A tale of two CEOs and the management of pain

This is the tale of two CEOs, one of them unfortunately….me.  It’s a story of how people handle unusual situations when selling to the top – an executive of a prospective customer.  And the stories couldn’t be more different.

Recently a CEO friend told me her story of a dinner with her director of business development and an executive of a major company, a candidate for a large sale.  As the dinner progressed, he started, and then continued to excuse himself from the table,

looking paler each time.  After several of these, upon his return, she asked him if everything was OK.  He responded, like most of us would, that all was OK, and that he was
having a bit of trouble breathing, would probably have to leave the dinner early, and drive home.

She took one more look, and went into decision mode.  “No, you aren’t fine,” she stated. “Give me your car keys; we’re going to the hospital.”  He reluctantly acquiesced, and she tended to him as her director drove all three to the hospital.  She had him call his wife on managementofpainthe way to meet them at the hospital.  As they waited in the emergency room, after more episodes, his breathing finally became easier, and by the time the doctor saw them, he could find nothing of worry, ruling out stroke or heart attack.  Our CEO then returned to the restaurant and met with the chef to have him list all the ingredients from the meal the executive was eating.  The problem was, as you guessed, an undiscovered food allergy, with a possible ambulance ride averted and a happy ending.   The executive even tells the story now that the CEO may have saved his life, because he was unwilling to own up to the fact that his breathing was so very difficult.

Now, I would not have been so fast to take charge. Maybe it’s a guy thing.  I would have been thinking about the sales relationship and the sale, and would probably have let the guy drive home, acknowledging his discomfort, and ending the dinner early.

This leads me to my story.  Years ago, I was in the process of selling a $125,000 system to a well-known baseball hero who owned his namesake hotel in St. Louis.  Flying on the red eye to make a morning appointment, his hotel bus driver dropped me off in the dark a few feet beyond the lighted portico. I stepped off the van into… a recently dug pit about two feet deep, and broke my foot in the fall.  What pain!  I tried to sleep in the room they gave me, and managed to make it to the 10:00 AM meeting with the very well-known sports figure and sales candidate.  He saw me drag my leg into the conference room, made no comment, but asked if I would like a tour of the hotel.  “Of course,” I said, ignoring the pain and dragging my foot the entire way through the tour.

Well, I didn’t make the sale.  And I didn’t sue the hotel.  I was in selling mode and nothing was going to detract from my focus or reputation.  I sure was not admitting to the problem or seeking recourse for the obvious flagrant error by the hotel in not marking the excavation.

Who was right?  Well, I should have led the meeting with my story of woe in order to protect others.  The other CEO took charge, and made a friend of both the potential customer and his spouse, who she called as they drove to the hospital.

Is it a guy thing?  Is it conditioning us to put things in perspective regardless of the personal outcome, including a lost sale?  I think about these two examples now, and have concluded that there are some traits of a great CEO that cannot be learned easily.  Putting others above self, and sacrificing a short term goal is not easy for a type ‘A’ driven entrepreneur when the stakes are high. But it is the right thing to do.

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Protect your outlier innovators.

Here’s one for executives of technology companies, or any company with next generation products in mind.  As your business grows more complex and there are more employees to manage and more customers to care for, slowly you will notice that more and more time of your chief innovation officer or system architect or R&D department is spent focused upon enhancements in response to needs of the user base.

The company’s most valuable technical visionary, the person tasked with staying out in outlierinnovatorsfront of new technologies, developing the next generation of new products, and thinking “a mile above the box” is drawn into working on projects that are incremental to the product and to the existing business.  Often he or she will approach you and state that the work has become more boring, and that there is no time left for creative thinking or next generation experimentation and development.

[Email readers, continue here…]  That’s one scenario. In many companies, there are people who are quiet geniuses, wanting to work on projects outside of the daily focus of the department or company.  Managers sometimes view this behavior as non-strategic or wasteful, and even sometimes will isolate or reject these outside thinkers outright.

Or finally, you may want to start a project using the next generation of tools to produce an entirely new product – but your development resources are all tied up with projects to enhance existing products.  Whichever of the three scenarios may apply to you, it is a red flag for your future if you condone the status quo, and allow the company to devote all of its resources to existing products and simple enhancements.  Your best creative thinkers will leave you, looking for more challenges than you can offer.  Your competitors may already be working on the next generation of product, as you remain stuck in the mud, even if focused upon serving the customer base with outstanding service and rapid feature rollout.

It is up to you to decide if research and development for advanced or next generation products is a strategic priority for you and your company.  If so, you have a duty to protect these future-focused developers or architects, removing or reducing the pressure of reactionary development work, and isolating them in a space that prevents constant interruption by others focused upon day-to-day work.

