Profit and Leadership : January 2016

Wednesday, January 27, 2016

THE 7 HABITS OF HIGHLY EFFECTIVE PEOPLE BY STEPHEN COVEY - ANIMATED BOOK REVIEW

Know All, Tell Not

I am going to give you this two by two matrix that describes different models of leadership. Now most leadership lives up in the KNOW ALL, TELL ALL world. The leader knows all the answers so he or she gives all the orders, and since they are the ones giving all the orders, they better know all the answers!

When I was ordered to the USS SANTA FE, a ship I did not know the technical details of, I dropped down into KNOW NOT but still TELL ALL. Why? That was the habit. Submarine Captains gave orders. It is not a good long term strategy.

When I made the decision that the problem was me, that I needed to keep my mouth shut and stop telling the crew what to do, I became a KNOW NOT, TELL NOT leader. Again, not a good long term place to be.

Eventually I learned the ship and I learned it very very well. I knew as much as anyone could probably know about the submarine. The question is, do I go back to being a KNOW ALL, TELL ALL leaders?

I ended up being what I call a KNOW ALL, TELL NOT leader. The lesson IS NOT don’t know your job! The lesson is know your job, but resist giving your people the solution when possible, because that is when they start doing their leadership push-ups! Try saying; “Hey, what do you think?” or “What would you do if I weren’t here?” That’s when you are going to be developing leaders.

My leadership nudge to you this week is this:

The next time your people come to you with a problem you know the answer to, resist telling them what to do. Let them tell you how they would solve the problem. The minute you stop telling people what to do, you start developing leaders!

Let us know how it goes!

Do You Have a Growth Mindset?

By John Hagel and John Seely Brown November 23, 2010

Posted on Harvard Business Review: November 23, 2010 10:29 AM

Mindset is everything. If that statement seems too strong, consider that we bring these basic assumptions to every decision and action we make. Left unexamined, they may unnecessarily restrict us or lead us in the wrong direction altogether. Perception may not truly be reality, but when it comes to how we approach challenges and opportunities, mindset determines the world we encounter and possibilities we apprehend. Achieving the power of pull requires us to make our assumptions explicit and examine them in different contexts—testing, challenging and refining.

In her 2006 book, Mindset: The New Psychology of Success, Stanford Professor Carol Dweck distinguishes two extremes of the mindsets people tend to have about their basic qualities:

• In a fixed mindset, "your qualities are carved in stone." Whatever skills, talents, and capabilities you have are predetermined and finite. Whatever you lack, you will continue to lack. This fixed mindset applies not just to your own qualities, but to the qualities of others.
• In a growth mindset, "your basic qualities are things you can cultivate through your efforts...everyone can change and grow through application and experience." Qualities like intelligence are a starting point, but success comes as a result of effort, learning, and persistence.

The distinction between fixed and growth mindsets has tremendous implications—as individuals and organizations—for how we address the growing pressures around us.

The Mindset Paradox:

The greatest threat to success is avoiding failure. One of the most provocative aspects of Dweck's work is what it says about our approach to challenges. In a fixed mindset, you avoid challenging situations that might lead to failure because success depends upon protecting and promoting your set of fixed qualities and concealing your deficiencies. If you do fail, you focus on rationalizing the failure rather than learning from it and developing your capabilities. With a growth mindset, you focus on learning and development rather than failure and actively pursue the types of challenges that will likely lead to both learning and failure. This sounds a lot like the questing disposition we have discussed previously.

Mindset profoundly shapes key business practices:

Business Ecosystems. If you have a fixed mindset, you believe that there are a finite set of smart people and valuable resources outside your company. The challenge is how to identify, connect with and mobilize them to deliver more value to the marketplace—static resources tied together in a static ecosystem. The ecosystem benefits from the network effects of adding more and more participants because more diverse capabilities are connected and accessible.

If you believe that both the resources and the ecosystem itself are dynamic, then the role of the ecosystem is not just to connect and mobilize existing resources but to build relationships that help all participants get better faster. This leads to a more powerful form of increasing returns—not just network effects but new mechanisms to accelerate learning and performance improvement—as each participant learns faster as more and more participants join the ecosystem.

Talent Management. A fixed mindset leads you to focus almost exclusively on attracting and retaining talent. The assumption: each person's skills and capabilities are set. You will tend to devote too many resources to those with a perceived stock of knowledge and overlook (and eventually lose) employees with limited stocks but great learning potential. Worse, because you underestimate the value of learning and development, you won't likely get the most out of those employees you do value.

