Today’s business leaders face stresses from all directions – economic challenges (recession or no recession), hiring struggles, supply chain disruptions, inflationary pressures, political turbulence, entitled employee attitudes, and information overload from noisy media.
As leaders juggle with all of these disparate balls in the air, the ball they often take their eye off of is themselves.
Kevin Lawrence, author of Your Oxygen Mask First, led a workshop for business owners and guests of Executive Forums Silicon Valley in downtown San Jose, to help the leaders be a little selfish for the day – to put YOUR OXYGEN MASK FIRST.
Mr. Lawrence is an award-winning business coach and has a passion for educating leaders on the importance of expanding mental health and mental growth and building leadership resilience.
The workshop opened with a discussion of the challenge – driving and maintaining leadership performance at the sweet spot as shown in the graphic below without progressing to burnout and sometimes even meltdown. Mr. Lawrence gave many examples about how leaders experience challenges, and the methodologies for diagnosing issues, as well as resources to use when sliding down the unwanted slope towards meltdown.
This discussion was followed by a description and a personal assessment of the 17 Habits that help high achievers survive and thrive in both business leadership and life. Each participant created a wheel of satisfaction (polar plot) of how each of the 17 habits below showed up in their life, for identifying key strengths and areas of opportunity.
After group discussions around the issue of balance in members’ lives, a set of resiliency habits have created that support a balanced life through specific, timed, and repeated activities to strengthen the body, mind, and soul.
Members and guests shared their existing resiliency habits for making improvements, such as deeply personal rituals specific to each individual leader – from musical instruments, to fitness routines, to bicycling, to meditation, to reading. Feel free to jot down your resiliency rituals using the grid below.
Moving forward from the leader’s resiliency discussion, the group discussed Leadership Habit Number 17 – Make Yourself Useless. This habit revolves around top-grading employees with the objective of building a team that delivers better results than you, or even without you. As stated by Harvey Firestone, “The growth and development of people is the highest calling of leadership”. The group, using a top-grading worksheet, was able to identify and rank employees and establish specific action plans to coach up or coach out.
It was a great session of deep thinking and dynamic exchange that happens monthly at Executive Forums Silicon Valley where we leverage the collective intelligence of the group for the benefit of each individual member.
I want to thank Kevin Lawrence (Lawrence & Co) and recommend that you contact him directly to learn more about his workshops and his book, Your Oxygen Mask First.
A shout out to some Executive Forums Silicon Valley members who celebrated over six years in the Forum – your business leadership and camaraderie are so very much appreciated.
I also want to thank the Silicon Valley Capital Club for the venue, meals, and logistic support. I highly recommend the Club for your events. Please contact Edith Hernandez (edith.hernandez@invitedclub.com) to arrange your next event.
At Executive Forums Silicon Valley, selected business owners and leaders work together to gain clarity, insight, and accountability to ignite their leadership engines, grow their businesses, and improve their lives. If you are interested in learning more about Business Owner Advisory Boards or the Entrepreneurial Operating System (EOS) please contact Glenn Perkins at gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/.
Leverage Your Time for Bottom Line Results with an Engagement Manager
Investing time in building and maintaining relationships – both external to the organization and internal to the organization – is critical to the success of every CEO.
I recently learned of a structured approach for enhancing relationships by Patrick Ewers, founder and CEO of Mindmaven, a coaching firm that works with leaders AND their assistants.
Using the Mindmaven model — leverage, intent, and fellowship— I began implementing some of these principles within my own business and invited Patrick to share it with members of the Executive Forums Silicon Valley peer groups.
How leaders can “achieve True Greatness by freeing up 8+ hours a week so they can use that time to invest in what truly matters most: relationships.”
Patrick shared with us several hands-on, step-by-step ways in which a CEO can gain leverage to build better relationships by training an executive assistant to become a CEO’s “engagement manager (EM).”
The term Engagement Manager (EM) is not the same as a social media engagement manager, but this role has some of the same results.
An EM is trained by the CEO to address tasks that not only free up a CEO’s time, but can increase relationship building opportunities, thus freeing the CEO to focus on high value activity which impacts bottom line results.
LEVERAGE tactics Patrick suggested:
Voice Communications via Dictation Software
Patrick demonstrated in real time how to leverage an hour or more a day using a phone application to dictate tasks, emails, and meeting notes. Leaders are much better at verbal communication and dictation can be done asynchronously (when time permits as opposed to when the assistant is available). Dictation files are delivered directly to an EM via email, text, or a project management system such as Asana. The EM receives the dictated instructions and moves the requested task forward.
Inbox Shadowing
A second technique discussed was inbox shadowing. By giving an EM access to a CEO’s email for “Inbox Shadowing,” a CEO can trust that emails are sorted by priority so they can move quickly through their inbox. Sorting labels or folders might look like this:
Drafts (responses drafted for CEO review)
Please Handle (emails on which the EM needs CEO input first)
Completed (emails completely handled within authority of the EM)
FYI emails (to read later)
Using dictation and inbox shadowing, an EM can be responsible for drafting follow up emails, meeting debriefs, and pre-meeting planning documents.
Meeting Debriefs and LoopLeverage
With structured and habitualized Meeting Debriefs, a CEO can quickly capture important details from a meeting in a voice dictation sent to their EM who then implements the Mindmaven LoopLeverage technique.
