Category: Insight CXO Blog

July 16, 2015

Eliminate The Fear Of Focus

Businesses have natural growth curves just like people or animals or plants: When they’re new, growth is exponential, but within a short time it slows.

Most small to medium-size companies start with very healthy growth. Systems and processes go on the back burner as the drive for new customers and new revenue streams heats up … but then revenue plateaus, seemingly for no reason.

There is usually an inflection point where the growth stops and complexity begins. It’s the nature of how companies start and grow, and it’s not a reflection on the founders or management. But it’s a major reason why there are so few U.S. companies that exceed $10 million in revenue.

The most common root cause for this plateau is that the company is trying to do to many things well, and operationally it’s spread so thin that mistakes happen, re-work is abundant and the once-common referrals stop coming in.

How To Break The Plateau

The answer to this problem is Market Focus. The management team must Crush the Fear of Focus with a Breakaway Move to return to Gazelle-like growth … 15% per year or more.

A Breakaway Move has 4 major components:

Extreme Focus on the Core Customer’s persona.
Extreme Focus on the market segment you want to own – a segment that you’ll be aggressive with a “play to win” (vs. a “plan not to lose”) mindset.
Extreme Focus on solving your Core Customer’s NEEDS – not WANTS – within the market segment.
Extreme Focus on operationally tuning the organization to deliver like crazy for this specific customer group.

Don’t stop doing all the work you are doing for existing clients and risk cash-flow problems. Instead, intentionally focus all of your sales and operational focus on a Breakaway Move that will result in more revenue, higher profit margins, more referrals and (best of all) happier employees.

Work with your team to discuss these 4 steps; you’ll begin to overcome the Fear of Focus once a real plan is in place. You’ll naturally start saying “no” to more things and “yes” to the opportunities that drive your economic engine.

(Image: Dimitris Kalogeropoylos / Flickr)

June 25, 2015

Win With Awareness And Focus

I’m just beginning to mountain bike race again after recovering from a second neck surgery. Rather than restarting in a class better suited for my racing re-entry point, I have chosen to line up against the top Pro/Elite racers in the region. These dudes are FIT and FAST…. “dialed-in” as we like to say in the mountain bike racing world.

Last week was my third race back in the mix, and historically I’ve done pretty well on race No. 3 coming back from time off. Not this time. I’m starting to race

I was in third place going into the woods on lap one and hung on for about 15 minutes… then I faded fast and lost the front group. I was in the dreaded “no-man’s land” for most of the race. I was out there by myself with no rabbit to chase (I could not see the front group), and the group behind me was out of sight as well. This is where the negative side of the brain really kicked in.

“This hurts way too bad, it’s too hot, they guy leading out is 20 years younger, pull over after this lap and quit!”

Fortunately I didn’t listen.

Lessons For Business

Just like in a mountain bike race, it takes AWARENESS and FOCUS to win in business when you feel like you are in “no-man’s land” and want to quit.

1. Awareness – Separate yourself from your situation and accept the fact that your negative brain has taken over the conversation. Replace the negative soundtrack with a positive one. Remind yourself why you’re racing, why it’s important to finish the project. Think of the lessons you’re learning that will help make you faster in the next race, the next project… or in the next quarter.

2. Focus – Refocus and re-energize by being aware of where you are and giving yourself control to have a good outcome, even if it means making an adjustment to your intended final result. In my race, I changed my focus from leading the race to not letting the group behind me catch me. And with this focus, I was able to raise my heart rate, get the adrenaline flowing again and push down the pain.

2.5. Never Quit – In racing we call quitting a DNF (did not finish). Always finish the race, no matter what. There are more lessons in not quitting than there are in winning. One thing I have learned is that when the race is over, it’s over. No going back. No second chance to change a decision. And the pain is gone in less than 10 seconds. Don’t let your negative brain win, though it’s very convincing. We are hard-wired that way, but a key to success is overcoming it.

In our professional lives, even with the best plans and preparation, things don’t always go the way we plan. Sometimes problems are just speed bumps that slow you down, and sometimes they seem like roadblocks that make you want to quit.

