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/
Why do trademarks matter to small and mid-sized businesses?
“The best companies are those whose brands are easy to remember and instantly recognizable,” said Dana Brody-Brown, Counsel at Hoge-Fenton during a recent interactive workshop at the Executive Forums Silicon Valley (EFSV) Advisory Board. Trademarks can serve to differentiate your products from others and efficiently deliver your marketing messages, in addition to providing competitive advantage, investment protection, product or process validation and business valuation.
Trademarks can also be important for operations, revenues and the ability to sell and ship into primary markets. For consumer facing goods, trademarks are especially important, according to Ms. Brody-Brown.
Business owners and key executives at SVEF learned about intellectual property’s value, importance, nuances and best practices during this workshop. Those who were not aware of the importance of intellectual property in their markets found the discussions extremely beneficial. This article will focus on trademarks.
Types of trademarks
There are many types of trademarks associated with traditional concepts such as words, symbols, slogans, pictures, emblems and packaging design as shown in this graphic below:
Additionally, trademarks can be associated with less traditional and more creative concepts such as sound, color, shape, business design or motion, as shown in the following graphic:
Distinctiveness and frequent use are two key factors
In selecting your marks, think distinctiveness. I often wonder about the effectiveness of the LIMU Ostrich for Liberty Mutual Insurance, the Smile on Amazon packaging, or the Peace Symbol of Mercedes. However, it is the distinctiveness of the mark along with the frequency of use that allows the product, service or company to be etched into the mind of the customer. The spectrum of distinctiveness and how it can be used is demonstrated in the following graphic:
In addition to the specific education around the topic of intellectual property and trademarks, several case studies were used to demonstrate the power and value of proper (and improper) application of these techniques.
Best Practices for using trademarks
The discussion closed with some best practices for using your marks in building strong brands including
Select Strong and Creative Marks
Search Well Before Use
Register – in the US (and Internationally)
Enforce Your Rights
Consistently Use in Messaging, Marketing, and Advertising
Other best practices include following your mark with the generic product category such as Kleenex® tissue or Ford® truck, maintaining use of the registered spelling or font such as MONTBLANC® fountain pen or Hershey Kisses® chocolate and always using the appropriate symbol ® or ™. There is also an ACID test for using a trademark which requires you establish
A – Adjective
C – Consistency
I – Identification
D – Distinguished from Other Text
The business owners and top executives of Executive Forums Silicon Valley learned a lot during the workshop and have practical techniques they can use in their business. I would highly recommend that you contact Dana Brody-Brown (dana.brody-brown@hogefenton.com , 408 947-2433, www.linkedin.com/in/dbrodybrown) to learn more about her background and expertise on this topic and to help you use intellectual property concepts for your company and business advantage.
Forbes- Feb. 21, 2012- “How Important is Small Business Branding Really?”, Jessica Bosari Contributor
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 please visit http://www.execforumssv.com/ .
Your Business’ “Grey Wolf” (Part 3 of 3, Organization Rewilding)
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.
7 Stages of Growth and Hidden Agents (Pt 2 of 3, Organization Rewilding)
Do you ever feel like there are times in your business that you keep bumping up against an invisible force field? Something that holds you back regardless of how hard you try to grow or move forward? What you may be experiencing is something James Fischer, in his book Navigating the Growth Curve, calls Hidden Agents or growth Transition Zones. Hidden Agents are obstacles to growth that were not easy for a leader to identify. Additionally, as companies move from stage-to-stage, they experience Transition Zones that complicate growth and can create business chaos.
In this blog, we will continue to reveal insights and wisdom from the book “Navigating the Growth Curve” that help leaders understand and manage the increasing complexity at every level of business growth. These materials were reviewed, discussed, learned and made actionable in the February 2020 Executive Forums Silicon Valley mastermind sessions.
Hidden Agents
Sometimes on the surface, issues look unclear and may only really show symptoms or side effects which can make it difficult to identify the real cause and design and implement the correct solutions. The three hidden agents identified by Fisher are shown in the graphic below and are obstacles to growth, hidden below the surface and difficult to diagnose.
