  • How is the message presented : to what extent is it based on logic vs. emotions
  • How does the format influence receptiveness (e.g, structure,  time-length, ease of finding the key points quickly,graphics, text, numbers, charts, etc.)
  • How does the setting (place, time of day, etc.) affect attention-spans

To deliver an Authentic Presentation, you believe in your message and commicate the message passionately to the audience. That’s done through speech (e.g.,tone, pacing, inflection, etc.) eye-contact, body language and mannerisms, interpersonal distance, etc.

Emotional Intelligence, which was popularized in the book by Daniel Goleman, is the capacity to be aware of, control, and express one’s emotions, and to handle interpersonal relationships judiciously and empathetically.  It consists of a set of Emotional and Social Skills that Influence the way we:

  • Perceive and Express Ourselves
  • Develop and Maintain Social Relationships
  • Cope with Challenges
  • Use Emotional Information in an Effective and Meaningful way.

As you can see, we might expect people with higher EQ to do better at designing and delivering presentations!  Indeed, Google notes that it’s the key to both personal and professional success.  For over 15 years, we’ve been using this approach when we train and coaching our clients to use ADAP for winning presentations.  Now, we will develop more format tools which a wider audience can use to test their EQ and ADAP capabilities. To stay informed on our progress, contact us.

Pitching Deals with Emotional Intelligence

Over the last year, I’ve witnessed a number of companies pitching private equity, investment banking and related deals that have all been disappointing. The time frame for closing the deal is extended enormously; the number of interested investors is a fraction of what was expected, and the multiple offered is far less than expected. In several cases, the deals just fell through.

In each case, recognized bankers/investment firms were involved. While the senior people gather the date they use junior people to produce the presentation products, using a forumalic presentation template. When the clients express disappointment in the process, I point out the obvious:

  • The people who draft the actual presentation products are detached from the true meaning of the deal (eg., really understanding the competitive advantage, the actual parties involved (buyers and sellers.)
  • They are judged by their ability to fit boat-loads of information into a standard presentation template which has two negative consequences:
    • The delivery doesn’t complement the material  (e.g., a suit should highlight the best of a man’s build; off-the-shelf suits don’t)
    • High quality content gets lost in a long-winded, presentation that makes sense to the designer but not necessarily the buyer. (E.g., an investor relations person was once asked to communicate  the Competitive Advantange of the deal and then spent minutes looking for the key part, and not being able to find it commented, “I know it’s here somewhere.”)
  • The presenter is encouraged to follow the banker’s format – rather than one that encourages the presenter to focus on the unique needs of the buyer (e.g.,present an Audience-Driven, Authentic Presentation). 

One example is a pitch-book devleoped for an apparel company . It addressed the traditional issues, quality of the products, distribution, and the company’s rate of return, and how it’s handling changes in the retail market due to Amazon. However, the company’s product is unique and no real mention of that fact was made.  Unlike most apparel (e.g., jeans, suits, coats, etc.) which generally can be used over and over again, this product is likely to be used only once or twice, and only at setting where it’s beauty-value is treasured.

Not unexpectedly, interested buyers saw it only as a commodity, and the selling process did not produce a satisfactory result.

The solution is to use Emotional Intelligence (EQ). Allow the presenter (in this case company leader) to deliver an Audience-Driven, Authentic  Presentation which use the emotional information of both presenter and audience in an effective and meaningful way. Unleash the presenter rather than fit their message into a (bad) template); meet the emotional needs of a buyer for something really special. Make sure the people designing have the EQ skills (which comes from experience) to understand both parties to the actual transaction.

What’s your experience on this issue?  Share it with us.

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