But ultimately it doesn’t matter how large the obstacle is. When things aren’t going as you’d envisioned, tap into your Awareness and Focus, shut down the negative brain, keep going and find a new way to win.

(Image: “MTB downhill 19 Stevage” by Steve Bennett. Licensed under CC BY 2.5 via Wikimedia Commons)

June 18, 2015

6 Questions To Crush The Competition

In today’s globally connected and competitive business climate, it’s no longer enough to look at strategy on an annual basis. Nowadays, every single month executive teams need to integrate strategy development within the business planning rhythm.

The key to unlocking strategy is answering a powerful question that gets the team thinking in unique ways. But a common “stuck” in strategy development is figuring out the right question to achieve your Breakaway Move to crush your competition. Answers are easy; getting the question right can be harder. Here are 6 questions to ask your team during strategy brainstorming sessions that can unlock hidden value inside your business.

1. Where is the next battle going to be in your business?

A good example is Facebook’s massive focus on mobile after they went public. Facebook CEO Mark Zuckerburg’s daily question, “how are we going to leverage mobile,” became his, and his company’s, daily question. Clearly, it’s working.

2. What has been tried before, either by your company or by your competitors, but did not work?
There are so many variables that can make an initiative really stick vs. flat-out fail. Failure does not always mean the idea was not good. For example, it could have been the wrong person leading the charge, market conditions might be different, technology could streamline the process, global platforms like LinkedIn and Facebook could accelerate growth.

3. What two or three existing things in your business, things you are already doing, can you combine?
This is one of my favorites. Take two existing things and create something original. What product and service can you combine and create a unique new product, service or program?

4. When your company wins, what other companies are impacted in a positive way?
Think about what relationships you can create – or what product offerings could you integrate with – to expand your market faster by leveraging other people’s trust relationships? I looked at office space this week to handle our expansion. I could not help but think about all the other things signing a lease would trigger, things like construction, IT, phones, furniture, etc. Building relationships with those companies can result in more referrals to your business.

5. What is fragmented in your market, and how could you coordinate it?
Think about what Uber did for taxi services and what Airbnb did for housing rentals. What is messy, hard to do, clunky, expensive or frustrating in your market, and how could you fix it? What product, service or platform could you create?

6. What can you be the only option for in your space?
Think about what parts of your business operations are hard for someone else to reproduce or copy. For example, there are several business coaches in the Charlotte metro area. But only Insight CXO has a team in place that can help execute the business plan in three areas. The Promise – what makes your firm unique and what is the sales engine to generate revenue? The People – is your team healthy and aligned and do you have systems in place to hire and keep A Players? The Process – do you have core processes documented and measured to make them better, faster and cheaper… with less drama?

Remember that your competition is not asleep behind the wheel, so your team has to be looking through the windshield and down the road as far as possible. Try asking these 6 questions in your next monthly executive planning meeting, and see if you can figure out the strategy – the one that will give your business the boost to crush the competition.

Image: Jingoba / Pixabay

June 11, 2015

Real Leaders Find A Way

Getting Core Values right in a business is the #1 way to build a strong and enduring Culture and is the foundation upon which an enterprise is built. Having a list of cool Core Values on a website – and really integrating them into the daily life of the organization based on intentional actions – are two different things.

EFI, an Insight CXO member with 80+ employees, finally nailed their Core Values and actions plans this week during their Q3 Quarterly Planning Session. We started the process in January, and I thought it would be helpful to share what a process can look like in reality. Month 5 is where this gets powerful.

Month 1 – Learn what a Core Value is and use sticky notes to generate a list of potential values.

Month 2 – Review the list and test it against the following questions.

Are the Core Values alive in the company today?
Would you fire an offender for repeated violations?
Would you take an economic hit to defend them?

Some values are great attributes, but don’t make the Core Values cut.

Month 3 – Finalize the 3-5 final Core Values. We know the right values are identified, but the wording is not perfect.

Month 4 – Get the wording right for the Core Values, and get clarity on the specific behaviors and actions that support or violate each one. Begin thinking about how the values will be integrated into the company.

Month 5 – Roadblock!!! EFI’s planning team was supposed to start implementing the Core Values, but even though the values LOOKED right, they did not FEEL right to the team. The team was concerned the employees would not embrace the values and might even reject them. This is a common FEAR in rolling out Core Values that nobody talks about.