LoopLeverage uses followup tasks, reminders, and tracking in a CRM, calendar, or project management software. These reminders, set for the EM, allow the EM to proactively follow up about promises made to and by the CEO. The personal connection information and business key facts that a CEO learns and shares in their Meeting Debrief dictation also gets tracked by the EM to bring up for robust future meeting conversations.
Together these leverage techniques—Meeting Debriefs and LoopLeverage—help a CEO build trust and stronger relationships while also lifting their mental load, ultimately resulting in increased intent and fellowship, goals of the Mindmaven model.
Culmination of Time, Training, and Small Steps Yield Results
Patrick emphasized that it takes three to six months for a CEO to make these steps natural and train an EM. However, small ideas and steps over time lead to cumulative results that can result in free time for a CEO to generate big ideas. And results.
If you are a leader who could use 8 to 10 hours a week to of free time build business relationships (internal and external) and reduce stress associated with low impact high urgency tasks, I recommend reaching out to Patrick Ewers and the Mindmaven team (www.mindmaven.com/contact) to have a discussion.
At Executive Forums Silicon Valley, selected business owners and leaders work together to gain clarity, insight and accountability to ignite their leadership engines, grow their businesses and improve their lives. If you are interested in learning more about Business Owner Advisory Boards, Entrepreneurial Operating System (EOS), Stages of Growth, Value Builder System or becoming a member at Executive Forum Silicon Valley, please contact Glenn Perkins: gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/.
Executive coach, speaker and author Vitale Buford presented at the Silicon Valley Executive Forum about overcoming perfectionism in May 2021.
She started by quoting Brene Brown: “Perfection is a 20-ton shield that we lug around thinking it will protect us when, in fact, it’s the thing that’s really preventing us from taking flight.”
Striving for excellence is a positive passion and a self-initiated drive that makes a great CEO or a leader, while being a perfectionist is allowing one’s worst critique constantly judging oneself as a bystander. A perfectionist mindset is based on limiting beliefs about oneself and others, and is mentally, emotionally and psychologically debilitating.
Symptoms of perfectionism in work and in life
Symptoms of perfectionism can be:
People-pleasing
Approval seeking
Control
Avoiding conflict
Anxiety and fear
Obsessive thoughts
High expectations
Low self-worth
Comparison
Procrastination
Feeling stuck
Indecision
Perfectionism is manifested in our careers like this:
In identifying patterns of perfectionist behaviors, Ms. Buford listed “slow and fast perfectionism” for our intentional observation:
Slow:
Procrastination
Indecision
Fear of failure
Imposter Syndrome
Feeling stuck
Anxiety
Black and white thinking
Avoiding conflict
Fast:
Approval seeking
People pleasing
Unrealistic expectations for yourself and others
Obsessive thinking
Need for control
“Work harder, achieve more” thinking
Constant overwhelm
Both slow and fast perfectionism can negatively affect our relationships, personal development, family and parenting, finances, health, fun and enjoyment and the ability to lead oneself and others.
Step 2: Mindset Change
Ms. Buford suggested using “habit of self-compassion”, summarized as “Four Cs” - criticism, curiosity, compassion, and choice, - to reframe perfectionist way of thinking, with mantras and routines:
Notice your Criticism
Get Curious
Show yourself Compassion
Choose better
Step 3: Action
What does it take to build habits of self-compassion, other than time?
“Reframing, mantras, routines” are the three words Ms. Buford used to conclude her presentation.
To get out of the negative and self-destructive habits of thinking, first refrain from thinking “what if…”, insead, think “even if…”. Refrain from viewing anxiety-causing unknown as “uncertainty”, but to view it as “possibility”. Refrain from constantly doing the “balancing” acts of pleasing everyone, and start to actively pursue your own “priority”.
Mantras like these ones below can also help us feel good about ourselves:
“I give myself room to be human.”
“Done is better than perfect.”
“I cannot miss out on what’s meant for me.”
Action leads to confidence leads to action.
Creating new routines to reinforce new habits of thinking can gradually lead to changing perfectionist behaviors.
To get more information about overcoming perfectionism, please contact @VitaleBuford
At Executive Forums Silicon Valley, selected business owners and leaders work together to gain clarity, insight and accountability to ignite their leadership engines, grow their businesses and improve their lives. If you are interested in learning more about Business Owner Advisory Boards, Entrepreneurial Operating System (EOS), Stages of Growth, Value Builder System or becoming a member at Executive Forum Silicon Valley, please email Glenn Perkins: gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/.
In times of turmoil, we hear the inevitable cry to pivot your business into a new set of products or services. Exactly how is that done? What are the steps?
Do we need a crisis to pivot our business?
Shouldn’t we always be looking to pivot our business?
And, if pivoting is so easy, why doesn’t everyone do it?
These questions were explored at the Executive Forums Silicon Valley Top Executive Forum this month through a presentation and discussion led by Beatrice Stonebanks (Stonebanks Sales Management Teams).
The discussion explored both the impact of the current COVID 19 environment as well as general long-term industry and buyer trends. After all, no one wanted to be like BlockBuster Video who missed the trend and technology of HOW consumers wanted to procure and engage, even though they knew all along about consumer demand for video content. Same goes with many taxi companies who did not innovate and pivot towards new ways of meeting customers’ needs for transportation and missed the trend and technology of HOW consumers wanted to procure and engage.
