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Posts tagged CEO
Fast Growth - Not an Overnight Phenomenon
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Companies experiencing rapid growth have often clinched product-market fit. Yet, securing product-market fit and rapid growth is not an overnight phenomenon. Most fast-growth companies are not startups. They have been in business for more than 5 years. Their CEOs are focused on what they want to accomplish.  They work harder and are more confident than their counterparts.

Fast growing companies are often quick to pivot. They work with partners that meet their strategic needs and are not averse to switching vendors or brands if they are no longer a fit. Successful leaders of fast-growing companies are intentional about each phase of growth. They are not reactionary. They take the time to pause and think, to avoid falling into the vortex of rapid growth.

The Role of the CEO

When companies stall, it is often a result of leadership myopia. It is when leaders are so focused on the day-to-day operations that they don’t see what is happening in the world around them.

Some CEOs are better than others when it comes to seizing opportunities. They are effective at connecting with their peers to share ideas and strategies and leverage those ideas with ideas generated within their company. They promote an environment of continuous learning and growth.

Where Good Ideas Come

Growing a business is not easy. According to Steven Johnson in “Where Good Ideas Come” most great ideas are the result of several people’s ideas interacting many times. CEOs of fast-growing companies spend over a third of their time outside the office engaging, collaborating, and learning. One efficient way of collecting ideas and collaborating with peers is through CxO Exchanges which bring together non-competitive, like-minded, forward-thinking executives.  Exchanges provide a place where executives can get solutions to the tough challenges of growing companies. They offer a confidential sounding board where new ideas can percolate. They can both energize and motivate leaders to greater performance.

Trying to tackle the challenges of growing a company alone is ineffective. Get out and meet with other experienced executives who are open to sharing ideas and perspectives.  Leverage that knowledge to avoid pitfalls and develop strategies to successfully grow your company to the next level.

ArtScience Group is a boutique consulting company that provides executive coaching, executive exchanges and team facilitation.  Learn more at www.artsciencegroup.com

 

 

 

Fast vs Deliberate Growth - Brian Chesky Gets it
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I recently spoke with a co-founder of a computer software company who described a 7-year journey involving multiple rounds of funding that enabled the company to grow from $2M to $150M in revenue in the first 5 years.  Fantastic!   Unfortunately, 2 years later that trend of rapid growth was nearly reversed and his diluted shares were penniless.  

His message to entrepreneurs was that fast growth facilitated by large increases in investment capital is not necessarily a good thing. This co-founder realized that while the availability of investor funding is important, so is monitoring cash flow, implementing prudent hiring practices, establishing priorities for customer acquisition efforts, identifying new or expanded market opportunities and having a strategic plan for growth.  He also came to the realization that capital partners are not always adept at running a company. 

Below are some key takeaways and recommendations:


Build Your Team Wisely

This includes hiring people with the right experience in a timely manner.  The VP of Finance for your $2M company may not be the appropriate person for your fast growing, national company. Delays in hiring a strategic CFO because your cash flow positive and your current financial person is handling  “it” can lead to bad spending habits and put your business at risk.  A management team that does not have the larger financial picture, lacks the ability to foresee potential cash flow constraints. Early detection of cash flow discrepancies allows your teams to make the necessary adjustments to strategies and operations to keep growth on track.


Carefully Shape Your Board of Directors

A company’s Board of Directors should include members with a broad base of business experience as well as those with specific industry knowledge.   Board members need more than just capital to invest in a company.  They must possess sufficient operational experience to be able to ask prudent critical questions:

  • What if the distribution channel doesn’t happen?

  • Where are the risks operationally?

  • What is the ROI from research, marketing, or IT activities?

  • Are sales objectives reasonable?

Periodically Evaluate Your Strategies 

A mantra from investors to grow big fast, get market share, go overseas and to go deeply into certain verticals needs a step by step action plan that includes careful and regular evaluation. Close tabs during expansion on customer-market fit, customer experience, projected vs actual sales and revenue will help you determine when growth needs to slow down to be sustainable.
 