27 Classic Challenges
One of the hidden agents identified in James Fischer’s research are the 27 Classic Challenges that companies face at one time or the other. Many times, several of these Classic Challenges were critical for business to address at a specific point in time – related to the company’s current stage of growth. The successful companies took the time and energy to focus on a critical few at any one time. They addressed the most critical challenge for their stage of growth and moved on. Take a look at the graphic below and identify your company’s stage and assess the challenges you might want to address. The key is for the leader and team is to stay focused on the right things at the right time.
Builder Protector Ratio
A second hidden agent identified in James Fischer’s research is the builder protector ratio. The B/P Ratio can be explained by understanding that in every company there are Builders (risk takers) and there are Protectors (risk averse). The Builder/Protector aspect of the Stages of Growth is a measurement within a company of confidence vs. caution.
Builders (risk takers) create new ideas and take new initiatives, find ways to expand revenue and profits, challenge the way things are done, and are highly confident.
Protectors (risk averse) are cautious and slow-paced, seek stability, may not feel confident in company’s financial strength, and tend to be suspicious of new markets.
As navigating the growth curve materials are about growth companies, you can see in the graphic below that the ratio of Builders to Protectors is greater than one for all of the stages except for the Delegation – Stage 3. Are you hiring enough Builders to achieve the right ratio at your stage of growth?
Three Faces of a Leader
The third hidden agent is called the Three Faces of a Leader Blend and is reflective of the leader within an organization. Depending on a company’s stage of growth, the leader must deliver a different blend (mix) of leadership attributes to make the company successful and keep the company growing. The three leadership attributes that must be blended in each stage are being a Visionary, a Manager and a Specialist.
Visionary Leader - makes sure the company knows where it wants to go.
Manager Leader – grows company through managing the work and the people.
Specialist Leader - delivers work to make sure the product meets clients’ needs.
As seen in the graphic below, the Visionary Leader is extremely important in a company’s early and late stages while the Manager Leader is dominated in a company’s middle stages. Note that the Specialist Leader decreases continually as a company grows.
Transition Zones
Finally, let’s look at what happens as a company transitions from one stage to another. A Transition Zone is a phase of chaos that the organization goes through to prepare for the next Stage of Growth. Rarely does it go smoothly, however, it does always go predictably. You can expect confusion and some chaos with your staff as you work through these zones, but if you aren’t prepared for them, they can take a toll on you and your leadership team.
Transitions between stages occur as either predictably as Flood Zones or Wind Tunnel. A Transition Zone is a phase of chaos that the organization goes through to prepare for the next Stage of Growth. Without this chaos, the organization would not be able to sustain itself or be able to compete in the next Stage of Growth. These zones can sometimes be identified by the mumbled complaints at leadership for putting the company in this ‘mess’. In truth most often the chaos couldn’t have been avoided and was a natural result of the company preparing for its next Stage of Growth.
Flood Transition Zone - a transition where the organization experiences a FLOOD of activity. It is being overwhelmed. The feeling inside a company is that you don’t have enough people to handle all the work. You feel like you can barely keep your head above water.
To address the chaos during a flood transition zone, you must
Communicate to people the upcoming increase in workload
Avoid the temptation to add new staff (hire at last resort)
Focus on the WAY your company manages workload
Wind Tunnel Transition Zone - is defined by a condition where the company needs to let go of ideas and processes that no longer work and create new ones that do. Often times the leadership of a company will have a difficult time realizing that what worked in the past is not going to work any longer.
To address the chaos during a wind tunnel transition zone, you must
Communicate growth and processes must change
Evaluate (measure) which processes must change
Don’t blame people for issues that require new processes
Consider the use and implementation of technology
As you can see in the graphic below, the Flood Transition Zone occurs leaving Stages 1, 3 while the Wind Tunnel Transition Zone occurs leaving Stages 2, 4 and 6.
The Stages of Growth material is very rich and challenged each leader in the Executive Forums Silicon Valley community to think deeply about the current state of their business and how to shore up the foundations for future growth. Having the knowledge to predict what is coming next and be able to align leadership and company focus to address these challenges can keep growth on track. We have discussed in pars 1 and Part 2 of this blog the following concepts.