Ms. Stonebanks walked the members through some specifics on how to use industry reports to answer the following types of questions, as a roadmap to focus on:
What are the trends in your market?
Exactly why are your best customers buying from you?
What technology will be used to buy your products and services?
Where are the growth sectors that value similar characteristics?
What happens in your target markets if a Black Swan event happens?
How must you embrace technology to stay relevant to your customers?
This is a concise and straightforward method using just a few key questions to determine why your best customers value your product, service or company and what additional value you can provide.
The members were led through the “Stonebanks Sales Management 10 Step Process” that acts as a roadmap to help companies work through this process. A summary of the ten steps of this process are:
Access 2020 Tech Trends Report
Research Your Sector (or the sector you might pivot into)
Keyword Search a Term or a Specific Niche
Conduct an Ideal Client Summary
Create a Decision Matrix for Your Company
Choose your Preferred Target Niche(s)
Review the Top Ten Fastest Growing Sectors – Match with Your Niche
Analyze Optimistic and Pessimistic Trends in Selected Sectors
Adjust Your Products or Services Accordingly
Create Your Business Development Game Plan
Each specific member company was presented with a quick summary of the results of this process. For example, for one member who runs a full-service printing company, the following trends were identified. Although these types of trends are just the tip of the iceberg, consider how valuable this type of data-derived information can be in developing business growth plans. These trends were identified for the printing company:
print on packaging is a growth area – flexography, gravure
professional services to other printers
geographic collaboration (FTD model) are applicable
sector growing by 12% through 2024
This short article cannot do justice to the richness of the discussion around this process, and how it is relevant at all times, beyond COVID 19.
So pivoting is not that easy, however, there is a process that can be used. If you are looking to skate your company to where the puck will be (or how to use the puck in a completely new game), I recommend that you contact Beatrice Stonebanks (510 338-0896 www.stonebanks.net).
At Executive Forums Silicon Valley, selected business owners and leaders work together to gain clarity, insight and accountability to ignite their leadership engines, grow their businesses and improve their lives. If you are interested in learning more about Business Owner Advisory Boards, Entrepreneurial Operating System (EOS) or The Seven Stages of Growth, contact gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/.
Perhaps the best way to succeed in your business, is to work yourself out of your business.
The better your company runs on autopilot, the more valuable it will be when you’re ready to sell or transition.
A recent survey by The Value Builder Score found companies that would perform well without their owner for a period of three months are 50 percent more likely to get an offer to be acquired when compared to more owner-dependent businesses.
Let your vacation be a detective
There is no better justification for taking a blissful, uninterrupted holiday than to see how your company performs in your absence. To gauge your company’s ability to handle your absence, start by taking a vacation. Leave your computer at home and switch off your mobile. Upon your return, you’ll probably discover that your employees got resourceful and found answers to a lot of the questions they would have asked you if you had been in the building or on the end of an email or telephone call. That’s a good thing and a sign you should start planning an even longer vacation.
You’ll also likely come back to an inbox full of issues that need your personal attention. Instead of busily finding answers to each problem in a frenzied attempt to clean up your inbox, slow down and look at each issue through the lens of a possible problem with your people, systems or authorizations.
People – start with your people and answer the following questions:
Why did this issue or problem end up on my desk?
Who else is qualified to answer this question?
Why did the organization not contact and consult that person?
If nobody is qualified, who can be trained for the future?
In my many years of leading and working with companies, growing the capability of the team is the most important role of the leader.
Systems – next, look at your systems and procedures:
Could the issue have been dealt with if you had a system or a set of rules in place?
Whose department or area should be accountable for developing that system?
Can this issue be solved with system automation to remove the human element?
The best systems are hardwired and do not require human interpretation; but if you’re not able to lock down a technical fix, then at least give employees a set of rules to follow in the future.
Authorizations – You may be a bottleneck in your own company if you’re trying to control all the spending too much.
Did the employees know what to do but did not have any means of paying for the fix?
Can you put in customer service rules with financial limits of authority?
You might empower (and encourage) an employee to spend a specific amount with a specific supplier each month without coming to you first for authorizing every payment. Or you might give an employee an annual budget, an amount they can spend without seeking your approval.
Let your vacation strengthen your company
Given the fires that may need to be extinguished after the fact, taking a holiday may seem more of a hassle than it’s worth. But don’t be fooled – if you transform the aftermath of a vacation into systems and training that allow employees to act on their own, you’ll find the vacation is worth what you paid for it many times over. Your company will increase in value as it becomes less dependent on you personally.
At Executive Forums Silicon Valley, selected business owners and leaders work together to gain clarity, insight and accountability to ignite their leadership engines, grow their businesses and improve their lives. If you are interested in learning more about Business Owner Advisory Boards, Entrepreneurial Operating System (EOS), Stages of Growth, Value Builder System or becoming a member at Executive Forum Silicon Valley, please contact gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/.
Have you ever considered making it your primary goal to set up your business so that it can thrive and grow without you?
A business not dependent on its owner is the ultimate asset to own. It allows you to have complete control over your time so that you can choose the projects you get involved in and the vacations you take. When it comes to exit, a business independent of its owner is worth a lot more than an owner-dependent company.