Realize Strengths and Weaknesses 

A Founder who is a strong sales and marketing professional may lack the experience to manage the day-to-day operations or to work within the confines of a budget.  Acknowledge your limitations and take steps to ensure they do not become blind spots that critically impact decision-making. Take the time to ask the critical questions of others whose expertise and knowledge you depend.
 

Avoid Inflating Your Valuation 

A company’s valuation is a snapshot in time. Many factors influence investor decisions, some rational, some irrational. Too high of a valuation can make your company susceptible to market changes that can negatively impact your valuation. While each funding round results in the dilution of ownership percentages for existing investors, a down round further increases the dilutive effect, potentially resulting in a disappointing return on investment.

Rapid growth can create stress and distort judgments, resulting in a refusal to face facts until it is too late. Too much money, too fast, can foster a lack of discipline in critical areas in your company, leading to financial crises even as the money pours in.


Pause and Be Deliberate 

A more deliberate approach to growth comes from Brian Chesky of Airbnb. Speculation about Airbnb having an initial public offering in 2018 has been high. However, Brian Chesky recently announced a decision not to go public in 2018. His rationale is that Airbnb needs to pause and be more deliberate and measured in its growth. He recognizes that organizations need to spend time carefully navigating the challenges of growth, which in the case of Airbnb include regulatory challenges pertaining to collecting and remitting local taxes, and legal challenges with short-term rentals in certain locations.

Brian Chesky stated  "The vast majority of people are saying that you should take your time and do whatever you need to do on your timeline. Because companies have struggled in the public markets, and it's a defining thing. So they've all said be responsible, take it slow."

While going public is generally viewed as a means for increasing a company’s capital for growth and expansion, there are often a lot of other factors that come into in play for a company to be successful. It sounds to me like Brian Chesky gets it.

United Housing Management Highlighted in the BBJ
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Kevin Bynoe, CEO of United Housing Management and ArtScience Group CEO Forum member, shares United Housing Management’s growth and expansion story with the Boston Business Journal.  United Housing Management’s commitment to both growth and servicing the community is what makes Kevin and his team stand out from the rest.

Bynoe describes one of the main (assets) of United Housing Management as their commitment to the community, for which the company has been lauded. Every year since 2003, UHM has been recognized by MassHousing for using the services of minority and women-owned businesses from the Roxbury and Dorchester area, exceeding the goals set by the state with expenditures of $4 million in 2010 alone.  Read the full story here

Allexe LawCEO, executive exchange
Power of Listening and Inquiry
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How you communicate makes all the difference when it comes to successful outcomes, whether it is sales, product development, customer retention, finance or operations. Are you interested in a meaningful exchange? What type of questions are you asking? Are you asking questions to collect information, draw a conclusion or are you looking to expand your understanding?

In addition to sharing information, a big part of our communication is listening. How much listening are you doing? In our regular communication, we spend approximately 60% of it listening, yet only retain 25% of what is heard.  Most people are not listening with the intent to understand, but instead with the intent to reply.  Our listening can be improved by becoming more engaged; by releasing the need for certainty in our conversation and being open to new perspectives.  Genuine inquiry means being present, listening and being curious. 

A CEO of a company working with large commercial real estate properties improving energy efficiency once told me that he had an affinity to sales people with music backgrounds. When asked what he meant, he said that when they enter a building, they are not just listening to what the client has to say but they are also in tune to the sounds of the building.  They have an ability to identify system and maintenance problems through listening and inquiring, often to the amazement of the prospective client.

Listening and Connecting

Great listeners are able to connect on a number of levels. They are able to make connections between what is occurring in a conversation; what is being communicated through non-verbal cues; and what they can learn from their surroundings.  They are able to make correlations between previous conversations as well as disparate threads of conversation and they are skilled at posing open-ended questions that engage others in a discussion.

An executive of a company providing a Software As a Service (SaaS) product expressed concerns about the lack of interest from potential customers following product demos. Curious to know where the problem lied, he began asking his sales team to walk him through the demo discussion.  He discovered that when a sales member learned that a potential client used a software that was not on the list of programs in which their product integrated, the sales member proceeded to end the meeting. What the sales team member was not asking was “What features of that software are critical for you? Does your entire work force use it or is it used by a certain group/department?  How else do you use the software?  What type of support do you receive on that product?  What has changed since you last purchased that software?   The sales person entered the demo with one outcome in mind and lost an opportunity to learn more about the company, their perspectives, assumptions and challenges.