With a growth mindset, you understand that individual and organizational capabilities can be cultivated and developed, to improve performance and to expand in new directions. You focus more on talent development, creating work environments and practices that enable employees, regardless of work classification, to develop new skills and to learn by working with others, by problem-solving and experimentation.

Relationship-building. A fixed mindset fosters a zero-sum view of the world: if you win, I lose. With a fixed and finite set of value, the only question is how to allocate it. This perspective fosters conflict and mistrust and, not surprisingly, relationships governed by relative power, tend to be transactional and are rigidly defined to protect each party's share of the value.

A growth mindset fosters a broader view of the possibilities: by working together, we can create more value than if we work individually. While there are still issues around allocation, relationships are cultivated based on a goal of creating an even bigger pie. These relationships center on improving the performance of all participants, and the process of creating value together fosters trust. The levels of collaboration and trust deepen with time, creating a more valuable relationship.

Mindset may be destiny but it is changeable. While mindset has a profound impact on our ability to harness the power of pull, Dweck (displaying her growth mindset) offers hope: "Mindsets are an important part of your personality, but you can change them. Just by knowing about the two mindsets, you can start thinking and reacting in new ways."

The future belongs to those who can adopt a growth mindset. Those with a fixed mindset will likely be increasingly stressed and overwhelmed by mounting performance pressures and sustained uncertainty. Worse, the more they avoid failure, the more susceptible these individuals and organizations can be, not learning from mistakes and missing opportunities.

What assumptions do you make about the world and how do they play out in your decisions? What techniques have been useful for exposing your unexamined assumptions? Have you succeeded in actually changing your mindset?

John Hagel and John Seely Brown are co-chairman and independent co-chairman, respectively, of Deloitte LLP's Center for Edge Innovation. John Hagel writes a blog at Edge Perspectives. Their monthly column, Innovation on the Edge, explores what executives can learn from innovation emerging on various forms of edges, including the edges of institutions, markets, geographies and generations. Sign up here for an RSS feed.

What Amazing Bosses Do Differently

We all know that job satisfaction often hinges on the quality of the relationships we have with our bosses. Yet in today’s rapidly evolving, 24/7 workplaces, it’s not always clear what managers should do to create the most satisfying work experiences and the happiest employees. My research into the world’s most successful bosses has unearthed some common practices that make work much more meaningful and enjoyable. If you supervise others, make sure you do the following:

Manage individuals, not teams. When you’re under pressure, it’s easy to forget that employees are unique individuals, with varying interests, abilities, goals, and styles of learning. But it’s important to customize your interactions with them. Ensure you understand what makes them tick. Be available and accessible for one-on-one conversations. Deliver lessons cued to individual developmental needs. And when it comes to promotion, look past rigid competency models and career ladders for growth opportunities tailored to the ambitions, talents, and capacities of each person.

Dr. Paul Batalden, a professor emeritus at Dartmouth College’s Geisel School of Medicine, who previously worked under Tommy Frist at healthcare giant HCA, told me that his former boss was “such an unusual CEO” of a company that size. “You could always get to see him. He always had time.” Samuel Howard, another Frist protégé who is now CEO of Xantus Corp, added, “when you asked him to do something, he would roll up his sleeves” and work with you to get it done.

Go big on meaning. Most employees value jobs that let them contribute and make a difference, and many organizations now emphasize meaning and purpose in the hopes of fostering engagement. But this is also the manager’s responsibility. You can’t rely on incentives like bonuses, stock options, or raises. You’ve got to inspire them with a vision, set challenging goals and pump up their confidence so they believe they can actually win. Articulate a clear purpose that fires your team up, set expectations high, and convey to the group that you think they’re capable of virtually anything.

Legendary bosses like Bill Sanders in real estate, Julian Robertson in hedge funds, and Bill Walsh in professional football all communicated visions that entranced employees and left them hell-bent on success. Scot Sellers, a protégé of Sanders who went on to become CEO of Archstone before retiring in 2013, recalled that his former boss “would lay out his vision and say, ‘I would like you to be a part of it.’ You were so honored to be asked… that you just wanted to jump in and say, ‘Sign me up!’”