Here are five ways to set up your business so that it can succeed without you.
1. Give Them A Stake In The Outcome
Jack Stack, the author of The Great Game of Business and A Stake In The Outcome wrote the book on creating an ownership culture inside your company: you are transparent about your financial results and you allow employees to participate in your financial success. This results in employees who act like owners when you’re not around.
2. Get Them To Walk In Your Shoes
If you’re not quite comfortable opening up the books to your employees, consider a simple management technique where you respond to every question your staff brings you with the same answer, “If you owned the company, what would you do?” By forcing your employees to walk in your shoes, you get them thinking about their question as you would and it builds the habit of starting to think like an owner. Pretty soon, employees are able to solve their own problems.
3. Vet Your Offerings
Identify the products and services which require your personal involvement in either making, delivering or selling them. Make a list of everything you sell and score each on a scale of 0 to 10 on how easy they are to teach an employee to handle. Assign a 10 to offerings that are easy to teach employees and give a lower score to anything that requires your personal attention. Commit to stopping to sell the lowest scoring product or service on your list. Repeat this exercise every quarter.
4. Create Automatic Customers
Are you the company’s best salesperson? If so, you’ll need to fire yourself as your company’s rainmaker in order to get it to run without you. One way to do this is to create a recurring revenue business model where customers buy from you automatically. Consider creating a service contract with your customers that offers to fulfill one of their ongoing needs on a regular basis.
5. Write An Instruction Manual For Your Business
Finally, make sure your company comes with instructions included. Write an employee manual or what MBA-types called Standard Operating Procedures (SOPs). These are a set of rules employees can follow for repetitive tasks in your company. This will ensure employees have a rulebook they can follow when you’re not around, and, when an employee leaves, you can quickly swap them out with a replacement to take on duties of the job.
You-proofing your business has enormous benefits. It will allow you to create a company and have a life. Your business will be free to scale up because it is no longer dependent on you, its bottleneck. Best of all, it will be worth a lot more to a buyer whenever you are ready to sell.
=============================================
At Executive Forums Silicon Valley, selected business owners and leaders work together to gain clarity, insight and accountability to ignite their leadership engines, grow their businesses and improve their lives. If you are interested in learning more about Business Owner Advisory Boards, Entrepreneurial Operating System (EOS), Stages of Growth, Value Builder System or becoming a member at Executive Forum Silicon Valley, please contact gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/ .
The Four Real World Employee Ratios that Can Drive Your Business
It’s a competitive jungle out there, and the most sought-after prizes aren’t treasure chests of money, but people. High performing employees to be specific. Regardless of employment levels, top companies know that success depends on not only attracting and retaining your most productive employees, but also on building a healthy set of employee performance metrics. This article will focus on four employee metrics that are not usually tracked, though they can make or break your business value. These key employee metrics are:
Employees per square foot
Customers per account manager
Ratio of Promoters to Detractors
Revenue per employee
If you’re planning to sell your company one day, tracking key ratios is a must. Acquirers like tracking ratios, and the more relevant ratios you can provide a potential buyer, the more comfortable they will become with the idea of buying your business. The bulk of the employee ratios that successful businesses need to monitor involve how human capital is most effectively used in a given enterprise.
Numerous sources can be found to confirm the following: “There is no doubt about the fact that the human asset is the key intangible asset for any organization. In today’s dynamic and continuously changing business world, it is the human assets and not the fixed or tangible assets that differentiate an organization from its competitors.”
There are four key employee metrics to keep your eye on, the first two having to do with efficiency and the last two focused on effectiveness.
Employees per square foot
By calculating the number of square feet of office space you rent and dividing it by the number of employees you have, you can judge how efficiently you have designed your space. Commercial real estate agents use a general rule of 175-250 square feet of usable space per employee. It’s not about crowding more employees into less space, it’s about workflow and productivity, so take virtual teams and work-from-home options into your calculations too.
Customers per Account Manager
How many customers do you ask your account managers to manage? Finding a balance can be tricky. Some bankers are forced to juggle more than 400 accounts, and therefore do not know each of their customers, whereas some high-end wealth managers may have just 50 clients to stay in contact with. It’s hard to say what the right ratio is because it is so highly dependent on your industry. Slowly increase your ratio of customers per account manager until you see the first signs of deterioration (slowing sales, drop in customer satisfaction). That’s when you know you have pushed it too far. You’re trying to create a balanced, high-performing team, where account managers can effectively spread their expertise over a full plate of customers, removing some of the waste in workflow management so that managers have their time well spent and customer needs are being met by an experienced resource.
Ratio of Promoters and Detractors
The Net Promoter Score® methodology, developed by Fred Reichheld and his colleagues at Bain & Company and Satmetrix, is based on asking customers a single question that is predictive of both repurchase and referral. It works by asking a single question, “On a scale of 0 to 10, how likely are you to recommend (insert your company name here) to a friend or colleague?” Now, as much as that can be an indicator of customer satisfaction, it can also be a telling question to ask of employees. The same principles apply, as employees are the single largest source of referrals for new hires, and referrals are a key indicator for longevity and productivity in your employees. Figure out what percentage of the employees surveyed give the company a 9 or 10, and label that your ratio of “promoters.” Calculate your ratio of detractors by figuring out the percentage of people surveyed who gave you a score of 0 to 6. Obviously the results need to be kept confidential if you’re doing the survey of employees, but the results are indicative of internal opportunities and work to be done. You calculate your Net Promoter Score (NPS) by subtracting your percentage of detractors from your percentage of promoters. The average company in the U.S. has a Net Promoter Score of between 10 and 15 percent while a good Net Promoter score is greater than 50 (Netflix, Amazon) and a world class Net Promoter Score is above 70 (Apple, Tesla, BMW). The glaring conclusion is that companies with an above-average Net Promoter Score grow faster than average-scoring businesses.