Here’s where EFI knocked it out of the park. Admittedly, the team was a bit discouraged, so they really dug and – with great focus – re-worded the values. They did not change the values, just the labels. Here’s what they came up with:

MAKE A DIFFERENCE – This is their overarching, one-phrase Core Value.

Respect every Individual

Lead with Humility

Focus on the Improvement Process

Assure Quality at the Source

Winning Attitude

To help everyone remember, they turned the first letter of the Core Values into this mnemonic: Real Leaders Find A Way.

Month 6 – Create a list and an action plan to integrate the Core Values into the company with real excitement. I will report back in a follow-up blog post on the cool and innovative ways they implement the Core Values.

EFI’s Core Purpose is To Inspire Through Innovation … I can’t wait to see what they do next!

My “One Word Close” at the end of our Q3 Quarterly meeting was GRATEFUL. I’m grateful to be EFI’s coach and get to witness a team who really cares about their employees and was unwilling to move forward with Core Values that did not 100% meet their standards.

Sometimes as a coach I learn more from my members than they learn from me. And I’m very grateful for that.

Image: Flickr

June 4, 2015

Stop Gambling On Hiring Decisions

Hiring the right person can seem like one of the most risky things you do. On the most basic level, you’re looking for someone who has the skills for the job, but – especially in a growing company – that person must be motivated, share your Core Values and work well with the other members of your team.

When you hire someone, you’re making a financial, organizational and emotional investment in them and your business. And when you take the risk to invest in a person, you need the best possible likelihood of that investment paying off for your company.

Although building a team of A-players is one of the most important things you do for your business, the typical interview process isn’t the best way to determine whether the person who looks great on paper and shines in a face-to-face will pay off. This is why Behavioral Assessments are an important part of top Talent Management and Organizational Development programs.

Behavioral Assessments allow us to look deeper into what criteria will make a role successful, and which candidates have the highest likelihood of filling that role well. The assessments look at three key areas of a person:

their behavior,
their motivators and
the core skills/competencies they can bring to the job.

Add Power To Your HR Program

Here’s how this can add power to your human resources program. In a typical job interview, you get just one or two hours to get to know someone. By adding Behavioral Assessments, you get an inside view of the whole person. It may also make that 1-2 hour interview even more meaningful, because you can ask questions that will better help determine whether the person is the right fit, particularly whether his or her personality and internal drive is the right fit for the role and your organization.

Behavioral Assessments are also a valuable tool to help current employees thrive in your company. They can help show where a person has opportunity for growth within the position, as well as whether changes can be made to better adapt to their behavioral style and make them better performers.

The information we can gather from Behavioral Assessments can be used in many ways, including increasing personal awareness, determining fit in a role, building development/coaching plans, defining what is needed for a particular role, and identifying the right candidate – someone who will fit the needs of the role and be happy in it over the long term.

Benefits of Behavioral Assessments

Some of the ways Behavioral Assessments can change how you look at hiring and performance planning include:

You will be more equipped to make informed decisions that will be best for the company and the candidate.
You’ll be able to more easily weed out ineffective candidates.
You’ll be better able to find the right person who can hit the road running and be more effective faster.
You’ll help your employees understand what is expected of them and enable them to perform at a higher level.
You’ll be able to target performance incentives on the things that most motivate individual members of your team.

Behavioral Assessments are an extremely valuable part of your overall Talent Management and Organizational Development strategy. Whether you’re looking at hiring or staff development, consider whether adding Behavioral Assessments might be a Breakaway Move that makes your staff happier, more effective and more valuable to your business.

May 28, 2015

Growth-Related Chaos? Take A Step Back

Rapid growth is exciting … and chaotic. When your growth strategies start paying off, the processes that worked well when you were smaller can break down as you add clients, revenue and employees to your business. As you get more decision makers, with differing opinions on how to do things, your processes can become so cumbersome that they threaten to slow your business and increase your risk.

This was the situation faced by one of our clients, a global pharmaceutical services company that saw an enviable 880% organic growth rate over the last four years. Its employee headcount and active customer list were growing beyond capacity, and they had a serious case of growing pains. They knew their processes weren’t working anymore, and they asked us to help them retool to both absorb growth and continue doing what produced their steep growth in the first place.