Technology companies are prime targets for this problem.  Every six to ten years, there is an entirely new platform to focus upon for the next generation of products.  Just think of the computer and software fields.  First there were mainframes, followed by minicomputers, then client-server systems, then peer-to-peer networks, then the Internet, mobile devices, cloud computing, and now mesh networks.  Each generation required new tools, rewrites of software, creation of new user interfaces.

And in each generation, there are dominant players from the past generation that fade as new companies not inhibited by the demands of their user base leap beyond the last generation’s leaders with new systems for the new age.  Leaders of significant size are sometimes made irrelevant over time, or pivot into service organizations, or absorbed into growing next generation companies.

What happened to Wang, Sperry-Univac, Burroughs-Unisys, DEC, RCA, and hundreds of early generation leaders?  Their CEOs did not provide enough of a safe environment and enough resources to their creative geniuses to make the leap into that next generation.

It is a cost of doing business that you cannot ignore.  Not only providing resources for next generation development, but protecting the people performing those development tasks should be one of your strategic priorities.

Posted in Surrounding yourself with talent | 2 Comments

Fire yourself. Rehire a new you.

When a new CEO or manager is hired into a company, for a while lots of energy flows from the top and new ideas seem to be generated daily.  It is one reason not to fear the unknown when upper level management long in place turns over, often leaving most everyone worried about the future of the company and for their own prospects.

Even the best of us fall into a routine in our jobs.  It is human nature to do so, but it is not a sign of our best efforts.  We recall the enthusiasm we had for the job earlier, how we couldn’t wait to get to work, or initiate a new plan, or share a new idea.  We can be that Job dismissal noticeperson again.  It just takes a bit of effort to change our mindset.

We may run out of fresh ideas after a time; most of us do.  But there are sources of great ideas right next to us in our own company, or available to us from fellow CEOs, or from industry consultants with a broader view of the landscape, uninhibited by our need to meet daily obligations.

One of my most respected CEOs arrived at his monthly CEO roundtable meeting years ago and announced that he had just fired himself.  He had reconfigured the company, delegating many of his previous responsibilities, and rehired himself in a new position more strategic to the company, retaining the CEO title.  It was an attitude adjustment, self-initiated. He credits that effort as the start of his company’s real growth, resulting in a great public company, dominant in his field.

Another CEO described how he drove to work each Monday morning forcing himself to think of what he would do if he were a newly hired CEO, fresh on the job that day.  He surprised himself with his many fresh ideas, just with that change of perspective.

However you do it, refresh yourself.  Be that new CEO – but with all the knowledge and skills you already have as a head start.

Posted in Growth!, Surrounding yourself with talent | 3 Comments

Are you too emotionally involved in the decision?

Negotiating an agreement, especially one that involves personal gain, is tough for the person personally involved.  There is too much to lose to be objective, to be willing to walk when terms go upside down.

It is my experience that you should have an expert negotiator with you or even in your place, whether from your board or an employee or outside professional such as an attorney – when the issue is personal.

Think of buying a car, for example. If you are looking for your spouse or offspring, it is Fear_decision1probable that they’ve picked out the perfect car and are ready to take it off the dealer’s hands.  Assuming that you are the elected as or self-assigned to be the negotiator, the last thing you want is to have them in the room while you haggle over price.  Advantage other side.

Negotiating on behalf of business associates too personally involved in a transaction: it’s a role I’ve played tens of times over the years. There are the several that were disengagements between partners threatening to sue each other for perceived wrongs.  There’s the sale of a company, where as a board member, I asked the CEO to name his asking price and then go home and wait the result.   There’s the disengagement with an angry employee threating to sue the company.

All of these are personal issues to a CEO or founder or entrepreneur.  And all of them draw that person emotionally into making decisions that cannot easily be objective, or into finding solutions that are mutually acceptable without the torture of constant re-explanation of opposing positions.

A smart lawyer, they say, should never represent himself.  And yet, lawyers are trained in the art of negotiation.  You should be careful not to miss the point of that admonition.

My oldest son learned to accompany me, but keep a deadpan look on his face as I negotiated for his ideal car, completing the purchase in minutes.  The CEO described above endorsed his company selling for twice his asking price, after his absence helped the negotiation to be completed within an hour.  The partnership described above dissolved without suit after a personal visit by the negotiator without the first partner present resulted in settlement within an hour.  The employee just described  accepted a severance check in trade for a release, without the emotion of arguing out old issues between employee and employer.

Are you too emotionally involved in a decision?  Consider the advice lawyers give each other, and find a surrogate to argue your case.

Posted in Protecting the business, Surrounding yourself with talent | 1 Comment

Help your employees to grow through their position.

When we accept the work commitment from a person we hire, we make a pact with the new employee that often stops at agreeing to pay for service rendered and to provide a safe working environment.