Revenue per Employee (RPE)
Payroll is the number one expense for most businesses, which explains why maximizing your revenue per employee can translate quickly to the bottom line. It’s a multi-faceted indicator of employee quality, company culture, employee-customer relations and the overall health of the business.
“Revenue per employee (RPE) is one of the most underrated metrics available for assessing business performance in a crowded marketplace.” Many leaders look at gross income and overall market share, but neither metric provides much actionable data. “If a competitor is achieving far higher RPE numbers than you, then you’ve got a pretty clear signpost towards areas for improvement.”
Amongst the largest corporations, average revenue per employee hovers at an astounding $1.3 million, with oil companies leading the way. Technology companies, where employee culture is considered some of the most innovative and efficient, put up some impressive RPE numbers as shown in the graphic above.
Some smaller companies struggle to cross the RPE threshold of $100,000, though their businesses are still wildly valuable (as size definitely does matter). Interestingly, smaller firms, which you would expect to be more productive than their larger competitors, actually average just over $100,000 per employee per year vs. almost $300,000 for the Fortune 500. All those systems and processes do count for something. Typical revenue per employee for various industries are shown below.
If you’re interested in benchmarking your industry, go to www.hoovers.com, the leading business database in the U.S. and search for larger companies in your industry. Click on the Fact Sheet that displays as an option and simply take revenues and divide by the number of employees.
Case Study – Revenue per Employee – The Container Store
An impressive case study can be made from the practices of The Container Store, the privately held retailer out of Texas, named one of the top places to work in the U.S. the past five years. They have a simple productivity formula: one great employee replaces three good employees; pay them twice as much ($20 per hour vs. the standard $10 a typical retailer pays) while having a lower total wage cost; and provide each employee with 160 hours of training. In essence, fewer higher paid smart people rather than a bunch of low paid “dump” folks! It’s your choice. And if you’re having a tough time recruiting employees, consider that The Container Store had 4000 people apply for the 40 positions they needed when they opened one of their retail stores in New York City. By building their business model from the very beginning to focus on garnering three times the productivity from sales associates, they can afford to pay them considerably above industry norm. The extensive training, in turn, helps to drive the productivity necessary to make the economics work. And the higher wages help to attract a better initial employee and retain the highly productive employees they create through their educational programs.
Now, it might seem logical to trim staff numbers to send your RPE ratios through the roof but don’t fall for it, as increasing workloads and lowering FTEs has been proven to negatively impact productivity in the long term.
The think tank at McKinsey has looked at RPE and at the intangible value that human capital contributes to businesses, and their results are thought-provoking:
“The vast majority of companies still gauge their performance using systems that measure internal financial results—systems based on metrics that don’t take sufficient notice of the real engines of wealth creation today: the knowledge, relationships, reputations, and other intangibles created by talented people and represented by investments in such activities as R&D, marketing, and training.
Companies fill their annual reports with information about how they use capital but fail to reflect sufficiently on their use of the “thinking-intensive” people who increasingly drive wealth creation in today’s digital economy.”
They go so far as to suggest a remedy for company CEOs and leadership that might be stuck in the past. “To boost the potential for wealth creation, strategically minded executives must embrace a radical idea: changing financial-performance metrics to focus on returns on talent rather than returns on capital alone. This shift in perspective would have far-reaching implications—for measuring performance, for evaluating executives, even for the way analysts measure corporate value. Only if executives begin to look at performance in this new way will they change internal measurements of performance and thus motivate managers to make better economic decisions, particularly about spending on intangibles.”
When it comes to building or presenting the value of your business, whether you’re looking to sell it or not, the data picture that you present truly does speak volumes. Like an artist using multiple textures and colors, data ratios, especially as they relate to employee efficiency metrics, can tell a much more compelling story than just looking at gross revenues or inventory turns.
If you’re still wondering if revenue per employee translates into bottom line performance, consider this: one recent study in the technology industry (software, hardware, IT services, etc.) found that the top 10% of companies ranked by performance had roughly twice the revenues per employee as the average. Now, can you afford not to examine RPE in your own business? Something to think about, hard.
At Executive Forums Silicon Valley, selected business owners and leaders work together to gain clarity, insight and accountability to ignite their leadership engines, grow their businesses and improve their lives. If you are interested in learning more about Business Owner Advisory Boards, Entrepreneurial Operating System (EOS), Stages of Growth, Value Builder System or becoming a member at Executive Forum Silicon Valley, please contact gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/ .
Avoid the Mile-Wide Trap in Your Business COVID 19 Response
What is the difference between a mile-wide versus a mile-deep approach to building your business? And why does it matter?