Take a Step Back

Anytime you’re looking for new, better ways of doing things, you must first define how you’re currently operating to figure out what’s really causing your problems. This process of defining your core processes – a group of related activities that transform various inputs into an output that adds value to the customer – is the best way to ensure that the solution you adopt is a Breakaway Move that supports your overall strategy.

To get there, step back and 1) look at processes to see how things are currently done; 2) determine if new systems would improve efficiency; and 3) challenge your processes and see where there might be opportunities to make them leaner.

Here’s what that looked like with the pharmaceutical services company we’re working with.

First, we had to get clear direction on what problems needed to be solved. We had to get the team laser-focused on the outcome and make sure we didn’t try to “boil the ocean”– to try to do more than was realistic or necessary.

Next, we defined the cost of poor quality – the things that could be negatively impacted by not making changes (for example, customer satisfaction, employee effectiveness, compliance).

Then we recorded all of the existing processes. When we began, the team thought they had 10 processes, but once we really dug in and challenged the team and each process, we found there were over 20 different processes in place, with multiple touch points and people involved. We got there by breaking each process down by the following components:

Define the process: What 1-2 sentences does the process owner use to describe it?
Inputs to the process: What steps, actions, templates or tools are needed for the process to start?
Process steps: What is the activity and/or transformation that takes place?
Outputs: What is the result of the activity and/or transformation taking place?
Controls: What manual or system controls are in place? What’s on your wish list for the future?
Risks: What risks are in the existing process?
Regulatory requirements: Are there any U.S./international regulatory or compliance requirements that must be considered?

Finally, we took the team through a “wish list” exercise to capture all areas of potential opportunity the client didn’t have capability for, but hoped to see after they made changes.

Potential solutions were weighed against a cost-benefit analysis to ensure that what they chose to adopt (and their priorities for adoption) would provide the biggest payoff in terms of alleviating problems and making processes better, faster and cheaper.

When your processes are causing a lot of business pain, it may seem like a lot of time and trouble to take a step back to define your core processes, but it’s the most effective way to implement processes that are more than a Band-Aid, but fix your problems for the long run.

Image: Geralt / Pixabay

May 21, 2015

FUEL UP Your Growth Engine

General Electric’s GE90 class jet engine is powerful enough to power a Boeing 777 airplane in flight for over 5 hours … on just ONE engine. GE is relentless in its engineering efforts to continuously create more powerful, safe, fuel efficient and light engines. But as powerful as this engine is, it cannot produce any thrust without fuel. It won’t even start.

Every company has a growth engine. But, in reality, leaders rarely take the time to inspect and tune it up for maximum efficiency. In a business, fuel is CASH. And the number one way to increase cash is to increase PROFIT.

There are 7 Levers that influence your Profit and Cash Flow, the fuel required to rev up your growth engine to maximum thrust.

Lever #1 – Price

Lever #2 – Volume

Lever #3 – Cost of goods sold (COGS) and direct costs

Lever #4 – Operating expenses

Lever #5 – Accounts receivable

Lever #6 – Inventory or work in progress

Lever #7 – Accounts payable

It’s easier than you think to take actions on these levers and increase your Profit and Cash Flow. The Power of One is a concept that shows how doing something to move those levers either 1% (on levers 1-4) or 1 day (on levers 5-7) in a few critical areas can lead to a significant increase in Profit.

Move The Levers

The Power of One One-Page Tool allows you to calculate the effect on your profit if you can move those levers either 1% or 1 day.

Lever #1 – Price: What’s the value of increasing prices by just 1%?

Lever #2 – Volume: What’s the value of selling just 1% more units at the same price?

Lever #3 – COGS: What’s the value of decreasing raw material and direct labor costs by just 1%?

Lever #4 – Operations: What’s the value of reducing overhead by just 1%?

Lever #5 – Accounts receivable: What’s the value of collecting from debtors just 1 day sooner?

Lever #6 – Inventory: What’s the value of keeping 1 day’s less stock/inventory on hand?