Focus on feedback. A 2013 Society for Human Resource Management survey of managers in the U.S. found that “only 2% provide ongoing feedback to their employees.” Just 2%! Many bosses limit themselves to the dreaded “performance review” and often mingle developmental feedback with discussions about compensation and promotion, rendering the former much less effective.

As I’ve written elsewhere, some organizations are changing their ways, but even if yours sticks with traditional reviews, you can still supplement that with the kind of continuous, personalized feedback that the best bosses employ. Use regular—at least weekly—one-on-one conversations to give lots of coaching. Make the feedback clear, honest and constructive, and frame it so that it promotes independence and initiative.

Hedge fund manager Chase Coleman remembered that his former boss and backer, Tiger Management founder Julian Robertson, was “very good at understanding what motivated people and how to extract maximum performance out of [them]. . . . For some, that [meant] encouraging them, and for others, it [meant] making them feel less comfortable. He would adjust his feedback.”

Don’t just talk… listen. Employees tend to be happiest when they feel free to contribute new ideas and take initiative, and most managers claim they want people who do just that. So why doesn’t it happen more often? Usually the problem is that bosses promote their own views too strongly.

Employees wonder: “Why bother taking risks with new ideas when my boss’s views are already so fixed?”

The best leaders spend a great deal of time listening. They pose problems and challenges, then ask questions to enlist the entire team in generating solutions. They reward innovation and initiative, and encourage everyone in the group to do the same.

Football coach Walsh went out of his way to encourage input not only from his assistant coaches, but also from the players themselves. He did this before the game, during the game, and afterwards when watching game film. This more collaborative approach probably had something to do with his track record with the San Francisco 49ers: six division titles, three NFC Championship titles and three Super Bowl wins.

Be consistent. Who could be happy with a boss who does one thing one day and another thing the next? It’s hard to feel motivated when the bar is always shifting in unpredictable ways and you never know what to expect or how to get ahead. So be consistent in your management style, vision, expectations, feedback and openness to new ideas. If change becomes necessary, acknowledge it openly and quickly.

Kyle Craig, who worked with restaurant impresario Norman Brinker at Burger King in the 1980s, remembered his boss’s consistent humility. “He was never unwilling to admit his failures and mistakes, which puts people around him very much at ease.” Bill Walsh, meanwhile, came across as consistently confident. As former 49ers wide receiver Dwight Clark remarked, “There was just an attitude. He walked with a strut almost—not cocky, just very confident.” These superbosses had dramatically different approaches, yet both worked well because they were consistent.

No behavior a boss adopts will guarantee happy employees, but managers who follow these five key practices will find that they will help improve well-being, engagement, and productivity on any team. The common denominator is attentiveness. Pay close attention to your employees as individuals.

Take that extra bit of time to build their confidence and articulate a vision; to provide constant, ongoing, high quality feedback; and to listen to their ideas. And ensure that your own messages are consistent. Is it hard work? Yes. But it’s worth it.

Sydney Finkelstein is the Steven Roth Professor of Management in Dartmouth’s Tuck School of Business and the author of Superbosses: How Exceptional Leaders Manage the Flow of Talent (Portfolio/Penguin, February 2016) from which this article was adapted.

Tuesday, January 26, 2016

What it takes to be a great leader

The world is full of leadership programs, but the best way to learn how to lead might be right under your nose. In this clear, candid talk, Roselinde Torres describes 25 years observing truly great leaders at work, and shares the three simple but crucial questions would-be company chiefs need to ask to thrive in the future.

Roselinde Torres

Leadership expert

BCG's Roselinde Torres studies what makes great leaders tick — and figures out how to teach others the same skills. Full bio

Good Strategy/BadStrategy: The Difference and Why It Matters

Video - http://www.youtube.com/watch?v=UZrTl16hZdk

Speaker(s): Professor Richard Rumelt
Chair: Professor Gordon Barrass

Developing and implementing a strategy is the central task of any leader. Richard Rumelt shows that there has been a growing and unfortunate tendency to equate motherhood and apple-pie values and fluffy packages of buzzwords with "strategy."

Richard Rumelt is the Harry and Elsa Kunin Professor of Business and Society at UCLA Anderson.

You are a leader

Monday, January 25, 2016

ANCILLARY BUSINESS OPPORTUNITIES

In almost every organization in which I have been involved, ancillary business opportunities have often provided, what I describe as, low hanging new revenue sources.