As many companies’ growth has stalled due to Covid-19’s shelter-in-place, unemployment, reduced consumption, workplace protection and other changes and limitations, some are looking everywhere for new businesses, even scrambling to diversify by adding new products and services to sell.
However, before a necessary pivot, it is important to make sure that you don’t fall into the “Mile Wide Trap” as you look to diversify your business.
The Mile Wide Trap
The Mile Wide Trap first starts to ensnare you when you do an excellent job serving a small number of great customers and they ask you to handle more of their DIFFERENT TYPES of work. You keep delivering, and they keep broadening the list of products and services they want you to supply. Your company is wildly profitable serving the expanding needs of this small list of “great customers” so you keep falling deeper and deeper into what eventually becomes “the mile wide but an inch deep” trap.
Pretty soon, you’re an inch deep and a mile wide in offerings and the only person in your company with the depth of industry experience to deliver all of the services is you. But you’re trapped because your expenses have crept up as your revenue has increased – leaving you dependent on the sales you get from a small group of demanding customers. And the chase never ends.
Another example of the Mile Wide Trap is when there is a disruption in the market, and you look to capitalize by doing something your company has not done before. This may be particularly attractive during this time of economic upheaval caused by Coronavirus.
A Mile Deep is Better Than a Mile Wide
Instead of selling more things to a few customers, first concentrate on understanding your company’s core focus – the intersection of your passion and your expertise, then sell a few things to a lot of customers.
In order to scale up a company, employees, not owners, need to be able to execute work with quality and speed. This is much easier to accomplish repeatedly when the company operates within its core focus where everyone is already trained to do their best.
As an extreme example, Ferrari represents a high-performance racing type automobile. Ferrari’s core focus is: “We build cars, symbols of Italian excellence the world over, and we do so to win on both road and track.” They are a mile deep in what they do – high performance Italian cars. They know that the gold is buried deep. One might think they could go wide and diversify into high performance motorcycles, snowmobiles or even airplanes, however, they stay close to their core focus and avoid the Mile Wide Trap.
When the markets seem to be in turmoil, it is easy to fall into The Mile Wide Trap that will eventually choke off your growth. Do pivot when necessary, but more often than not, doubling down on your core focus will provide the long term, scalable growth you are looking for.
If you’re curious to benchmark your company on growth potential and the other seven factors that drive your company’s value, take 13 minutes and get your Value Builder Score here: https://bit.ly/36nPCKn
At Executive Forums Silicon Valley, selected business owners and leaders work together to gain clarity, insight and accountability to ignite their leadership engines, grow their businesses and improve their lives. If you are interested in learning more about Business Owner Advisory Boards, Entrepreneurial Operating System (EOS), Stages of Growth, Value Builder System or becoming a member at Executive Forum Silicon Valley, please contact gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/ .
Business owners are often fully devoted to running and growing their companies that they hardly pay attention to both business and personal assets’ acquisition, accumulation, protection, and transition.
In March 2020, Executive Forum Silicon Valley (“EFSV”) members had a great educational discussion with Nico Wiborg of the New York Life Insurance Company around a holistic view of how business owners and leaders should think about, protect and plan for business and personal finances. The educational discussion was segmented into four key areas:
Sources of Income
Threats to Income and Assets
Application of Income and Assets
Legacy Choices
As business owners and leaders, we are often expected to provide the right answers to our customers, teams, and employees. At Executive Forums Silicon Valley, we often focus our peer groups to make sure that leaders also are skilled at asking the right questions. It is through asking the right questions that the best and correct answers often emerge.
Income and Asset Protection, Retirement and Estate Planning
When it comes to Addressing the Six Key Areas of Capital Accumulation and Protection, it is necessary to ask the right questions. Nico Wiborg led the group through a comprehensive review of the six key areas with thought-provoking questions that resulted in a rich discussion between the business owners. Questions that were covered and addressed with the business owners are shown in the table below.
Asset Area
Key Questions to Ask
Income Protection(Source)
When will you be finished accumulating assets?How many assets will be required to replace future income?What other sources can provide the necessary income?
Income Tax(Threat)
Are you trying to predict future tax rates?Do you know how to tax-diversify for the best flexibility?What strategies do you have for a rising tax rate environment?
Capital Risk(Threat)
Do you have a specific strategy to grow your assets (not income)?Do you monitor, review, and adjust your strategy on a regular basis?How are you using your business for income now and legacy later?
Asset Protection(Threat)
Are you aware of the impact of creditors, lawsuits, and judgments?Do you have assets that you can shift to a different owner?Have you integrated insurance into your asset protection plan?
Retirement Plans(Application)
Do you have enough assets to allow your income to completely stop?How much do you need and now much more needs to be set aside?Where should you put the assets for growth, protection, and income?
Estate Planning(Legacy)
Do you have a proper inventory and accounting of your assets?Are you directing your assets or letting the existing law dictate your plan?How do you want your heirs to receive your legacy?
Get a holistic picture of your assets and planning ahead
Sometimes as business leaders we are so focused on leading our teams and serving our customers that we neglect to rise up to 50,000 feet and take a holistic view of our assets and establish a strategy that covers all of the sources, threats, application, and legacy issues. If you think you have answers but are unsure if you are being asked the right questions, I would highly recommend that you contact Nico Wiborg (nwiborg@ft.newyorklife.com 408 655-5964) and have a great discussion about how to build and protect your assets to create the legacy that you deserve. Wouldn’t you feel better if you did that right now?