Stages of Growth – the number of people drive complexity and growth stage
Gates of Focus – profit, process, people – where to focus and when
Four Key Messages – if you are not growing, you are dying
Hidden Agents – Classic Challenges, Builder Protector, 3 Faces of a Leader
Transition Zones – how to address the Flood or Wind Tunnel transitions
Part 3 of this blog, we will discuss the “Building Blocks of infrastructure, Culture and Leadership” and how to “Rewild” your business to get it back onto a high growth trajectory.
At EFSV, 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 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 https://execforumssv.com/
7 Stages of Growth and 3 Gates of Focus (Pt 1 of 3, organization rewilding)
In February 2020, Executive Forum Silicon Valley (“EFSV”) members feasted on the insights and wisdom from the book “Navigating the Growth Curve” that helps understand and manage the increasing complexity at every level of growth. They each take back to their own organization the tools acquired at the Forum for engaging the people in their own company to deal with challenges at their particular stage of growth.
EFSV is a platform where business owners, CEOs and executives act as their fellow collaborators, co-inventors, partners and even “co-conspirators”, in getting clear picture of where they want to go, what stands in the way, and how to achieve their respective business growth goals. Forum members share resources, conduct self-assessment and identify opportunities. Upon getting clarity and insights, they hold each other accountable with support and encouragement.
Based on the research of over 650 successful companies with up to 500 employees, “Navigating the Growth Curve”, by James Fischer, describes a model for successful growth and identifies insights, behaviors, and focus areas that the leader needs to manage and balance.
People, Profit, Process “3 Ps” for Successful Growth Companies
Fischer found in his research that successful growth companies are light, agile and intelligent, and throw out the old model of “business as a machine”. These companies flourish by using the lens of the following “Three Gates of Focus” in addressing challenges as they arise:
Growing people
Growing profit and revenue
Growing processes
Conversely, unsuccessful Companies often share these three traits:
work environment without staff satisfaction
lack of a sustainable profit model
cannot understand, predict, and manage their growth
Understanding Where You and Your Company Are Today: The 7 Stages of Growth
You can identify your appropriate Stage of Growth from the graphic below. As shown a company’s Stage of Growth is directly proportional to the numbers of employees as that drives complexity into every phase of the business. As a company grows throughout the 7 stages, the complexity level of that company increases based on the most challenging aspect of managing any organization – people. Not profits, not processes – but people. The higher the number of people in a company, the more complexity.
A description of the what the company needs from the CEO, the typical priority challenges and the personnel balance needed, and the lenses of focus to keep a company growing in each Stage of Growth are as follows.
Stage 1 – Startup (1 – 10 employees)
3 Gates of Focus Priorities – Profit, People, Process
3 Faces of the Leader – 40 % Visionary, 10% Manager, 50 % Specialist
Classic Challenges – Chaos, Inadequate Sales, Limited Capital to Grow
Personnel Type Ratio – 4 Builders to 1 Protector
Stage 2 – Ramp Up (11 – 19 employees)
3 Gates of Focus Priorities – Profit, Process, People
3 Faces of the Leader – 40 % Visionary, 20 % Manager, 40 % Specialist
There are four key messages associated with growth principles that a leader needs to understand as your company progresses from one stage to another:
Message 1 – Movement from stage to stage is not clear-cut. In business, there is no black and white, there is only gray. You don’t simply BECOME a Stage 2 company overnight. You begin to be a Stage 2 company as soon as you enter Stage 1. Preparation for the next stage begins as you enter the current stage.
Message 2 – What’s left undone from prior stages must be dealt-with. What you don’t get done in a specific stage of growth DOES NOT GO AWAY. -Not solving People, Process and Profits challenges during your current stage will simply put harder demands on you as a leader in the next stage of growth.
Message 3 – Length of time a business has been around can make a difference. Slower growth is usually easier to manage. Many companies choose to stay at a certain size (usually for the lower stages). They prefer to grow in other dimensions, not in employees. Simply assuming that you have “taken care of business” because you have been doing business as usual for some time isn’t the same thing as addressing your current stage challenges.