There should be more than that.  With some people you hire, you know you are just renting their services as they pass through your organization, aimed at a higher calling.  Others want to know that they are signing on to a career, not a job, and expect to move up within the ranks or on to a larger company that can accommodate their goals.

A recent statistic I saw surprised me. But as I thought of examples of people I know, it Idea concept with row of light bulbs and glowing bulbseemed more accurate than I would have imagined. The average new college graduate today will work thirteen jobs in his or her career, in an average of five different fields.  Ouch!  What happened to a job for life?  How can employers expect complete loyalty if there is no clear upward path to the top for the best new hire?

[Email readers, continue here…]  The answer coming from the best of breed in corporate personnel management is to form a trusted bond with that openly-identified employee, helping that person to manage his or her career within and preparing to follow the company experience.  If a superstar agrees to work for you for a period while learning the ropes to move to a better job elsewhere, assuming that there is candor in the communication by the employee and a level of trust in and by the employer, it is perfectly proper to offer to help that employee succeed. The pact between employee and employer is that the employee gives the best possible service to the company, in return for the company helping the employee to grow in, and perhaps beyond the position.

Especially with young entrepreneurial CEOs, this feels to them like a stick up.  “Give me your money, and I will work only until I find a better job.”  And that attitude might be warranted if the employee just performs to the minimum required level, marking time to the next opportunity.  But if the person has skills and knowledge that the company needs, there is the basis for a fair trade of talent and time for a later organized, positive move to the next level outside of the company.

With that openly positive corporate attitude, you can celebrate the growth of the employee with a party as the person graduates, instead of either feeling anger when an employee resigns with short notice, or being suspicious that the employee will leave with trade secrets in tow.  Certainly other employees will see the supportive behavior, understand the company’s contribution to the career of this upwardly mobile employee, and celebrate not only the graduation event but the great culture of the company itself.

Posted in Surrounding yourself with talent | 1 Comment

Don’t manage with “what” without “why!”

Empowering your direct reports with the reasons for your orders gives them incentive to act, motivation to accept authority, and purpose behind action.  I try to teach this with the simple phrase that is the headline of this insight.

Think of the last time someone above you in your business or personal life gave you an order to do something that seemed either illogical or of low priority – to you.  If you accepted the authority of the person giving you the order, you just performed the task, probably either wondering if that person was nuts or whether you just didn’t understand the reason for the task.

What if that person had told you why it was important to be done, in clear terms that question-markrelated to that person’s priorities?  Wouldn’t you be more prepared to perform the task knowing the context?

[Email readers, continue here…]  I just spoke with an old friend who is in sales.  He lamented the fact that his boss recently layered several more sales reports on him to complete each week, reducing his selling efficiency.  How many times have we heard this complaint, especially from sales people?  I suggested that he go back to his boss and explain that it would be more than just helpful to know why these new reports are needed, that even though the salesman has no need to know, it would certainly make doing the work less of a chore.  And by the way, I offered, if the boss could not explain why, there might be an opening to advance the argument that the trade in time between completing the new report and reduced sales call time might be worth a revisit of the order.

How many tasks, reports, and rules hang around the necks of people throughout a more mature organization, which remain as “what” without anyone remembering “why?”   It is probably as effective a tool for the manager as for the recipient of the order, to explain why when telling what to do.

Your employees will appreciate the small extra effort, better understand the reason behind the request, and perform the act with more enthusiasm.  What’s not to like about that?

Posted in Surrounding yourself with talent | 1 Comment

Do you tell your direct reports HOW to do a job?

Unless your job is to teach, attempting to tell your direct reports HOW to do the job you’ve asked or ordered them to do will be a disincentive, will remove some of the authority you’ve delegated, and definitely reduce their motivation to act and lead.

Think for a moment of sometime in the past where someone directed you to do a job, then launched into a lengthy explanation of how you should do it.  How did you feel at that moment?  I’d bet that you were either silently or openly angered that the person assumed that you didn’t know how to do a job even before asking if you did.  This has been true since we were kids, and dad told us to rake the leaves, and then launched into an Managing_forceexplanation of what tools to use and how to do the job.  If that happened to you in some form over the years, I’ll bet you pushed back immediately with something like “I know how to do that, Dad.”  You felt diminished by dad’s assumption that you didn’t know how to do the job.

[Email readers, continue here…]  The same is true in business, even if there is less drama and far less confrontation exhibited by the respondent.  It is perfectly logical for that person to ask for help, or to a lesser extent to immediately offer it without a request.  But it is a grand disincentive and personal affront to force upon a respondent a short lecture on how to do a job without being asked.

Most of us would think that it is just good management to provide another tool – teaching how to complete the task when asking for it to be done.  Not true. Remember dad’s doing that to you years ago.

