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Sunday, 31 October 2010

Where Are You on Your Company's Life Cycle? Try the PAEI Code!

Every company has its life cycle and sadly during the recession quite a few have come to the end of theirs.   Some businesses seem to go on for ever and some shine brightly for a while and then the light goes out just as quickly.

The trick is to estimate where you are on the life cycle of the business and there are quite a few points to consider, all of which can indicate not only where you are but also where you are heading.

A neat technique is the PAEI code.   This is used to give a subjective assessment of the business at various stages of its development and while it is obviously not definitive, it can help the leader to see how the business is changing and hopefully progressing.

It works like this.   P stands for productivity, the amount of effort which is put into the business across the board and by everyone concerned.   A stands for administration, the way in which the business is administered, how effective it is and also how unobtrusive it is to the outside world.  

E stands for entrepreneurship, the ability of the business at all levels to develop their markets, their product range and to look for new and profitable "rivers of cash"; those new ventures to diversify the activities of the business.   Finally I means integration, the manner in which the people in the business feel and indeed are engaged and empowered to make decisions, to do the right things rather than to do things right, and generally act and operate as a genuine team.

So how does it work?   If we assess a typical start-up business and score each of the PAEI components on a one-to-five basis, P (productivity) will almost certainly be a five because a vast amount of effort has to be put into all the activities of a business in its early days.   On the other hand, A (administration) will probably be rated at one or two simply because of the need to "do the job and sort the paperwork out later".   Not ideal of course but inevitable.

The level of E (entrepreneurship) is also likely to be at level five for perhaps obvious reasons, but I (integration) will tend to be at a lower level, probably two or three again because of the high level of time and effort being put into developing the business rather than the people.

Now move forward a couple of years.   The P level will probably remain high, the A will have started to increase to keep pace with the way in which the business is growing, the E level may start to diminish somewhat in the face of the need for patient trading, and the I level will also have increased as more people come on board with the consequent need to develop them and their abilities.

Fast forward to perhaps ten years after the start up when the business is beginning to shows signs of adulthood.   P has diminished significantly because A has increased dramatically.  E has almost disappeared and I either rates highly or in some cases, very low.

It is at that stage that the business needs a kick to drag it back into the start-up phase and to ensure that it doesn't just plateau and then go into the inevitable decline.

So, take a look at where you are right now.  If your assessment is that there is still entrepreneurship in the business, that the administration is at an acceptable level and is not leading to ossification, that your people are working hard and effectively and are well engaged, then that's fine.

If, on the other hand, all the signs are of premature ageing of the business, then now is the time for new thinking, innovation and a measure of risk taking.

For further information visit www.maa-uk.co.uk 
To contact us, email to ivan.goldberg@maa-uk.co.uk

Sunday, 24 October 2010

A Top Performer? Yes, and a Terrorist!

How many times have we heard the story of a top performer in the business in sales or operations, finance or technical, et al, who is consistently successful - and hates everyone and everyone hates him/her?

If we consider the quadrant matrix so beloved of consultants and plot performance vertically and attitude horizontally, it will give an idea of how performance and attitude interact.

For example, if someone in the business is in the bottom left quadrant and is perceived as having poor performance and a bad attitude perhaps you should be asking the question - why are we still employing them?

Conversely, if someone's results show up in the top right quadrant, that is, high performance and great attitude, perhaps we should be considering what we need to do to ensure that they stay with the business.   As Lee Thayer, noted Vistage speaker and author says: "We need to protect and nurture the virtuosi and make sure that they continue to thrive and contribute to the business".  Ask youself another question; what are we doing to encourage them to stay and to grow with the business?

In that exceptional book on management, Good to Great, the authors make the point that we need to get the right people on the bus and if you have a virtuoso, that is the right person.

Now consider the person who finishes in the bottom right quadrant.  This is an individual who has good attitude but low performance and it is worth while then making an effort to help them to improve their performance possibly to move into the top right quadrant.

The real problem is that individual whom you assess as having great performance and bad attitude.   It is a perennial issue and causes the leader no end of anguish.
"How can we get rid of him?" I hear you say. "He is our top salesman/technical expert/financial expert etc. etc."