Messages 4 – If you are not growing, you’re dying. Stagnation will not allow you to be successful in an ever-changing competitive world. Something has to continue to grow and change for your organization to thrive. However, humans tend to gravitate toward a state of equilibrium because it is safe and understandable. But if we stay in that state too long it leads to slow decay and death, just like in nature.
More on the Three Gates of Focus: People, Profits, Process
Every issue found within a growing enterprise can be understood through one or more of these Three Gates. When looking for clarification with an issue, ask yourself: is it a Profit problem? People problem? or Process problem?
Then you can FOCUS on the right thing at the right time. To that end, the Three Gates of Focus shift priorities based on your stage of growth.
At the Executive Forum Silicon Valley, members first determine which of the Three Gates of Focus they most focus on today, by list and assessing priorities. Next, they compare with the following chart, “Three Gates of Focus and Stages”, to find the IDEAL Gates of Focus priorities to line up with each of their companies’ stage of growth. The members discussed how to get their focus back in alignment with their particular stage’s priority and identified a set of initiatives focused on each member’s key areas of concern.
The above Gates of Focus are always stacked in order of the most important focus for that particular stage of growth. For example, Stage 1, the Profit Gate is the primary focus, with the next focus being the People Gate and the last is the Process Gate.
Different stages of growth require different types of focus. Once you’ve identified your own stage of growth, the model below helps you do the right things at the right timeby shifting among these three key focuses: people, profits and process.
In Part 2 and Part 3 of this blog, we will discuss the Hidden Agents that can hinder and hold back your growth. Three Faces of a Leader, the Builder Protector Ratio, the Classic Challenges will be discussed as well as how to “Rewild” your business to get it back onto a high growth trajectory.
At EFSV, 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 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 https://execforumssv.com/
Ray Dalio’s Four Guiding Principles for Business and Life (Part 2 of 2)
In Part 1 last week, we shared about Ray Dalio’s first two principles: 1) Embrace reality and deal with it, 2) Practice radical open-mindedness. Today in Part 2, we are continuing with Dalio’s 3rd and 4th principles, all of which have provided clarity and insight to members of the Executive Forum Silicon Valley (EFSV.)
Principle #3: Use the 5-step process to evolve
Dalio´s third Principle is a 5-step process that he uses to evolve both personally and in his company. Some of these may seem obvious to you but according to Dalio, what inhibits most people´s growth and evolution is the flawed execution of one or more of these steps.
Let’s look at each in greater detail:
1. Have clear goals
Prioritize
Be audacious
Great expectations create great capabilities
2. Identify and don’t tolerate problems
Identify the biggest problems first Don’t avoid them because they are rooted in the harsh realities of your business. Once we identify a problem, don’t tolerate it
3. Diagnose problems to get at their root causes
Focus on “what is” before deciding “what to do about it”
Distinguish symptoms from the true root cause
Root causes can be found with honest effort
4. Design plans to get around them
There are typically many paths to achieve a goal
See the plan as a movie script and be creative
It may not take a lot of time to design a good plan
5. Do what’s necessary to push through results – Push through to completion
Great planners who can’t execute go nowhere
Good work habits are vastly underrated
Establish clear metrics to follow your progress
The 5 steps must be completed in order. To evolve, we need to do them fast and continuously. Weaknesses don’t matter if we find solutions by either getting better at it yourself, or finding others to cover your weakness.
Principle #4: Understand how people are wired
Both genetics and environment make people think and act in very different ways. Everyone is unique and people often are not aware of which type of person they truly are. People end up not understanding each other and ignoring others’ points of views and values. Our brains are unique in the way they work. Some of the different ways people are wired are:
Big picture vs Detail-oriented
• Big picture thinkers think detail-oriented people have no imagination
• Detail-oriented people think big-picture people are dreamers
Extroverts vs Introverts
• Extroverts love talking out ideas
• Introverts prefer thinking privately and sharing after they’ve grappled with a problem
Planners vs Doers
• Planners stick with a plan and are rigid to adapt
• Doers change direction often based on new information
Left brained vs. Right brained
• Left-brained people reason sequentially, analyze details and excel in linear analysis
• Right-brained or lateral thinkers think across categories, recognize themes and synthesize
The power of knowing how you and others are wired. Be curious to understand how people who see things differently came to see them that way, try to understand where they came from. Then, seek to understand our and others’ strengths and weaknesses to get the best results out of everyone. One of the ways is using behavior and personality assessments to get a clearer and more objective reading of people and yourself.