Too often, people engage potential clients or colleagues with a script about their product, service or idea.  They have an internal dialogue on how they will rebut or defend their position as opposed to being present and truly listening to what the person is saying. As a result, they miss opportunities to collaboratively identify new possibilities.

Why do some people ask good questions and others don’t?

Some of the reasons include

-       lack of interest about the product or service they are providing or their work

-       poor listening skills with a tendency to do more talking than listening

-       lack of training on how to listen and to have a meaningful exchange

-       fear of asking questions that might be perceived as unknowledgeable and therefore, not seeking a deeper understanding

-       feeling rushed or pressured to close a deal

-       making assumptions about what is behind a decision or action

-       asking the wrong type of questions (e.g. either/or, or leading questions)

-       too focused on promoting and defending versus learning

-       overreacting to words or statements

Questions and listening are key to discovery. Good questions lead to aha moments that spark brilliant solutions.  They require an ability to listen, adjust and pivot in order to find the information that nobody else picked up on.

How do you ignite curiosity?  Build questioning skills?

 Developing great listening and questioning skills takes time, intention and practice. A few actions you can take to develop these skills with your teams are:

  • Role Play

  • Practice listening skills

  • Explore the difference between discovery questions vs provoking questions which lead to deeper discussion and understanding.

  • Share experiences both successes and failures

The better the guidance and training, the more eager your team members will be willing to engage.

What actions, training or strategies have you employed to create better listeners and questioners?  Please share your stories with us at info@ArtScienceGroup.com .

ArtScience Group is an executive coaching and facilitation company offering services both locally and globally.  For additional information about our services, please visit our website at www.ArtScienceGroup.com or email us at info@ArtScienceGroup.com .

No Values?
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When someone is described as having “No Values”, it typically has a negative connotation. It usually indicates that the person has no moral compass or scruples - that you don’t know what to expect from them.

The same holds true for a business or organization.  Without clear values that define a company’s operating principles, it becomes difficult to recruit top talent, to lead existing employees, or to explain the special sauce that differentiates your business from others.

Why Values?

As more people are on boarded and a company grows in size, employees want to know what to expect from the executive team, managers, and their colleagues.  Are people dedicated to providing a great product/service or are short cuts and go arounds the norm?  Are the processes in place respected or randomly ignored?  Do people own up to mistakes and learn from errors, or do they seek excuses and scapegoats?

As a customer doing business with a company, you want to understand what to expect from those delivering a product or service.  How does working with your company make a difference?  Is this difference consistent across the board no matter whom you are dealing with in the company?

Values are the foundation of a company.  They are the core of what makes the company tick.  They form its personality.  To be authentic, values should come from within.  Picking company values from another company’s website, may get you a list of values but they may not resonate and be actualized by employees.

Developing Values

To create a list of values, look within your organization.  Think of the people who have made the company to date and the characteristics and traits they possess that have made a difference.  Begin the discussion with your executive team who sets the tone for the rest of your organization. What do they respect about each other?  What values are important to them?  Often values are ingrained early on from our experiences and from the people closest to us.  Sharing what values are important to us and how they are demonstrated leads to an authentic list of values from which to build.  It also allows for stories to evolve that bring life to values.   

Once you have a core list of values, share them with others in your company. Provide actual accounts of how they are demonstrated in your organization on a regular basis.  Seek feedback on the values and input on where others have seen them in operation. Then, narrow and refine your list to a reasonable number, preferably 5, and bring them to life with a brief narrative that clarifies their importance in the way you operate.  But, don’t stop there, identify ways to recognize these values in day-to-day internal interactions and in the interactions with customers, suppliers and partners. 

By dedicating time to discuss and recognize values, you send a strong message that values are taken seriously.  Regularly recognizing the values creates a mutual understanding and alignment in the way people work, allowing more time to be spent focusing on the growth objectives of the company.

What strategies have you used to make your values come to life?  We would welcome your thoughts at info.ArtScienceGroup.com.