In most of our businesses, our primary focus is on the mainstream products and services our companies offer. These provide the bulk of any organization’s revenue growth. They are the mother nest business. We train our sales forces to doggedly pursue growth in these revenue centres. Our sales staff is rewarded on their success achieving their targets. But what would happen if we stood occasionally and objectively looked at our operations and analyzed the operations of our clients with the objective of identifying what else we could be doing with the assets we already have to provide additional products and services to the client. Let the thought process move in every direction in search for new opportunities. You might be amazed at the revenue opportunities that exist which require very little additional investment and could represent significant high margin business.

I use several key parameters when prioritizing ancillary opportunities:

Is there additional revenue to be made that we ordinarily would not have earned?
Are we already knocking on the doors?
I recommend looking beyond just sales staff activity, examine all aspects of your operation. I recently was involved in discussions regarding a company that had service staff entering the offices of over 30,000 small, medium and large businesses on a monthly basis to fulfill their service requirements. This company was not in the delivery business but we did identify a number of opportunities where these service reps could be used to provide deliver services for other non-competitive companies.
Is the additional investment minimal both in terms of money and human resources?
Does the opportunity have the potential for synergies beyond just revenue?
There may be circumstances where your organization can provide a service that may not directly generate revenue but strengthens your brand, competitive position, customer relationships or provides opportunities for you to generate new challenges for underutilized staff or management that you may be at risk of losing.

Here are some examples based on my experience that you may find helpful:

1. When I was in charge of Trader Classified Media in Quebec, we published close to 75 classified advertising magazines, directories and associated websites that provided Quebec businesses and consumers with critical data on the used car, truck, recreational vehicle, motorcycle, boat and real estate markets. These publications and their websites were highly regarded sourcing tools or buying guides for anyone wanting to purchase previously owned items. The Trader products and services were the market leaders.

The business model was very simple. Gather photos and data on used inventory from consumers and dealers and publish it in appropriate publication or post it on the appropriate website. Every week, thousands of products were advertised. The company maintained some of the largest databases in Quebec on vehicles and real estate.

Some creative folks in the Quebec operation identified a unique opportunity to generate additional revenue using this data that they were already collecting. Trader negotiated with the government to be the government’s source of pricing data on used cars in the province. At that time, in Quebec, if you purchased a used car, when you went to the motor vehicle office to register the car and pay the sales tax, the government official would go a database to determine the “book” value of the vehicle and the tax would be based on that “book” value rather than the actual receipt received at time of purchase. Trader convinced the government that they were the leading authorities on used car prices and their database should be the one referenced by the government. The agreed upon arrangement was that the government agency would have an exclusive online access to a database that was setup and administered by Trader just for the government. The online database was constantly updated and it was accessed daily by several Quebec government departments.

The revenue generated from this online data management arrangement was significant and the margin was impressive for the following reasons:

The data was already being collected due to the nature of Trader’s ongoing mainstream operations.
There was very little additional administrative expense required to operate this ancillary business.
The service was provided online so there were none of the usual publications costs involved.

Keeping in mind that this data was being used to determine the true market value of a used car or other vehicle, it was in the best interests of the used car dealers to ensure that whatever price they charged for the vehicle it was consistent with the price sourced by the government office when the buyer went to pay their sales tax. While the dealers could not have access to the actual online database, they were given the opportunity to subscribe to a service whereby each month they would receive a pricing directory which was basically a download of the database done every 30 days. Needless to say almost every used car dealer in Quebec subscribed to this print service. In addition and annual pricing directory was made available to consumers through retail stores.

Here was a case where the data was originally sold to Trader by the consumer or used car dealer through the purchase of an ad. The data was then resold to the government and again to the dealer as well as the consumer. When you think of it, from the perspective of those consumers and dealers who paid to advertise their vehicles in Trader’s publications, they were in effect rebuying the same data they had paid Trader to advertise.

2. The real estate market provided another lucrative opportunity. We published approximately 24 real estate titles in Quebec. The primary advertisers were real estate agents selling residential properties. The site we operated was called Visinet. This site was the third most visited site in Quebec after MLS and, I believe, ReMax. The main reason for the site’s popularity was the nature of its content. The site advertised real estate from any agent or agency that wanted to advertise. Unlike most other sites, such as Remax, our site was not restricted to carrying product being sold by one company. Consumers liked the site because they could search a large portion of the real estate market by visiting only one site.