The Power of Habit. Habit is inertia, the strong tendency to keep doing what you have been doing. It can take time to change a habit, yet habit is the easiest way to change our behavior. In nurturing new habits, be patient with yourself and others, provide incentives that are tailored to the individual, and celebrate small wins to create positive momentum.
Putting it all together: “Evolution is life’s greatest accomplishment and reward.”
EFSV members’ insights
Members at the EFSV found the above four guiding principles for business and life tremendously inspiring and helpful. They shared with each other their own new insights and discussed the value of establishing, recognizing and evolving key principles as leaders of organizations.
Some principles of leaders of the Executive Forums Silicon Valley Forum that have contributed to their business and personal success include:
“Do Right by Others”,
“Be Open to Perspectives that Questions Your Assumptions”, “
“Care About People”,
“We Don’t Win Alone”,
“Be Comfortable Holding Multiple Conflicting Points of View”,
“Be Grounded in Reality and Discover Others Points of View”, and
“Never Be Outworked by Others.”
Through learning to specifically identify and declare our principles, we as leaders can respond to the challenges of the day in a consistent and principled manner to help our companies thrive.
If you are interested in participating or learning more about becoming a member at Executive Forum Silicon Valley, please contact @GlennPerkins at gperkins@executiveforums.com or call 408-901-0321. For more information visit https://execforumssv.com/
Ray Dalio’s Four Guiding Principles for Business and Life (Part 1 of 2)
At the Renaissance Executive Forum Silicon Valley (“EFSV)’s January 2020 Forum, business owners, CEOs and executives learned about Ray Dalio’s four guiding principles for business and life. As always, each Forum member and the group as a whole received great value through executive level discussion that inspired each leader to recognize and distill their own principles. The four guiding principles from Ray Dalio include:
Embrace reality by overcoming your ego and blind spots
Be radically open-minded
Use the 5-step process
Understand how people are wired
“My hope is to prompt readers to discover their own principles and ideally write them down to keep refining them as they encounter more experiences.”- Ray Dalio
About Ray Dalio, some of his quotables
Ray Dalio is one of the 100 most influential people in the world, according to Times Magazine 2012, and is ranked on Forbes 2018 as the 30th richest in the US with a net worth of $17.7 billion. He joined Bill Gates and Warren Buffett vowing to donate more than half of his fortune to charitable causes during his lifetime. He is the author of the #1 New York Times bestselling book “Principles: Life and Work”. Ray Dalio is the founder, co-Chief Investment Officer and co-Chairman of Bridgewater Associates, which is a global macro investment firm and is the world’s largest hedge fund with $160 billion.
Ray believes that reality works like a machine and that principles for dealing with reality are required to be successful. “Whatever success I have had in life has more to do with knowing how to deal with my NOT knowing that anything I know.”
Principles help with systemizing decision-making
Every day, leaders are bombarded with blizzards of situations. With principles, decision-making can be systemized to avoid erratic and unpredictable reasoning and behaviors. Principles are the foundation for our behavior and reasoning that helps us achieve our life and business goals.
Principle #1:Embrace reality and deal with it
There are two barriers to get to know reality: ego and blindspot.
The 1st barrier – a leader’s ego. Sometimes referred to as “pride”, “fear to be wrong”, or “saving face”, ego makes it harder for us to accept/admit our mistakes and weaknesses. Every leader wants to be capable and be seen as such. But you must not let your need to be right be more important than your need to find the truth. Being blind to truth disconnects you from the feedback loop that helps you make good decisions.
On the other hand, taking responsibility for your own weakness or mistakes can lead to solving a problem, which gives you the knowledge to adjust and avoid the same obstacles in the future, – “never let a good crisis go to waste,” as the saying goes. This allows you to move your company to a higher level where the stakes become ever greater.