About EFSV
Executive Forum Silicon Valley (“EFSV”) is a platform where successful business owners, CEOs, and executives act as their fellow collaborators, co-inventors, partners and even “co-conspirators”, in getting a clear picture of where they want to go, what stands in the way, and how to achieve their respective growth goals. Forum members share resources, conduct self-assessment, and identify opportunities. Members get clarity about the way forward, obtain strategic insights to overcome their leadership blind spots. They hold each other accountable with support and encouragement. If you are interested in learning more about becoming a member at Executive Forum Silicon Valley, please contact gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/
The grey wolf metaphor comes from the success in the revitalization of the Yellowstone Park’s complex ecosystem in the 1990s. Through the introduction of a Key Systemic Element (grey wolves), a complete transformation occurred to bring back vitality, life and growth of the park. Similarly, businesses are a complex ecosystem and through the identification and introduction of Key Systemic Elements, in short amounts of time, vitality, life and growth can be accomplished. An expanded version of the Yellowstone Park story is provided at the end of this blog.
In February 2020, Executive Forum Silicon Valley (“EFSV”) members feasted on the insights and wisdom from the book “Navigating the Growth Curve” and Organizational Rewilding concepts that helped them understand, predict and solve the increasing complexity at every stage of company growth.
In Part 1 of this series, 7 Stages of Growth, we discussed that the different stages of growth are based on the complexity of a company (in proportion to the total number of people) and require different “Gates of Focus” – people, profits and process – at different times.
In Part 2 of this series, “3 Faces of a Leader,” we discussed “Hidden Agents” that can derail a company’s growth. These Hidden Agents such as the 27 Classic Challenges, the Builder Protector Ratio (confidence to caution) and the 3 Faces of a Leader (visionary, manager, specialist) must be optimized at each stage of a company’s growth. Also discussed were transitions between stages such as the Flood Zone (overwhelmed by work) and the Wind Tunnel (new systems required).
Here in Part 3, we will be looking at the “Key Building Blocks” and “Non-Negotiable Rules” for growth companies. It is through the analysis of these elements and the previous stages of growth principles – Gates of Focus, Hidden Agents and Transition Zones – that the key systemic element (grey wolf) can be identified to revitalize any company.
First, let’s explore the similarity between the situations that frequently occur in small and medium sized businesses with the challenges faced in the Yellowstone Park. The key point is the first – businesses are complex ecosystems (people, products, processes, places and projects) and as the number of people increases so does the complexity of the ecosystem.
Additionally, in complex ecosystems symptoms may be obvious, however, solutions are not. And because there are unseen forces at work, the situation may not appear that bad (impacting growth) and their ecosystem is not self-repairing. The correlation and similarities are detailed in the table below:
System Element
Yellowstone Park
Small Businesses
Featured a complex ecosystem
Yellowstone’s ecological system is comprised of complex relationships between flora and fauna.
Businesses feature a complex system of interrelated, dynamic, and living resources. The level of complexity is impacted by the number of employees.
May not have appeared that bad
An untrained eye may not have considered the situation in Yellowstone that dire. The lack of vegetation and animal species mirrored other places in the U.S.
You might not even see areas that are unhealthy or lack vitality. “That’s how it’s always been” or “It’s still better than the last place I worked” are common justifications.
Obvious symptoms, unclear solutions
The obvious problem was the overpopulation of elk. The reintroduction of elk hunting reduced the population, but did not have a dramatic impact.
What is obvious is the surface symptom. Leaders are often too busy or lacking the tools necessary to identify root causes and are stuck playing “whack-a-mole.”
Not self-repairing
The Park could not solve its imbalance without the involvement of humans, because it was the human eradication of wolves that started the decline.
Leaders must be intentional to identify the missing elements and actively infuse them into the business ecosystem.
Unseen forces at work
The decrease in wolf population had an Instinctive relationshipwith deterioration of the ecosystem. Upon spontaneously communicating the new reality the environment responded.
You don’t have to fix everything. Instead, infuse the right elements and the unseen forces often resolve the other challenges on their own.
Depth of impact unexpected
Inserting a keystone predator had the intended results of reducing elk population. Experts were amazed by the transformation; the breadth, depth, and speed of change was totally unexpected.
When any key systemic element of a business is absent, the entire organization suffers. Infusing the right elements does achieve the expected improvement and the ripple effect will go beyond your expectationin ways you could not anticipate.
Non-Negotiable Rules and Building Blocks
Regardless of the type of a business there are several areas of competency that must be developed, nurtured and mastered at each stage of company growth. These business competencies (non-negotiable rules) fall into six key disciplines – business development, business model, financial systems, operations, leadership values and workplace community and three broad areas (building blocks) – Infrastructure, leadership and culture.
Let’s take an example of how this shows up for a Stage 4 company (35 – 57 employees). With respect to the six key disciplines or non-negotiable rules, a Stage 4 company should be focused on the following items:
Stage 4 Company – Non-Negotiable Rules
Business Development
Effective marketing campaign management system, repeatable sales process and a customer care program.
Business Model
Scrub the business plan annually with quarterly reviews.