Lever #7 – Accounts payable: What’s the value of paying creditors 1 day slower?

I know what you are thinking. You already know all of this!

But the reality is, most companies don’t take the time to actually measure the impact these small changes can make. You can easily add 3% to your bottom line just by tuning your engine, making small and painless adjustments.

Put the Power of One into action with a simple spreadsheet that you and your team can use to measure the impact of the changes in each Lever. Assign a person to each lever, and create SMART goals and action plans to generate more profit to FUEL UP Your Growth Engine!

(Image: Dale Coleman / Wikimedia Commons)

May 7, 2015

Scale Up Faster With A ‘Play To Win’ Mindset

One of the most challenging phases for CEOs or executive teams who start a company is to break out of the startup mindset.

In an organization’s early stages, it’s all hands on deck and everyone is a generalist, wearing many hats.

The CEO is involved in every decision and every transaction. The realities of cash constraints, funding payroll, etc. – and the whirlwind of emotions tied to them – are hard-wired into the entrepreneur’s brain.

Then, over time as the company grows, two things happen.

First, the company reaches a ceiling of complexity – things get harder and not easier. Hiring more people feels more like an anchor than a sail.

Second, the startup mindset and the emotional imprints it creates turn the founder(s) into a bottleneck, or the constraining factor to growth.

To grow, the CEO and senior team must become hyper-aware of how their past experiences can be limiters on future plans – and commit to change. Reading Scaling Up by Verne Harnish is one of the best ways to learn how to punch through the ceiling of complexity and continue to grow in a fun, healthy and drama-free way. BUT, the tools don’t work unless the CEO and senior team 100% commit to a Play to Win mindset.

What does Play to Win mean? It means NOT playing not to lose, which is an entrepreneurial trap. It’s why so few companies make it past the $10,000,000 revenue mark. To escape the trap, the next time you are having a growth- or strategy-related discussion, ask yourself and your team: “Based on the plans we are discussing, are we Playing to Win or just playing not to lose?” You’ll be surprised how the conversation – and your plans – can change with that simple question.

5 ways to create a Play to Win mindset

Be very intentional about including your team in strategic-level thinking and problem solving. It’s hard to Play to Win by yourself … you’ll need a team.

Realize that you and your team might not have all the answers. Look outside the organization for help. Hire an expert, coach, consultant, trainer, join a peer group, etc. An expense-centric mindset limits access to information and learning. Most high-growth companies are investing in resources to make big leaps.

Imagine yourself winning. As a professional mountain bike racer, I can’t achieve a podium finish without first believing I can and imagining it happen. I let myself experience the start- and the finish-line sprint. Only then can I plan my Breakaway Moves.

Use the term “Play to Win” with your team. They’ll get it. It’s energizing. Everyone loves to be on a winning team.

Create an enemy. Create a race. Create a finish line. Create competition. High-growth companies create plans to crush their competition. Flat-lined and slow-growth companies stop competing, stop getting upset when someone else wins.

Create a Play to Win mindset for you and your team, and get your company on the podium every time!

Image: Skeeze / Pixabay

April 30, 2015

6 Roadblocks to Growing Your Business

Companies often encounter barriers as they mature. Here are six big ones and how to break through them.

1. Not knowing your ideal customer

Customers aren’t all equally valuable; some can even be unprofitable. So CEO Scot Lowry of digital marketing firm Fathom, in Valley View, Ohio, had his CFO draft a profit and loss statement for each. That helped him phase out the costly customers — and identify the ideal ones, such as health care and financial services firms that need very customized service. “Our strategy is based on deep customer intimacy,” he explains. “We have to focus on select clients to deliver on this.”

2. Failing to scale systems

Many companies don’t want to invest in brand-new software for accounting, customer-relations management, and other operating systems as they grow because they’re pricey. But procrastinating will lead to chaos and mistakes when you need to tackle tasks that should be easy to do instantly, like updating customers’ addresses in all your records at once. If your company has hit 50 to 150 employees without upgrading its systems, don’t delay any more. It’s an emergency.