“The biggest difference between leaders who guide their own growth and achieve their goals and those who don’t, is that those who make progress reflect on what causes their amygdala hijackings,” says Ray Dalio. Reflecting on and refraining from fight/flight and other reactions is key to a leader’s evolution.
The 2nd barrier – our blind spots. We all see the world through our own biased lenses and we all have limited observational skills. Besides, focus can create blind spots – the more we focus on a topic, the harder it is to see alternatives. We can’t appreciate what we can’t see, so we need to be open to people who see things we do not, and that leads to:
Principle #2: Practice radical open-mindedness
Motivated by accepting that we all are partially blind, being open-minded is the ability to explore other points of view without the interference of our ego or blind spots.
How do we open our eyes? If we believe that seeing more will only help us make better decisions and accept the possibility that others might see something differently than we do, then instead of “I’m right”, ask “what might I be missing?”
Look for believable people. Believable people are those who 1) have repeatedly accomplished the thing in question, and 2) can explain their approach when probed. Be open-minded with the most believable people we have access to. Business owner peer groups like Executive Forums Silicon Valley are made up of successful, experienced, believable business owners who will tell you the hard cold truth, without any personal agenda.
Appreciate the art of thoughtful disagreement. If the goal is to find the truth, not to convince others you’re right, let disagreement trigger curiosity, not explosions. Agree to disagree, and agree how you are going to be with others.
To make open-mindedness a habit, we need to keep our ego in check, get to know our blind spots, be open to mind training, hold two or more conflicting concepts in our mind to assess their relative merits, honestly believe we could be wrong and ask genuine questions, and be more interested in finding the truth than in looking good. Let disagreement trigger curiosity and
calmness and appreciate the art of thoughtful disagreement.
We will continue next week in Part 2 about the remaining two Ray Dalio Principles – the 5-Step Process and Understanding How People are Wired.
At EFSV, business owners gain clarity, insight and accountability through sharing collective experience and wisdom in a group setting, to ignite their leadership engines. They learn from the best like Ray Dalio to clarify their own principles upon having new insights sparkled from group interactions.
If you are interested in participating or learning more about becoming a member at Executive Forum Silicon Valley, please contact @GlennPerkins at gperkins@executiveforums.com or call 408-901-0321. For more information visit https://execforumssv.com/
As the new year 2020 just started, business leaders are planning sales and growth for the year. There is no better place to help leaders with accountability and execution of sales plans than at Executive Forums Silicon Valley (EFSV), where business owners, CEOs and executives “ignite your leadership engine.” EFSV is a confidential peer advisory board where selected business owners and executives work together to create clarity, insight and accountability that improves their business and accelerates their personal leadership, learning and growth.
Steve Johnson of Scaling Sales, a sales specialist and consultant, recently presented at the Executive Forum Silicon Valley (EFSV) business owner forum about “Six Steps to Build a High-Performance Sales Team” that
Maximize quarterly, monthly and yearly sales
Are scalable and repeatable; and
Find and win “good’ deals
The “Six Steps to Build a High-Performance Sales Team” focused on people, process and systems, as summarized follows:
Step 1 – How much do you want to sell within a time frame? This step focuses on developing clarity around sales goals and quotas, more than mere spreadsheets. Establish key parameters such as leads to qualified opportunities, average sales per deal, deal closing rate, sales per salesperson, lead value, etc..
Step 2 – What are your customers biggest problems? Prior to selling, first gain insight about a customer’s specific problems. For instance, when a customer is running from alligators they are trying to save their life and are not worried about price.
Step 3 – People – Who can best sell to my customers? This key step provides the insight for aligning the sales team to the customers buying process and risk tolerance.
The illustrations below show how to identify and use the right salespeople for different sales types:
Step 4 – What processes best support these people? Simplified and well-defined processes enable consistency, repeatability and personnel interchangeability necessary to scale sales, such as:
Sales Process mirroring customers’ decision process with step by step actions
Lead Generation, Accurate Sales Forecasting & Pipeline
New Employee Onboarding, Accountability and Coaching
These processes must also be reinforced with accountability as shown in the following graphic.