Financial Systems
Established departmental budgets and advanced weekly and monthly key performance indicators.
Operations
Implement master processes and allocate 5% of revenue to build and automate systems.
Leadership Values
Hire or train professional level managers who are accountable and proactive.
Workplace Community
Share project management and foster competition between department teams.
Similarly, with respect to the three broad areas or building blocks, a Stage 4 company should have in place or be working on the following:
Stage 4 Company – Building Blocks
Infrastructure
Accountability Charts, basic Key Performance Indicators, Position Role Descriptions should be in place. The Stage 4 company should be working to improve Process Systemization and Weekly Personnel Check-ins.
Leadership
The Business Model and annual business plan should be in place and the Stage 4 company should be working to train and improve managers.
Culture
One on One Discussions, Vision, Mission, Core Values, Brand Values and New Hire Onboarding should be in place.
What Doesn’t Get Done at One Stage Will Hold a Company Back
A complete visual of the non-negotiable rules and building blocks for all 7 Stages of Growth is shown in the following graphic. Be aware, what doesn’t get done at one stage will hold a company back from growing to full potential.
ReWild Key Elements (“Grey Wolves”)
How does a company establish the missing element that is holding back growth? How do you identify your grey wolf? The Rewild Group (www.rewildgroup.com) has established a business assessment that uses all of the elements we have discussed in this blog (Part 1, Part 2 and Part 3) to establish a prioritized set of grey wolves for individual companies. This assessment is primarily driven by data from the 650 companies researched by James Fisher in “Navigating the Growth Curve” and with additional analytical tools that examine relationships between Gates of Focus, 27 Challenges and Non-Negotiable Rules.
The types of grey wolves that are impactful for small and medium sized business are shown in the following graphic. As an example of how this works, Stage 3 and Stage 4 companies that may have low profits (symptom) may benefit most by establishing Master Processes. This grey wolf has the impact of operational efficiency, employee productivity, and speed of product or service delivery which all positively impact profits.
A Stage 5 or Stage 6 company experiencing employee turnover and lost expertise (symptom) may benefit most by an Exceptional Manager Program that builds across functional teams, reinforces company values and addresses needs of lower level employees. This grey wolf better aligns the workforce, improves accountability and engages employees to reduce labor churn.
As shown in Part 1, Part 2 and Part 3 of this blog, the Stages of Growth and Organizational Rewilding are powerful analysis and solution tools to help a company grow and revitalize companies where growth has stalled. Understanding all of the analytical tools – Gates of Focus, Hidden Agents, Transition Zones, Non-Negotiable Rules and Building Blocks – and what is most important at each stage of growth, will help a business leader focus AND help a leader anticipate what is coming down the line. Wouldn’t you feel better if you knew what to do now and what to do next?
Find Your Own “Grey Wolves”, Clarify, Insight and Accountability at EFSV
Reach out directly if you are interested in learning more about the Stages of Growth or Organizational Rewilding, or if you would like to brainstorm about what kind of “grey wolves” are needed to revitalize your company’s ecosystem.
Executive Forum Silicon Valley (“EFSV”) is a platform where successful business owners, CEOs and executives act as their fellow collaborators, co-inventors, partners and even “co-conspirators”, in getting a clear picture of where they want to go, what stands in the way, and how to achieve their respective growth goals. Forum members share resources, conduct self-assessment and identify opportunities. Upon getting clarity in the way forward and strategic insights and the illumination of leadership blind spots, members hold each other accountable with support and encouragement. If you are interested in learning more about the Stages of Growth or becoming a member at Executive Forum Silicon Valley, please contact gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/
In 1995, Yellowstone National Park’s ecosystem was rapidly disintegrating. The expanding elk population was defoliating the park at an alarming rate. Yellowstone Park was on the verge of becoming a barren landscape, where many of its resident species could not survive. The solution to this issue wasn’t clear, but the U.S. Forest Service Rangers and a team of scientists knew they needed to act soon.
Grey Wolves Rebalanced Ecosystem
They chose to reintroduce several packs of grey wolves, who had been missing from the park for 70 years, into the ecosystem. Amazingly, within a short six-year span, the park dramatically transformed.
As one might expect, the elk population was reduced, creating smaller but healthier herds. Additionally, the remaining elk population avoided open valley areas so as not to be easily trapped by the new predators. Saplings sprouted in the once barren meadows, providing material for beavers to create new dams. Berry bushes and underbrush created shelter for small mammals. These in turn provided more food for growing populations of badgers, foxes, and birds of prey. Rapid tree growth gave homes to an increased population of songbirds. The river banks were reinforced with wild grasses that were no longer over-grazed. Every level of the trophic chain (food chain) began to flourish again.
Balance had returned to Yellowstone’s ecosystem through one simple change – the reintroduction of packs of wolves. The insertion of the wolf packs as a “Key Systemic Element” rippled all the way down to how the rivers and streams flowed through the park.
Business Organizations Need “Grey Wolves” as Key Systemic Element
We realized that there are powerful parallels between nature’s ecosystems and human business organizations. Many of the businesses we have encountered exhibit the same loss of vitality that Yellowstone was experiencing in the mid-1990‘s. Inserting a keystone predator had the intended results of reducing elk population. Experts were amazed by the transformation; the breadth, depth, and speed of change was totally unexpected.