Perhaps so, but their bad attitude and their inability to relate to others in the business is even more important.   We try to change these people, fearful that their loss would impinge negatively on the success of the business and we plough on, hoping and against hope, that they will change.  Of course, they don't.

Another Vistage speaker, Ed Ryan, says: "We hire on skills and fire on attitude" which is a very enlightening statement.  The answer, of course, is to interview in such a way as to uncover attitude and behaviour patterns and not to concentrate on experience and technical ability which should be a given.

So many times I have heard people say that after they terminated a terrorist, other members of the team asked why it had taken them so long.

A team should ideally consist of dedicated virtuosi, working together, knowing how they are doing and where they are going, and driving for success as a team.  The odd individual who goes against that ethos is corrosive and has no place in the scheme of things.

Ed Ryan also asks: "Why does it take us eighteen months to get rid of someone we interviewed for an hour?".  Now there's a question.

For further information visit www.vistage.co.uk
To contact us, email to ivan.goldberg@vistage.co.uk

Sunday, 17 October 2010

5% Growth Next Year? Go For a B-HAG Instead!

Renowned author and Vistage speaker, Lee Thayer, tells the story of the time he asked a client what he was planning for next year in terms of growth of the business and was told "around 10%" which Lee said was the expected answer as he (the client) could do that in his head.

"Not at all" said Lee: "I think you should go for doubling your turnover"

The client went pale and there came a flood of the usual negative reasons; "We don't have the people", "The market isn't there", "We don't have the finance" etc. etc etc.

"I guess so" replied Lee, "But if you were to do it, what would you need to do in order to make sure that you achieved it?"

Now that is an entirely different question from "How can you do it?" because it presupposes that there will be a measure of analysis of the situation.   A useful method is the Ishikawa technique which uses the format of a fish skeleton (visualise a cat emerging from a cartoon dustbin with a fish skeleton in its mouth).

The head of the fish is the objective.  By the way, the word objective can be defined as "something that we INTEND to achieve" rather than a target or even a goal.   The ribs of the fish are the business functions such as finance, sales, marketing, operations and so on, as appropriate to the the business.

Preferably using an outside facilitator, the team then brainstorms ideas of what each function needs to do in order to achieve the main objective, often using Stick-It notes applied to each function.

When the process is complete, the team will know pretty well what actions will be needed in order to achieve the objective.

Ask yourself the question; is it worth your while going through all that activity for a 10% growth objective?  Far better, as Lee did, to go for a B-HAG, a Big Hairy Audacious Goal (the words have been changed to protect the innocent) and then go through the Ishikawa procedure.  Even if the team doesn't achieve the objective, their minds will have been opened to greater possibilities and that can only be of value in difficult times.

The brainstorm may well throw up some great ideas as to how the business can develop new opportunities for products, markets, technologies and so on, all of which may be necessary for the projected growth.

Essentially, this is NOT a forecasting exercise.  It is a statement of where you want the business to go and then to develop a process by which the objective can be achieved.  Forecasting is best done by licking the finger to see which way the wind is blowing and is about as accurate.

So what happened to Lee's client?  He took the idea on board, sold it to his team, and they went for it and didn't succeed.  They went from $20m turnover to $35m in the year.

If you don't ask and you don't plan, you won't get, so go for that B-HAG.
Have a great week.

For further information visit the all-new www.vistage.co.uk website
To contact us, email to ivan.goldberg@vistage.co.uk

Sunday, 10 October 2010

Motivation? I Pay Them, Don't I?

It's curious how subjects for this blog seem to pop up out of the blue each week, mostly from mentoring sessions.   Motivation of the troops is a perennial theme, especially on the basis of "I don't seem to be able to motivate them - I pay them enough!"

The problem is, of course, that motivation is a frail flower and depends absolutely on the individual.  In essence, it isn't feasible to offer a "one size fits all" solution.

Alright, it does work in, for example, investment banking where vast profits generate vast bonuses which apparently motivate a very small number of people to work long hours to make large mounts of money.   However, the proportion of those people in comparison to the rest of the working population is minute, and really shouldn't be used as a tool for motivating others.

The fact is that we make surprising assumptions about motivation mostly concerning rewards for performance.   Noted US speaker, Dan Pink, has an excellent short (11 minutes) video on YouTube at  http://www.youtube.com/watch?v=u6XAPnuFjJc which debunks the whole concept of payment by results for cerebral work while noting that it seems to work for more physical activities.