Step 5 – What systems enable and enforce the processes? With all of the tools available in the marketplace to support the sales process, a key discussion point was to keep things simple and aligned to the size of your team and the complexity of your sales process, using some of the key system tools such as:
Dashboard, CRM, Data & Reporting
Intelligent Sales Assistant/Coach, Call Recording
Sales Enablement, Forecasting and Pipeline Tools
When building a sales team, to establish accountability, it is necessary to measure individual performance (as shown in the graphic below) and the performance of the team.
An example of a salesperson’s dashboard:
Step 6 – Execution – Getting it done. Building sales teams and scaling sales requires focusing on activities that have the largest impact and adjusting your efforts as you learn:
Make a plan & prioritize
What’s the one thing that if implemented would have the biggest impact?
Only introduce ONE improvement or change every 2-4 weeks
Test and adjust as needed
Follow through – Do what you say you’re going to do
Rinse and repeat
The educational component in the “Six Steps to Build a High-Performance Sales Team” allowed the business owners at the monthly Executive Forums Silicon Valley (EFSV) to take something away to improve their sales.
To learn more about Steve Johnson’s “Six Steps to Build a High Performance Sales Team”, about his background and how to apply these techniques to building your sales teams, please contact him at steve@scalingsales.com, 415-259-7882, or visit www.scalingsales.com.
=============================================================== If you are interested in participating or learning more about becoming a member at Executive Forum Silicon Valley, please contact @GlennPerkins at gperkins@executiveforums.com or call 408-901-0321. For more information visit www.execforumssv.com.
The majority of CEOs and business owners focus myopically on growing profits, increasing margin and expanding sales. Likely even more CEOs believe that they are personally responsible to make those things happen. What do you think would happen if you removed the CEO from the business? Disruptive as it may sound, one of the most dynamic goals you can is to do just that – setting up your business so that it can thrive and grow without you.
After all, isn’t that the point? A business not dependent on its owner is the ultimate asset to own. Like the perfect self-driving car, it works without you and is a vehicle to get you where you want to go (and the freedom to choose the project you want to get involved in, when you want to get involved).
An owner-dependent company can end up strangling its own potential, as it can be challenging for top dogs to get out of the way and let others drive the sled. In order to create a business that can succeed without you, these five recommendations are key:
Share the success and the shoes
“The opportunity to think like the business owner, to face the decisions the owner faces, and to have a stake in the outcome, is what creates top-notch senior employees who can lead the company in the owner’s stead,” said Glenn Perkins, executive coaching and forums leader for Renaissance Executive Forums in San Jose and Silicon Valley. “The CEO or owner needs to let others walk in their shoes.”
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: being transparent about financial results and allowing employees to participate in the company’s financial success. Employees who have a piece of the action are more invested in the outcome, and the results are consistently superior to companies who are less inclusive.
“Pilots have their names painted just beneath the canopy of their aircraft,” observes world-reknown leadership pundit Simon Sinek. “This gives the pilot a sense of ownership for his or her jet. What's more, like cars, each aircraft has its own personality, so it's important for a pilot to get to know and love his aircraft.” Truck drivers do the same, and they don’t own the truck the same way the pilot doesn’t own his or her jet. Ownership thinking is the key.
If you’re not quite comfortable opening up the books to staff, consider a simple management tactic instead. Try responding to every question your employees bring you with the same answer: “If you owned the company, what would you do?” Encourage your employees to walk in your shoes, get them thinking as you would and build the habit of starting to think like an owner. Pretty soon, employees are solving problems with a broader perspective and with less direct involvement from the owner. If there’s nobody but the owner who can address a particular issue, instead of getting in line for an appointment, progressive leaders start to ask: who can be trained to handle this in the future so that we don’t have to bother or involve the owner? Then, with the owner’s support, they get those people trained.