3. Using an old org chart

It’s tempting just to stuff this important document in a drawer and forget it. Don’t. With his now nearly 150-person team squabbling over priorities and resources, Lowry shredded his org chart and reorganized everyone into teams dedicated to specific accounts. He is listed at the bottom, with the role of helping employees serve clients at the firm, which expects $20 million in sales this year. “I stopped talking about my ‘direct reports’ and switched to calling them my ‘direct supports,’” he says.

4. Trusting your gut

In the startup phase, you’ve got to rely on your instincts because there’s no historical data to guide you. But intuition often deceives CEOs as their businesses become more complex, says Sunny Vanderbeck, managing partner at Satori Capital, a Dallas-based firm that invests in growing, profitable companies. If you’re not letting data drive decisions, such as what products to develop or which customers are worth pitching, he says, “you’re missing out.”

5. Letting your skills flatline

Companies often outgrow the founders’ ability to lead them because the CEOs don’t sharpen their management skills. “If your company is growing 30% a year, you have to be 30% better by this time next year,” says Vanderbeck. Learn from other CEOs by joining a peer group like Entrepreneurs’ Organization or Young Presidents’ Organization. “If you aren’t a learner, you are the reason the company isn’t as big as it could be,” Vanderbeck says.

6. Not investing in team training.

Out-learning the competition is a powerful and sustainable growth strategy. To get everyone playing the same music, CEOs must focus training where the company needs it most. Studies have proven over and over again that training has the highest ROI compared to any other investment a firm can make. Jeff Frushtick, CEO of industrial equipment maker Leonard Automatics, found this to be true: Training employees on Lean production resulted in a five-fold increase in profits in a single year at the 35-employee, Denver, N.C., firm. Look into training that can boost your firm’s profits similarly.

Verne Harnish is the CEO of Gazelles Inc., an executive education firm. Robert Fish is founder and CEO of Insight CXO.

This blog is adapted from a story in the May 19, 2014 issue of Fortune.

Image: Nicholas Canup / Flickr

April 23, 2015

Find Your Never-Ending Energy Source: Core Purpose

Nothing can grow without energy – not people, not animals, not plants, not businesses. Whether you’re an organism or an organization, if you don’t have enough fuel, your growth will be slow and stunted, your potential unreached.

If your business is rapidly growing (or looking to do so), you need a powerful and renewable source of fuel to sustain that growth, to maintain the willpower to execute on your strategy, to empower the A-players who have the drive to make a positive difference, not just show up for a paycheck.

The strongest fuel you can find is one you can create on your own – your company’s Core Purpose. I like to say, “It’s where the batteries come from.” It’s the organization’s unique and never-ending energy source, its reason for being. It’s the guiding star that fuels you and enables you to make your Breakaway Move™ to beat the competition.

Costner Law, a Charlotte Business Journal #3 Fast 50 company in Charlotte, NC, is very clear about its Core Purpose: Making real estate transactions easy and simple. This Purpose drives Costner’s strategy, the kind of people they hire, the technology they use, the kind of clients they work with, the way they design their internal processes, and so on. As a result of being clear on their Purpose and doing things right, Costner is on track to becoming the largest real estate law firm in the southeast.

Define Your Purpose

If you don’t have a clearly defined purpose, a good place to start is by watching Simon Sinek’s TED Talk called The Golden Circle. It’s been downloaded more than 22 million times. But be forewarned, discovering your purpose is one of the most challenging strategy developments you will make. Not because it’s so hard, but because it’s so uncomfortable. Figuring out why your company exists becomes emotional and it engages the limbic part of the brain that does not have language. It’s where gut feelings come from. It’s why you might like one car over another, even though the other has clearly better specs. One just feels right to you … you just connect with it.

Ask Five Times

Another method is to start with a simple statement describing what your business does, then ask “why is that important” five times. Ask yourself and your leadership team: “why is that important? – why does that matter? – why is that important? – why does that matter? – why is that important?” This should reveal the organization’s Core Purpose. If you think you have gone too far, just back up one level. You’ll know when you got it right, because you will emotionally connect to it. It will feel right.

Reach for the Stars

Just like a star, Core Purpose is not something you can actually reach but is something that keeps you on the right path and constantly motivated. So, to find your never-ending energy source to sustain your journey, develop and leverage your Core Purpose, and set your course for the stars!