To reiterate, the problem is that different things motivate different people which is much more of as problem in large organisations which invariably fall back on the pay/reward solution.

The American psychologist Herzberg postulated the concept of the positive and negative motivational factors and, perhaps surprisingly, salary is not a positive factor.   In essence, if the salary paid is broadly acceptable to the recipient, the result is neutral while if it is lower than perceived as acceptable by the individual, then it de-motivates.

On the other hand, reward is seen as being positive in all senses, but it must be pointed out that reward can be defined in a multiplicity of ways, and not necessarily in monetary terms.

For example, a bunch of flowers to the right person at the right time, a simple "thank you for a job well done" email, cream cakes all round on a Friday and so on, can and are just as effective in showing the team that their work is appreciated.

In the end, however, the only real solution is to discover the trigger that says for each individual that this is the company for which I want to work, where I am appreciated, and where I can see a way to progress.

While I am not an enthusiast for annual appraisals and 360 degree assessments, they can be of value in uncovering the aspirations of the individual.  Far better, however, is the regular (and I mean, regular) at least one hour one-to-one conversation, on the diary once a month and inviolate, and at the agenda of the individual.  These should start off by "what do you want to discuss today" so that the individual can discuss and explain his/her issues without fear or favour.

This demand, and I mean demands, an absolutely no-blame culture which engenders an environment of trust and an elimination of anxiety.   Kenneth and Will Hopper in their wonderful book, The Puritan Gift, say that: "Upward communication is an essential part of the effective functioning of an organisation" and that can only be based on trust.

The one-to-one then can uncover the motivational trigger which must not then be exploited but can be used judiciously to help the individual grow and progress in the organisation to the advantage of both.

There are other ways, of course.  The great coach of the Green Bay Packers, Vince Lombardi used to say: "I want you guys to be fired with enthusiasm.  Because if you aren't, then you will be fired - with enthusiasm!".  Now that's motivation.

And me?  I'm motivated to go get a cup of coffee.  Have a great week.

For further information visit www.vistage.co.uk and www.vistageblog.co.uk
To contact us, email to ivan.goldberg@vistage.co.uk

Sunday, 3 October 2010

E + R = O? Event Plus Response Equals Outcome!

Attending the Vistage Speakers Reception at Ashdown Park this week, reminded me of the many tips and ideas which we take away from our speakers, all of which can make a difference to the ways in which we operate.  Sometimes, the change can be dramatic indeed.

One such tip, donated at a recent Vistage session to my group by motivational speaker, consultant and author, Nigel Risner (www.nigelrisner.com) is remarkably simple and quite remarkably effective.

It is a simple equation of E + R = O which means Event plus Response equals Outcome.  So how does it work?

It works on two levels.   If we accept that an event is something that has already happened and consequently can't be changed, and the eventual outcome is perhaps not what we would wish for, then we need to examine how we reacted to the event to generate the outcome.

That is of course "after the event" and can lead to recriminations if things do not go the way we wanted.   It is, of course, possible and indeed necessary to learn from the way in which we responded to the event and that can lead to better understanding and improved reactions in the future.

The other and more positive use of the equation is again to accept the event as one which cannot in itself be changed, and then to decide on what outcome we want.  Having made that decision, we can then adjust our response to generate the desired outcome.  Easy, yes?

No, of course it isn't easy because it requires a moment or two of mature reflection instead of shooting from the hip in an immediate reaction. 

It has been suggested that we need time to reflect on how to respond and that is true in some situations, perhaps in personnel or serious commercial matters, but the equation still stands.  Keep asking the question: "What outcome do I want?".

In other situations, perhaps in personal relations, the time for reflection can be as long as two or three seconds and that is enough to change from being an aggressive reactor to someone who can see his/her way through a situation and come to the right conclusion.

It is no exaggeration to say that in many cases it has entirely changed the way in which I react to circumstances and has allowed me to behave in a more thoughtful and mature way.

Thank you Nigel - I owe you one!

For more information visit our all new website www.vistage.co.uk and www.vistageblog.co.uk
To contact us, email to ivan.goldberg@vistage.co.uk