It is a lesson in understanding human pride and dignity.  Don’t include “how” when you tell a person “what” and “why,” unless they ask for help.

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You are watched more closely than you think.

Ever had a manager above you who said one thing and did another?  At least once?  Or in a pattern of repeats?  Well, you’re not alone.  Did you think less of that person for it?  Would you follow that manager to the ends of the earth?  Well, almost everyone has had multiple such experiences with a senior manager.  And most people think less of that person than before.

On the other hand, think of the professional you most admire.  Do you know of any times that person has made promises to you and missed on delivering them?  The difference comes down to trust and respect.  We lose both when we catch someone, especially 2014-0329_OxyTEDx-0276someone above us, acting differently than his or her self-proclaimed rules, or even violating company rules.

[Email readers continue here…] It is one of the most vital elements of good management – restraining oneself when rank would ordinarily grant special privilege, and instead acting as one would expect a subordinate to act.

Black and white examples include taking supplies home, using company time to perform personal duties (if not permitted), and even traveling business class at company expense on short trips.  Larger and more important examples involve direct promises that are broken, such as review dates with implied raises, or promised follow-through on an issue of great urgency to person receiving the promise.

Everything you do as a manager is watched by one or many.  The very culture of the enterprise is shaken when someone in power gets away with bending or breaking the rules expected to be adhered to by all.  Why have rules, or a company handbook, or new employee orientation sessions if the actions don’t match the words?

And once violated, it is almost impossible to retract the action.  That should make us think twice before taking small liberties.

Posted in Surrounding yourself with talent | 4 Comments

Stay in touch with your investors.

Investors as a group have a common gripe – almost universal.  Information flows from the company irregularly, in fact most often when the company is urgently in need of more money.

Investment documents usually call for quarterly reporting by the company to the investors.  Less than a quarter of companies receiving early stage investment voluntarily fulfill this promise.  Usually, one or more of the investors is placed on the board as a requirement of the investment documentation.  The entrepreneur often expects that Raising moneyperson to keep fellow investors informed.  And sometimes the board member does perform the service.  But most often, the CEO or founder has a much better idea of the flow of quarterly activity than a board member meeting monthly or less often, and for a relatively short period of time.  More importantly, the investors want to hear directly from the CEO.

[Email readers, continue here…]  Many times, companies need another round of investment, and the first people approached are the same ones that invested the first time.  If they have not been kept informed about the progress of the company, and if they are surprised by the fact that the company has run out of money more quickly than planned, it is a much harder sell to obtain the next round than the last.

Rob Wiltbank, Ph.D., of Willamette University, is one of several academics who have followed multiple rounds of investment in a significant group of early stage companies.  The typical finding is that second round investments are not as profitable for the investor as the first round. So investors are more cautious as a result when approached for additional money if not kept in the loop between rounds.  If a company is meeting milestones and growing as projected, and if the CEO is diligent in keeping the investors informed, a second round is much more likely to be raised from the early investors.  But the studies include all second rounds, including those that were pulled from investors reluctantly to protect their first money in, skewing the curve away from more heavily weighting successful conclusions.

Keep your investors informed. Avoid late surprises. Plan financial needs early, and inform investors early of that plan.  Explain problems encountered and solutions undertaken.  You and they will benefit by this candor and communication.

Posted in Raising money, Surrounding yourself with talent | 4 Comments

The five “Whys” a manager should ask

This is a trick headline.  There can be three “whys” or twenty, depending upon the issue and the responses.  To make the point, the word “why” has to be one of the more powerful words in a manager’s vocabulary.  Asking the question forces the other person to think beyond the usual “what” that generated a response to “why.”

It sure is a way to get to the bottom of an issue.  “I just reduced the number of ad words we’re paying for.”  “Why?” “They weren’t paying off in enough revenue.” “Why?” “Well, all we could measure is dollars of revenue against cost for clicks.” “Why?” “Well, we have no
question-markway to know which other ad words might have done a better job of conversion into revenue.” “Why?” “We have no-one on staff with enough knowledge of marketing to distinguish words from phrases, or with experience to know how to capture clicks into conversions.” “Why?”  “We’ve never thought this to be an important part of our marketing effort.” “Why?” “We just don’t know what we don’t know.  Will you stop asking ‘why’?”

[Email readers, continue here…]  How revealing! There is no better way to get to the bottom of an issue than this.  In the case above, lack of performance was caused by lack of knowledge, and inability to find resources to help.  A good manager-questioner might conclude that a small expenditure with a consultant might pay off in great rewards, before abandoning the use of ad words entirely as a result of the comment from the subordinate.

Practice your listening skills with one or more attempts at the five “why’s” and see if you find insights into answers to problems that might not have been obvious without your queries.

Posted in Protecting the business, Surrounding yourself with talent | 3 Comments