The site attracted a large number of real estate agents of all sizes. Many of the real estate agents who advertised had limited, if any, web presence beyond their involvement with our site. While this was good for our business, we realized that eventually they would want to have their own web identity and when that happened they may reduce their commitment to our site. We therefore decided to offer web development and web hosting services to individual real estate agents. This business had a lot of benefits for us

We managed to get additional revenue from the real estate professionals that we were already dealing with.
We kept these agents “in the family” as we helped them develop their own web identities. This allowed us to continue to nurture existing relationships and identify value add opportunities.
Even with their own websites, they tended to stay committed to us because we could constantly offer upgrades to their web capabilities that they could not afford to do independently.
Their exposure on Visitnet drove traffic to their own site but they liked the synergy of having their business exposed on both sites.
This made good business sense to us because we already had made the investment in web development and hosting assets. To do this work for the agents was not a huge strain or require significant additional cost. The real estate professionals selected their web design from templates we had pre-designed and hosting requires very little administration or cost. It provided us with opportunities to better utilize existing staff or add new staff that we could not have rationalized based on just our internal requirements.
The value adds we were providing solidified our customer relationships.
We created additional revenue opportunities for sales staff.

3. I was the head of business development for a market leading conference management organization. They organized over 100 conferences per year. The attendees at their conferences were professionals mainly lawyers, investment bankers. While their events were well attended, they realized that in any given firm only 1 or 2 professionals would attend an event. Efforts to attract more attendees were unsuccessful.

The answer was to assemble the proceedings from each event into a publication. Wait a few weeks after the event was over and then make the publication available to others in firms that had sent a delegate to the event. The rationale was that those who attended the event would return to their offices and discuss the event. Ideally this would stimulate a demand for the information from the event. Delegates would be able to reap the benefits of the knowledge or information they acquired from the event for a week or two before the opportunity to acquire the proceedings was given to their colleagues. The proceedings were sold to the colleagues at about half the price of the event. The only people eligible to buy the proceedings were members of firms that had sent a delegate to the actual event.

This strategy served a number of purposes:

It re-purposed the proceedings providing the opportunity to generate revenue beyond the event itself.
The margin of the sale of the proceedings was high because the costs associated with preparing the publication were quite a bit less that organizing an event.
The publication would be passed around within the respective firm and thus continue to promote not only the event but also the event organization. Basically the client was paying for the privilege to promote the event company.

4. I was COO with a new-media company that provided products and services to the “enterprise software development” community. Their website was an intriguing example of ancillary revenue generation. Those who contributed content to the site were paid based on a fee schedule that had fixed and variable elements. The company broke their content into categories (articles, news posts, interviews etc.) established a core value on each category (the company established a fixed fee for each type of content based on degree of effort....e.g. an article was worth more than an interview etc.). They paid that set amount plus a variable amount based on views of the specific piece. They would generate approximately 150 new pieces of original content/topics monthly. Their content just kept getting better and more relevant because they could continually monitor its popularity and the contributors were motivated to keep abreast of what were popular topics because it was in their best interests to give the readers more of what they wanted. The company also aggressively tagged all content (probably 4-5 tags per topic). The tagging allowed for cross referencing to items for sale such as online books (most of these books were custom written just for their audience), lead generation assets etc. They could target advertisers or product/service providers based on readership patterns. Client products or ads would be posted on pages where articles or other content appeared that contained words or phrases tagged to their product or service offering.

The company also published e-books. E-book titles were selected based on an analysis of the traffic. Since the site had a B2B focus, the content of the books tended to be need-to-know information. The writers that created the online editorial content were the authors of the books. Management tracked a given writer’s popularity with readers and because of their tagging and tracking they could identify which of the writer’s subject categories were most popular. The writer would then be contracted to write a book on a specific topic. The books were then sold as e-books or they could be purchased in print through Amazon. Companies that sold products or services that were relevant or related to a book’s content were invited to sponsor the book if they wished. The sponsorship deal could take 2 forms. One form was for the sponsoring company to pay a sponsoring fee. The other arrangement would be for the company sponsoring the e-book to have it made available as a free download but the e-book customer was required to register for the download and the company sponsoring the e-book got the registration. The client company paid the site operator for the leads that were generated.

By exploiting every possible ancillary revenue opportunity. This company site generated several millions of dollars relying very little on traditional advertising revenue.