No more CEO micro-managing
Stepping back and allowing others to lead the company takes trust, and trust often takes time. An easy phase to stop owner micro-managing is this brief exercise: identify the products and services which require the owner’s personal involvement in either making, delivering or selling them and stop selling those. It might seem revolutionary, but to get out from under the day-to-day responsibility of carrying the company, you have to do it. Score everything thing the company sells on a scale of 0 to 10 on how easy each is to teach an employee to handle (NOT the CEO or owner). Assign a 10 to offerings that are easy to teach or hand off to employees and give a lower score to anything that requires the owner’s personal attention. Stop selling the lowest scoring product or service on the list. Repeat this exercise every quarter.
“A true leader steps back, trusts his or her people, and allows them to succeed,” as it’s in the DNA of most leaders and owners to never step back. This counter-intuitive owner behavior, to step away, is “the only way to give others an opportunity to make decisions and gain confidence in their abilities. If you don’t do that, you can’t be sure whether your talent strategy is working. You can’t be sure if your succession plans are solid. You can’t be sure that the decisions you made a week ago or a month ago or a year ago were the right ones or not.”
Scrub your sales and set up a system
If you’re the owner, are you also 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.
Next, look at your systems and procedures. If you had a system or a set of rules in place, could issues run smoothly without the owner involved? At least give employees a set of rules to follow in the future, as many are nervous about out-pacing the top officer of the company (think “exceeding the speed limit” set by the owner).
Those rules can even include controlling spending, another sure-fire bottleneck for owners. Even if employees know what to do to move forward or help customers, they may not have the means of paying for the fix they know the owner would want. Empower employees to do what’s right (within boundaries), and get out of the way. For example, you could put a customer service rule in place that gives your frontline staff the authority to make a customer happy in any way they see fit provided it could be done for under $100. You might allow an employee to spend a specific amount with a specific supplier each month without coming to you first. Or you might give an employee an annual budget, an amount they can spend without seeking your approval.
If you develop systems and training that allow employees to act on their own, you’ll find the investment is well worth it: your company will increase in value as it becomes less dependent on you personally.
Write an instruction manual for your business
Make sure your company comes with instructions included. Write an employee manual or what MBA-types call Standard Operating Procedures (SOPs). These are a set of rules employees can follow for daily operational tasks in the company. This will ensure employees have a rulebook they can follow when you’re not around, and, when an employee leaves, it’s easier to onboard new talent to handle the duties the company needs.
Business experts agree that having “an actual written training and orientation plan so your employees know what is required of them” is crucial. “Use an incentive-based rewards system, and maintain a no-problem attitude about issues that crop up” and you’ll be able to step back and let the company run itself.
Take a LONG vacation
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.
There is no better justification for taking a blissful, uninterrupted holiday than to see how your company performs in your absence. The better your company runs on autopilot, the more valuable it will be when you’re ready to sell.
Start by taking an off-grid 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 just down the hall. That’s a good thing and a sign you should start planning an even longer respite from the office.
It's a proven method for a managerial boost. “The only people who can really determine how things work in the near-term are the managers closest to clients and daily operations. If that’s not you, stop worrying and start trusting. If you’ve done your job right, you’ve hired the right senior leaders and given them the direction and resources to do that work well. If you didn’t do that by the time you got on the plane for your vacation, a few emails from the beach or the links won’t do the trick.” Yes, it might seem risky, but it’s a sure-fire way to find out if you are a crutch for your top team. “If your business can’t survive your vacation, you’ve got a bigger problem.”
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.
A company that is not bottlenecked by an owner’s involvement is much more attractive than the alternative. Try getting out of your own way, simple steps at a time, and you might find a higher ROI than you expected. You also might find that you’re more suited to stepping back than you might think. Let your team surprise you, and even pass you on the right.
Renaissance Executive Forums draws Silicon Valley’s diverse business leadership community together, allowing business leaders to readily learn from each other and sharpen their CEO skill sets. As an active business advisor and multi-faceted business executive with deep-rooted experience across numerous industries, Glenn Perkins is the leader of Renaissance Executive Forums Silicon Valley, and a conscientious resource for the business leaders and owners in the area. He is continuously spear-heading the formation of new executive peer groups, innovative workshops and business education opportunities as the local, national and international markets continue to evolve. If you are interested in participating or learning more about becoming a forum member, please contact Glenn at gperkins@executiveforums.com or call 408-213-9513. For more information visit www.execforumssv.com
